Category Archives: Oakland

05.07.12
by

Capitol Raiders

No, I don’t mean the Raiders moving to Sacramento. I’m referring to the state’s raid on redevelopment agencies, which we discussed last week.

At issue is a matter of dates. The state contends that via its new redevelopment laws, transactions that occurred in 2011 between RDAs and third parties (developers) are up for review, and that those that were done after June 28, 2011 would be struck down. June 28 is notable because that’s the date that bill AB 1X 26 was signed by the Governor. (A companion bill, AB 1X 27, was also signed by Governor Brown, but was killed by the state Supreme Court in December, leaving no path forward for redevelopment as we knew it.)

Cities are saying that there is no implicit cut-off date because none was specified in the legislation. There are dates for when certain transition activities are supposed to occur, but those were not the “effective immediately” date the state is gunning for. The League of California Cities’ lawsuit was filed last July. October 1, 2011 was when the RDAs were supposed to wrap up all activities, but the lawsuit granted a limited stay, so the RDAs were able to continue operations to some extent. San Jose City Attorney Rick Doyle characterized the legislation as “rushed” when referring to the lack of a date. Now the cities are saying that the effective date is April 20, 2012, the date Controller John Chiang sent letters to affected cities ordering properties to be transferred to the state.

If October 1 is decided as the transfer date, both the SJDDA-Wolff land option deal (November 2011) and funding for the Coliseum City feasibility (March 2012) would be in jeopardy. In the land deal’s case, the property would be transferred to the state and would subsequently be sold or auctioned, preferably for as close to market value as possible. The key there is that Wolff locked in a discount based on the property’s use for a ballpark, a price that would be presumably lower than an open market price. If the state were to assume and sell the land, there would still be an opportunity for Wolff to buy the land. The market isn’t great in the Diridon area right now, but when speculation comes into play all bets are off. If the city refuses to put the ballpark  parcels on its transfer list, the state could sue to get the land, which would tie up the deal for some unknown amount of time. Eventually the land will be sold because the state needs to get proceeds for the state budget and for schools, so it’s a matter of when and how much as opposed to if.

In Oakland’s case, the problem is a matter of expenditure, not property. $3.5 million has been approved for the study, which is supposed to be concentrated in the Coliseum-Hegenberger-Edgewater area. If the state gets the funding for the study struck down, all work would have to be terminated and would remain incomplete, unless a third party came in and volunteered the funds for the rest of the study. Perhaps Let’s Go Oakland or Don Knauss’s group could front the money. The issue there is that both groups prefer waterfront ballpark sites over the Coliseum, so those precious resources may not be best spent on what is effectively a third option, and a bunch of stuff that is not related to a ballpark at all.

There’s also a third way that is emerging, though it’s definitely an edge case. The successor agencies that are taking over for the RDAs are county-based bodies that report to the state. Their boards ultimately decide how the assets get divvied up. Some counties have had their own redevelopment agencies that were also affected by the new law. In Sonoma County’s case, they’ve chosen to keep two redevelopment projects going that would normally have been turned over to the state because they felt the projects were worthwhile. There would appear to be a conflict of interest for in-county activities as opposed to city-county activities, which are more arms-length. Alameda County’s board could conceivably come to Oakland’s rescue because both are partners in the Coliseum JPA. At this point it’s too soon to tell if that will a matter of discussion.

Both the Oakland and San Jose situations are not quite doomsday scenarios (that already happened when 1X 26 was passed), but they create uncertainty and delay at the very least. For Lew Wolff it’s a matter of cost. If Bud Selig is looking to put off a decision until all of this shakes out, he certainly has reason to.

05.04.12
by

The Knauss Plan, for now

Clorox CEO Don Knauss has been making the rounds, first on KQED yesterday, then on KNBR this morning, and finally on The Game during the lunch hour. All three are worth consuming, so if you haven’t done that yet, get through all three links, then come back and read the rest of this post. Cool?

…

Okay. Knauss was very consistent with his messaging, which should be no big deal for a CEO of a high profile public company. The bullet points from his pitch were these:

  • Knauss and other East Bay business interests would like to meet with Lew Wolff and perhaps MLB to discuss options in Oakland.
  • If current ownership (Wolff/Fisher) continues to believe that there is no shot in Oakland, Knauss has put together a potential ownership group with members in the East Bay and others in SoCal that could buy the team, keep it in Oakland, and build a ballpark.
  • The group has identified three sites in Oakland. The preferred sites are the two on the waterfront: Howard Terminal and Victory Court. The Coliseum complex is the third site, though it is not “preferred”.
  • Financing for the stadium would be patterned after the model the Giants used to build AT&T Park. This includes the selling of seat licenses.

During The Wheelhouse, Mychael Urban pressed Knauss for answers about plan specifics and why the group has never directly contacted Wolff. Knauss replied that in the first case, he wanted to at least until after the May owners meetings (though he didn’t say anything would be released at that point), and in the second case, he “wanted to respect the process” MLB has put forth with the commissioner’s panel and so forth.

Well then, how does one go about making it work as the Giants did in China Basin? Thankfully, some very smart economists – John M. Quigley, Eugene Smolensky, and Stephen J. Agostini – have gone to the trouble of diagramming the process.  The flowchart below comes from a paper titled Stickball in San Francisco. It’s better known as the San Francisco Giants’ case study in the book Sports, Jobs, and Taxes by noted sports economists Roger Noll and Andrew Zimbalist. Ready? Here’s the secret recipe:

stickball

Step-by-step instructions on how to follow the Giants’ plan.

 

See? Easy peasy, no sweat right? Sure, there are a few things that are different, such as the need for a ballot measure. Oakland has long claimed that it doesn’t need one. That claim originated from two theories: that either Oakland could leverage redevelopment money or the powers within the Coliseum Authority (JPA). The latter still stands technically. The former? As long as Oakland’s pledge to take care of costs to put the site together stands, and those site costs keep rising (Victory Court was at last count $250 million), the Mayor and City Council are going to have an extremely difficult time convincing the voters that they shouldn’t vote on it. Even in the Coliseum’s case, going without a vote is inherently very risky because many of the people on the JPA board are standing office holders, such as Ignacio De La Fuente and Scott Haggerty. The stench of the Mt. Davis deal still hangs thick and heavy over the Coliseum, and the Authority is having trouble refinancing existing debt at the complex. Does anyone honestly think a $2+ billion megaproject like Coliseum City won’t go to a vote? The project is calling for its own streetcar! Maybe Knauss will don a Harold Hill costume the next time he does a press conference.

Then again, Knauss expressed a preference for one of the waterfront sites. We know that Victory Court is incredibly expensive and that some current landowners aren’t exactly going to roll over for a ballpark, even though they are great Oakland supporters. Maybe it’s time to revisit Howard Terminal one more time. It’s difficult to see how the Howard Terminal site would work. Matson, one of the key corporate supporters at yesterday’s press conference, consolidated operations at HT several years ago. There’s no readily available place to relocate Matson should they give up HT. I suppose it’s possible they could give up a portion, say 15 of 50 acres, in exchange for some kind of break from the Port. Then it just be a matter of dealing with the nearby power plant and prepping the site, which would require completely new pilings/foundation work (just like AT&T Park). Judging from the price tag for SF’s Piers 30 & 32, the cost would be around $80 million to start plus whatever the price is to compensate Matson. Whatever that total is, it’s probably cheaper than Victory Court. (Personally I’d pick HT just because of its proximity to Beer Revolution, but that’s just me.)

Finally, there’s the matter of seat licenses. Knauss and his partners think there’s a market there. Lew Wolff has said there isn’t a market from the beginning. Who’s right? I’ll defer to Wolff, who has access to the season and advance ticket sales rolls and has a pretty good idea of what people are willing to pay for tickets and premium offerings. The Giants’ $255 million financing package included $75 million from 15,000 charter seat licenses. That’s a $5,000 average upfront payment (available in installments, of course). Is the market really there as Knauss claims? Consider for a moment that the 49ers are selling seat licenses right now. The Raiders, if they get a new stadium built at the Coliseum, will require their own seat licenses. They may also be in the mix for whatever venue the Warriors cook up. The A’s would be entering the fray with, if using the formula the Giants used, 20% of the ballpark cost, or $100 million of seat licenses. The A’s don’t have the Giants’ 25,000-strong season ticket roll, or the reputation of having a large number of premium ticket buyers (Green Collar Baseball, anyone?). So you’d have three, possibly four teams selling seat licenses along with more expensive tickets. That’s a good way to oversaturate the East Bay, a market which has historically shown trouble maintaining solid fanbases unless the teams are ultra-successful. These financing terms don’t work unless great support can be maintained through thick and thin, or at least if some of the load can be sloughed off to corporate interests. Otherwise someone has to make up the shortfall, and as we saw from the OFMA debacle, the results can be disastrous. MLB and Selig know this, and they won’t be impressed just because someone says “we can work it out”. Selig will want to see pledges, upfront payments, real tangible proof that seat licenses can be supported and that there won’t be a shortfall that drags down the franchise. The CBA has a provision that the A’s have to come off revenue sharing by 2016, unless they’re still at the Coliseum. MLB is not going to approve a plan that creates huge risk for the team and causes them to stay on revenue sharing even with a new ballpark.

Perhaps the best predictor of how portable the Giants’ financing model is comes from a 2002 AP article which quotes former owner Peter Magowan and  Rob Tilliss, the JP Morgan consultant who put the deal together. Magowan:

“You cannot expect a private ballpark to be built in Cincinnati or Milwaukee, there’s not the economic base there. It’s not the Silicon Valley,” he says. “And we couldn’t do it today. We were very lucky in our timing we had low interest rates and a very good economy.”

Tilliss:

“It definitely is not a one-size-fits-all kind of model.”

Knauss’s argument is that economically, Oakland is closer to San Francisco or Silicon Valley than it is to Cincinnati or Milwaukee. I find that hard to believe.

05.03.12
by

The enemy of my enemy is my friend, Part Deux

Shortly after Commissioner Bud Selig convened his three-man panel to figure out what to do with the A’s, all sorts of political machinations started happening. That included then-Oakland City Attorney John Russo (now City Manager of Alameda) penning a lawsuit threat against the A’s. I wrote back then:

What recourse do the Giants have, then? They can try to go to bat for Oakland, even though they have no history of doing that previously. Even though, in moving to China Basin, they’ve actively siphoned East Bay fans away from the A’s. Even though they’ve held a regional hegemony for decades. It wouldn’t be hard to posture themselves as saviors of baseball in Oakland – no matter how strange that sounds – as it wouldn’t require much effort and could be done in a sort of stealth mode. It wouldn’t be difficult to get a few letters from prominent pols in order, so no problem there either. The best part is for the Giants is that it works. It paints Wolff as a villain and Oakland as a victim, despite the backstory’s greater complexity.

Eerie, no?

Now we have word from the Trib that Jean Quan has met with Giants ownership. That wouldn’t be the first time. Perhaps it’s completely altruistic, in that they’re instructing her on how to put together an AT&T Park-style stadium deal, the kind that Clorox CEO Don Knauss is pursuing. (Knauss also had a lengthy interview with KQED.) Then again, this is the same Giants ownership group that may have pulled a power play to kill the Piccinini-Dolich group’s chances to buy the A’s, because the Giants didn’t want an Oakland-based group owning the A’s:

More likely, Piccinini suspects the San Francisco Giants ownership had a hand in convincing Selig to make sure the deal never materialized, especially since Selig has called the A’s move from Kansas City to Oakland “a terrible mistake.”

“I can tell you there’s an executive with the Giants, who shall go unnamed,” Piccinini said. “I ran into him at a Warriors game. He said, ‘I hear you’re getting involved with the Padres. We want you in San Diego; we just didn’t want you here.’ “

Speaking of Piccinini, he’ll be available soon if he wants to deal with the struggle to be an owner again. Piccinini is part of the Moorad group who were teased the Padres, only to have the rug pulled out from under them. Moorad won’t be able go after another team, knowing that there are permanent veto votes against him within the Lodge. Much of the rest of the Central Valley base of the ownership group should be available, and they could pull in another frontman – Andy Dolich, perhaps?

If Piccinini’s right, the Giants don’t care for the A’s in Oakland or anywhere else in the Bay Area. That makes it frustrating to see Quan consult with the Giants. The Giants aren’t doing the City of Oakland any favors. Just because they may have a somewhat allied interest (keeping the A’s out of San Jose) doesn’t mean they are allied.

If Quan’s smart, she’ll ask for some of the SF sponsors that Oakland will need because as much as the East Bay wants to puff its chest out , the pickings are slim. The Chron 200 is an annual list of the Bay Area’s largest independent, publicly-traded companies by revenue. Generally these are companies with revenues over $100 million annually. Some private companies, like Bechtel, or subsidiaries, like Matson (Alexander & Baldwin), and nonprofits (Kaiser Permanente) are excluded. Distributed by region, San Francisco has 19 of 200, with 5 in Marin County and 26 in San Mateo County. Santa Clara County has 102, or 51% of the list. Oakland has 3 companies on the list, the East Bay in total has 38.

Chron 200 list by city/county-region

If you combine SF, San Mateo, and Marin Counties, you get 50 companies. That’s not significantly greater than the East Bay’s 38 – or 40 if we include Kaiser and Matson. Straight up it would appear that there’s enough corporate strength in the East Bay to make a privately financed, $500 million ballpark happen. But the Giants’ argument for years has been that they needed the South Bay to finance AT&T Park. If that’s true then there’s a logical incongruence at work. Either the South Bay was required and there’s no other way but to include them, or the South Bay wasn’t required and the strength of the West Bay is enough. So which is it?

Also, check out the imbalance of companies in the Giants’ designated territory and the A’s. The Giants have over 75% of the Chron 200. The A’s have less than 20%.

The secrecy of the mystery ownership bidder is also a bit baffling. Lew Wolff has said that no interested party has asked him directly about selling the team. Instead, whoever’s interested has chosen to use back channels to engage Wolff – once. What is the point of that? If the East Bay coalition’s goal is to first work with the current ownership group to develop a plan to keep the A’s in Oakland, why have they never directly called Wolff once? They’ve gone semi-public twice in the last several months to indicate there’s an ownership group in waiting. Seems to me it’s a lot harder to put together a press conference than to call Wolff or arrange a meeting. For whatever reason, they haven’t done the latter. In the last comments thread, a question was posed, “Why doesn’t Lew listen to what these guys have to say?” I think the answer is that they have to present something to the man first. They’ve presented a plan to MLB three years ago that went unanswered. If they want to work with Wolff, they might want to first try to, you know, work with Wolff instead of posturing. It’s somewhat embarrassing that Mayor Quan has probably spent more time talking the Giants brass than the A’s. If A’s ownership is the enemy, don’t pussyfoot around it or hedge. Declare it and get to work. Otherwise it’s just another exercise in scoring PR or political points. And the only real winner in the end is the Giants.

05.03.12
by

Oakland Press Conference at Clorox HQ (Updated)

Today at 10 AM, there will be a press conference at Clorox headquarters in Downtown Oakland about efforts to keep the A’s in town.

Clorox is handling the media advisories for the event. That’s all I know for the moment. Since I’m still in San Diego, I won’t be able to attend. I’ll keep an eye out for news as it comes in.

…

Update 10:30 AM – A tweet from KRON’s Haaziq Madyun:

…

11:10 AM – From Baseball Oakland’s Facebook page:

Today Clorox CEO Don Knauss has announced continued support by the East Bay buisness community in Keeping the A’s in Oakland. He is willing to work with current ownership, however if that cannont happen he is willing to work with another group that is willing to buy the team and pledge support for them (sic) 

11:30 AM – I just got off the phone with Lew Wolff. He confirmed that the team is not for sale and that ownership has explored all options in Oakland.

…

11:55 AM – Oakland Mayor Jean Quan has put out a press release.

FOR IMMEDIATE RELEASE

May 3, 2012

Clorox and Other Major East Bay Businesses Join Mayor Jean Quan to Voice Their Support
to Keep the A’s in Oakland

OAKLAND, CA– Chairman and CEO of The Clorox Company Don Knauss, joined by several of the largest companies located in the East Bay, today stood with Oakland Mayor Jean Quan to announce support for keeping the Athletics baseball team in Oakland.

At the event, Knauss stated, “Clorox strongly and enthusiastically endorses the efforts of the East Bay business community and City of Oakland to keep the Oakland A’s here in a new, world-class stadium. As former president and CEO of the Minute Maid Company, I was actively involved in the design of the new Houston Astros downtown ballpark and subsequently secured naming rights to change the name to Minute Maid Park. From that experience, I can speak first-hand to the revitalization a world-class ballpark can bring to a city. Certainly, Oakland would benefit greatly from the jobs, tourism and vitality a new stadium would bring.

“The business community is committed to helping drive an effort to support the current ownership group in their quest for a new stadium so long as they are committed to staying in Oakland,” Knauss went on to say. “However, if the current ownership group is not committed to Oakland, we want to make clear that Oakland and the East Bay business community are ready to step up to the plate to help ensure the A’s stay home where they belong in Oakland. We’re confident we have identified an ownership group with the financial wherewithal to buy the team, keep them here and get a new stadium built.”

Added Oakland Mayor Jean Quan, “I want to thank Clorox and members of the business community for doing what is necessary to keep the A’s in Oakland. Developing a world-class sports, entertainment and business complex as a new home for the A’s will generate thousands of jobs and create economic development opportunities for this City.”

At the event, the East Bay business leaders said they are prepared to work with the City, County and A’s ownership to help secure corporate sponsors in the following areas:

  • Stadium Naming Rights
  • Major Corporate Sponsorship Commitments – Significant anchor sponsorships, including seat licenses and luxury boxes. (A number of the companies have already made substantial deposits into an escrow account to demonstrate their seriousness when it comes to such sponsorship commitments.)
  • Other Regional Sponsorships — Given the size and breadth of the East Bay, home to nearly 2.5 million people, representing one of the country’s strongest economic markets and huge marketing and sponsorship opportunities, the business leaders made clear they would work with the City and the County to identify additional corporate supporters throughout the entire Bay Area and beyond, including Sacramento and Stockton.
  • Reaching Out to Business Partners – Given the size of the companies, many have relationships with business partners who would have a strong interest in supporting the team and the region as sponsors.
  • Identifying Specific Industry Anchor Sponsor Opportunities – Pursuing opportunities for the kind of anchor sponsorship relationships Major League Baseball teams typically have in sectors like the airlines, health care, car manufacturers, beverage and food companies, energy companies and major consumer companies.

Among the East Bay businesses represented today are:

  • Bigge Crane & Rigging
  • Jobs and Housing Coalition
  • Kaiser Permanente
  • Matson Navigation Company
  • Oakland Metropolitan Chamber of Commerce
  • Pandora Internet Radio
  • Reynolds & Brown
  • Safeway
  • Signature Development Group
  • Wendel Rosen Black & Dean
  • World Market

…

If the team is not for sale, and East Bay backers would prefer new ownership, where does that leave us? No different than yesterday or a week ago, I suppose. The game plan by many of the Oakland-only community has been to wait out the process and hope that Selig denies Wolff the rights to San Jose, then come forward with a new ownership group and stadium plans, which may or may not be tied to Coliseum City. The problem with this is that how do you impress Selig, who according to many of the community is out to get Oakland, without some serious level of detail and planning? They’ve had over three years to put something cohesive and coherent together. Press conferences like these, which seem to occur every couple of months, are good at generating media interest. Beyond that, where’s the substance?

Clorox deserves a lot of credit here. Don Knauss is driving this forward, and as I’ve mentioned before, every stadium campaign needs a champion. Knauss might be that guy.

There’s also one key difference between what’s happening with the A’s and what’s going on with the Sacramento Kings. The Maloofs are broke. The Wolff/Fisher group is anything but broke. The only party who can “force” a sale is Selig, and he’d need a very good case to make that happen.

04.25.12
by

A’s not on May owners meeting agenda

Small item in John Shea’s report today:

Managing general partner Lew Wolff, who attended Tuesday’s game, conceded that the A’s stadium issue won’t be on the agenda at the May 16-17 owners’ meetings, and he wouldn’t guess whether it’ll be included at the next owners’ meetings in August.

As long as Bud Selig keeps leaving the A’s and Wolff twisting in the wind like this, he’s the one who’s going to have to fix it. The A’s lease runs out after 2013. Selig should have to be the one who negotiates any short or long-term Coliseum extension, not Wolff. The Coliseum Authority and Wolff aren’t exactly buddies these days. Then again, Wolff and Selig supposedly are. With friends like these…

04.24.12
by

AEG looks to add NorCal to its empire

A very clever strategy is emanating from facility operator Anschutz Entertainment Group. It’s a two-pronged affair based in Sacramento and Oakland. The movement draws upon what can be considered serious deficiencies in both markets in their inability to attract certain types of events and visitors. Most importantly, it offers hope to both cities, which are both in danger of losing their respective pro sports franchises.

For San Jose Earthquakes fans, AEG may as well be a four-letter word. The company owned the Quakes franchise as part of its initial MLS holdings. When AEG was unable to forge a new stadium deal in San Jose, the team was abruptly moved to Houston in 2006, making the parent company persona non grata in the South Bay. AEG came back in 2008 with a small move, taking over for Live Nation as the operator of The Warfield in SF.

In Sacramento, AEG is seen as the facilitator for the Railyards Entertainment and Sports Complex. The backing out by the Maloof family has for now killed the plan, though it’s possible that AEG could resurface as a key driver with or without the basketball Kings. Should Sacramento lose the Kings, they’d have the option of building an on-spec arena, similar to former Kings home Kansas City when it built the Sprint Center. That’s a far different scope from Oakland, which is looking to keep three franchises at home via at least two new venues plus a convention center and hotel. Oakland’s model is the AEG-run LA Live complex and LA Convention Center.

AEG is the premier arena operator in the country, with Staples Center as its crown jewel. It has the experience to make cities listen when they come calling, and the weight to make cities cower when threatening to attract a team, as evidenced by AEG’s NFL pursuits. While dangling its own success in front of potential suitors, it forges ahead with its plans to expand its SoCal empire by working on a football stadium-cum-convention hall. While not a short-term likelihood, the threat and possibility remains into the future, and would hugely benefit AEG in two key ways: it would make LACC more competitive with San Diego and Las Vegas for conventions, and it would create the ultimate flexibility for all of its LA venues, which happen to be within blocks of each other.

AEG's Downtown LA operations provide great flexibility and huge traffic

To understand what make LA Live unique, it’s important to look beyond Staples Center. LA Live has two venues of its own: the 7,100-seat Nokia Theatre and 2,500-person Club Nokia, both of which are essentially auditoriums. They slot in below Staples Center for booking concerts, which is necessary because Staples is home to three pro teams and at least 126 home dates per year. In most other cities an arena operator would use a curtain system to reduce capacity at a large arena. AEG doesn’t need to do this sort of “half house” setup with Staples much, instead it can push a show to the Nokia Theatre. Staples famously hosts the Grammys every year, while Nokia hosts the Primtetime Emmys, MTV VMAs, and the finale of American Idol. Club Nokia mostly serves as a venue for up-and-coming and smaller acts. The Convention Center churns plenty of day business and drives demand to local hotels. Both convention and entertainment visitors benefit local restaurants and bars, some of which are in LA Live. It boils down to the equivalent of the population of the Bay Area visiting downtown LA every year, spread out among 2.5 events per day.

Oakland wants this kind of traffic, so they’re looking to drop SMG like a bad habit then partner up with AEG now and into the future. It’s going to be difficult to pull off. A third of AEG’s visitors come from the convention center. To build a competitive center in Oakland, the facility would have to surpass Moscone, San Jose, and Santa Clara in terms of space. It would require at least one, probably two anchor hotels attached to the convention center. A thriving commercial and retail district wouldn’t hurt attracting people and conventions. Oracle Arena is a good, modern arena thanks to the 1996 renovation, and AEG is promising to maximize utilization of the arena to its full potential and provide consulting for the Coliseum City concept.

The inherent risks are timing and cost. AEG built Staples Center prior to the 1999-2000 NBA and NHL seasons. The Nokia Theatre didn’t open until 2007, after Staples as AEG responded to market conditions. Club Nokia opened the following year. For AEG to be that involved and willing to invest in Oakland, it would have to recognize similar market potential and a chance to dominate the market the same way it does in LA. The arena part will be difficult to pull off as Sharks Entertainment will always be competitive with HP Pavilion. The Warriors could build an arena in SF, relegating Oracle Arena in the process. Another Planet Entertainment controls several smaller theaters throughout SF and the East Bay, providing natural competition in the process. There is no proper 7,000-seat auditorium in the Bay Area, pushing shows of that size to the arenas unless AEG sees fit to build one (the Bill Graham Civic, as historic as it is, is really a gym). Plus there is no shortage of 2,500-seat venues in the Bay Area: Fox Oakland, Paramount, Warfield, SF Masonic Auditorium, and the San Jose Center for the Performing Arts. AEG isn’t going to bring a fully-formed Coliseum City on Day 1. It would have to be phased in over many years, with no guarantee that much of what’s being promised will be built.

For AEG, the best part is that in making these deals, it’s getting exclusivity for usually a year or more for a very small price while making a little money to boot. AEG has been willing to invest in venues to some degree as it did with Sprint Center. However, Phil Anschutz is not about giving away the farm, as witnessed by his hardball dealings with the NFL and the contribution cap AEG paid for Sprint Center. Maybe something will happen, maybe not. Either way AEG is the first one in and keeps competition out, while getting a better understanding of how to exploit a particular market. As great as LA Live is, it shouldn’t be considered easily repeatable. Sprint Center is a more realistic and perhaps cautionary example. The arena is the second busiest in America according to Pollstar and is highly profitable by AEG’s standards, though it’s a $13 million annual drain on the city’s coffers. Sprint Center is well integrated with KC’s $850 million Power and Light District development. There remains no major pro team. AEG appears to be happy with whatever business model works best for it whether it’s three teams or none, civic pride not being a great priority.

One other curiosity about AEG: as interested it is in the NFL and as extensive as its holdings are in hockey (LA Kings), basketball (Anchutz’s minority share of the Lakers), and soccer (LA Galaxy, Houston Dynamo), there’s one glaring omission on its resume: baseball. Does AEG care about baseball at all? It doesn’t operate any ballparks, nor does it own a minor league team. It doesn’t seem to have any relevant experience with baseball. Its new AEG Sports division has no baseball interests at all. Judging from AEG’s track record, I have to think its priority list would look like this:

  • Concerts
  • Soccer
  • Conventions
  • Hockey
  • Football
  • Basketball
  • Baseball?

Judging from that, maybe AEG would be more interested in bringing a MLS team to Oakland than in keeping the A’s there. In regards to the A’s, AEG’s presence is similar to Larry Ellison in that certain factions would love for either of them to be interested in the A’s, but neither has shown any sign of interest to date. A clause in the Coliseum management contract dictates that AEG can’t talk to teams about moving, which I suppose might have teeth if a team were bound to a long-term lease (only the Warriors are). It gives a new twist on the Coliseum City exercise being a feasibility study.

04.19.12
by

A Streetcar Named Aspire

Today the commissioner said that the A’s need a new stadium… and that’s about it.

In Billy Beane’s weekly slot on The Drive, he mentioned that the team/ownership is at “the end of the process” and that regarding the recent news “there seems to be a lot of smoke, and where there’s smoke there’s fire”. Not exactly revealing, but at least it lines up with Selig trying to broker a deal between the A’s and Giants.

Added 8:50 PM – Joe Stiglich has more on the negotiations that may or may not be happening that no one officially wants to talk about. 

I did find out something revealing about the Coliseum City project. Turns out that as part of the planning for the project, the City is looking at putting in a streetcar or trolley. The streetcar is not part of the Oakland Airport Connector, which is currently under construction. It wouldn’t go downtown or to Jack London Square. Instead it would be a very short trolley, running around one mile in length between the Coliseum BART station and the Edgewater area on the other side of the Nimitz. I’ve racked my brain and haven’t heard of a streetcar or trolley built for what is primarily a sports complex.

I can only assume that the project’s principals and supporters want this streetcar to improve the project’s attractiveness as a potential corporate and commercial hub, since it would provide a direct link to BART and the other parts of the Coliseum City. What’s not clear is why they’d choose a streetcar. A people mover like the Airport Connector would make more sense. An extension to the Airport Connector from the BART terminus through the complex (creating a “U”) would make the most sense, except that station’s design (see pic below) prevents that kind of alignment.

The Airport Connector's alignment runs perpendicular to San Leandro Street and the BART alignment, making it difficult to extend and turn the system.

The crazy thing about this streetcar idea is that it creates a third, disjointed transit option in this relatively small area. Meanwhile, there are far better places to use resources on a streetcar project, such as Broadway (which is getting yet another separate study). Clearly, if the streetcar option gains traction it’ll add a quarter-billion to the project’s $2 billion price tag. Yet it might be considered a necessity if the City wants to lure a big corporate fish.

As Marin County rejected George Lucas’s long-gestating studio expansion project and then ran back to Lucas in desperation only to be rejected by the filmmaker, Oakland City Councilmember Rebecca Kaplan wrote an open letter to Lucas encouraging him to take a tour of the city. Coliseum City has to be at or near the top of places the City would offer to Lucas. Now, it’s hard to envision any locale in Oakland comparing to the pristine Skywalker Ranch or the wonderfully preserved and adapted Letterman Center at the Presidio. And Oakland’s already tried to push Coliseum City in its bid for the Lawrence Berkeley Lab expansion and lost. But if you’re gonna dream big, you might as well go fully preposterous. I know of at least one reader, native Oaklander, and Lucasfilm employee who would weep tears of joy if Oakland got Lucas’s blessing to build the new studio in Oakland.

I couldn't resist.

04.12.12
by

All sides, now

KQED producer extraordinaire and friend-of-the-blog Nina Thorsen has been interviewing many people about the ballpark and potential relocation issue. Today she posted the second in a series, this one focusing on San Jose interests for and against Cisco Field. This follows up on last week’s Oakland-focused segment (which had a bit with our own Jeffrey). Next week will be a comparison of Oakland and San Jose from a bottom line standpoint. All of it is definitely worth a listen.

Something worth a read is a piece by Fox Sports’ Tracy Ringolsby from March 31. Somehow this article eluded me despite my best combing for news, and for that I apologize. Gojohn10 referred me to the article yesterday while we were at the game, and I was so astonished by the statement within that I couldn’t believe it. Sure enough, he brought up the article and I was very surprised. I posted the important blurb in the comments, but I’m putting it into this post so that front page readers will see it. Enjoy.

The challenges for Oakland A’s is not finding a buyer, but rather coming to agreement with the San Francisco Giants on the A’s desire to move their franchise to San Jose.

“Both sides are deeply positioned and I am in the middle of trying to fashion some type of an agreement,” Selig said. “It is very complicated.”

No other two-team market has territorial rights, but the Giants claim they control the San Jose area, and contend that was a critical part of their ability to finance AT&T Park. Giants officials also argue that Lewis Wolff and his partners were aware of that agreement at the time they purchased the franchise from the Haas Family, which is why they were able to buy the team for $180 million.

“It is different because in 1990 when Bob Lurie wanted to move the Giants to San Jose, Walter Haas, the wonderful owner of the Oakland club, who did things in the best interest of baseball, granted permission,” Selig said. “What got lost there is they didn’t feel it was permission in perpetuity. He gave Bob permission to go down there. Unfortunately or fortunately, it never got changed. We are dealing with a lot of history here.”

It’s part of the challenge of being commissioner.

“Nobody ever said it was going to be an easy job,” Selig said.

I’ve never heard or read Selig go into that much depth on the issue before. It’s a clear indicator that he is actually trying to broker a deal, which as I have written here repeatedly, would not be easy to do but could be done.

04.11.12
by

Last night’s crowd

When the weather turns bad, it makes hard core night (Mondays) seem like a piece of cake.

From Chris Townsend's (@townsendradio) Twitter feed last night

The announced paid attendance was 10,670. Obviously the number of people that actually showed up was only a small fraction of that. Blame it on a number of things: rain, ownership, team, stadium, whatever. The real implications of something like this happening are that teams lose money and fanbases look bad. 8,000 no-shows equates to $100,000 in lost concessions revenue. The walk-ups that didn’t occur and the parking passes that weren’t sold also add up. And it makes us look like we’re a bunch of fair weather fans, literally. Are we? I’ll be there today.

One other thing – Tuesday’s are pretty much out for me, so yes, I was secretly rooting for a rainout so that I could see a double-dip today.

03.26.12
by

New HOV lanes, BART-to-SJ good news for A’s fans

If you’re one of the 80% of A’s fans who drives to games, you just might get a quicker trip to the Coliseum in the future, thanks to a flurry of new road projects that Caltrans is starting this year.

According to Mr. Roadshow, the Bay Area is getting $5 billion to be spread among 19 projects. While none are in San Francisco, San Mateo, and Marin Counties, the bulk of the work (12 projects) will be in Alameda and Santa Clara Counties. Key among them are the extensions of carpool lanes along the Nimitz:

  • I-880 from Hegenberger Road in Oakland to Davis Street in San Leandro ($108 million)
  • I-880 from CA-237 in Milpitas to US-101 in San Jose ($31.5 million)

The South Bay project is less expensive than the East Bay project because most of the groundwork was already done for the former as part of a previous 880 widening project a decade ago. Combine these two with ongoing improvements to the Nimitz and improved interchanges at CA-92 and CA-262/Mission Blvd., and it should eventually be much smoother sailing in each direction for carpoolers, who are the usual profile for those who drive to games in Oakland.

If the A’s move south, the carpool lanes, along with at least 4 lanes in each direction the entire way between Oakland and San Jose, will help funnel gameday traffic. However, it’s not a complete, direct solution. Once a driver coming south along 880 hits the 101 interchange, the freeway will revert to not having carpool lanes, which could create congestion there and along surface streets as they try to make it the last two miles. A good way to go might be the Gish/10th Street exit on 880 South just before 101, as it’s a quick detour to downtown and SJSU.

The big ticket item is $2.3 billion for the 10-mile BART extension from Warm Springs (its own separate project) to Berryessa in North San Jose. Again, it’s not a direct trip to Cisco Field, but it’s a lot closer than Fremont and the only way to get to downtown San Jose is to first build to Berryessa.

Not related to Caltrans funding is one more big mass transit project, Caltrain electrification. The long-awaited conversion from diesel to electric trains will create an opportunity for more frequent service, which will drive down the operating cost per trip and help keep Caltrain solvent. To achieve this, Caltrain cut a deal with the state’s troubled high speed rail authority to devote $700 million towards the electrification project. To support the more frequent service and greater number of riders, the San Jose, Millbrae, and San Francisco stations will be expanded. The $1.5 billion project is expected to be completed by 2020. HSR is teetering right now politically, so it’s not clear if that project will ever be built. This money shift appears to be an acknowledgement by the authority that it may need to start in the most heavily impact areas first, before it commits to the full intra-state backbone. The move could backfire in the long run, as it may convince stakeholders and citizens that high speed rail would be best if it terminated in San Jose, not San Francisco.