Category Archives: Owners

02.20.15
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Coliseum City EIR Final Draft now available, JPA postpones lease extension vote, Saperstein comments

The Coliseum City EIR Final Draft was made available around lunchtime today. It’s 17 MB in size and worth looking through. As I run through it I’ll post my observations on Twitter with the hashtag #ColiseumCityEIR.

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(Update: As pointed out by Floyd Kephart, the vote was over the lease. The JPA isn’t a party to the ENA, only the City and County can be among public entities.)

Over at the East Bay Express, Steven Tavares reports that the Coliseum JPA postponed a vote (again) to approve the Raiders’ lease extension. Tavares got comments from various JPA Board members, including outgoing and incoming Board Presidents Nate Miley and Larry Reid. While neither said why the postponement occurred, both indicated that certain aspects of the deal don’t look favorable to the county. Miley went on to talk about some of the Coliseum City issues we have talked about on this blog many times: hundreds of millions in infrastructure costs, the Coliseum’s outstanding debt, and the value of the land. Miley even indicated that some public contribution may be required for a Raiders stadium, which should raise some eyebrows in the East Bay.

Larry Reid characterized New City as “90% there” in terms of getting a team commitment, that team being the Raiders. Yet the Raiders’ joint announcement with the Chargers about a shared stadium in Carson took everyone by surprise. Reid still believes Mark Davis wants to keep the team in Oakland, and really, what choice does he have? The only shocker at this point would be if the JPA, City, and County kicked the Raiders to the curb after spending so much time, money, and energy on Coliseum City.

About that time, money, and energy:

Meanwhile, local officials met with NFL officials in January, said Reid. Their assessment was the city and county had made no progress in efforts to build a new stadium since a similar discussion between all the parties a year and a half ago. ‘They made it clear that the city and the county wasted the last eighteen months,’ said Reid.

Again, don’t pay attention to what people are telling you about how Coliseum City is progressing. When teams commit, when real actions happen to advance the ball, then you’ll know. As a wizard once said,

johnwooden380232

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Last item today comes from a commenter on the blog named “Let’s Go Oakland,” who snipped a piece of a Facebook thread and dropped it in the comments.

wow

Guy Saperstein is a minority partner in the A’s ownership group

Assuming this is the real Guy Saperstein speaking, it sure sounds like the ownership group is still in lockstep in their position on San Jose, despite San Jose being off limits for the foreseeable future. Saperstein has long been based out of Oakland/Piedmont. Regardless, the only group the A’s can actually make a stadium deal with at this point is the Oakland/Alameda County/JPA triumvirate. As the fog enshrouding the Raiders and Mark Davis recedes, maybe they’ll actually make a decision on their future. Hopefully it doesn’t hurt the A’s in the process. If Davis can make a deal with Kephart, there will be a Raiders stadium at the Coliseum and the A’s can slide down to San Jose. If the Raiders can’t work something out, they’ll jet to LA while the A’s work out a new ballpark deal at the Coliseum complex. Those are the two most realistic scenarios that can be sussed out at this point. Anything else is wishful thinking.

 

02.19.15
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Raiders, Chargers announce shared stadium plan in Carson – huge leverage/hedge play

The Chargers have expressed real frustration with the City of San Diego over the last several days. So announcing an LA stadium plan seems like the next logical step. But the Raiders? Say it ain’t so, Mark!?!?

It's like the 49ers' digs, only 400 miles south

It’s like the 49ers’ digs, only 400 miles south

The LA Times’ Sam Farmer has the scoop, describing the deal as a Plan B for both teams if they can’t work out “publicly financed” stadium deals in San Diego and Oakland, respectively. The teams quickly followed up with their own joint statement, explaining their plans with a surprising amount of detail – at least at this early stage. The statement:

  • We have both been working in our home markets to find a stadium solution for many years, so far unsuccessfully.
  • We remain committed to continuing to work in our home markets throughout 2015 to try to find publicly acceptable solutions to the long-term stadium issue.
  • We also both understand and respect the NFL’s relocation process, and we intend to adhere strictly to the relocation procedures that the League has set forth for Los Angeles.
  • In particular, we respect the right of the NFL’s owners to decide on all Los Angeles-related relocation issues and understand that any relocation application that is filed for Los Angeles must obtain the approval of three-fourths of the NFL’s owners.
  • Both teams have kept the NFL owners’ committee on Los Angeles, and the Commissioner, fully informed about our joint efforts.
  • We are pursuing this stadium option in Carson for one straightforward reason: If we cannot find a permanent solution in our home markets, we have no alternative but to preserve other options to guarantee the future economic viability of our franchises.
  • In short, for the remainder of 2015, we intend to move down two tracks simultaneously:
    • On track one, we will continue to work in our home markets to find permanent stadium solutions that are publicly acceptable.
    • On track two, we will work in Carson to preserve our options, and the future economic viability of our franchises, in the event that our efforts in our local markets fail.
  • Throughout this process we will respect the rules and procedures set forth by the League and defer completely to the ultimate decision of the NFL’s owners.

There’s a lot to unpack here, so let’s start from the top. The first five bullets are meant to curry favor with the true audience for this statement, the NFL and its constituent team owners. It’s Dean Spanos and Mark Davis saying to the owners, Look, if you want someone who’s going to play by the rules, who won’t go rogue *cough*Kroenke*cough, it’s us. Stan Kroenke’s actions have taken much of the leverage over LA away from the NFL despite the league’s protestations, so the play here may be that if Kroenke gets stuck in litigation with the league, Spanos and Davis may benefit by getting the two LA slots. By the time the dust settles, the Chargers and Raiders will already be in LA and the Rams may be stuck in St. Louis. Most importantly, Farmer’s report revealed that the Chargers and Raiders bought the 168-acre plot of land in Carson on which the stadium would sit. That’s more than a mere verbal threat, that’s real action.

Kroenke, who didn’t buy land in Inglewood to sit on it, probably anticipated this, while having talks with Spanos and Davis about partnering up in The Wood. He claims to have a privately financed stadium there. Spanos & Davis claim to have a privately financed stadium in Carson. Let’s be clear, though, TWO privately financed stadia in LA don’t work. Even with a market the size of LA, that’s too many suites to sell, too many sponsorship commitments. Two stadia would compete with each other for Super Bowls, NCAA playoff games and any number of other big events, effectively cutting into each other’s profitability and feasibility. If we want to term this a race to LA, there are at most two teams that can win and one stadium plan that can win.

That’s the hedge part, or so we’re being led to believe. The leverage play from Spanos and Davis is that they’re still working on plans in their hometowns. Spanos has allowed team lawyer Mark Fabiani to be the bulldog, quickly getting into a war of words with San Diego Mayor Kevin Faulconer. Davis, who appeared to say the right things only a month ago when he said he wanted to pursue his own stadium plan, is now running back to Floyd Kephart and Coliseum City. If Davis wasn’t on board with CC before, what’s going to change now to make him sign on, besides being backed into a corner? Having LA as an option is a hedge against that very possibility. If you look at what’s been happening in both cities, there isn’t much progress. Neither city wants to to provide any public funding. Both cities’ greatest asset is land, which isn’t nearly as good as money. The Chargers are being aggressive, whereas the Raiders are waffling.

The Chargers’ attacks on San Diego can be considered the first blink after Kroenke’s plan was unveiled. This joint-stadium plan is the second blink. Who blinks next? San Diego and/or Oakland, in order to force everyone to the table? Or is it Kroenke, who may want to accelerate his plan in order to keep others from taking his leverage away? Or perhaps it’s Roger Goodell, who is in danger of losing control over the process?

The boldest move would come from either Faulconer or Oakland Mayor Libby Schaaf. These cities don’t have to be pawns in the stadium extortion game, one that has gotten exponentially more complex because of the number of factors involved. They could call this bluff. The only winning move is not to play, right? It’s one thing for the teams have land. It’s another to actually assemble a shared stadium deal that works for both teams. While MetLife Stadium can be considered a success for the Giants and Jets financially, in use it’s a lifeless gray mess, terribly lacking in home field advantage and absent either team’s character or signature. Do Spanos and Davis really want to go down that path? The LA stadium renderings, done by Warriors’ SF arena firm Manica Architecture, look like Levi’s Stadium 2.0 – similar caste system bowl layout, red seats, and no façade. At least there’s a partial roof.

In the end, the promise of a huge valuation raise may prove too alluring to dismiss for these teams. It’s easy to give lip service in trying to build at home, but it may be the toughest challenge to stay. Even with things moving as fast as they are in 2015, it’s still too early to predict how this is all going to shake out. There are many, many moves left in this game. It’ll be fascinating to watch, that’s certain.

02.11.15
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Raiders withhold Coliseum rent as leverage play vs. Oakland

Mark Davis doesn’t have a ton of cards to play against Oakland, other than the usual “I’ll take my team elsewhere” card, which has half-played by entertaining talks with LA and San Antonio. He pulled one out this week, refusing to play the $400,000 rent bill on the Coliseum for the 2014 season. We covered the lease terms in November 2013, when the last Raiders lease deal was made.

According to Matthew Artz, the Raiders are paying rent on their Alameda training facility, which makes withholding rent a rather petty move. What kinds of concessions could get from Oakland/Alameda County at this point? They’re certainly not going to sign over development rights to the Coliseum over a measly $400k. Though somehow Davis has been depicted as a “more willing partner” for Oakland than Lew Wolff, his actions say differently: meetings in LA/SA, repeatedly talking about how he’s doing his best while not creating his own plan until very recently.

It would be one thing if Davis were angling to move to LA for the 2015 season. The NFL has put the kibosh on such a move for 2015, so what reason would Davis hold out? The answer probably lies in the current lease. Besides the rent for the Coliseum and training facility, there’s also the matter of the parking revenue split between the JPA and the Raiders. At the moment that’s a 50/50 deal, with regular parking prices capped at $35 per car, per game. The opening of Levi’s Stadium has bumped the going rate to $50, so Davis may be eager to up the charge, a move that’s accounted for in the current lease. Even if that were the case, it can’t make much of a difference:

  • $15 hike * 10,000 parking spaces * 10 games = $1.5 million, split 50/50

The Raiders would net less than $750,000 after the City collects its parking tax. It’s truly a piddly amount of money for a pro football team.

If it’s something else, like a cut of concessions revenue, Davis should’ve acted before allowing Wolff to take it off the table for upcoming years. He’ll get a chance to sell ads on the new scoreboards without having to spend a dime on the project. It’s a head scratcher why Davis would do this.

Then again, maybe this is all a bluff to see how the reciprocal and related parties act. Would Oakland and Alameda County start getting ugly with Davis the same way they did with Wolff last year? Would Davis try to see what the NFL might do to back him (or not)? Davis has already said he doesn’t want to have the Raiders play in Santa Clara, and that’s the obvious local Plan B for Roger Goodell if negotiations got tense. He won’t be able to use this issue to force an LA move because that doesn’t fit into the league’s plans. If Davis is trying to score points in order to get a premier spot in LA, it’s an odd way of doing it.

I doubt that this discord will turn into anything protracted. The A’s-Oakland parking dispute turned into a $3 million issue because Wolff preferred to let it fester until the next lease negotiations, three years down the road. Davis doesn’t have time to let anything fester. The Raiders have to play somewhere in 2015, and preferably beyond. There are no indications that public officials want to to stick Davis with a locked-in multiyear lease, as they’ve been perfectly willing to go year-to-year for the time being as the larger Coliseum City deal is worked out.

Oakland, and especially the Coliseum, is a sort of economic paradox for both the Raiders and the A’s at the moment. Deals there are potentially the most frictionless, yet it can most realistically happen if one of them steps aside. Yet each team has its eye on more lucrative markets that they might consider worth the friction. If one of them “wins” Oakland, the other will get to go to the more lucrative alternative. The “winner” will have the challenge of remaking the Coliseum to benefit not only themselves, but also the City and nearby communities. Oakland as both prize and booby prize? Somehow it makes sense.

01.31.15
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McKibben to become next JPA Executive Director, Raiders want ENA canceled?

BANG’s Matthew Artz reports that Scott McKibben will be the next Coliseum Authority Executive Director, filling a position that had been vacant for over six years. JPA counsel Deena McClain has been the JPA’s interim executive director since 2008, when Ann Haley left. Zennie Abraham notes that the vote was unanimous.

McKibben says his goal is to “keep the A’s and Raiders in Oakland.” Having someone with sports experience not limited to negotiating leases is important for the Coliseum’s future.

Andy Dolich endorsed the hire, and McKibben apparently had several recommendations, far above and beyond the previous candidate, the controversial former Assemblyman Guy Houston.

Having McKibben in place will allow the JPA to move forward in concert with the City of Oakland and Alameda County, the partners in the JPA which have been at cross purposes throughout the Coliseum City process for the last three years. If McKibben can lead a team including McClain and the City and County working on the deal terms, they’ll have a much better chance at success. It’s a much better situation than a year ago.

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More interesting is a tidbit from Steven Tavares at East Bay Citizen, referring to AlCo Supervisor Scott Haggerty:

However, Haggerty made it clear Raiders ownership does not favor an extension of the ENA. Over a lengthy lunch recently with Raiders owner Mark Davis, Haggerty said, the team lobbied for the county to vote against the extension with New City. Progress is being made, though, added Haggerty.

Why would the Raiders want to kill the ENA? They wanted to provide a competing bid at the last minute, which may indicate that they already have a developer on board for whatever they’re planning. If the Raiders (like the A’s) now want little to do with Coliseum City and New City Development, it would make sense to cut the middleman out altogether, though that would open up a lot of questions about how to steer redevelopment of the Coliseum. The EIR and Specific Plan are moving forward, and the latter piece is valuable to Oakland for planning purposes. But the feasibility studies that have been done on Coliseum City to date would be lost. New applicants like the A’s and Raiders would commission their own supporting work. It’s almost moot at this point since the ENA is set to be extended again, yet from now on it’s worth questioning the value of New City’s place in all of this if both teams would rather go it alone.

If the teams would prefer to not work with the Coliseum City team, it’ll be up to McKibben and the JPA to figure out a way to bring the teams together. In all likelihood, both teams will provide competing visions with little-to-no room for each other. How the two visions can be merged to both sides’ satisfaction along as the City/County – well, that’s not like scaling Mt. Davis. It’s more like trying to climb Mt. Everest.

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P.S. – Remember those shady looking campaign contributions from Lew Wolff to Rebecca Kaplan during last year’s mayoral campaign? Turns out they were legal. Oh well.

P.P.S. – The Orange County Register reports that Mark Davis teamed up with an investment firm last September in order to buy the Hollywood Park site. That attempt failed. 

P.P.P.S. – Mark Purdy has a different telling of the ENA situation.

Did Haggerty interpret the talks wrong, or is someone from the Raiders covering something up?

01.26.15
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The Manfred era begins – Did anything change yet?

Over the weekend, the commissioner’s torch was officially passed from Bud Selig to Rob Manfred, starting the Manfred era in earnest. Manfred’s tenure as commissioner will depend largely on how he deals with specific business and big picture issues the sport needs to address. Selig handed Manfred a highly effective business model, surpassing $9 billion in revenue in 2014 along with the lengthiest uninterrupted labor peace of the four major pro sports. Certainly, Manfred could keep the ship pointed in the same direction while keeping the motor running, and there would be few complaints from the owners who elected him. But people don’t get commissioner’s jobs just to be caretakers; they’re expected to have their own agenda to push baseball beyond its current audience. That’s the part we the public don’t know much about yet.

In Manfred’s letter to fans, he mentioned that his top priority is to bring more people into the game, by greater youth outreach to foster the next generation of players and by streamlining the game to make it more palatable to casual fans, especially younger ones. The letter is quite high-minded, masking Manfred’s reputation as a tough yet also conciliatory negotiator. Manfred’s in his mid-50’s, which places him in the baby boomer era, seeing the worst of the 60’s and 70’s as a youth: concrete multipurpose donut stadia. His predecessor helped get rid of nearly all of the cookie cutters, though Manfred played the heavy in many stadium talks. League attendance has largely plateaued with only Oakland and Tampa Bay stuck with bad parks, so if he and the other owners want to see continued growth at the turnstiles, they’ll have to do something about those two teams.

CBA talks will begin before or during the 2016 season, and unless it goes badly there should be a deal struck by the World Series. That’s 20 months away. If talks are contentious, they could take out the 2017 World Baseball Classic or worse. We shouldn’t expect to see contraction on the table, as it won’t help extort new stadia out of those two markets, plus it will only anger the player’s union, who will see 50-80 jobs (not including hundreds of minor league jobs) disappear. And no, adding a player or two to every roster is not a good substitute. There will be some calls for greater revenue sharing, along with greater pushback against it by the big market teams. Players will want earlier free agency, tweaks to arbitration, and other perks. Talk of a soft or hard salary cap has largely died. Umpires signed a new CBA over the weekend, allowing their agreement to run concurrent with Manfred’s term, one less hassle for the new commish.

That doesn’t mean it’s all smooth sailing. There remain numerous legal disputes to work out, internal ones like the Nats-O’s-MASN deal, and external issues like the minor league antitrust and television blackout lawsuits. As a long time insider, Manfred is keenly aware of these battles, and of the future CBA negotiations.

That leaves little room for Manfred to take on the A’s and Rays’ respective plights. Manfred and Selig have remained committed to the Bay Area while rather noncommittal to Oakland. Quoth Selig from John Shea’s sendoff profile:

“I think two teams can exist in the Bay Area. Certainly, (A’s owners John Fisher and Lew Wolff) want to stay in the Bay Area. When I say Bay Area, you understand there are several alternatives.”

Manfred from two weeks ago, asked by Bill Shaikin about the A’s:

Not much difference there. Manfred’s going to leave both Oakland and San Jose dangling, knowing he has a plan A in Oakland if public officials choose wisely, and a plan B in San Jose if not. Plan B is not considered an easy plan because of the Giants, yet if a solution can’t be found at the Coliseum, Manfred will have to come up with a solution that works for both the A’s and Giants.

This site is coming up on 10 years old. I never thought I’d be at it this long. As I’ve said on multiple occasions, I’ll keep following the story where it leads. That’s Oakland, San Jose, Fremont, Mesa (for spring training), wherever it may go. A’s fans deserve nothing less than as complete coverage as this site can provide. Thanks for hanging in there, friends.

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P.S. – Manfred aroused discussion yesterday when he said that he’d like to forego defensive shifts. I don’t consider that much of an likelihood, since there really aren’t rules that dictate how to set up defenses right now, so creating new ones would be an inevitable mess that would be difficult to enforce – as if certain rules aren’t already improperly enforced. Instead, I look at Manfred’s statement as something that got baseball in the national discussion at the beginning of Super Bowl week, a difficult thing to do. It is Manfred’s job to help promote the sport, after all.

P.P.S. – More from Manfred in an AP interview:

“I don’t think of the Oakland issue as Oakland-San Francisco. Oakland needs a new stadium. There’s a new mayor in Oakland. We just prevailed in the San Jose litigation, so things are moving around a little bit out there, and I’m hopeful we can make progress on getting a new stadium in Oakland in the relatively short term.”

01.21.15
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Sharks to become two-headed with top affiliate move to San Jose

For a casual hockey observer, this seems out of the blue: Mark Purdy is reporting tonight that the San Jose Sharks will move its top affiliate, the Worcester Sharks (MA), to San Jose starting with next season. The Worcester Sharks are in the American Hockey League, the hockey equivalent of AAA baseball. TSN hockey reporter Darren Dreger reported last month that the move is part of a five-team shift to establish a true division of West Coast teams. The AHL had operated strictly under a Western/Eastern conference alignment this year, when divisions were introduced.

The problem with the new alignment is that even in the Western Conference, the team furthest west was in San Antonio, with no teams in the Mountain or Pacific time zones. By re-establishing five existing teams on the West Coast, those teams will be able to support each other with less travel distance between them. In conjunction with the new two-headed Sharks in San Jose, Calgary will move its AHL affiliate to Stockton, displacing the ECHL Thunder. According to Dreger, the other teams expected to jump on the bandwagon are the Kings, Ducks, and Oilers. Strangely, that leaves the Canucks without a West Coast AHL mate, their current AHL city being Utica (!), NY, pending a future move or new affiliation. The Pacific Northwest is already well represented in terms of minor league hockey thanks to several junior teams (WHL) in place for years or even decades.

So far the Sharks are the only franchise to agree to house its minor league and big clubs under the same roof. Purdy thinks it’ll be a short-term move, the to-be-renamed minor league team farmed out to Oakland after the Warriors leave, Sacramento when the new arena is completed, or elsewhere in a few years. Next fall will be an interesting experiment in observing how much hockey San Jose and the Bay Area can tolerate. The Bulls and Spiders both failed at the Cow Palace, but that was largely due to the Cow Palace’s age and location. There is a real risk of oversaturation, especially if the Sharks don’t improve from their uninspiring (but playoff-bound) state. The counter to that argument is that the real hardcore Sharks fans will have an opportunity to really indulge their ice jones, by being able to watch the big show and players on the cusp of the NHL. The AHL has a 76-game schedule, so if you halve that you get a total of 79 regular season home games between the Sharks and mini-Sharks, plus preseason and potential playoff games. That’s almost as many as a baseball home schedule.

View from my 10-game SharkPak seats during the 2013-14 season

View from my upper level 10-game SharkPak seats during the 2013-14 season

Pricing is the perhaps most curious conundrum. The Sharks want to price AHL games affordably, to attract families and casual fans, yet they don’t want to undercut their premium NHL product too much. Currently, season tickets for the Worcester Sharks at 80’s vintage DCU Center run from $12 to $20 per game depending on the package, an absolute bargain compared to the Sharks or any other NHL team for that matter. They have a number of all-season promotions, including $79 family four-packs including concessions and $2 popcorn, hot dogs, and sodas on Fridays. A family four-pack in San Jose costs $120-360 depending on where you sit.

Naturally, operating costs at SAP Center are going to be a little higher than in Worcester, so we may not see prices quite so low for AHL games. The organization can choose to run a smaller operation by curtaining off the upper level, limiting the capacity to around 10,000 seats. I figure if they can pull in 5,000 a game, they should be able to break even if most tickets are around half the price of their counterparts at a NHL Sharks game. Many of the concerts, ice shows, and other paid events the AHL games would displace are meant for crowds of 10,000 or less, with numerous sections “backstage.” Unless mini-Sharks attendance is extremely poor, the organization shouldn’t lose money.

I overlaid the Worcester Sharks home schedule on top of the SAP Center’s event schedule and found 19 date conflicts. A handful involved touring shows like Disney on Ice or Marvel Universe, dates for which games could be easily rescheduled. Only 7 were SJ Sharks home games. Again, most of those could be rescheduled by either swapping dates with the visiting team or changing dates. For some weekend games day-night doubleheader situations might be appropriate. It would allow the arena to stay in rink configuration for two events over a full day. Downtown San Jose businesses would love that. Worcester and other AHL teams also have the unusual practice of scheduling the same opponent for back-to-back home games on consecutive nights. That may not be doable given the number of events at SAP Center.

Purdy alluded to new dressing rooms being built at the arena. I figure that the cluster of smaller auxiliary dressing rooms will be modified for that purpose. Another dressing room would have to be built at Sharks Ice as well. A very fan-friendly move would be if the mini-Sharks offered more open practice sessions.

Finally, the team name will not be San Jose Sharks, or Sharks 2.0. I wouldn’t be surprised if the team dumped the Sharks moniker for the team and even went with the “Silicon Valley” locator. The name would resonate with sponsors, most of whom are Valley tech companies who already have their names on the ice and boards. Maybe it’ll be something that Purdy himself has used frequently, the Tiburones. Silicon Valley Tiburones. There are no sharks in a valley, you’ll say. Hey, I’m no marketing genius and it’s only a minor league team. They can afford to experiment.

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P.S. – Names I would not like: San Jose Chips, Silicon Valley Brogrammers, San Jose Apps.

01.18.15
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Schaaf proposal would allow competing proposals from Raiders and A’s

Oakland Mayor Libby Schaaf wants to extend the Coliseum City ENA. But that comes with one huge condition. From BANG’s Matthew Artz:

“…the 90-day extension, expected to receive City Council backing on Tuesday, would come with a condition that the two teams are free to offer competing plans.”

In effect, the Raiders and A’s would be pitted against each other, and also against Coliseum City.

It’s a bold and wise move by Schaaf that’s likely to garner much broader support from Alameda County than Coliseum City has so far. It would also force Mark Davis off the sidelines, into a role with much greater involvement in the stadium process. Previously, Davis had been content to be mostly hands-off, allowing developers to sell him on their plans while remaining detached. This would also explain the promotion of Marc Badain to Raiders team president. Badain, the CFO and interim team president, was the lead in Oakland stadium talks to this point.

What does this mean for Coliseum City? That depends on how much lifting the Raiders want to do. Badain’s the long-time numbers guy for the team, not a developer. It seems most logical for the Raiders to partner with Coliseum City, since some $5 million has already been spent on studies for the project, including an in-progress EIR. The plan already favors the Raiders over the A’s, so unless Davis dislikes some part of the plan so severely that he’d rather strike out on his own, it makes the most sense for him to partner with CC. At the very least he’d have to sign a completely nonbinding letter of interest or something similar.

If the Raiders choose to craft their own plan, Coliseum City as we know it is dead, since it would be competing against the two teams it’s trying to sign. It’s unlikely that CC would be able to satisfy both teams and its own investors to all parties’ desired benefit, especially now that the amount of land being discussed is merely the 120-acre Coliseum complex (out to Hegenberger), no additional land involved. That’s also a game-changer, since shrinking the focus to 120 acres would preclude further public land acquisitions by the City, County, or JPA.

Meanwhile, the A’s have been waiting for this moment for more than a year. Lew Wolff, as well as most of the discerning public, knew for some time that Coliseum City was serious pipe. Wolff will legally have the opportunity to present his own plan, and the City/County can decide which plan is best, or if no presented plan works. There’s a series of questions everyone will have to answer before a single shovel can hit the ground. Among those questions:

1. Which of the venues will be demolished to make way for new development? Neither team wants to play in the Coliseum long term, yet neither wants to build a new stadium for the other since it would blow up their own respective budget. So it might make the most sense to allow the other team to stay at the Coliseum, which would be renovated to some degree (or not) to make it more suitable long-term. Naturally, the Coliseum’s current condition is much better suited for football than baseball thanks to Mount Davis. Plans could also call for the demolition of the arena, which represents 8 valuable acres within the complex.

2. Who pays for the infrastructure? While it was assumed that the City/County would pay for new infrastructure, the introduction of competitive bidding gives them some leverage in terms of allowing the developer to pay for some or all of that cost. That cost would eat into each bidder’s bottom line, so the challenge for the bidders is to balance that public desire with their own internal projections. For instance, a bidder could adjust to assuming infrastructure costs by adding additional square footage to offset. However, keep in mind that Coliseum City’s full buildout at the complex called for around $400 million in infrastructure.

CC-easements

Colored lines represent easements for utilities, some of which may have to be relocated. Cost could run into tens or hundreds of millions.

 

3. How much does one team’s plan respect the other team? Both owners have expressed an interest in limiting the construction of parking garages in order to preserve surface parking. That’s also valuable, developable land. Again, how does the bidder strike the balance? Does one team’s bid kick the other team to the curb?

4. Does either plan pay off the existing Coliseum debt load? The original Coliseum City plan had no provision to pay off the $100 million at the Coliseum. Floyd Kephart added that responsibility to his plan. Lew Wolff’s alternative also appears to take care of this. If the Raiders propose their own plan do they offer the same? And what about the $100 million owed on the arena, which may not be paid off if/when the Warriors leave?

5. How does the development fit in with Oakland’s planning strategy? A hidden issue in all this redevelopment talk is how the future Coliseum will affect Oakland, especially East Oakland. Will it add much needed affordable housing? Will it gentrify East Oakland? Could it attract one major employer in a campus setting, or numerous smaller companies? Would the retail component be targeted properly, or could it end up with a bunch of empty shell buildings bringing in few rents? What if the retail part is just more big box stores? And how does the plan work with Oakland’s desire to create a thriving transit hub? Does that plan compete with downtown Oakland?

This is finally the emergence of the adult conversation we have long been waiting for. Kudos to Mayor Schaaf for acting so quickly to allow that conversation to begin in earnest. There’s actually a decent chance that Oakland can come out of this looking good in that the City won’t be ripped off. It’s a better chance than it had previously. It gives Oakland new, real leverage. Oakland should approve the ENA with the new conditions, and let the best team win.

Perhaps the City should fly in Mills Lane to judge the proceedings

Perhaps the City should fly in Mills Lane to judge the proceedings

01.05.15
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Happy New Year! Stan Kroenke and Inglewood have an LA stadium plan

Update 10:50 AM: The NFL released a statement that doesn’t actually address Kroenke or Hollywood Park, at least not until 2016. From league spokesman Brian McCarthy:

“No team has applied for relocation and there will be no team relocations for the 2015 season. We are committed to working towards having franchises that are strong and successful in their existing markets. Any decision on relocation in 2016 or later is subject to approval by the 32 clubs.  An affirmative vote by 24 of 32 clubs (three-fourths) is required.”

Overhead of plan:

New Hollywood Park plan with football stadium

New Hollywood Park plan with football stadium

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The LA Times’ Sam Farmer and Roger Vincent have a bombshell to start your week: Rams owner Stan Kroenke is partnering with the capital and master developer behind Hollywood Park to add an 80,000-seat football stadium to the current plans.

Artist rendering of Inglewood’s City of Champions project, with NFL stadium in background

SF-based Wilson Meany is the development partner (think of JRDV for Coliseum City), with plans already in the works. Adding Kroenke’s recently acquired 60 acres to the adjacent 238 acres brings to total development to nearly 300 acres, a massive complex of easily redevelopable land, 50% more than the refocused vision in Oakland. Wilson Meany already has experience redeveloping a race track, having redone Bay Meadows in phases going back a decade. Bay Meadows is a much smaller site than Hollywood Park at 83.5 acres.

Stockbridge Capital, also based in SF, is a large real estate investment that often sinks its teeth into large projects. Stockbridge bankrolled Bay Meadows, hotels in Las Vegas, and more staid assets like office parks throughout the country. It’s a bit ironic that two SF companies are partnering on Hollywood Park, whereas a consortium of mostly SoCal interests are behind Coliseum City.

Kroenke's land is between the Forum (upper left corner) and the large race track.

Kroenke’s land is between the Forum (upper left corner) and the large race track. Note plane flying overhead.

Anyone who reads this site is well aware of the Rams’ current situation in St. Louis. The football team beat the operator of the Edward Jones Dome (a public authority), which entitles the Rams to $700 million in improvements – or a completely new stadium if renovation doesn’t make sense. This was thanks to perhaps the most team-friendly lease in pro sports. A package of renovations was not approved by the City, putting the Rams into a year-to-year lease with no penalty for leaving. As the rumor mill of teams escaping to LA heated up, St. Louis civic and business interests including a former Anheuser-Busch exec put together preliminary plans for a stadium near the Gateway Arch along the Mississippi River. Financing is unclear, with another decade of debt still remaining on the existing Dome in addition to new stadium debt (sound familiar?). Chances are that the State of Missouri will have to be involved in the same manner they’re involved currently, to the tune of a $12 million annual subsidy. St. Louis, meet Oakland. Create a support group.

Teams still won’t apply to move for 2015, as Roger Goodell is pulling the strings here. Instead, this move and maybe another by AEG down the road will ratchet up pressure on St. Louis, Oakland, and San Diego to deliver stadium deals in short order. Inglewood intends to put full Hollywood Park plan before voters this November. Having rejected the Chargers’ desire for a downtown stadium near the convention center and Petco Park, San Diego has a tall order to come up with a satisfactory plan for all parties before the calendar turns to 2016. It’ll be interesting to see how Rams ticket sales are affected by this announcement, since it’s Kroenke, not some third party, doing it.

The Raiders’ lease at the Coliseum has already expired, and the team has given indications that it wants a new short-term deal. Mark Davis prefers a repeat of the previous lease, a 1-year deal that forgoes previously-desired stadium revenue streams in favor of maximum flexibility. Knowing that and the ticking clock, will Oakland put up much of a fight as it did in last summer’s drawn out negotiations with the A’s? It seems unlikely. Oakland has precious little leverage at the moment, especially as it tries to work on plans with both the Raiders and A’s, football team in the driver’s seat.

With the Inglewood announcement, the NFL’s grand plan comes into clearer view. The league has been very hands-off with the teams and cities over the last 1-2 years, allowing their respective political processes to play out. Rules required teams to make good-faith efforts towards new stadia in incumbent markets, all done in various ways for all three teams. St. Louis dared the Rams to go to arbitration and lost badly. San Diego let its convention center’s interest override the Chargers and lost the script on a football stadium. The Raiders stayed involved to a minimal degree with Coliseum City as that project flailed repeatedly. Now the NFL, through its relocation team, can start to hammer cities with demands. If those demands aren’t met, well, hopefully those respective mayors have made the proper political calculations as to what football stadium subsidies mean to their tenures.

2016 has started off with a bang. Meanwhile, Lew Wolff sits back and waits.

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P.S. – BTW, if you haven’t kept up on Bay Meadows, it’s not nearly finished. Development was kept on a slow track thanks to the recession and a desire for controlled growth. Phase II is underway.

12.31.14
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Maybe the 49ers should’ve built a dome instead

Remember the famed groundbreaking for the 49ers stadium in 2012? It was a joyous regalia, with red carpet for VIPs and an artificial turf field where the grass field would eventually be placed. Little did the 49ers and Santa Clara know that the fake grass would end up being the best-looking field all the way through the stadium’s first year of existence.

If they only knew how it would work out 30 months later...

If they only knew how it would work out 30 months later…

Tonight, a crowd resembling an late-April A’s game at the Coliseum “filled” the seats at Levi’s Stadium for the Foster Farms Bowl. Despite being local, Stanford’s small student body and alumni base was not going to buy the team’s 9,000-ticket allotment. Maryland, having jumped from the ACC to the Big Ten (oops, B1G), is not a great football power whose fanbase travels well. Add to that the thoroughly abused field, plus blustery winds and a chill that were far more reminiscent of the ‘Stick than of sunny Santa Clara (remember how fans were frying in the seats in September?), and the optics more than a little disappointing. The only notable thing, other than the Cardinal’s offense actually looking cohesive, was Foster Farms’ sponsorship of the whole affair, punctuated by animatronic chickens singing 80’s karaoke favorites during the commercial breaks. The bowl’s executive director expressed hope for a Cal-Michigan matchup next year. I’ll go out on a limb and guess that Meeeesh-igan, for some reason, won’t end up as low as 6th (thereby qualifying for the game) in the B1G next season.

Somehow, nearly everything about Levi’s Stadium has ended up disappointing in 2014. The field has been bad enough to be planted five separate times. A stadium that loudly touts its LEED Gold certification can’t properly grow grass. That should change for 2015 with new dirt and sod, if not the roof deck may have heads on pikes as featured attractions. The late summer heat chased fans to the concourses, leading to empty seats. The 49ers were shut out in their first home preseason game. As the team continued to disappoint on the field, novelty and public curiosity wore off, leading to even more empty seats and a lot of head-scratching about the venue. The Pac-12 championship game was poorly attended. The Foster Farms Bowl was even worse.

Was Levi’s Stadium too luxurious? Yes. Did it lack character? Absolutely. Was it worse in ways you wouldn’t anticipate going in? Sure. Can it be fixed? Perhaps not to the degree everyone would like.

The irony of all this disappointment is that considering the >$1.2 billion spent on the stadium, they could’ve put a dome on the thing and fixed a good number of those problems. An enclosed stadium with a roof fixes the summer heat and tonight’s wind, and it could be done without needing climate control, a la Safeco Field. It probably fixes the grass problem, since the stadium would have either Field Turf or a grass tile system like in Houston, so no grass debacle. Yes, a retractable dome would kill the open feel of the stadium. The flip side to that argument is that the footprint would have to be more compact, with fans closer and a more intimate setting.

And like other domes, which attract Final Fours and multiple Super Bowls without weather worries, a domed Levi’s Stadium would be a more flexible venue overall. I recognize that a dome – retractable or fixed – is anathema to building in the Bay Area, where the very site on which Levi’s Stadium sits was once part of the incredibly fertile “Valley of Heart’s Delight.” If anything, we’ve found out that the environment, and human reaction to the environment, are much more fickle than we’re initially willing to admit. An add-on dome is not a realistic option for Levi’s Stadium, considering the limited space around the stadium to support it and the way it was built in the first place. Seat licenses make midfield ticket holders just as likely to retreat to the clubs or not show up at all if they don’t feel it’s worth it. There’s little the 49ers can do at the moment to fix it, though I expect them to experiment a lot on different types of service going into next season.

Levi’s Stadium inaugural season hasn’t gone the way Jed York would’ve wanted. Neither has the team’s collapse. Fixing the 49er fan experience means more than merely providing new amenities to escape to. It means providing value for every fan in every seat location, everywhere throughout the stadium. Providing solutions for that problem will require some Silicon Valley ingenuity, but more importantly it will require swallowing some pride and getting back to basics. That’s innovation that not many companies get right, whether in tech, sports, or hospitality. I’ll write more about what that could entail – for football and baseball – in the new year.

12.29.14
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Could cities use eminent domain to acquire teams? Don’t hold your breath

Field of Schemes‘ Neil deMause has an intriguing article at VICE Sports today positing the idea of teams buying teams via eminent domain. It’s not an entirely original idea. You see it on a message board every so often, and the City of Oakland famously tried to use ED to keep the Raiders from moving to LA (it failed). deMause doesn’t consider any eminent domain proceedings to be a slam dunk, as their efficacy could vary wildly based on jurisdiction. Instead, deMause looks at the ED threat as a cudgel to use against another threat, the move threat teams often wield over cities. Whether or not teams actually talk about moving to other markets, the possibility of being tied up in court, having to open the books, etc., might make team owners think twice about it.

As for eminent domain actually having teeth, it’s difficult to argue for it. California already has two cases on the books that support teams and leagues over cities, and of the teams that have recently built or are looking to build new venues, none are using that extortion weapon – except perhaps for Arte Moreno against Anaheim.

The Green Bay Packers are often touted as the model for publicly-owned sports franchises. The franchise was stabilized nearly 90 years ago when they became run as a public corporation, with real stock sales. Once issued, shares cannot be resold except back to the franchise, and the stock doesn’t offer any sort of dividend or significant voting rights, so they’re mostly for stadium improvements or for financially supporting the team, which struggled through the Great Depression.

Let’s say Raiders fans wanted to try such a model in Oakland. They’d have to raise $1 billion, or 10 million shares at $100 each. A new stadium would also cost around $1 billion, so make that 20 million shares. If the NFL was amenable to the idea (they have disallowed publicly owned franchises except for allowing the Packers to be grandfathered in), it might work. 20 million shares at $100 with no tangible returns is pretty hard sell, though cheaper than Coliseum City when you think about total costs. deMause floated the idea of cities using eminent domain, then raising bonds for the team purchase. Cities don’t have the cash to competitively outbid private parties in today’s escalating franchise sales wars. If eminent domain were considered legal for this purpose, it’d probably be the only way a city could buy a franchise.

You may consider the concept of cities attempting to own sports franchises a serious overreach of government power and responsibility. On the other hand, you might see it as a reasonable alternative to the increasingly money-driven, greedy ownership model we currently see. A third way might be the public stock offering, which worked in Green Bay and is also in use to a much greater degree in European soccer. Whatever your take, the very rich men who plowed nine or ten figures into their sports franchise investments have zero desire to change the current ownership model. If that is legitimately threatened, you can be sure that they’ll fight to the bitter end to protect those investments. While I wouldn’t expect it to happen, challenging the status quo can often be a good thing. I’d like to see what happens. It’s not my retainer, after all.