Manfred insists Oakland effort is progressing, hints at groundwork for deal

Months ago I pleaded with the A’s to start communicating more regularly with the public on the state of the ballpark effort, if only to give fans some confidence in the effort. With MLB Commissioner Rob Manfred’s answers to questions about Oakland during the current postseason, it appears that the A’s are relying on Manfred to be the credible source. Might as well, since Manfred isn’t (yet) reviled the way A’s ownership is among many locals.

Before I get too far into Manfred’s role, let’s reset the situation. The A’s and Raiders both positioned as preferring the Coliseum for their prospective Oakland stadia, which put the City of Oakland in a bind. The A’s pledged to look at other sites in Oakland in case a football stadium pushed them out. While the A’s are more-or-less bound to Oakland, the Raiders have put a lot of effort into a glitzy venue in Las Vegas. Raiders owner Mark Davis has also flirted with Los Angeles, San Antonio, even San Diego if the Chargers vacate for LA.

In August A’s majority partner John Fisher brought staff with him on a tour of Howard Terminal, Oakland’s best hope for a waterfront downtown ballpark site. No findings have been released, with John Hickey’s article referencing how Howard Terminal remains a difficult proposition due to cleanup and infrastructure costs. There’s also a mention of Brooklyn Basin, but given how the developers for that project weren’t able to pick up a key piece of land that now effectively splits the project in two, it’s highly unlikely that something will magically open up for a ballpark there.

That brings us to Laney College, which sits between Howard Terminal and the Coliseum physically and perhaps also in terms of rank. I tweetstormed about Laney in April. The important thing to note about Laney is that it’s actually two sites separated by E. 8th Ave. The north site is familiar to most as the Laney College athletic fields The south site is the collection of Peralta (Laney’s district) administration buildings. Laney was studied as part of the 2001 HOK presentation, and at first glance it would seem to be a highly favorable location. The land is mostly fields with few structures and is publicly owned. It’s close to Lake Merritt BART and there is some – though not much – parking to the west.

Some of the Oakland sites under consideration. Peralta is below Laney.

Some of the Oakland sites under consideration. Peralta is below Laney.

Unlike the Port and City, who have public land reserves to draw upon, Laney/Peralta have their facilities concentrated among 50 acres straddling Lake Merritt Channel, and they have shown little interest in disposing of any of that land. A planning document published in 2011 showed that the college wants to expand, mostly into the undeveloped parking lot in the southwest corner. Coincidentally, this is where the Raiders’ pre-Coliseum home, Frank Youell Field, was located.

Making a ballpark work at Laney College would require a multi-phase approach because the facilities would continue to be in use for significant portions of the development cycle. If the Laney fields become the site, it’ll be up to the college to figure out how to accommodate practically the entire outdoor athletic program. There’s no obvious place to relocate them. Some might look to a land swap with the Coliseum, but that wouldn’t make sense since the fields would be five miles away, nearly as far from the campus as Merritt College. If the Peralta site is chosen, the administration offices and support for all four campuses in the district would have to be relocated. Perhaps a solution could include a large parking structure with offices atop. That could help serve parking needs for Laney, Peralta, and the A’s. It could also be crazy expensive on its own.

There will be more time to ruminate on sites known and unknown. For now let’s get back to the commish. There’s a lot there to support the notion that Manfred is pushing Lew Wolff and John Fisher towards a solution in Oakland and holding them to account. That’s good PR for baseball in Oakland. Then there was another quote from Manfred about Oakland Mayor Libby Schaaf that caught me off guard:

‘The Mayor in Oakland has made it clear to me that baseball is her first priority. She would like to keep both teams, but baseball is her first priority. And I think that’s a good spot for baseball to be in.’

Schaaf has gone to great pains to never express any outright favoritism between the A’s and Raiders, though she has admitted that the sheer number of games the A’s play (82 vs. 10 for the Raiders) is a better economic driver. And there have been whispers that she has backed the A’s privately, biding her time until the Raiders eventually leave. Of course, there’s no guarantee that “eventually” will ever happen, so she has to keep Oakland in play for a football stadium despite a funding gap that is no closer to resolution since the issue was raised during the Quan administration.

Now comes word that Manfred is walking back his assertion about Schaaf, though neither of their respective offices have made any statements to that effect yet (2 PM PT). Given the lack of such statements, it seems that Schaaf is not getting any serious blowback. It also confirms a certain journalistic truism:

Messaging is tough, though not as tough as getting a stadium privately built in California. Manfred wants to accelerate the process regardless of the restrictions placed on the A’s. His vague timeframe of “within the next year” follows similar statements made by Wolff and Oakland pols. It’s likely to slip. No one would be surprised if it did for myriad reasons. That said, Manfred’s desire to get a site picked is a tactic designed to inevitably put the ball in Oakland’s court. Oakland and the A’s have to this point skated on the dual-dilemma scenario with the Raiders. Manfred’s shaking the tree is meant to put some pressure on both team and City. He can do that directly with Wolff and Fisher. He can’t do that to Oakland, not until there is a site and some level of commitment. The key is Manfred’s admission that he’s not sending anyone to Oakland full time to work on the project. In the past that was either Manfred or Bob DuPuy acting on Bud Selig’s behalf, or Eric Grubman doing the same type of field work for Roger Goodell.

When that site is decided, Manfred will turn around and say to Schaaf,  Look at all I’ve done for you, I got the owners in line, there is a site and a plan,what are you going to give baseball? By give I mean the pledges of infrastructure, land, or whatever is needed to offset the enormous investment Wolff and Fisher will have to undertake to build a ballpark. That’s when messaging gives way to dealmaking. It’s a better tack than what the NFL is doing as it looks more generous. Will it ultimately be more successful? Hell if I know.

P.S. – Laney’s in the news, but remember, the A’s still consider the Coliseum the #1 for now. We’ll see if their study changes their assessment.

Raiders ink 1-year lease with options, hire former 49ers CFO MacNeil

The Raiders agreed in principle to a one-year lease at the Coliseum, with the potential for extensions in 2017 and 2018. Specific terms were not revealed at today’s press conference, but the main reveals are that the Raiders will pay more in rent than they had in the most recent lease, and that Larry MacNeil, former 49ers CFO, was hired to work with the City/County/JPA on a new stadium deal. Davis touted MacNeil’s experience in developing Levi’s Stadium.

Towards the end of the press conference, Davis challenged A’s ownership to “commit to Oakland”:

Right now there’s 120 acres. There’s parking, there’s an arena. We like the gameday experience of tailgating on that parking lot. We don’t want to give that up. Now, there’s two teams that play in that Coliseum. One’s the Oakland A’s, one’s the Oakland Raiders. People have not listened when I said I do not mind if there are two stadiums on that site. The A’s stadium would take about 12 acres, the Raiders’ stadium would take about 15-17 acres. That’s fine with me, but I do not want to give up the parking.

If, in fact, the A’s do want to stay in the Coliseum site, they need to commit A.S.A.P. so that we can go ahead and design and take down the Coliseum, provide all the infrastructure necessary to build two new stadiums in Oakland, and two teams will then come back in and play in two new stadiums. What I do not want to do is build a football stadium in the corner of the parking lot while the Coliseum is still standing, and then once we have a brand new stadium we begin to tear down – or build a new baseball stadium – and then tear down the Coliseum, disrupting the ingress, egress, and parking, tailgating experience for Raider fans on gameday. What it’s going to take is for the A’s to make a commitment to Oakland and tell the people what they want to do.”

You mean something like this, Mark?

Two new venues on a slightly larger footprint than the original

Two new venues on a slightly larger footprint than the original

The A’s response did not waver from their ongoing evaluation process:

Let’s, for a moment, follow Davis’s argument all the way through to its hypothetical end. He is right that he’s been consistent about this. For nearly two years he has wanted the Coliseum torn down immediately, to be replaced by either a football stadium on the original footprint, or two venues next to each other. As you can see from my drawing above, it can be done while taking up only slightly more land than the original Coliseum did. There would even be some advantages in that a grand plaza could be built between the two stadia, leading to the arena.

But is it realistic? Let’s consider how this would progress. Assuming that Lew Wolff and John Fisher could be convinced to go along with this plan, the Coliseum would be torn down and the site graded shortly after the end of the Raiders’ 2017 season – let’s call it a year from now, February 2017. From that point new infrastructure would have to be put in place, followed by actual construction. If they started by the summer, the A’s couldn’t move into their new home until the 2020 season because of a very compressed schedule for an early 2019 opening. The Raiders could potentially open in 2019, but consider that 2019 is the projected opening for the Rams’ stadium in Inglewood – and that site is ready to go, demo already completed. For all intents and purposes, both the Raiders and A’s would be out of Oakland for three years – the A’s probably to AT&T Park, the Raiders to Levi’s or somewhere else. Throughout all of this, Davis would have final say on any development on the 120-acre Coliseum site.

Is there anything in Davis’s history or actions that makes anyone believe Davis is the person to make this happen? He has no experience in development or in the kinds of complex legal and business arrangement requires. His sudden ability to rattle off catchphrases like “opportunity cost” like he just rolled out of a basic microeconomics class isn’t impressing anyone. MacNeil is a good hire, but his presence alone isn’t going to convince investors to subsidize a stadium. And Davis’s desire to stick with ingress/egress/parking as his most important issues in Oakland is downright bizarre. Preserving parking has some nobility to it and is a good way to pander to Raiders fans, especially when compared to the mess that is Levi’s Stadium parking. That argument can’t possibly impress the other 31 owners, who have demonstrated repeatedly that they want deals that improve revenue for teams and for the league as a whole. Parking is worth maybe $4 million a year in revenue. Davis has somehow neglected to talk about revenue as a rationale as every other owner seeking a new stadium has done. Raiders ticket prices will be frozen again for 2016, keeping prices and local revenues essentially flat for the several years since he took the reins. And Mt. Davis will remained tarped to boot. If the Raiders’ revenue position is going to improve, the Raiders will have to charge much higher prices at the new stadium, and in the intervening years they’ll have to test out those higher prices on fans at the Coliseum, the same way the Warriors are doing now in preparation for their new arena. Without a major revenue boost, there isn’t even a business case for building a new stadium, even a small one. The $500 million (+$100 million gift) Davis frequently talks about comes from stadium revenues. If he can’t hit the targets in those loan programs he’ll have hell to pay from the other teams’ owners and his own investment group, in large part because he’ll end up bleeding his golden goose (the NFL’s TV contracts) to pay everything off. And we still don’t know how the $300 million funding gap would be filled.

Historically, none of the old multipurpose stadia have been redeveloped in the manner Davis is suggesting. There generally was a sequence with one tenant staying in the old building while another was built next door, then the old one was demolished and replaced. That was a successful model in Pittsburgh, Cincinnati, and Philadelphia. While the Bay Area has the luxury of high quality venues that could host the two Oakland teams in a pinch, you’re also allowing them to take both feet out the door for three years. Either team (or both) could back out of any stadium deal at any time (really, please try to force a team to build a stadium when the city is providing no money for it). The only leverage Oakland has is that the Coliseum still exists and remains functional, allowing MLB and the NFL to maintain its inertia regarding both teams. Without the Coliseum, Oakland is practically a non-entity for pro sports. I’m not sure if the politicians gathered around Davis at the presser believe in Davis’s vision. The presser certainly wasn’t the venue to argue against Davis. The theme of the event was unity, even though all they were talking about was a short lease extension. Well, unless we start to see hard numbers and actual advantages for the A’s and Raiders besides preserving parking, we’re a long way from actual unity.

P.S. – Davis is trying to play some sort of PR game by claiming that the Raiders are “hamstrung” by the A’s lease. That’s only true if the only way to build a stadium is to do it Davis’s way. Otherwise the A’s lease can be terminated with two years’ notice. That’s it. It’s not unreasonable for the A’s to ask for some time to get their affairs in order. Unless you’re Tommy Boy, I guess.

One step forward, two steps back for Port of Oakland as major terminal operator ends lease

As the hubbub surrounding Howard Terminal grew to include a major deal between the Port of Oakland and shipping giants Matson and SSA, I wrote about a piece about potential fallout from the deal. If Matson and SSA were to get a favorable deal from the Port, what would happen to Ports America, which operates an even larger terminal in the Outer Harbor, near the Bay Bridge?

Credit: BANG

Ports America property near Bay Bridge to be vacated. Credit: BANG

In 2013, Ports America threatened to sue the Port over the SSA settlement because it threatened their own deal. This week the company decided to terminate its 50-year lease at the Port of Oakland, pulling out of the Port entirely. PA was only 6 years into that 50 year lease. The company chose to expand operations at other West Coast terminals at Tacoma, Los Angeles, and Long Beach.

At a State of the Port address, officials tried to spin the departure as a way to benefit the other remaining operators, who are below capacity and could use the business Ports America is vacating to improve profitability. TraPac, which runs a terminal adjacent to Ports America’s Outer Harbor facility, is nearing a deal with the Port to take over a 44-acre section from PA.

That would leave 166 acres vacant, potentially available for another operator, other types of cargo (bulk, cars), or as Commissioner Bryan Parker indicated, for a ballpark or stadium. That’s in addition to the 50-acre Howard Terminal, which has been targeted time and time again as potential ballpark location. On the other hand, the shipping of coal has been an idea vigorously debated for some time, even floated as an option for HT. I hope it never happens because of serious local environmental issues (West Oakland deals with enough now), but the revenue situation may eventually cause the Port and City to consider it. PA was expected to provide more than $35 million to the Port this year, a quarter of the Port’s projected revenues.

At first glance, 166 acres looks appealing because of its size. That would be plenty for a Raiders stadium and parking. The location at the foot of the Bay Bridge has its appeal. But it’s 2 miles from the West Oakland BART station, and although the BART tracks run next to the property, they’re always on an incline because that’s where the aerial section transitions to the Transbay Tube, so no infill station there. The location is also quite windy.

The Coliseum’s fate notwithstanding, Raiders and A’s fans might welcome the possibility of large, publicly owned parcels like this. However, “free” land isn’t really free. It comes with a price, measured in the number of jobs lost at the Port (up to 1,000 at PAOHT) and lost revenues. San Francisco endured the transition by going whole hog on giving up shipping completely, allowing Oakland to expand and consolidate. Despite efforts to modernize facilities and transform unused lands like the Oakland Army Base to better accommodate the shipping and logistics industry, Oakland finds itself having to make compromises and decisions that negatively affect operations at the Port.  And if a Raiders stadium is proposed at the Outer Harbor, it will surely be challenged by the other shipping companies that surround the property.

Add this location to the list of options, I guess. I know this much: there’s no way in hell the Port is going to get $35 million a year from something sports related, even if they have three stadia on Port property.

P.S. – Before you ask – NO, A BALLPARK CANNOT FACE WEST. Unless you like bad shadows and batters not being able to pick up the ball properly.

News for the week: Tommy Boy Edition (1/16/16)

While Mark Davis drowns his sorrows with some beer and wings, pondering his next move, we should consider what else has been happening this week. After all, unless either the Chargers decide to stay in San Diego, Davis is more-or-less stuck in Oakland. He could conceivably apply to move to a vacated San Diego or San Antonio, but that require going through this rigmarole again with a much smaller payoff. So we’ll let whole football thing settle down for a few weeks. If you want to understand what Oakland is getting ready to offer the Raiders, read my post from November.

Matier and Ross reported earlier this week that Oakland Mayor Libby Schaaf is pushing Howard Terminal hard for a new ballpark, which is no secret. Included was this nugget:

The city would probably also have to come up with at least $90 million in infrastructure improvements, including funding for a car and foot bridge connecting Howard Terminal to Market Street east of the railroad tracks.

That $90 million figure is no accident. Schaaf is offering the Raiders the same amount for infrastructure at the Coliseum. She’s trying not to play favorites with either team. Of course, there is the danger of spiraling costs, and Oakland is putting itself in the position to carry the debt burden all by itself, since it’s nearing a deal to buy out Alameda County. As costs rise, the question will linger over how much Schaaf is willing to support before the projects become untenable. At least her staff has acknowledged the need for an overpass at Market Street, which was a major issue for me. Frankly, I think they need two overpasses because of Market Street’s location well away from Jack London Square. If you want to get reacquainted with Howard Terminal, read my various posts about the site.

Other news:

  • The City of St. Petersburg’s City Council approved by a 5-3 vote to allow the Rays to explore other stadium sites outside the city limits. That includes all of Pinellas County (St. Pete is the county seat), and neighboring Tampa and Hillsborough County. It’s too early to tell whether this will ultimately lead to the end of the Rays’ tenure in St. Pete, but proponents are at the outset painting this as the team’s best chance to stay in the 4.3 million-strong Tampa Bay Area, which has proved poor for attendance and excellent for TV ratings. As always, the biggest issue is figuring out how to pay for it. Head over to Noah Pransky’s Shadow of the Stadium for complete coverage.
  • The Warriors are pushing back the opening of their arena to 2019 to accommodate the legal challenge by the anti-arena Mission Bay Alliance. MBA also sued UCSF’s Chancellor and now has two lawsuits against the arena project in different jurisdictions. It’s a legal Hail Mary that will largely depend on whether the arena will be afforded an expedited legal review. (SFGate, LA Daily News)
  • The new arena near the The Strip in Las Vegas has a $6 million per year naming rights deal with wireless carrier T-Mobile. (Las Vegas Review Journal)
  • Hartford’s downtown ballpark is delayed and has $10 million, for which no one has figured out how to pay. Thanks to the delays, the AA (Eastern League) Yard Goats will be forced to play on the road for the first six weeks of the season. (Hartford Courant)
  • Walmart announced a slew of store closures, including a store in south San Jose and the Oakland store on Hegenberger near the Coliseum. The store will close Sunday, which led @fanpledge to wonder if it could work as an A’s ballpark site.

Most importantly, the In-N-Out in the northeast corner can stay intact. I’ll cover this site in greater depth later.

The Inglewood Compromise

“Inglewood Compromise” sounds more like a Cold War era weapons treaty than a pact between football teams, yet the latter is what we’re facing. Now that it’s clear that Cowboys owner Jerry Jones has pushed for such a concept and that it may be gaining momentum, it’s time to start thinking about what it could mean for the teams at the center of the debate, and of course, our beloved Oakland Athletics.

Of the two Los Angeles stadium plans, Stan Kroenke’s vision at Hollywood Park (next to the Forum in Inglewood) is furthest along. Most of the land there has been cleared, including the area set aside for stadium construction. The same can’t be said for the land in Carson, which needs a final round of remediation before any construction can begin there. Inglewood is encountering some resistance in the form of FAA objections over the height of the stadium and the materials used for it, but these issues can be mitigated. Besides, other stadia have been built beneath airport landing approaches before, including SAP Center and Levi’s Stadium.

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While the NFL is pushing for 50/50 partnerships regardless of site, it’s clear that Kroenke would run the show in Inglewood whereas Dean Spanos would do the same in Carson. That goes for stadium design to some level of revenue control. If Mark Davis could find a way in he’d be happy with the arrangement, if only because his team’s revenue-generating capacity would be so much more than the abysmal figures he’s been pulling down in Oakland. The thinking is that under the Inglewood Compromise, Kroenke would provide concessions that Spanos needs to ditch the Carson plan, whatever that entails.

That would leave Davis as the odd man out, locked out of the LA market perhaps forever. The Raiders would be stuck with Bay Area, namely Oakland, as its best local hope for a new stadium. Oakland has been largely consistent in saying it would provide no public money, though it has gone a little softer in opening the doors for infrastructure financing.

Assuming the Inglewood Compromise moves forward and crystallizes, the options the NFL could provide to the Raiders could come in a number of forms, even taken separately or together.

  1. The simplest option would be an extension of current talks between the Raiders and Oakland. At the moment there remains a $400-500 million funding gap on a $900 million stadium that would be the smallest in the league while not having the amenities or cachet necessary to host a Super Bowl. Raider fans are holding out hope that some of the potential $1.1 Billion in relocation fees paid by the Rams and Chargers could be rerouted to Oakland. Given that Roger Goodell shot down a similar idea floated by St. Louis stadium principals, it seems unlikely at this stage or Oakland. Goodell also dismissed the initial framework of Oakland’s proposal for the Raiders, calling it insufficient. More fleshed out proposals from St. Louis and San Diego were also considered insufficient as well. If it wanted, the NFL could create a new funding mechanism outside the existing G-4 loan program to help bridge the gap. However, I suspect that the NFL won’t consider loosening the purse strings unless the City of Oakland at least matches that extra money. By that I don’t mean land rights or sales, since land is considered table stakes for any stadium deal. I mean cold hard cash. So if Davis comes up with $200 million and the NFL matches it, the league could provide another $100 million or more but only if Oakland also matches that piece, $100+ million. Without that, I can’t see how the NFL could take Oakland’s overtures seriously.
  2. When the 49ers’ stadium project in Santa Clara started to come to fruition, the NFL tried to lean on Davis to partner up to allow for two teams at what would eventually be named Levi’s Stadium. Davis considered Santa Clara too far from Oakland so the talks never went anywhere. The NFL left Davis to work with Oakland, and we all know how that worked out. With a reset in talks coming for those two, the NFL could introduce Santa Clara again as a short term or long term play. The NFL remains concerned about revenue for the Raiders. Levi’s would be the most direct way to provide a boost. If Davis is more concerned about the atmosphere and experience in Oakland, then talks would prove fruitless again. But with the league bringing in those relocation fees, it could take $100 million, build out the second home team locker room in Levi’s, and provide enough money to make the stadium more Raiders-friendly through new flexible signage and other elements. Previously there was talk that the Raiders would be a mere tenant with the 49ers getting most of the revenue including for Raiders games. The NFL could grant a partial renovation G-4 loan to the Raiders for the renovations, making them more of a partner for the stadium. The NFL could also lean on the 49ers to provide more revenue to the Raiders, since the 49ers wouldn’t be on the hook for the renovation project. The 49ers had sought a minimum 10-year lease term to make the second team scenario work financially. If the NFL and the Raiders are footing the bill that’s no longer an issue. The Raiders could stay for a 5-10 year lease, with the ability to leave if an Oakland stadium opens during that time frame. Or the Raiders could find out over time that the arrangement actually works the best for them and forgo an Oakland stadium completely, as the Jets eventually did after they moved to New Jersey.
  3. Then there are the other relocation alternatives. San Antonio continues to be the city that tries to get noticed in all of this. That all seems in vain, though who knows what could happen when LA shakes out? Davis has friends in San Antonio, and he could use them to either bargain a stadium deal out of Oakland or to move to the Alamo City in earnest. There has been talk that St. Louis could try to attract the Raiders after being spurned by the Rams, but the NFL seems unwilling to accept their proposal regardless of which team the city tries to attract.

After trying to piece through all of that, Davis may decide that the status quo is the best plan at least for the short term. He could go back to Alameda to consider what he’ll truly need to commit to get a stadium deal done, and whether it’s worth it. As a man who has never built anything significant on his own, it has to be at the very least a somewhat appealing (and comforting) option. As I noted in the previous post, Davis hasn’t burned all his bridges yet as his counterparts Kroenke and Spanos have.

Setting Terms: A Commitment to Exodus

Okay, there was real news about the Raiders and Oakland today, not rumors, so I feel compelled to write about it. I’m over the soap opera news cycle of the last year, looking forward to January, when something LA might (not) be resolved to the NFL’s satisfaction.

As St. Louis and San Diego provided stadium financing plans pledging $350-400 million in public funds for their respective stadia, Oakland officials offered a mere five-page letter promising no public money for construction, hoping that the NFL’s respect of legacy and history would help keep the Raiders in the East Bay. The NFL’s reaction was that the letter was expected, while Mark Davis expressed befuddled disappointment.

At this point, you have to think that based on the efforts City of Oakland and Mark Davis, few people within the NFL believe that any new stadium is going to happen in Oakland. The City has no will to do it, and Davis has spent far more time and effort on Carson than Oakland. The NFL will have to gauge the owner’s interest in resolving the Raiders’ situation against resolving the dilemma in Oakland. Of course, many within the league previously preferred to have the Raiders share Levi’s Stadium with the 49ers, the same way the Giants and Jets share MetLife Stadium. Even with Davis continually dismissing the idea, the concept remains a viable backup plan should nothing continue to happen at the Coliseum.

But again, my beat isn’t the Raiders except in how the Raiders’ plans might affect the A’s. From today we got a big list of deal terms the City is willing to make in the pursuit of the Raiders’ new stadium. Whether or not the Raiders stay, regardless of the Coliseum’s future as the home of the A’s, the numbers are effectively setting the bar for future stadium deals for either team. What is Oakland willing to provide? Let’s take a look at the “concepts” presented to the Raiders.

  1. 69 total acres in and around the Coliseum, including the “South 60” consisting of the B & C parking lots, plus the Malibu and HomeBase parcels. Also included are 9 acres of publicly owned land near Coliseum BART could be used for a hotel or other commercial development adjacent to an expanded BART station and transit hub. The Raiders and a partner developer would receive development rights based on the Coliseum City rezoning effort.
  2.  $90 million in infrastructure, to be designed and approved by the City of Oakland.
  3. No public money towards construction of the $900 million, 55,000-seat stadium. The Raiders would be responsible for all stadium construction costs, including overruns.
  4. At least 8,000 surface parking spots with minimal ancillary development.
  5. Raiders would own the stadium, City and/or County would own the land underneath. That would set up recurring ground lease and possessory interest tax (PIT) payments.
  6. Raiders would take in all stadium revenues while assuming all operating costs.
  7. City’s promised defeasance of the outstanding Coliseum debt (worth $100+ million now, goes down over time).
  8. Construction to start in 2017, stadium opening in 2019.

Per the A’s current lease at the Coliseum, if they are to be evicted because of new stadium construction for the Raiders, the Coliseum JPA has to give the A’s at least two full seasons at the Coliseum while they figure out where to play next. The lease terms also call for the A’s to be compensated for the scoreboards and for lost revenue associated with new football stadium construction.

If we’re to assume that the A’s should get a similarly valued deal to the Raiders in order to stay in Oakland, the deal would be worth $200 million straight away because of the debt and infrastructure costs, plus the value of any development rights wherever the A’s end up, whether that’s at the Howard Terminal, Uptown somewhere, or the Coliseum. That’s the price Oakland will have to pay, and MLB will be happy to press Oakland hard on that. The A’s are expected to build their ballpark entirely with their own money, so it should in theory be a pretty clean deal with no intrusions or complications created by new, single-purpose quasi-governmental agencies like stadium authorities.

Just to be clear, that’s $200 million in value, not cash. The A’s would never see that money except in terms of the completed infrastructure. It could be that certain sites have such high infrastructure costs that they could approach $200 million on their own. New parking garages, the community benefits agreements and PITs Mayor Libby Schaaf mentioned during tonight’s press conference – they’re all worth something. Will Oakland show as much restraint for the A’s as they have displayed with the Raiders? I imagine they would, though it’s far too early to speculate. For the time being, let’s continue to watch how the NFL-LA business shakes out, and see where the Raiders end up as a result.

Schaaf aims to use public financing for Raiders stadium while claiming it’s not public financing

Libby Schaaf has crossed the Rubicon.


In further explaining her plans for the Raiders stadium (h/t SFGate/Rachel Swan), the mayor started talking about money. Schaaf explained that “she is now feeling the pressure of (NFL) deadlines,” a sign that Oakland is succumbing to the NFL’s tactics, even though she didn’t provide specifics in the NFL presentation on Wednesday. It’s unfortunate that Schaaf had to go there, but if Oakland is to genuinely provide more than the table stakes offer it was giving previously, it has little choice.

What money, you ask? Yes, there is whatever is expected in terms of infrastructure, land, and debt, but Schaaf also talked about instruments that could be used to finance construction of the stadium.

Namely, that means lease revenue bonds. What are lease revenue bonds? Here’s how the State Controller’s office defines them:

LRBs are a form of long-term borrowing the State uses to finance public improvements, including state office buildings, state universities, prisons, and food and agricultural facilities. Like a GO bond, an LRB is, in effect, an IOU. Unlike GO bonds, however, LRBs are not backed by the full faith and credit of the State, and may be authorized by law without voter approval.

While sports facilities aren’t mentioned in the examples above, they are the kinds of projects that LRBs can fund. In fact, both the Coliseum and the Arena were financed using lease revenue bonds, so the instrument isn’t new. If not structured properly, LRBs can present the same risk as the first Mt. Davis project.

GO bonds are also referenced. GO stands for general obligation, the same kinds of bonds used to fund civic projects via pledged taxes. That may be where Schaaf isn’t considering what she’s suggesting as a form of public financing, since it probably won’t incur new taxes on citizens. Instead there will probably be a number of use fees such as ticket taxes, concessions and parking fees, plus the property tax increment generated by redeveloping the project. Is that not public financing by another name? To me, yes. To others, maybe not. While it might not involve new sales taxes or new property tax assessments, the project will get plenty of other benefits: reduced or eliminated property taxes, lower borrowing costs, and reduced liability.

Schaaf also described how the Mt. Davis payoff would work: the County would buy the debt out via a lump sum payment (the County has money), while the City would pay the County back over time, perhaps using a similar payment schedule to what it pays now. That would mean that Oakland would pay on average $7-8 million a year to Alameda County, instead of bondholders. At the same time, Oakland would have to buy out Alameda County’s share of the land. I expect that it would happen via some sort of land swap since that wouldn’t require upfront cash on Oakland’s part. If no satisfactory swap arrangement can be made, then tack some money onto the annual payment City has to make to County. Then Oakland could make its money back by selling some of the Coliseum land, though that too has its issues. Neither the Raiders nor A’s have expressed any interest in seeing a great deal of development go up next door to the Coliseum as they want to preserve parking. Neighborhood groups decrying gentrification came out in force during the Coliseum City process to protest sales of public land to private developers for what will largely be market rate housing and tech offices. Those factors helped sink Coliseum City. Why would should it be different this time? Because Libby Schaaf is behind it and not Jean Quan?

Lastly, Schaaf indicated that a a successful Coliseum project for the Raiders might help push the A’s towards downtown. Considering that Wolff has HOK working on plans at the Coliseum, he’s probably not pleased by this. I mean, it’s written into the A’s lease:


Licensee and Licensor (or Licensor’s designee) shall continue to engage in good faith discussions concerning the development of a new baseball stadium for use by the Licensee that would be a permanent home for the Oakland Athletics, provided that such discussions shall solely focus on the development of a new baseball stadium that would be located on land within or immediately adjacent to current Complex property. If agreement is reached on development of such a stadium, the Parties will renegotiate any terms of this License Agreement that may need to be modified or eliminated in order to facilitate the construction of the new stadium. The Parties’ discussions concerning a possible new stadium will continue during the Term until Licensee communicates to Licensor that Licensee has made a decision on a permanent baseball stadium at another location or until Licensor provides Licensee notice of early termination (as provided in Paragraph 7.2.2.) in connection with a Raiders Construction Plan.

Should Schaaf actually convince the Raiders to stay, the A’s escape clause could be triggered thanks to negative impacts on the A’s operations. And with the amount of assistance the mayor is getting ready to give the Raiders and the NFL, it’s reasonable to expect the A’s (more likely MLB) to ask for a similar amount of assistance. Howard Terminal or any other site near downtown is going to be incredibly expensive to acquire and/or prep, not to mention new infrastructure that will be required there. If that kind of assistance isn’t pledged, well, that’s how teams start gearing up to leave, isn’t that right Mark Davis?