Category Archives: Politics

05.15.13
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Hearing schedule for S4SJ vs. City of San Jose

While we’re watching the A’s fight for the division title this summer, we’ll also watch the Giants and A’s duke it out in court. Santa Clara County Superior Court Judge Joseph Huber has released a hearing schedule for the Stand for San Jose-vs.-City of San Jose trial:

  • June 6 – Petitioners Opening Brief
  • July 8 – Respondents & Real Party Opposition
  • July 29 – Petitioners Reply
  • October 4 – Hearing on the Merits

Unless the sides decide to settle out of court, chances are that the case will drag on through the end of the year.

05.14.13
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With Trask gone, who will carry torch for Raiders’ stadium?

Less than two weeks ago, Amy Trask came on The Game’s morning show to talk about the Raiders’ ticket donation program. While there she talked up the Coliseum as the best location for a future stadium and defended Raider Nation to the hilt – as she has done frequently. So it came with some surprise that Trask resigned her CEO post over the weekend. She went out honoring the team and its fans. She could easily write a book on her 25-year tenure as a rare female executive in pro sports. Chances are that she’ll write a paean about her experiences with the Raiders instead.

Under the surface it seemed Trask’s days were numbered. With Reggie McKenzie handling the football side and Dennis Allen as his coach, Trask was marginalized to the role of figuring out the Raiders’ future stadium situation. Even then, the team got little momentum on that front as its lease was renegotiated and running towards its end. According to Tim Kawakami, at first Trask pushed for a stadium-sharing model with the 49ers, a move that would’ve been highly practical. As the 49ers pushed forward in Santa Clara, any murmurs about sharing died, replaced by a renewed push for something new in the East Bay. Mark Davis made calls to folks in the Tri-Valley about Camp Parks while Trask emphasized that the Coliseum was the best spot. Davis is working in conjunction with the NFL on the Raiders’ spot within Coliseum City, a less showy vision than what Oakland pols are promoting.

Now that Trask is gone, it’ll be up to Davis and a hired gun to sell the prospects of a new stadium at the Coliseum. Rumors abounded during the offseason that a new team president would be hired. There was even talk that Davis would give the reins to Jon Gruden, which went nowhere. It would seem that Andy Dolich would be a natural fit since he performed that kind of role for the 49ers and he’s perhaps Oakland’s biggest booster outside of the city limits. Yet Dolich took a job with recruiting firm Odgers Berndtson instead. Perhaps Davis wants to go with someone younger or someone not previously associated with the 49ers. Whatever the reasoning, it’s a puzzling non-move.

Successful stadium/arena campaigns are usually the product of a solid public-private partnership. The Giants had Larry Baer, Peter Magowan, and Willie Brown pushing for a ballpark. The 49ers had Jed York go door-to-door and two mayors, Patricia Mahan and Jamie Matthews. The Earthquakes had Lew and Keith Wolff, David Kaval, and Chuck Reed keeping San Jose’s bureaucracy from getting in the way. Miraculously, Kevin Johnson had no help from a team owner, but KJ had a history and reputation as a great NBA player to help himself within the NBA. Let’s assume for the moment that Jean Quan, Larry Reid, and Rebecca Kaplan can capably lead the public side. Mark Davis isn’t going to do the heavy public campaign himself, will he? It’ll be up to the new President/CEO/COO or whatever the proper title is to pound the pavement, rally the sponsors, gather the votes. Without that effort there’s little chance Coliseum City will get the necessary support behind it to be successful.

05.04.13
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Dolphins stadium bill dies in Florida House

Get ready to roll out the red carpet in Santa Clara, because Super Bowl L (2016) is coming. Florida legislators and lobbyists have been working overtime to get a state funding component for Dolphins Stadium through the legislature. The package was sneakily amended to a transportation bill in the Senate and passed, but didn’t even come up for a vote in the House. With that non-action, the entire package can’t come up for a referendum in Miami-Dade County unless the Governor calls a special session to take up the issue.

The NFL will decide between Santa Clara and Miami in three weeks, and if Miami doesn’t have its ducks in a row Santa Clara is expected to win by default. The loser is expected to “compete” with Houston for Super Bowl LI. At this point it’s unclear if the Dolphins would go back to the drawing board or resurrect the deal in the next legislative session. Still smarting from the defeat, stadium boosters blasted lawmakers in Tallahassee.

The House’s reticence can be blamed on the stench that continues to emanate from the Marlins Ballpark swindle, which remains fresh on Floridians’ minds. One has to wonder how much a similar sentiment may hurt the prospects at Coliseum City. Many are still aware of how bad a deal Mount Davis was, and some local pols are hesitant to move a plan forward without a better understanding of the public cost.

May 21 is the date of the owners’ vote on the site of Super Bowl L. The vote is expected to be little more than a formality at this point.

05.03.13
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Might as well dream big

Coliseum City strikes me as the City of Oakland’s equivalent of playing a big lottery like Mega Millions or Powerball. The chances are infinitesimal at best, yet they can’t win if they don’t play. So they’re putting in a few million dollars to get some studies done in hopes of a lot of circumstances falling very neatly for them to keep the three current tenants at the Coliseum complex.

Never was this more evident than in the Oakland Planning Commission meeting on Wednesday, when the City gave more details on the plan. It’s expansive, to put it mildly.
  • 68 – 72,000 seat NFL stadium with 1.8-2.2 million square feet of space, covering 12.6 acres
  • 35 – 39,000 seat ballpark with 1.2 million square feet of space, covering 12.3 acres
  • 18 – 20,000 seat arena with 850,000 square feet space, covering 5 acres
  • 14 million square feet of office, R&D, commercial, and retail space
  • 6,370 housing units
  • 15,000 parking spaces at Coliseum site (mostly through garages, existing site has 10,000 spaces)
The word expansive is often trailed closely by the word expensive. At a conservative $150 per square foot, the non-parking buildout alone hits $2.1 billion, closer to $3 billion when including the additional stadium development costs. Either is an astounding figure, and for anyone who actually operates in the commercial real estate development world or has even basic knowledge of the Oakland market, a truly puzzling one. This is redevelopment era thinking in a post-redevelopment world.
Coliseum City Specific Plan

Coliseum City Specific Plan

The facilities described in the project summary would be among the largest and most expensive in the nation respectively. The football stadium would rival Cowboys Stadium in scope, and while there’s no mention of a dome, there’s no way to get the kind of flexibility the City is aiming for without a dome. Cowboys Stadium was built with a $300 million loan from the City of Arlington, yet City Administrator Fred Blackwell “defiantly” stated that the era of publicly financed stadia was over. All Mayor Jean Quan talks about so far is EB-5 funding or grants to provide infrastructure. Infrastructure will probably end up being 10% of the cost of the project in the end. From the looks of things that will include:
  • A new transit hub, including a widened, more pedestrian-friendly bridge from the BART station to the stadium complex
  • Two additional bridges that span I-880 to the arena and greater development west of the freeway
  • An elevated, landscaped public space that connects everything
  • A revitalized Damon Slough
  • A new water inlet leading from San Leandro Bay to the arena
  • Many new garages
Just this list of items is going to run into the hundreds of millions of dollars. It’s a lot of new concrete construction – particularly the bridges, plus land acquisitions, and reshaping of waterfront areas. And let’s also consider the whopping 6,310 housing units. That’s twice as big as the finally reborn Brooklyn Basin project and nearly two-thirds of the way to Jerry Brown’s famed 10k plan, which was largely done under redevelopment. And note that in the map there’s a Ballpark District, which contains housing. Any chance of that getting built if the A’s aren’t there? Not likely.
Furthermore, how on earth is any of this going to be paid for? Something has to drive private development to gamble its own money on the other 90%, and it’s not clear what that is. East Bay Citizen noted that a meeting of East Bay business luminaries will be held to assess corporate capabilities in the region for the Raiders stadium. That’s a start. The stadium will be at least $1 billion to construct. Understand, however, that the East Bay alone isn’t going to cut it. Anyone without blinders on knows that the East Bay’s corporate strength is not a strong suit. Similar to what Kevin Johnson did in Sacramento, East Bay interests need to attract a lot of money from within the Greater Bay Area and outside it to convince anyone that the stadium is feasible. It’s going to be even tougher because the stadium will be twice as expensive as the planned arena.
Some on the Planning Commission rightly asked about how anything would be paid for, a question that went without a real response. Oakland officials can keep talking hope and pie-in-the-sky concepts as much as they want. They can only duck behind that for so long. Eventually they’ll need to reveal the price tag. When they do, they’ll have no place to hide.
05.01.13
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Coliseum lease negotiations stall over parking taxes

It was bound to happen. As the Coliseum JPA and the A’s got further into lease extension talks, they were sure to hit a snag. KTVU reports that after year of ongoing dialog, talks halted last week over the requirement for the A’s to pay $7 million in parking taxes. (Note: Six weeks ago, Matier & Ross had the number owed at only $3 million.) The issue goes back to when Oakland, looking for a way to boost tax revenues, started to enforce a 18.5% parking levy in 2009. All three tenant teams boosted rates to cover the tax, including the A’s charging $17 instead of the $15 they had charged previously. Unlike the Raiders and Warriors, the A’s pocketed the hike while the City and Alameda County fought it out over how much money the two parties and the JPA should get.

The Authority has been asking the A’s for the money for a few years, with Lew Wolff focused chiefly on plans to move to San Jose, only in the last year or so turning towards an extension at the Coliseum. Both sides indicated that discussions were going well, but it’s probably difficult to come to an agreement over $7 million when that’s more than the A’s have paid in rent the past five years. The A’s say that they don’t owe money but will pay the tax moving forward, which sounds thoroughly disingenuous considering they raised the parking rate in response to the imposition of the tax.

The County wants a bigger cut of concessions revenue, which was practically signed away to the A’s when the team and the JPA settled their post-Mount Davis lawsuit. The A’s were also burned by the JPA when they chose to take money meant to replace scoreboards and rerouted it towards the Coliseum City study.

For their part, the A’s will only say that “The disputed items are subject to arbitration or possibly incorporated in a new five-year lease extension.” Arbitration could easily put the A’s on the losing end, paying the full $7 million, but if they’re aware of that and they could somehow get less through negotiation or arbitration, holding out is not a bad tactic. They know that the City’s and County’s stance is to go ofter them hard as the A’s have really nowhere to go while a move to San Jose sits in limbo.

The A’s abruptly cut off talks for now, which itself may be a negotiation tactic of sorts. Is Wolff willing this to go straight to arbitration, or does he want to wait until after the baseball ends to pick up talks again? If they, it’s not likely that everyone at the table will suddenly become nicer.

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P.S. – I did some quick and dirty math on this. The City imposed the tax start in July 2009. That left 3.5 years of tax accrual before the start of the 2013 season. 5000 spaces * 3.5 years * 82 games * 18.5% = $4.5 million. Not $3 million, not $7 million. Free Parking Tuesdays and last year’s playoff parking revenue are not accounted for.

04.29.13
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NBA relocation committee votes against Kings move

Just in: the NBA’s relocation committee voted unanimously to reject a relocation of the Sacramento Kings to Seattle. This preliminary vote is meant to be a recommendation to the greater Board of Governors. Given that it was a 12-0 vote, the decision effectively kills any chance of the sale and relocation being approved. It’s possible that Seattle’s Hansen-Ballmer group could launch a lawsuit against the NBA, but that would interfere with any future consideration for either an expansion franchise or another potentially relocated franchise such as the Milwaukee Bucks.

Now it’s up to Sacramento Mayor Kevin Johnson and the “local” ownership group headed by Vivek Ranadive and Mark Mastrov to pull through with the money parts of the deal. KJ and the City Council have to get an EIR passed, put up $250 million in arena bonds, and work out the financial details, which aren’t yet finalized. As for the “whales”, they have to put up their half of the arena through realized pledges from the community. After years of Maloof-caused turmoil, Kings fans can for once breathe easily. The Capitol will keep its team. I can practically hear the cowbells from 90 miles away.

04.25.13
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San Jose’s Motion to Disqualify Denied

The City of San Jose and the A’s received another legal setback this week, as their Motion to Disqualify Counsel, namely Pillsbury Winthrop Shaw Pittman, was denied by Judge Joseph Huber.

I’m out of town right now, so I don’t have the ability to view the judge’s order. When I get back I’ll take a look at it, but honestly, it was easy to read the way the judge was leaning with this ruling and the one from September. Now the City/A’s and Stand for San Jose can move forward with the trial. Lawyers for both sides are in the process of preparing briefs. We’ll be following this one closely. I expect that MLB will too.

04.21.13
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Giants refinancing ballpark debt to fund other development

The Chronicle’s John Shea confirmed something I had heard about the reasoning for the Giants’ AT&T Park debt refinancing.

The Giants’ plan to pay off their stadium debt by 2017? No longer in the works, we hear. There have been steps to refinance the $170 million loan to help fund their proposed development on parking lot A across from McCovey Cove. There was a time the Giants said they had to limit their payroll because of the $20 million annual mortgage.

Remember how, in 2009, SF City Attorney Dennis Herrera threatened to sue baseball over the perceived financial threat posed to the City if the A’s were granted territorial rights to the South Bay? Well, I’m glad for everyone’s sake that the Giants feel it’s safe enough to take on even greater debt to grow their empire. I was so worried for a while there.

Meanwhile, a group of East Bay mayors including Oakland’s Jean Quan and Berkeley’s Tom Bates are trying to upend legislation introduced by SF assemblyman Phil Ting that would help smooth (or bypass) some of the environmental review and approval process for the Warriors’ arena. It’s not strange that they would pursue this route, since it is local politics at work. The irony is that whatever new law helps the W’s arena could provide a blueprint and pave the way for an A’s ballpark at Howard Terminal, which makes sense because both are on waterfront sites and face the same restrictions.

Of course, if Howard Terminal never gets past the talking points stage no one ever has to find out how expensive it’ll be to build there.

04.12.13
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San Jose attempts two Hail Marys, one batted down

San Jose Mayor Chuck Reed’s attempt to get an in-person meeting with MLB Commissioner Bud Selig was rejected this week. Selig preferred that the City continue to work with and make inquiries through his committee, now in its fourth unproductive year.

Reed expressed frustration at Selig’s rejection, vaguely hinting at a ratcheted up legal threat. It’s definitely a defeat on Reed’s part. If Selig’s decision effectively called Reed’s bluff, it’s to Reed to make good on the bluff. Reed’s termed out in 18 months, so if he wanted to bare some teeth, now would be a good time to do so.

Speaking of lawsuits, the Stand for San Jose suit had its Motion to Disqualify Counsel hearing today. Judge Joseph Huber had difficulty understanding the reasoning for the motion, explaining that the privileged documents that are at the center of the debate were already returned by Pillsbury are not part of the record, and will have no bearing on the case. Judge Huber asked Perkins Coie attorney Geoffrey Robinson if he was supposed to guess if and what privileged details made into the S4SJ’s case. Robinson said that the documents could shape the case even if the documents are not part of the record. (Judge Huber took over the case for Judge Patricia Lucas, who was appointed to the 6th District Court of Appeals by Governor Jerry Brown last fall.)

Switching to the other side, Judge Huber quite severely admonished Pillsbury for its previous behavior in the case, Pillsbury’s Ronald Van Buskirk argued that the firm was merely doing its job to make the best case for its client, and that the attorneys were only “exposed” to the documents and shouldn’t be disqualified just for exposure. Of course, they previously made a motion to augment the case using those documents, so that argument may fall on deaf ears.

The big takeaway is that both sides recently agreed upon a schedule for briefs, which means that a trial date is coming soon. The attorneys will have a few weeks to prepare their briefs. A trial date should be set shortly. Van Buskirk indicated that the plaintiff’s case would be solid thanks to questions about airport impacts, which to me sounds flimsy based on what I’ve read and the fact that taller or similar height structures already exist closer to the flight path, such as HP Pavilion.

Judge Huber will make his decision on the motion to disqualify early next week. If Pillsbury is thrown off the case so close to trial, it would be huge blow and force a delay to bring in new counsel and get them up to speed. If Huber throws out the motion, at least we’ll finally get to see this trial move forward, which would clear up at least one major issue that’s probably causing MLB to delay any decision regarding San Jose and territorial rights. I’ve been of the opinion for some time that MLB will not grant San Jose anything until the land deal is locked in and secured. The Giants know this, which explains why they’ve aggressively gone after San Jose in the courts and through the State Controller’s redevelopment clawback efforts. It’s the new Moneyball.

04.11.13
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Oakland gets some good news and bad news

When Oakland Mayor Jean Quan revealed plans to take advantage of the federal government’s EB-5 visa/foreign investment program, I called it creative and a good potential source of funds to replace redevelopment. What was missing prior to this year was a healthy, rebounding real estate market to encourage investment. That moment has come, culminating with Governor Jerry Brown’s announcement in Beijing of the Brooklyn Basin development, formerly Oak-to-Ninth (or “O29”). I don’t know for certain that Chinese firm Zarsion Holdings Group Ltd. is a pool of EB-5 investors, but considering the lack of information about the company and the City’s push to get EB-5 investment in China, it seems quite likely. The first phase of the project will include 1,300 of the planned 3,100 housing units.

Brooklyn Basin, comprised of two small peninsulas jutting into the Estuary to the east of Jack London Square, has undergone a painful and grueling process to get to this point. Formally initiated in 2006, the mixed-use development plan went through multiple lawsuits, EIR challenges, and even required legislation to make the land transaction work. When the recession hit, any hope of the project breaking ground before the end of the decade was dashed. Former councilman Ignacio De La Fuente occasionally spoke out for a ballpark as a favor to his developer friends at Signature Properties, to no avail. The land was included in the 2001 HOK study, coming up short compared to Uptown and other sites. I visited community meetings in 2006 to gauge sentiment on a ballpark there, and it was not met with much support due to the infrastructure problems that exist along the Embarcadero. In addition, not all of the land was available, as Oakland landowner J.W. Silveira fired off lawsuits against Oakland to send a message that their slice was not up for sale or eminent domain.

So no, Brooklyn Basin has never been considered a serious ballpark site contender. Could it be a catalyst to complement a ballpark at Howard Terminal? Perhaps. The question at Howard Terminal, as ever, is how will any of it get paid for. The East Bay Express reported yesterday that the Port of Oakland, which controls Howard Terminal, is in debt up to its eyeballs. This is a problem, because the loss of funds from redevelopment could be backfilled by additional debt on the Port. If the Port is strapped for cash, it’ll be hard to build the proper infrastructure that would be required to support a ballpark. Even AT&T Park got help from San Francisco on the infrastructure front. Victory Court died partly because costs to prep the site far surpassed the $85 million that was originally budgeted for the site. The loss of redevelopment money was the final nail in the coffin. At this point there is no true cost estimate for Howard Terminal, and there won’t be unless an EIR is done there to ascertain the cost of cleaning up the site in advance of a ballpark’s foundation work.

Mayor Quan has talked about Coliseum City as a candidate for EB-5 funding, which I can see happening. While that’s promising, it’s important to keep EB-5’s impact in perspective. For the first phase of Brooklyn Basin, Zarsion is only putting in $28 million, or less than 2% of the entire project’s cost. With Coliseum City’s much larger price tag, developers and the City will have to either get foreign investors to bump up their share (which may be limited by how EB-5 works) or find other sources which don’t include redevelopment, state, and perhaps even sales tax money. In the end it all has to pencil out. It’s unclear how either site pencils out with the limitations set on the City and County.