We’ve heard this one before. USA Today’s Bob Nightengale was on The Chris Townsend Show with guest host Brodie Brazil on Monday night. He indicated that something will happen in August, when the next owner’s meetings are slated to be held in Denver. Nightengale claims that if a vote isn’t held (Wolff has asked for one as a procedural matter), Bud Selig will rule on the matter. Nightengale noted that he has been wrong about this before (as have I), and at this point – 40 months into the debate – there’s little evidence to indicate that this will be resolved in short order.
The big admission of this apparent deadlock is that when asked about the situation during a press conference prior to the All Star Game, Selig replied that both teams still have numerous questions to answer. Seriously? At 40 months? Surely, the commissioner and his exploratory committee have had ample time to look at every option, look under every rock, comb every bit of the Bay Area landscape. Admittedly, there are plenty of questions for the contingent cities as to how they’ll complete the deals that will be necessary to host a new ballpark. Those issues aren’t under the Giants’ and A’s control, and they can’t see proper resolution until a decision on how to progress is made. Whichever way it goes, one team (and some city) is going to be upset. The longer this gets delayed, the more expensive the eventual solution becomes – whether it’s in Oakland, San Jose, or elsewhere.
Then again, why bother? It’s not as if the A’s matter to baseball. Inertia, thy name is Selig.
Category Archives: Politics
39 months and counting
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MLB Commissioner Bud Selig just had his midseason “state of baseball” presser prior to tonight’s All Star Game. He fielded numerous questions about expanded instant replay (not yet), the Mitchell Report (feel good about it), and TV blackouts (working on it). As for the A’s:
Selig says A’s/Giants situation is in his hands. “Both clubs need to answer a lot of questions for us.”
— Bill Shaikin (@BillShaikin) July 10, 2012
39 mos in on #As stadium study. But again, nothing new from Selig on this — Eric Fisher (@EricFisherSBJ) July 10, 2012
Wolff and Baer have said it’s in commissioner’s hands, and Selig just agreed. — John Shea (@JohnSheaHey) July 10, 2012
I asked Selig what the main hangup is with A’s stadium issue and he said “The main hangup is we don’t have the answers yet.”
— John Shea (@JohnSheaHey) July 10, 2012
There’s a bottle of Balvenie DoubleWood sitting across from me as I write this, and even though it’s early it’s looking really good right about now.
News for 7/4/12
Stuff to read while you’re getting the BBQ going.
- Late Tuesday, the 49ers successfully fought to keep $30 million in redevelopment funds out of the County’s hands until at least July 27, when another hearing will be held to determine the fate of the money. While the team was lawyered up, the County’s oversight board had no legal representation for the hearing in Sacramento. The issue is whether or not the $30 million (originally $42 million) at stake is considered an “enforceable obligation” between the 49ers and the City of Santa Clara. If it is ruled an enforceable obligation, the money should be safe to use for the stadium. [San Jose Mercury News/Mike Rosenberg & Steve Harmon]
- AEG pulled out of a plan to help build and run a new Sacramento arena without the Kings as a tenant, effectively killing the plan outright. The next move is the Maloofs’, as they could apply to move from Sacramento before the end of the 2012-13 season (which is entirely expected). Will Mayor Kevin Johnson concede defeat and push for a different initiative, such as a stadium? Perhaps, but the teams that KJ would be interested in (A’s, Raiders) would have to show their own interest. So far they haven’t. [Sacramento Bee/Ryan Lillis]
- Oakland’s Uptown was profiled in an All Things Considered segment as a positive example of how redevelopment can revitalize a neighborhood, while the death of redevelopment could halt further progress. [NPR/Richard Gonzales]
- Another article from the Chronicle takes a stab at figuring out what will happen to Oakland’s three pro sports franchises. As usual, Mayor Jean Quan lacks specifics, instead using grandiose phrases such as “Staples on Steroids” to describe the Coliseum City project. She also seems to be gravitating further towards a retractable dome concept-cum-convention center, which new partner AEG would certainly champion. Careful hitching your horses to the AEG wagon, Madam Mayor. As we saw in Sacramento, AEG will ditch a city posthaste if they see no future there. Plus, all of the secrecy behind Quan’s supposed “secret committee” working on Coliseum City doesn’t help when it comes to taking her seriously, as she recently took a huge hit to her credibility with new data released about her “100 blocks” policing plan. [SFGate/Vittorio Tafur, Matthai Kuruvila]
- Cities are looking for ways to resurrect redevelopment, and one popular one emerging is the establishment of revitalization zones via state legislation. The zones would have similar tax increment and bonding powers as redevelopment agencies did, plus they would be enshrined by state law. SF Assemblyman Tom Ammiano is pushing for the creation of an infrastructure financing district to serve the America’s Cup development along the waterfront. The problem with this method is that eventually any law passed by the Legislature still has to go to Governor Jerry Brown for approval. Brown has been steadfast in opposing any kind of old-school-style redevelopment for the past year, making it hard to see him signing any legislation that could undermine his redevelopment clawback efforts. [Sacramento Bee/Dan Walters]
- Added 4:30 PM – Today’s the halfway point of the home schedule. Because the first two home games were played in Japan, the Attendance Watch box on the right has shown multiple representations of attendance, one with the Japan games included and one without. Projected over the rest of the season, the total 81-game attendance (with Japan) would be 1,733,521. The total 79-game attendance (without Japan) would be 1,599,938. ESPN and other statistics aggregators usually include the Japan games in their attendance tables. Based on games sold, the A’s consider today’s game #39. Attendance tends to pick up throughout July and into August, just before the school year begins, then drops off, the variance depending largely on the team’s record. At this juncture, three teams already have surpassed the A’s projected season attendance (both figures): Philadelphia, Texas, and the NY Yankees.
More as it comes.
49ers get restraining order for $30 million transfer, hearing on 6/3
A Sacramento judge has given the 49ers a temporary restraining order, preventing Santa Clara County from doing anything with the $30 million of redevelopment funds that remains in dispute. Furthermore, a hearing to determine what to do with the funds will be held on Tuesday.
It strikes me as strange that the State Controller is involved in many of these disputes, figuring out who gets what and when. In this case, it’s going straight to the courts, with little or no Controller involvement. If it sounds like there are no clear rules, you’re probably right.
Clawback, Part III: Diridon transfers to be reviewed in July
The post-redevelopment landscape remains somewhat chaotic as new legislation and decisions by the State Controller’s office fill in some of the information and procedural gaps. On April 20, Controller John Chiang sent a letter out to all so-called “successor agencies” that were assigned to clean up after the dissolution of each municipality’s redevelopment agency. The letter asked for all property transfers that occurred after January 1, 2011 to be returned to the successor agency so that they could be disposed of under the auspices of AB1x 26.
Following up that letter was another letter from Stand for San Jose’s law firm, San Francisco-based Pillsbury Winthrop Shaw Pittman LLP. The firm represents the San Francisco Giants, and Stand for San Jose’s astroturf war against the San Jose ballpark project has always been transparent, with the S4SJ throwing everything against the wall to see what will stick. The letter asks for all transfers to be reversed in keeping with the January 1 date, citing that SJRA transferred the land to SJDDA on March 8, 2011, and entered into an option agreement with the A’s on November 8, 2011.
Fortunately, the Controller will start a review of the case on July 9, with the process taking 4-6 weeks. While a decision on the land transfer won’t settle everything in the City and S4SJ’s ongoing legal battle, it should at least guide the next steps regarding use of the land, whether the transfer/option is allowed to move forward or the land has to be sold by the successor agency under new terms. For what it’s worth, the agency’s board consists of City and County pols. The chair is San Jose Mayor Chuck Reed, with general counsel being City Attorney Rick Doyle. Next meeting of the oversight board will be August 9, after the summer recess. The Controller may have rendered a decision by then.
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In related news, at today’s oversight board meeting it was revealed that the successor agency expected to have all $86.9 million that the County withheld by this afternoon. This will allow the City to fulfill its August 1 debt service payment obligation. The resolution of this matter also allows the agency to get a letter of credit extension, which was completely up in the air until this week.
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Added: The San Jose/Silicon Valley Business Journal reports that the City of San Jose and Santa Clara County worked out a deal in which the County wouldn’t challenge the Diridon transfers. The Controller still has to make its determination.
Clawback, Part II (Updated)
First we had Santa Clara County pulling $30 million in RDA funds back from the 49ers stadium project/Authority. Now we’ve got the flipside, as State Controller John Chiang has ruled that the County went too far in holding back $86.5 million in funds due to the City of San Jose.
The money came from collected property taxes and proceeds from the sale of numerous City-held properties. The money’s needed to service outstanding debt, which had already been downgraded to junk status by Fitch because of the holdup. The bond ratings should be restored to some degree, but the damage is done. The now-defunct SJRA’s successor agency oversight board is having its regular meeting on Thursday. I may attend it.
It’s a bit early to say what kind of effect this will have on either Cisco Field, 49ers Stadium, and City of Oakland (HJKCC) since it’s just one of a series of rulings that will be made in the coming months. A follow-on editorial from the Merc is pushing for the County to surrender the funds so that the bond payments can be made by the end of the month. In addition, a budget trailer bill (AB 1484) in the Legislature is trying to better define the limit and range of the powers of oversight boards and successor agencies.
Update 6/27 3:32 PM – AB 1484 passed and is headed to the governor’s desk. The big takeaway is that the carveout for affordable housing projects is now set. Until now, affordable housing was as much on the chopping block as any other types of redevelopment work.
Save Oakland Sports meeting 6/25/12
I headed up the Nimitz to attend the biweekly Save Oakland Sports meeting at the Red Lion Hotel on Hegenberger. The meeting ran two hours and was, despite the organization’s rather young state, quite well run. S.O.S. is really just getting started with its various activities, so I’m going to refrain from appraising their efforts. I can tell you that it looks like an eager, resourceful group and broad coalition, though they’re aware that Oakland and the greater East Bay are under pressure to deliver for the three teams without much time to do so.
If you want to know more about what S.O.S. is doing, I suggest you attend one of the meetings. Again, they’re held at the Red Lion Hotel in Oakland near the airport, though the venue could change from time to time. If you’re pro-Oakland, I urge you to attend. The group needs people as a show of strength, and they’re soliciting creative ideas to help bolster support for the teams and new venues. I’ll even go so far as to say that if you are pro-Oakland and you’re not attending, you’re doing yourself a disservice.
At the previous meeting, Mayor Jean Quan gave her thoughts on the Coliseum City plan. One notable thing I picked up was that she said that the Pier 30/32 rebuild would cost $400 million, not the roughly $100 million many had estimated previously. I don’t know where that figure comes from, but it seems inordinately high. We’re talking about removing old piles from the bay, driving new ones, and building a 13-acre concrete deck on top of it. It doesn’t matter that much if you’re building on the water or on mud next to the water because around here that mud is a huge liquefaction risk (ironically, partly due to pile driving). I’ll try to verify this in the coming days.
Now, if you’re wondering how I was treated, I’ll put it this way: When I introduced myself, I got a good amount of applause. One of the members expressed reservations about having me there because he considered me a pro-San Jose guy. Given the chance to clarify my stance, I said, “No offense to Oakland, I’m just a get-it-done-quickly guy. I’m not particular about cities.” Everyone I met was friendly and respectful, even if we had disagreements about actions and motivations. Folks, we can have a clear, reasonable dialogue on these issues without resorting to name calling, accusations, and recriminations. I don’t know how S.O.S. is going to do in the future, but I have the utmost respect for what they’re doing and how they’re going about it. Good luck, Save Oakland Sports.
Clawback, Part I
As redevelopment agencies were threatened with extinction last year, the 49ers and the City of Santa Clara made a structural change to the stadium financing plan. Instead of using $30 million of redevelopment money set aside for the project, the 49ers loaned the funds to the City to get construction moving. The idea was that once the redevelopment situation was resolved and the money given back to the project, the 49ers would be paid back.
Of course, the best laid plans often go to waste. Santa Clara County, which has a board overseeing all redevelopment work and funding countywide, decided yesterday to take that $30 million and use it for various county services, including education. The county has every right to do this, as City officials admit. The 49ers also have the right to sue to get the money back, though that money is anything but guaranteed. The team could say that the funds were “under contract” before last year’s June cutoff, which from looking at previous news, appears to be the case. They could also say that the County’s clawback move creates a breach of contract situation. I’m not clearing on what the best criteria would be, but if the 49ers wanted to, they could make it get messy. Perhaps they should call San Jose City Attorney Rick Doyle for some advice on dealing with the County.
A comment from the team’s front office indicates that the 49ers could also simply eat the loss. If the clawback happened last year, it could’ve jeopardized the deal. Now that the financing package is complete and construction is underway, there’s no way to stop the stadium from being built. It all goes back to the fundamental change in the deal last year which created the loan. Both the City and the 49ers knew that any redevelopment money could be subject to clawback and was subject to the discretion of the County. $30 million down the drain? Nonsense. Better the 49ers than the City or County.
Another Airport West land deal + Muni budget item approved
Well, there goes a potential backup plan.
San Jose is getting ready to restructure the land deal (also see rendering) at the Airport West (FMC) property. In February, the City approved the Earthquakes Stadium project, which is to be located on the southern end of the property. Originally, the Wolff-Fisher group planned to build offices and perhaps a hotel on the remainder of the land. Now that remainder will be developed by South Bay developer Hunter Storm, with the section closest to the train tracks set aside for new soccer fields adjacent to the Earthquakes training pitch.
Overlay showing how Airport West property will be subdivided. Earthquakes practice field is the green block on the furthest right.
That last part is especially new, because that land was initially destined to be part of a BART maintenance facility. With BART for now terminating at Berryessa while full funding for the rest of the Silicon Valley extension is to be determined, the land would sit idle if not for this change. Plans currently call for an expansion of the Hayward BART maintenance facility to accommodate the extension, and there may be an option along the extension line for another yard if called for.
The controversial part is that in executing this land deal, the total proceeds to the City will go down $10 million. While the City has an equivalent surplus, in the previous agreement Wolff wasn’t expected to complete the land purchase until 2015. In the new proposal, Hunter Storm would pay for its share of the land by the end of the month. Revenues from the Quakes Stadium and the soccer fields would begin in 2013.
As for the Earthquakes Stadium itself, the article mentions that it’s under FAA review/audit. Apparently this is because the FAA wants to check out light spillage from the stadium light design to ensure that it doesn’t create any difficulties for air traffic. Problems don’t seem likely, but this is a bureaucratic government organization we’re talking about. Already the FAA has determined that both the 49ers stadium and Cisco Field would require temporary flight restrictions due to the way they are sited within the SJC flight path. The FAA review is the only issue remaining that delays stadium construction.
I’ll be at the City Council session later today to cover this issue.
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Just across the wire – City Council voted 8-3 to approve $85,000 in improvements to Municipal Stadium. Noted is the fact that the City Council can reopen discussions later over how the Giants’ subsidies are spent – especially if they’re used to fund a lawsuit against the City. Later is probably 2013, when the lease is due for renegotiation. Will there still be a lawsuit in play at that point? We’ll see over the next year or so. One thing to keep in mind – as long as the uncertainty regarding the lease and lawsuit hang over the club, it would be hard for ownership to sell the franchise to new San Jose-based interests. Outside San Jose, that’s a different story. The City Council was careful to say that there’s room for both teams within city limits, a posture that has really only come to the forefront in the last couple of years.
I got your lease right here!
In the world of pro sports, $85,000 is not much money. It barely pays for a month of a rookie minimum contract in MLB. It’s the rough equivalent of one decent section’s worth of revenue at a San Francisco Giants game, or the A’s typical daily parking take. In the grand scheme of things, it’s not much. For the City of San Jose, it might be a very important piece of leverage which the City can use against the San Jose SF Giants.
The Merc’s John Woolfork reports that the City wants to get more financial disclosures from the team before it authorizes $85,000 in maintenance funds for Municipal Stadium. The main thrust of the argument against the expenditure comes from a memo (PDF) jointly written by councilmembers Sam Liccardo and Pete Constant.
Finally, as we contemplate whether to continue subsidizing the rent and repair at Municipal Stadium or any other City facility, we should know the extent to which any related entity is financing litigation costing our taxpayers thousands of dollars. Extended delays caused by frivolous CEQA litigation could stall or prevent the most transformative private economic development project – a privately-financed half-billion dollar major league baseball stadium- in anyone’s memory. It would seem minimally sensible to know whether we’re paying for the bullets with which we’re being shot.
Indeed, why subsidize someone else’s antagonism? It’s not exactly neighborly of the Giants to continually come to the trough while suing the city.
Moreover, the memo shed some light on the sweetheart deal the SJ Giants have been getting from San Jose for years. The team is set up as a nonprofit, which is not entirely unique among minor league teams. Thanks to the Giants being a nonprofit, their rent at Muni starts at $1,000 per month. Think about that. The Giants pay less in rent than most apartment renters in San Jose, or the rest Bay Area for that matter. The Giants contribute to upkeep as part of the lease terms, as does the City. But keep in mind that whatever leasehold improvements the team makes can be a tax writeoff (one of many depreciation items), which makes it the costs only slightly more than trivial. And the nature of the improvements is important: the City has paid for structural maintenance and improvements, such as a new scoreboard, electrical equipment, and lockers. The Giants have paid for value-add items like flat screen TVs on the concourse. Next year, the last of the current lease, the Giants will pay $29,000 in rent, which is a tiny improvement.
The memo also compares the Giants’ deal with the Sharks’ lease at Sharks Ice (next door to Muni) and Team San Jose’s arrangement at the San Jose Convention Center. The Sharks paid $5.5 million over the last two years for capital improvements and debt service for Sharks Ice, in addition to $5.3 million in rent just last year alone at HP Pavilion. With the lease due for renegotiation next year, the SJ Giants will be lumped in with the A’s and Raiders, whose respective leases also expire in 2013. Just as you can expect the Oakland leases to reflect additional contributions from the teams, the same should be expected of the SJ Giants.
After all, the Giants definitely don’t need the nonprofit status they’ve had since the beginning of their existence in 1988. That might have made sense back then, when it wasn’t clear how well the community would support the franchise (Lew Wolff knows a little about that). The Giants are routinely one of the best gate performers in A-ball and have their operations almost completely subsidized by their SF parent club/owners. If the Giants want to keep operating as a nonprofit, per the next lease they should comply with the Council Policy 7-1 (PDF), which requires financial disclosures of nonprofits operating city facilities:
…under Council Policy 7-1, non-profit organizations obtaining use of city facilities at a reduced rent must provide a “certified financial statement, including sources of funding and any constraints applied to funds,” and the “City may require, prior to and during the lease/property use agreement, the submission of such additional information as may be needed.”
It would be the neighborly thing to do. If the Giants don’t like it, well, I’m sure there are plenty of other places ready to offer a sweetheart stadium deal. Then we’ll see what kind of blowback the Giants get for being both leeches and antagonists. The irony is delicious. Oh, and if you think this has no teeth, here’s some very interesting language from Council Policy 7.1:
A below market lease/property use agreement may be terminated by the City at any time for any of the reasons established in the lease/property use agreement…
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The City will not enter into leases or property use agreements at below market rates to organizations engaged in political activities or to religious organizations that would use the leased premises to promote sectarian or religious purposes.
Can the Giants’ efforts to derail Cisco Field be called political? Not overtly, but there’s something there.
newballpark.org 