Category Archives: Politics

10.20.11
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High Speed Rail design options reviewed in San Jose

As part of the ongoing planning process for the California High Speed Rail project, a Good Neighbor committee meeting was held tonight at the Roosevelt Community Center, east of downtown San Jose. To make the review more localized, several segments were identified and “separated” so that each could be reviewed separately. Diridon Station is not only a major transit hub, it is also the nexus of two such segments: San Jose-to-Merced and San Jose-to-San Francisco. The Good Neighbor committee, which is made up of local residents and other potentially affected parties, has been providing feedback on the station design, planning throughout the station area, the ballpark, and the most controversial piece, the prospect of either an aerial or tunnel rail segment that will run through the area. From the beginning, local residents have been opposed to an aerial option and have forced the City to include a tunnel alternative as part of the environmental review. This is in keeping with what Peninsula residents have wanted for some time, though finance constraints may make it difficult to move forward with anything other than an aerial option.

A modern, wave-shaped station may serve as the HSR terminal. It would stand adjacent to the existing depot and above the planned BART line.

The image above is only one of several possible station designs, all meant to give the public a sense of the building’s mass and volume. The apex of the new station would be 90 feet above grade, more than twice the height of the current station but 20 feet lower than HP Pavilion, which is located a block away. There could be a large public space in between the two stations or a larger, fully connected “grand” terminal.

The current view from the west along the Alameda (Santa Clara St) as one approaches Diridon Station and HP Pavilion

Same view with the aerial viaduct for high speed rail added. A mezzanine level takes travelers from the station to the HSR platform, above the commuter trains.

I’ve mentioned before that the ballpark has not received nearly as much resistance from locals as the HSR project, and the above pictures are Exhibits A and B of that resistance. The height of the rail will be 65 feet above grade, with another few feet above that for the platform and a retaining wall and/or fence. The columns and the viaduct itself appear to be buff or sand-colored concrete, which should help soften the look compared to drab, gray concrete. Still, there’s no getting around the fact that the structure itself is a behemoth. As the alignment enters and exits downtown, it will be widened to four tracks, making it the equivalent of a very tall freeway. Expect the property values for recent buyers at Plant 51 to come crashing down (at least on the side that faces the station) if the aerial is built.

The ballpark did get mentioned, insofar as there is some buzz about whether or not MLB will be making a decision on territorial rights (yes, some of those folks read this site). If the owners and Commissioner Selig decide to take the issue up (they never have officially) and rule in Lew Wolff’s favor, the decision will set a few more things in motion. Another Good Neighbor session would have to be held shortly thereafter. At that session several things would have to be discussed:

  • Design of Cisco Field and how it differs from the alternatives approved for the original and supplemental EIRs
  • Timing of the project, including land acquisition, referendum, groundbreaking and construction
  • Status of needed infrastructure improvements (Autumn Parkway)

If/when this session occurs, I’ll post a notice well in advance. I urge anyone with a passing interest to attend. (Note: A similar session to the one held tonight will be held at the MLK Library a week from tonight.)

Satellite photo showing how everything fits together. Blue line is the HSR alignment.

Twenty-five years ago, the Diridon area was partly light industrial and partly residential. HP Pavilion allowed the City to clean out many of the residences (via eminent domain). With Cisco Field, it’s expected that most of the industrial properties will go away as well, as those don’t fit in with the concept of a commercial transit hub. We touched on this two years ago, and this is yet another small step towards fleshing out the vision. The Diridon Station Area Plan, which was approved by the City Council in April, is starting its own EIR process now (PDF).

10.20.11
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CA Redevelopment Court Case Begins 11/10

Oral arguments for redevelopment’s case against the state will happen on November 10 at 9 AM. The venue will be the Supreme Court Courtroom, Earl Warren Building, Fourth Floor, 350 McAllister Street, San Francisco. The hearing will also be broadcast on the California Channel, which is available on local cable systems or via the web. I may go up there if I have time just to get a feel for the scene. It’s the first step towards resolving the fate of redevelopment as a local institution.

10.14.11
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Wolff, SJ ready to roll on remaining Diridon land purchases

We’re almost exactly one month from what could be a very pivotal owners meetings in Milwaukee. And while Commissioner Bud Selig may not end up feting his colleagues over a Brewers’ World Series, it may be that Selig’s frat bro Lew Wolff will be the one celebrating. Merc scribe Tracy Seipel reports that the recently formed San Jose Diridon Development Authority (a.k.a. SJ City Council) will meet in closed session to arrange an option from which Wolff could buy the remaining ballpark site parcels.

As discussed previously, Wolff would in all likelihood have to pay for both land and moving costs for the affected landowners/business, since SJDDA/SJRA is tapped out now and for some time to come. One thing that may help is that Maritz Wolff, Wolff’s real estate investment firm, sold a series of hotels in August for $570 million. Some portion of that could easily offset the estimated $24+ million of the remaining land buys. Now that I think about it, I wonder if the timing is set up for a 1031 exchange, which would limit tax exposure for Wolff (in-depth knowledge on this subject is above my pay grade).

Seipel also reports that the purchase may be part of a final push to convince Selig and the other owners:

Mayor Chuck Reed explained it another way:

“It’s so that Lew can go to the commissioner of baseball and say, ‘I control the dirt.’ ”

Reed characterized the plan as taking away “one more little reason the commissioner can’t make up his mind.”

Because of the black cloud over redevelopment and the lawsuit against the state, it’s possible that much of the money may have to be reclaimed by SJRA for its extortion payment to the state, the big bond payment that’s due next month (which could cause a default), or other issues that the agency has to address. It’s not just a matter of SJRA being broke. They also can’t enter into any new agreements, which is probably what caused City to in a moment of prescience create SJDDA. It’ll be interesting to see how the option agreement is structured. The Airport West agreement went through some major changes before arriving in its current form.

Seipel ends the piece with a note from City Attorney John Doyle, who said that a referendum will be required for the ballpark/land transaction.

There are a number of follow-up questions that can only be answered by the actions of SJDDA and affected parties in the coming weeks:

  • What will be the final price for the transaction(s)?
  • Does this lead to Wolff buying all of the land, or giving the purchased part back to the City/SJDDA?
  • Unlike Airport West, the purchase of Diridon has a much earlier deadline. What is that deadline?
  • Is Wolff in effect bailing out SJRA by doing this?
  • While Reed openly cheers on the influence that this move may have, Doyle (as you would expect) tamps down expectations on MLB’s decision-making. What’s the story here?

The road ahead promises to be scenic, and a little bumpy.

10.04.11
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San Jose redevelopment set to default after Brown vetoes bill

Bond Buyer reports that a bill written to help the ailing (and largely shuttered) San Jose Redevelopment Agency limp along until its fate was decided by the state Supreme Court in January was vetoed by Governor Brown. Senate Bill X1 8 was designed to extend SJRA’s credit facility past a November 25 deadline. Redevelopment reform bills passed in concurrence with the budget disallowed any new borrowing or even extensions such as the one San Jose (and Rocklin, also in the bill) was asking for.

San Jose wasn’t doing itself any favors by becoming a plaintiff in the League of California Cities/California Redevelopment Agency’s lawsuit against the state and Brown, so no one could expect a favor back from the Governor. San Jose is on the hook for $100 million in redevelopment debt, or rather, JP Morgan is. Buyers of the issued redevelopment bonds are not on the hook according to an earlier Bond Buyer report.

Typically, (Tom Jacobs, Moody’s) said, principal would amortize over three to five years starting a few months after the draw, with interest accruing at an above-market interest rate.

But in this agreement, the San Jose RDA would immediately be obligated to repay the full amount drawn by the trustee — the full $95 million, and the JPMorgan letter says the San Jose RDA will not have the capacity to repay that amount.

It’s unclear what options SJRA will have over the next few weeks, or after the default is triggered. The Diridon ballpark properties have been transferred to San Jose Diridon Development Authority, which should in theory insulate the ballpark project from creditors, but any such speculation is extremely premature at this point. The $100 million at stake is a drop in the bucket compared to SJRA’s $3.5 Billion in total debt. One thing is clear: any new projects San Jose was planning to do in the future will come with extremely high borrowing costs as SJRA’s credit rating (Moody’s: Baa1/Baa2, S&P: BBB+/BBB-) is blown to bits. At this point, SJRA is toast.

10.02.11
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We (and Sid) get a mention in the Merc

Earlier in the week, I received an email from Merc scribe Scott Herhold requesting to excerpt the now infamous bachelor party account by commenter Sid. I obliged and was grateful for the mention. I had been waiting to find out when the story would hit, so you can imagine my joy at seeing the article this morning.

IA couldn’t get a comment from AT&T. But through Kalra’s chief of staff, Joseph Okpaku, the councilman denied the bulk of Sid’s assertions. The councilman said he didn’t say AT&T was being a “pain.” Through his spokesman, Kalra added that he had never said anything about a backdoor deal. “It seems this guy is trying to get his five minutes of fame by making it seem like he has the inside scoop on the A’s situation,” Okpaku wrote (read the back-and-forth at http://www.mercurynews.com/internal-affairs).

I don’t have much else to write about the whole thing, other than as usual, take everything you hear with several grains of salt.

09.25.11
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Eminent domain the last hurdle for San Jose

I want to point out something before we begin. Whether it’s this story or the quotes from Susan Slusser’s articles, let’s remember that none of it are statements from the A’s, MLB, or San Jose. As close as they seem to the situation, there’s a lot of conflicting information out there so take all of this with multiple grains of salt.

It’s always been there, lingering in the background. I even wrote about it only six weeks ago. It’s the boogeyman. It’s eminent domain. A frequent commenter has the gory details:

I was at a bachelor party in San Diego this past weekend. A San Jose city council member was part of the group and we discussed the A’s in detail.

What he told me was this:

1. ATT is being a “pain in the ass” and will not move unless forced to by eminent domain. Even re-zoning the land for ATT in West San Jose did not help the cause at all. In fact the city council in hindsight would have never agreed to it had they known ATT would still refuse to leave.

2. The city will not use eminent domain on ATT unless MLB gives the OK that the A’s can move to San Jose. Therefore this is not a “race” between OAK and SJ. San Jose like Oakland is in a holding pattern waiting for MLB to make a decision…..Two cities, same boat.
He told me that they cannot “justify” using eminent domain on ATT without MLB approval to move forward.

3. He stated to me their RDA is pretty much done and he “implied” to me Wolff will have to buy the last 2 parcels himself but would not out right say it when I tried to question him more on it. The city council knows full well that Wolff will pay for it because everyone knows it is a “drop in the ocean” of the overall cost of the stadium. He also mentioned SJ unlike most cities did not misuse their RDA funds and used it for several successful developments across the city.

4. He agrees with me Lew Wolff has some kind of “backdoor” deal with Selig as being a former lawyer he does not understand Wolff’s patience with the situation. The city has brought up an anti-trust lawsuit to Wolff and he has told the city “not to sue” and to let the process play out despite San Jose having an excellent case in anti-trust court, which he agreed with me is “solid”.

5. Without Wolff supporting an anti-trust lawsuit San Jose is stuck in mud and he is very pessimistic the A’s to San Jose will ever occur. Although he is still holding out some hope.

6. He also agreed San Jose is getting the “best ballpark deal” of any city in history of MLB. The city is not paying for anything outside of what they have so far. Diridon will be re-developed regardless of the ball park but not for several years to come. BART or High Speed rail would have to be within 3-5 years of being in San Jose.

I wanted to share this info with everyone as this is first hand info from a SJ city council member that is as recent as yesterday.

AT&T owns the largest remaining property within the Diridon site. Its reluctance to sell will force San Jose to use eminent domain to acquire AT&T’s land (and possibly one other piece) in order to complete the site. There is no way to build a ballpark without the AT&T land.

AT&T land is in blue. Most of the rest has either been acquired or is no longer part of the planned site.

Even though Lew Wolff has expressed a willingness and confidence in the ability to acquire all of the ballpark site, not having a willing seller creates a big time hitch. San Jose can’t force AT&T and the A’s to negotiate on land. Instead, San Jose can acquire the land, then negotiate on the relocation and replacement land costs, then have the A’s reimburse the City. Making things more complicated is the fact that public-to-private exchanges tend to be politically unpopular. That may cause a final step in which the A’s buy the land, then convey it back to San Jose for free so that the site (and maybe the ballpark) are publicly owned. The Quakes stadium site is a publicly owned “island” surrounded by Quakes-owned land. Wolff indicated there are numerous ways this could play out, and these are just a couple different permutations.

Adding to the complications is the still lingering fate of redevelopment, which won’t be decided until January. Right now no agency is allowed to buy anything even though the state Supreme Court granted RDAs a six month stay to operate. San Jose is trying to bypass this roadblock by moving assets to its San Jose Diridon Development Authority, a redevelopment wing thinly disguised as a joint powers body. Keep in mind that San Jose has not made its ransom payment to keep its barebones redevelopment group running, choosing instead to sue Governor Jerry Brown over the new redevelopment laws. For that matter neither has Oakland, and Oakland could require eminent domain on multiple landowners to clear Victory Court.

Despite this major hurdle, all we’ve heard over the last week is a growing confidence in public statements by both Wolff and Billy Beane, indicating Sid’s item #4 may well be in play. If that’s the case, here’s how I see this playing out:

  1. Wolff gets green light during November owners meetings.
  2. San Jose seizes upon this and makes one last offer to AT&T before the end of the year. If AT&T continues to holdout, City notifies that it will start the eminent domain process via SJDDA.
  3. City can’t actually start eminent domain without a referendum, so if it’s required a special election will be held during the early spring (with MLB picking up part of the tab).
  4. City procedes to acquire the land and begin relocation, which should take 3-6 months to complete.
  5. Demolition and site clearing would have to be done throughout the summer and fall of 2012.
  6. Groundbreaking happens in November or December 2012.

It’s important to note that there’s always that final offer. Eminent domain is every bit as much a threat as it is a tool and may be used simply to bring parties to the table. AT&T knows that San Jose is hamstrung by the referendum requirement and other political realities, so it may be playing its own special brand of hardball. A supposed quid pro quo deal between City and AT&T over rezoning an old work site near Santana Row may have been AT&T playing City like a fiddle. The Death Star of telecom is no stranger to strongarm tactics. This is the company that thinks eliminating a wireless carrier by acquiring it will actually bring more competition to the industry.

FWIW, I’ve been consistent in my feeling that no one in the South Bay camp has the stomach for a lengthy antitrust challenge to MLB. As for the “best ballpark deal”, with the A’s on track to pay for everything ($450 million ballpark and up to $100 million in land and improvements), yes, it would be better than the deal for AT&T Park and any other MLB ballpark deal in the last century.

09.15.11
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Unanimity

On March 11, Chuck Greenberg was ousted as Texas Rangers’ managing partner and CEO. Nolan Ryan was named CEO immediately thereafter, with the plan to become the managing partner down the road. Two months later on May 12, Ryan was approved as the Rangers’ managing partner by a 30-0 vote.

Just over six months after Greenberg’s ouster, the Giants were forced to announce managing partner Bill Neukom’s “retirement”. Mark Purdy reported that Larry Baer would be named CEO of the team, with someone else becoming managing partner. Purdy included three names as the possible next managing partner, including Franklin Templeton Chairman Charles Johnson, who appears to be the frontrunner among internal candidates (I’m not aware of any outside money coming in at this point, though Neukom said he will divest his share in the future). The Giants will need to address that hole at the top of the organization, since it’s the managing partner who represents the team on all relevant league matters, and a fairly important league matter is coming up in CBA negotiations. (The CEO title is entirely internal to the team organization.) Based on the lead time for the slam dunk approval for Ryan and the drawn out process for Jim Crane’s purchase of the Astros, approval of the Giants’ new managing partner candidate should take at least two months.

Now we all know how much Bud Selig, who gives the ultimate thumbs up or down on all ownership matters, likes consensus (or at least the appearance of it). He had no trouble rustling up the 30-0 yea for Ryan, since the fireballer has been a known quantity in baseball for over four decades and is not the type to rock the boat. He wants the same thing for the Astros, and he should get it for the Giants. Reservations about Crane’s previous business doings have tripped him up at least in some owners’ eyes. Just as reservations stand in the way for Crane, there could be at least one owner who stands in the way of 30-0 for the Giants: Lew Wolff.

Wolff has signaled on this site that he’s going to go along with whatever the Commissioner decides, so we can’t expect Grandpa Lew to pace outside Bud’s office wearing a sandwich board. Yet he doesn’t even need to formally verbalize his dissatisfaction regarding the Giants’ territorial rights stance in an owner’s meeting – everyone knows what he thinks and the threat he represents. This provides an opportunity – or rather, an excuse – to bring the two teams to the table to work things out. The Giants have the big holdout vote on the A’s moving to San Jose, and the A’s could be the dissenter in approving a new Giants managing partner. Obviously, the two decisions are not even in the same spectrum in terms of impact, but when you have a commissioner who strives for unanimity, even the smallest tensions can upset it. What’s a commissioner who normally sits on his hands to do? The last thing he needs is the appearance of disunity among his ranks, and a stalemate between the two Bay Area teams couldn’t come at a worse time, even if CBA negotiations are not expected to be particularly rancorous. Both the Dodgers and the Mets are on Lady Justice’s clock, which means no quick resolutions for either.

It’s unfortunate that the Giants chose to make this change now, before the season is officially over. They know that the CBA is coming up, they know that Wolff is looking for a crack in the door. They were probably looking to wait until after the big decisions were complete in November-December before they announced Neukom’s departure. Purdy foiled their plan with his reportage, and if it wasn’t for the very professional Giants media relations staff, he’d be persona non grata at AT&T Park. Nevertheless, that’s where we are now, and while it’s a leap to think that Wolff will aggressively pursue a course of action or lobby owners, that crack is there.

I’ll characterize Wolff’s chances at this point at 25-30% of getting what he wants, 50% of at least getting to the table. Considering where we’ve been for the last few years, I think he’ll take the odds every time.

09.11.11
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Legislative and political flurry

A series of changes at Oakland City Hall and the State Capitol may portend well for Oakland’s chances to get either an A’s ballpark or Raiders stadium built. Or maybe not.

First up, newly hired Oakland City Administrator Deanna Santana, late of San Jose, made two key hires in poaching SJ Finance Director Scott Johnson and SF Redevelopment head Fred Blackwell to be Assistant City Administrators, each with different roles. Johnson will be tasked with the responsibilities you’d normally consider as part of a city manager/administrator role, such as finance/budget and labor relations. Meanwhile, Blackwell will be covering a redevelopment-oriented role. Scuttlebutt is that CEDA head Walter Cohen may be on his way out amidst “major changes” there. Could CEDA and ORA be headed for big time restructuring? It would make sense if they want to deal with next year’s budget deficit early. That shouldn’t mean bad things for the Victory Court EIR or the Raiders project since they’re already in the pipeline. It probably means there will be fewer resources for planning and future projects, both short and long-term.

Up in Cowtown, yet another bill (actually two) designed to bypass the CEQA process has made it through the Legislature. SB 292 (D-Padilla, San Fernando Valley) limits potential legal actions against LA Stadium/Farmers Field EIR by pushing challenges up to the State Court of Appeal, where cases could be expedited more quickly. This is important because it could save several months, maybe even a year by offering this kind of protection. The actual EIR review process will not be impacted in a major way, only the method for dealing with legal challenges. SB 292 only protects the Farmers Field project, so it isn’t helpful for either Oakland project, or others with already certified EIRs.

A companion bill, AB 900 (D-Steinberg, Los Angeles), could help Oakland. Initially meant as a companion for SB 292, AB 900 expands its coverage to large projects worth $100 million or more. Naturally, that would include any major stadium or arena project throughout the state, including either Oakland stadium, the Kings’ downtown arena in Sacramento, and others. AB 900 actually sets a time limit of 175 days for the Court of Appeal to issue a decision on any affected project after a party files a petition challenging said project. AB 900 will not become law unless SB 292 also is signed into law, so at this point everything rests with Governor Brown, on whose desk the two bills sit.

Brown may be of two minds on the bills. On one hand, he can’t be in love with the Legislature for flat out denying him on a multitude of tax extension requests, though he may be putting the blame on Republicans instead of his own party. And while he’s no proponent of stadium projects, in the case of these two bills there are no traditional public sources of funding being tapped, so he may be a little more amenable to signing these bills than he would for other deals. We’ll see shortly.

08.22.11
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America’s Cup Draft EIR available

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This view where Harrison Street ends at The Embarcadero could be blocked by huge yachts or a marina if the project is developed as planned.

In fact, not only is the America’s Cup environmental impact report out, the initial 45-day comment period is almost over (last day for comments: Thursday). Somehow I missed this among all of the other stuff going on. Thanks to Chronicle architecture writer John King’s article in protest of some of the waterfront changes, I finally got a look at it. I’ll have more to write about it later.

The EIR was made available on July 11, only 7 months after the deal was made between the America’s Cup and the City of San Francisco. It goes to show what can happen when there’s a real deadline and a real partnership in place. Contrast that to what’s happening with the Victory Court EIR, which is at least for now, nothing publicly. The America’s Cup project is leaps and bounds more expansive and impactful than Victory Court, covering huge swaths of SF waterfront with the potential to significantly reshape the area much the same way post-Loma Prieta planning did 20+ years ago.

So why isn’t there anything yet about Victory Court? Maybe Oakland no longer feels it’s in a rush. Maybe Oakland isn’t prioritizing the project at the moment. Maybe Oakland doesn’t want to have that big discussion with its citizens just yet. No one can say that it’s a matter of due diligence, since the scope of the America’s Cup project is so much more vast. Victory Court has impacts beyond the 12-block project area, but everyone knew that going in. All I can give to the VC project right now is a big shrug.

08.11.11
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Redevelopment agencies granted stay until January

CORRECTION: Apparently I misinterpreted the news wrong. From the LA Times:

The court issued an order delaying enforcement of most provisions of the new law until a ruling on the merits of the case, but said redevelopment agencies could not incur new debt, transfer assets, buy property or enter into new contracts in the meantime.

So that means that neither SJRA or ORA could make the land purchases. Ah, but San Jose created a new joint powers authority, SJDDA. Sounds like a truck-sized loophole.

It looks like the gambit being played by RDA lobbyists, San Jose and Union City has paid off, at least for a few months. The California Supreme Court ruled today that redevelopment agencies have been granted a stay, delaying their dismantling until as late as January 15, 2012, when the court is expected to make a final ruling on the constitutionality of Governor Brown’s plan (Chron/Merc).

That doesn’t mean that RDAs are dancing in the streets. Yesterday, Los Angeles committed to a $97 million payment to the state so that the agency could stay operational. In doing so, that means the top two RDAs (LA, San Diego) have chosen to pony up. That leaves Oakland, which hasn’t said much about its plans, and San Jose, which is a plaintiff in the lawsuit, looking to either continue activities as planned or negotiate a different payment schedule.

For San Jose, this probably means they can move forward with the final land acquisitions at Diridon, which were supposed to be wrapped up by the end of June. In Oakland, this probably means they can go ahead with the Coliseum/Raiders redevelopment plan, and if other expenditures were required for Victory Court (such as extra EIR work), those could get the green light too.

All right, cities. You’ve got up to five months to crank out some results. Get to it!

OT – On A’s Talk, Chris Townsend may have revealed that the Sharks may not be on The Game this upcoming season.

One more thing – Cisco rose 16% today on a better-than-expected earnings report.