Summing it up (with Slusser update)

Mark Purdy takes all of the stuff we’ve learned over the past couple of weeks and neatly summarizes it, with a few more tidbits thrown in for good measure.

  • The January owners meetings will by January 11-12.
  • Lew Wolff says that he has not been any discussions about selling the team.
  • San Jose Mayor Chuck Reed craps all over Oakland’s plans (such as they are).

I get the feeling that a lot of San Jose boosters are very excited this holiday season. Their gift will have to wait until after the New Year.

Updated 11/22 1:30 AM – Susan Slusser also adds to the story, describing Wolff’s trip to Scottsdale to meet with Selig two weeks ago. This time, Billy Beane was reportedly on board. Here’s the sure-to-be-controversial bit:

Oakland lost money last season for the first time this century, with an expected shortfall of several million dollars, according to Beane. The team is consistently a recipient of $20 million or more in revenue sharing, and Oakland’s attendance actually went up in 2011, but the payroll also went up $15 million, from $52 million to $67 million.

In past years, when the A’s were clearly out of contention close to the non-waiver trade deadline, the team’s modus operandi was often to sell off players. Part of the reasoning was to get young players (probably with little-to-no service time), part of it was to dump salary. 2011 was different in that despite the team was mired near the cellar for much of the second half, yet Beane and David Forst did not sell off Josh Willingham, Coco Crisp, or any of the starting staff. The only notable trades were of Brad Ziegler and Mark Ellis, and in Ellis’s situation the A’s actually sent the Rockies a little cash to make the deal work. While it would make sense to hold onto Willingham if they weren’t receiving anything they wanted in trade, if they held on they’d potentially get a first round or sandwich pick as compensation when some other team signed Willingham.

By not trading any of the veteran free-agent-to-be outfielders (Willingham, Crisp, Matsui), the A’s kept $3-6 million on the payroll. That’s probably the difference between breaking even and losing money in 2011, if Beane is to be believed. Keep in mind how this works from an accounting standpoint: unlike moneymaking teams who get virtually all of their revenues either in advance or throughout the course of the season, the A’s revenue sharing check only comes in December, well after the season is over. They and the other have-not teams don’t consider the revenue sharing receipt as part of their P&L because it’s not there when it can make a big impact. (No, the check is not going to impress Scott Boras if Beane calls about Prince Fielder.) On the other hand, it has a short-term turbo-boost effect on teams that recently opened or are about to open new ballparks, since those teams can get both the receipt for the past season and higher projected revenues for the first season in the new park.

Did Beane and Wolff hold onto to the outfielders in order to prove a point to Selig and MLB? That the M.O. of the past decade(s) was untenable in the long run, while bucking the trend doesn’t work in the short term? Surely they must have realized that Type B compensation was going away – it was talked about throughout the season – so why keep David DeJesus? It wouldn’t surprise me in the least if this was planned, given the current spending freeze until a resolution to the stadium problem is found. It reminds me of that silly fake-to-third-throw/fake-to-first play. It’s plainly obvious what’s happening and it elicits a chorus of boos. Once in a while it actually works.

Rosenthal has scoop on San Jose (Updated with analysis)

Read Fox Sports baseball writer Ken Rosenthal’s new article on A’s-to-San Jose move developments, then check back here for analysis and discussion.

The big stuff from Rosenthal:

  • MLB wants a larger seating capacity than 32,000. FWIW, last year I explained how the A’s could get up to either 36,000 or 38,000 by simply adding four rows to one or both seating levels.
  • Selig supposedly warned Wolff that $180 million precluded a move to the South Bay. First, take a look at the chart of recent franchise sales I posted last May. Then consider two takeaways from this: 1) Wolff may have to pay compensation to enter Santa Clara County even if he disagrees with it, 2) An Oakland or East Bay-based A’s automatically has a depressed value, as was speculated when Steve Schott lacked interest in Uptown. How does MLB reconcile those two problems, which are clearly related?
  • The usual back-and-forth between Wolff and critics, and the Giants’ continued intransigence.
  • MLB could explore the Montreal option and buy the club and resell when they get a stadium deal and a buyer for the team. Of course, that only hastened the Expos’ departure from Montreal. Also, MLB has to know by now that $500 million for an Oakland ballpark with the economic and political climate in California is going to be more than a little difficult. It goes back to bullet point #2 above: if MLB and prospective owners know that Oakland and the East Bay are limited in terms of revenue generation, what is the financial incentive to build there? How does that help the franchise or MLB for that matter?
  • There’s a claim that the Giants would have to hit 3.2 million in attendance in order to “break even” with a projected $130 million payroll in 2012. That’s a curious point, and one I’d ascribe to a talking point from someone in the Giants, until I looked at the numbers. This past season, the Giants hit a $114 million payroll figure on $230 million in revenue (49.5%). Historically, the Giants have been at around 52-53% of revenue over the course of the last CBA, though in 2008 they hit 56%. That’s probably their upper limit, and $130 million in payroll would speak to that unless they got some new revenue stream out of nowhere. Or unless someone took some dead weight contracts off their hands.

All of the things I’ve been hearing leading up to the owners meetings is that some sort of resolution is due as soon as January. Rosenthal’s article certainly supports this, and actually gives a tiny amount of credence to the idea that Selig is being thorough. (Imagine that?) The path to resolution, as described by Rosenthal, is not the easiest to negotiate.

That’s a lot to take in for a lazy Saturday afternoon. I’ll be off to a birthday party soon, so my contributions to the comments thread may be limited the rest of the day. I’ll still check in every so often, so behave yourselves.

Added 4:20 PM – The Merc’s Scott Herhold picks apart the San Jose ballpark land deal, calls critics “short-sighted”.

Checking the couch for loose change

Mary Ann Azevedo of the SV/SJ Business Journal has the news (print version) that the San Jose Redevelopment Agency is using proceeds from the summer sale of various downtown properties to pay off lingering and pressing debts, instead of using the money to pay for ballpark land.

The numbers paint an interesting picture:

  • Sale proceeds are around $19.9 million, which is less than the $25 million SJRA and the City expected to get when the properties went up for bidding early in the year.
  • The discount on the five acres of ballpark land is $19 million, based on the combined original purchase price for the various properties and not accounting for inflation.

It would seem that if the A’s paid the full $25 million for the land, it would help the City further service agency debt while also countering a criticism that that Lew Wolff is getting a plum deal. Even if the A’s paid $12 million more, which would be the appraised “ballpark purpose” market value, it would significantly dull the chief argument by ballpark opponents.

Of course, it’s easy to say the A’s should keep piling on the dollars since it’s their money. They’re only footing the bill for the rest of the land and relocation costs, infrastructure improvements (in all likelihood), and the cost of ballpark itself. By my math the cost of the entire project, including land, is somewhere in the neighborhood of $550 million. If the City continues to provide the $19 million discount on less than half the ballpark land, the A’s and Wolff are paying for 96.5% of the entire project along with 100% of stadium construction cost. There’s no other public-private funding mix in recent history that comes close to this. By comparison, AT&T Park’s public-private mix was roughly 80-20 ($357 privately financed construction, $90 million in publicly-financed land, infrastructure, and tax abatement). FYI, the best deal in all of North American pro sports over the last 30 years is probably the late Bill Davidson’s The Palace of Auburn Hills.

Even with the land sale, SJRA is not in the clear. The fate of the agency lies in the California Supreme Court, where the Justices are expected to decide how redevelopment will be formed moving forward.

Meanwhile, Oakland continues to pursue redevelopment despite impending doom. It’s spending nearly $8 million to spruce up the aging Convention Center. The Port of Oakland, in conjunction with the City, is applying for a $40 million grant to transform the Oakland Army Base into a “trade and logistics center.” I’m sure the pollution-plagued residents of West Oakland are in love with that idea.

Don’t expect major news next week

Last week I suggested that the Dodgers’ situation would take the A’s off the agenda for next week’s owners’ meetings. The closer we get to the sessions, the more I suspect that this is correct. The one thing that might have allowed the A’s to be brought up next week would’ve been an early CBA announcement, but none has happened as of yet. So it’s A) CBA, B) Dodgers, C) Astros, plus whatever committee stuff is on the agenda. Unless a miracle happens, the A’s will not be up for discussion at all.

That’s bad news for many fans hoping that a resolution to the A’s situation would allow the front office to start building next season’s team in earnest. If Billy Beane and Lew Wolff hold fast to their “no spending while in limbo” stance, the December GM meetings will come and go with little movement. Of course, there’s no stopping Beane from making moves well after the GM meetings (the Swisher trade was in January 2008), and regardless of stadium/site news the team were not expected to be a player for any big free agents. Instead, they’ll make the usual arbitration deadline offers for guys like Coco Crisp and Josh Willingham, and scoop up whatever picks they can when those two are signed by other teams.

This week I’ve seen frequent references to a Bill Madden article at the NY Daily News from last weekend. Here’s Madden’s scoop:

Are the Oakland A’s finally about to know the way to San Jose?

According to baseball insiders, the reason A’s co-owner Lew Wolff, the L.A.-based real-estate developer and close personal Selig ally, is not going to be a bidder in the Frank McCourt Dodger auction (as had been frequently speculated) is because the commissioner has given him tacit assurance that his effort to move the A’s to a new stadium in San Jose is eventually going to be approved.

Once Selig completes his major accomplishment of ridding the game and liberating the Dodgers of McCourt – which hopefully will be before Opening Day – he can turn his attention to the A’s, who have been waiting more than two years for his relocation study committee to deliver its report on San Jose and the San Francisco Giants’ territorial rights there.

Again, Wolff wasn’t going to be caught up in the Dodgers’ bidding process because A) he’s fully committed to the San Jose project and the A’s, and B) the fact that the Dodgers will be sold through an auction means that the team will go to the highest bidder instead of a deal orchestrated by Bud Selig. Note that Madden doesn’t say when Wolff will be granted San Jose, only that it’ll happen after the Dodgers sale is wrapped up. The next logical time for a decision to be made would be the next owners’ meetings, which are usually in mid-January. With several major issues presumably off the table, the A’s plight could finally get the attention it deserves. It’s also possible that the Giants’ managing partner discussion will come up at that point, making the possibility of both coming into play simultaneously that much more acute. The Dodgers probably won’t come up again because with the number of parties expected to bid on the Dodgers, I doubt the prescreening process will be finished by then. It would make more sense for the owners to approve the ownership change in May, as they did with the Rangers last year.

Maybe I’ll be wrong on this. Everything I’m reading and hearing points to events moving in that oh-so-deliberate fashion for the green-and-gold heroes. The quick acceleration of the Dodgers situation – which I’m sad to admit is more important from a business standpoint for MLB – makes it absolutely imperative that Selig addresses them first.

News for 11/09/11

Tomorrow morning I’ll be in SF to check out oral arguments for the State vs. Redevelopment case. If I can liveblog it, I will.

The regular media (SFGate, Merc, MLB.com, KGO) covered yesterday’s proceedings fairly well, though I’m surprised there wasn’t a bigger mention of the discussion about the referendum requirement. No matter, the San Jose City Council formalized the requirement by amending the motion just before passing it. Still, I don’t think this is the last of the referendum discussion.

There’s other news on the ballpark/stadium front:

  • The Royals may or may not have agreement in place to sell the naming rights to venerable Kauffman Stadium.
  • Rangers Ballpark in Arlington is undergoing $12 million in renovations, including a major revamp of the area behind centerfield. Changes will include relocation of the suboptimally located visitor’s bullpen, the addition of an indoor club and several concession stands.
  • The University of Washington’s Husky Stadium just started a massive $250 million renovation project. The track will be removed, the field dropped four feet, and more seats will be added close to the field, similar to the changes at the LA Memorial Coliseum. In addition, new locker room and training facilities will be added, as well as premium seating options. Like the $321 million Cal Memorial Stadium renovations, these will be largely dependent on donations for funding. The Huskies will play next season at CenturyLink Field (formerly Qwest Field).
  • The Populous architect overseeing the 2022 Qatar World Cup project believes that the venues will not need air conditioning. The goal is to make the venues carbon neutral, something that made the winning Qatar bid attractive. A company called Arup Associates has a demo of the technology in place at a 500-seat stadium, though you could naturally be skeptical about the ability of the tech to scale to a venue with 100 times the spectators.
  • The Sacramento Bee’s Marcos Breton wonders what the ongoing NBA lockout means for the local arena effort.
  • A report on NPR’s Morning Edition goes over the economic impact of the lockout.
  • A’s naming rights sponsor Cisco Systems (Nasdaq: CSCO) beat the Street today, which may signal an upswing for the networking giant. The stock was down during the regular session but up in after hours trading.

That’s all for now.

SJ City Council to consider land deal on Tuesday

Update 10:25 PM – Not surprisingly, the Merc’s editorial board has come out in favor of the land deal.

Procedurally, the approval of the land deal to complete the Diridon ballpark site should be a slam dunk, considering the SJDDA (which approved it in the first place) and the City Council are effectively one and the same. Still, since tomorrow’s City Council session will be a public affair, there should be a mix of voices pushing to persuade/dissuade the Council. In particular, I wonder if any/many of the Occupy San Jose protesters will attend, since they will be in close proximity. Far be it for me to expect fireworks at a San Jose City Council session, but I’ll be attending anyway. The session will be at 1:30 PM at Council Chambers.

City has also posted the agenda for the session and an all-important memo containing the details (PDF) of the deal. Some of the finer points:

  • The issue at hand is the approval of an option agreement (end of memo), in which terms are laid out for the A’s to purchase the land. That’s not the end of it, because a formal purchase agreement will have to be drawn up within 90 days of execution of the option agreement.
  • Quoting from the memo directly here: “The Redevelopment Agency paid approximately $25,160,000 for acquisition and relocation costs for the entire ballpark site.” That’s a bit misleading, because the land being sold does not include the parcels that are yet to be purchased to complete the ballpark site.
  • Colliers International estimated that the entire value of the site is $38,250,000 if for its “highest and best uses”. Appraised solely for a ballpark use, the land is worth only $19,100,000. Back when Diridon was first discussed in 2005, the market value of the entire Diridon site was probably close to $70 million. If they had purchased the PG&E substation and the land fronting Los Gatos Creek, the cost would’ve soared over $100 million easily.
  • Purchase price of the site for AIG (yes, that’s the “Athletics Investment Group” if you haven’t been watching local broadcast disclaimers) is $6.975,227, or 36.5% of the appraised value, and does not include the already public land within the site (Montgomery and Otterson Streets).
  • AIG’s option to purchase the site is for two years ($50,000), with the possibility of an additional year ($25,000).

This is the only item on the afternoon session agenda, which should allow for a lengthy discussion and comment period. Baseball San Jose put out a letter on its blog providing talking points on the deal.

Buster Olney is not all sunshine and roses

During this afternoon’s installment of The Drive with Brandon Tierney and Eric Davis, ESPN’s Buster Olney showed up for a segment on baseball and hot stove action. Among the talk of free agents was a discussion between the three about the state of your Oakland Athletics. As with the Wolff interviews, I’ve taken the time to transcribe the 5+ minute discussion. This time I won’t provide any commentary. I’ll leave that to you in the comments. Keep in mind that this was Tierney and Davis asking Olney on his opinion about the franchise, so do not take it as gospel. Instead, consider it simply as the view of a prominent national baseball writer who is not known for mincing words. Also, remember that Olney’s musing last year got the ball rolling on the Wolff-to-Dodgers rumor. That’s how powerful his word is.

Without further ado:

Davis: Things are just dire. They’re a mess over in Oakland.

Olney: Terrible.

Davis: It’s horrible over there. What do you hear that they’re willing to do in baseball to help this club?

Olney: Well, the Athletics continue to be strung along with the hope that they’ll eventually end up with a ballpark in San Jose. Here’s the thing. They started that Blue Ribbon panel 2 1/2 years ago, that’s 1 1/2 years longer than it took the Warren Commission to issue its report on the Kennedy assassination.

Davis/Tierney: *chuckle*

Olney: The bottom line is that they haven’t gotten any kind of traction from MLB. Now the Dodger situation is getting settled. The labor agreement is getting settled. Maybe at some point soon the Athletics – who to me right now have less hope than any organization in baseball – they are rotting. Maybe if those things get settled out that’s when you’ll see MLB go to the Giants and say, “Look, we need to talk. We need to figure out a way where you get the Oakland territory and Oakland gets San Jose.”  That way they can have a future. Right now the Athletics have no future and that’s why Josh Willingham is leaving and their other free agents are leaving, and they’re really not going to step in and do anything about it because their future is so uncertain.

Tierney: I’ll tell you. It is sad and I think you lay it out well. Willingham, there’s no doubt that he’s gone. DeJesus, Matsui, Coco Crisp. I guess the question is besides Jemile Weeks and Pennington who do we even know on the team next season?

Olney: And the pitchers.

Tierney: Yeah.

Olney: The problem is now though is that let’s say that midway through next year baseball stepped in and said, “Guess what? You get a stadium in San Jose.” All these pitchers they developed, the Trevor Cahills, the Brett Andersons, Gio Gonzalez. By the time they actually break ground and make progress and starting building that park those guys are going to be trade bait.

Tierney: That’s true.

Olney: They’re gonna have to move them out of there because they’re not gonna keep them around, and they’re not gonna sign them to long term deals. It’s really a sad situation.

Tierney: …Lew Wolff, where does he rank in terms of wealth amongst owners? I’m just trying to connect the dots here.

Olney: He’s got wealth – and I’ve always believed this – for example, when people rip the fans in Tampa Bay for not going seeing the Rays. My feeling is those people who live there, they made that decision based on their information. And I don’t blame them. If they don’t think it’s convenient, they don’t think it’s attractive, they’re not obligated to watch their games. I think in the same realm I don’t think Lew Wolff is obligated to pour his money down a hole. The history of Oakland Athletics, whether anyone likes it or not, they cannot draw there. They didn’t draw there with Reggie Jackson. They didn’t draw there with the late Billy Martin’s teams. They didn’t draw there for the Dennis Eckersley teams, the Tony LaRussa teams. They don’t draw now. I think you’ve got a lot of history which tells you that site and that place is a loser if you’re the Oakland Athletics.

Tierney: Wow. *laughs* That is just desperation mode.

Other than personal attacks, anything in that discussion is fair game in the comments. Keep it clean.

Have a nice weekend, everyone?

Revised Citi Field dimensions unveiled

Sandy Alderson is making his mark as the new general manager of the Mets, and it starts with changes to the dimensions at Citi Field. Sure, beleaguered owner Fred Wilpon probably made up his mind long ago, but Alderson must’ve had some say over the details. The new dimensions are much more neutral than the expansive, pitcher-friendly measurements of old, as you can see from the comparison below.

The corners remain unchanged and didn’t need to be changed. Gone is much of the Modell’s notch in right field, to be replaced by a picnic area and a chain link fence. Where the original juts out in the power alley, the dimension and wall remains. Another short fence brings in the notorious triples alley in deep right-center under 400 feet (hint-hint, Giants). In left field, most of the 16-foot high wall will have an 8-foot fence placed in front of it, which should make David Wright’s life a lot easier. Wright tallied 14 HR at Citi Field during the 2011 season, it should be interesting to see how much he and Jason Bay benefit. Bay in particular has not been able to make the adjustment with only 18 HR in 900 PA over the last two years. In addition, it’s just as important for the Mets that Citi Field shake its reputation so that it can attract free agent sluggers in the future.

Despite the planning goof that Citi Field was at the outset, it generally follows the important rule that it’s always easier to bring fences in than to move them out. Around here we’re worried enough about Cisco Field that we’ve turned to making suggestions about making the dimensions more neutral. Unlike Citi Field, which was built on a large expanse of land, Cisco Field’s dimensions are limited by a major street to the east. There’s no moving that, or a gigantic wall/building in right.

A’s to get huge discount on SJ ballpark land

As part of the complex land deal the City of San Jose is trying to complete in order to assemble the Diridon ballpark site, City is selling five acres of land it has already acquired to the A’s (and Lew Wolff) for $6.9 million, according to the Merc’s Tracy Seipel. Indexed for inflation, that price is only a quarter of the original purchase price and half the land’s market value. The land in question includes the former Stephens Meat plant (now a parking lot), the vacant former KNTV studios, and other properties along West San Fernando. The land sale will be voted on at the November 8 City Council meeting.

If the Quakes land deal is any guide, City will do the following assuming they get the green light from MLB:

  • Make final offers to holdout landowners including AT&T, threaten eminent domain if needed
  • Allow A’s to step in and buy properties at market value plus relocation costs
  • A’s deed all land back to City
  • City arranges for nominal ground lease for A’s to build ballpark (similar to China Basin)
diridon_parcel_map-03_2010

Ballpark site parcel map as of March 2010

The whole package would have to be voted on be the citizens of San Jose sometime within the next year. I expect City to push hard for a special election sometime in the early spring – perhaps during spring training or as the baseball season begins – instead of choosing for the 2012 June primary or November general election.

Mayor Chuck Reed continues to express confidence (bravado?) in the City’s ability to finish the land deals without resorting to eminent domain. To that end, an AT&T spokesman gives a sufficiently cagey answer when asked about selling the Montgomery work center.

Within the span of nine days, we’ll have three major developments in this neverending saga:

  • November 8: San Jose City Council votes on land deal
  • November 10: Oral arguments begin on redevelopment court case in San Francisco
  • November 15: Territorial rights may be taken up on the owners meetings agenda (not guaranteed)

I’ve cleared my schedule properly to cover all of this, in person for the local stuff.

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).