The A’s small market myth?

There’s a good column about the A’s and their claims of being a small-market team by virtue of their stadium situation. I agree the assessment that the A’s have been holding the pursestrings too tightly, and that the small market claims are as much a sell job as they are fact. However, the writer didn’t point out one big issue for the A’s – the revenue sharing agreement. The A’s are perennial recipients of a revenue sharing surplus, which should be fed back into the organization for player salaries. The problem with that is that the surplus is received well after the season ends. Other teams with large revenue streams get much of their money upfront in the form of suite leases, large season ticket rolls and locked-in ad agreements. The A’s are stuck in a place where they’ll get this surplus ($19 million this year), but they can’t expect to receive that amount every year, and so they can’t immediately invest it in new players. Because the amount of the surplus fluctuates from year to year, it’s difficult for them to commit to free agents for long-term deals. What the A’s have done (with the exception of 2004) was get players midseason, and many of those moves have enhanced Billy Beane’s reputation, while giving the team that second half boost. Still, they should shell out some of the extra cash to keep a few of their franchise cornerstones instead of pocketing the cash.

There’s also a little dishonesty about the Forbes figures. Since MLB is private, it’s hard to tell how much revenue is being hidden by organizations who happen to also own the stadiums, concessionaires, radio/TV outlets, etc. The A’s don’t have that type of vested interest relationship, so their revenue figures are probably more accurate than the Giants or Yankees. Unless a team gets into major financial straits and gets audited as the Brewers did in 2004, we may never know how much any team truly makes.

Wave Magazine blurb on new ballpark initiative, San Jose

The Wave Magazine notes that the March 11 press conference was not merely a little get-together between Oakland and Alameda County officials and Lewis Wolff. It was also staged to announce Wolff’s “personal involvement in an Alameda County ballot initiative that seeks a new (read: permanent) home for the A’s in Oaktown.” This is the first time I’ve seen a mention of such an initiative, and while it’s considered a given that a referendum will be required for any stadium in the Bay Area, I hadn’t seen anything regarding the A’s direct involvement until now. That leads me to believe that the process may be fairly advanced at this point, which it would have to be if they wanted to get something on the November ballot or even the midterm primary ballot in 2006.

The clock is definitely ticking. Even if an initiative passed, it’s unlikely a new ballpark would open before opening day 2009. If the ownership group is directly involved, there will almost certainly be an ad campaign accompanying it, featuring current and/or former players. The Dallas Cowboys got Arlington, TX voters to pass their new stadium initiative due in large part to a $5 million campaign. Ads and public appearances featured former Cowboy greats such as Troy Aikman, Roger Staubach, and Daryl “Moose” Johnston. Stadium opponents spent only $40,000.

The irony is that some Alameda County voters may not be able to see any pro-stadium ads during A’s games broadcast on KICU-36 because of poor reception.

The next issue of The Wave promises “the complete lowdown” on the San Jose effort.

More on A’s sale

According to an article on MLB.com, the vote on the A’s sale to Wolff & Co. will happen on Wednesday. Not much else new except for what appears to be a confirmation that Steve Schott will remain a limited partner in the new ownership group. There’s also another quote from Selig regarding Santa Clara County territorial rights:

“We have a sport where you just can’t have anarchy,” Selig said. “You can’t be changing territories. It’s a territory that’s owned by the San Francisco Giants and that will be respected. You just don’t change those things and we won’t.”

I believe that places the ball in San Jose’s court.

Estuary Plan

This post posits an alternative Oak-to-Ninth plan which incorporates several features in keeping with the EPP. Among the features:

  1. Most of the Fifth Avenue Marina is developed for recreational purposes, including an expansion of Estuary Park on the other side of the channel, a new public marina on the southwest end, a meadow/public park, and parking.
  2. Preservation of the Silveira property.
  3. Potential other mixed use (commercial/industrial)
  4. Conversion of Clinton Basin to a 70-slip floating home community much like those seen near Sausalito, in Alameda and in Seattle.
  5. 1,000 new apartments and condominiums in a 13-acre village concept on the Ninth Ave section, with up to 100,000 square feet of commercial space.
  6. 40,000-seat ballpark at the east end of the Ninth Ave Terminal, with a 1,200-car garage adjacent.
  7. 300-room hotel overlooking the estuary.
  8. Greenbelt/Park established along waterfront for both Fifth and Ninth sections.
  9. An option to preserve most if not all of the Ninth Ave Terminal building.

Click on the photo below to view a larger version.

One of the interesting possibilities lies in the land between the Embarcadero and 880 (the yellow strip in the photo above). Formerly a rail right-of-way for Union Pacific, it’s not used for anything right now. The track is still there except for portions paved over at intersections. Part of it will be used for the Caltrans Fifth Ave Interchange project, but much of it may be available for other uses. The strip could be converted into parking for about 250 cars. An alternative plan could have the track reused for a trolley that runs between Jack London Square and the ballpark. Such a trolley could help alleviate the parking problem that will occur on site by letting patrons park near JLS, then take the spur to the game. While a light rail or trolley project for Oakland has been discussed for some time, the presence of rail makes it more of a possibility to fast-track a LRT plan. Alameda has been discussing transit options including bus rapid transit and a tram.

Advantages:

  • Nearly half of the area would used to establish new waterfront parks and recreational facilities.
  • Small ballpark footprint is designed not to dominate landscape.
  • Introduction of new types of housing (floating homes) and numerous units of affordable housing.
  • Subsidies that may be needed to support affordable housing would be lower than those that may be required of Signature plan.
  • Site is “owned” by City and Port, mitigating acquisition costs.
  • Preservation of Silveira property and artist colony.
  • Addition of a luxury or resort hotel, which currently doesn’t exist in Oakland.
  • Potential to introduce new mass transit options that serve the waterfront.
  • Location is both close to downtown and highly visible from a major freeway.

Disadvantages

  • Costly cleanup and preparation. The land is considered a brownfield, and cleanup is estimated at $16 million.
  • Distance from existing BART (Lake Merritt Station) is 1.2 miles. That’s a bit too long to walk. A new station could be built along 8th St near 8th Ave next to BART’s maintenance facility, but construction of a station platform and the pedestrian overpass required to span the rail yard immediately to the south could be prohibitively high. The use of a shuttle bus to negotiate the remaining distance may be cumbersome.
  • Limited parking – 1,200 spaces for ballpark in a single garage devoted to the ballpark. A parking district would also have to be created for residents.
  • Infrastructure costs. The Embarcadero along this stretch is often only a two-lane road, and it would have to be widened to accommodate assumed increases in traffic. Controlling ballpark traffic so that it doesn’t hamper residents of nearby neighborhoods would also have to be planned accordingly.
  • Startup costs for trolley are high. Cost to build the roughly 1 mile segment would be $40-50 million, which may not be worth it considering the number of riders that might use it. Similar projects were developed in Memphis and Seattle, and both have very limited ridership.
  • Housing advocates may want more units or more affordable units.

Conclusion
The Estuary presents a unique opportunity to create a mixed development that benefits many different groups and gives the A’s a distinctive home. However, there are numerous hidden costs associated with development, and it is unclear who would pick up the tab.

Estuary Site Overview

The Oak-to-Ninth Estuary area is a unique site. It’s one of the last undeveloped, urbanized waterfront areas on the West Coast. Because of its development potential, civic and community leaders have been keen to make sure it doesn’t become overly privatized or densely developed. In 1999, the City of Oakland and the Port of Oakland put together a set of development guidelines called the Estuary Policy Plan. The EPP isn’t overly specific about what should be built on the 60 acres the area covers, but it does insist on the creation of open spaces with recreational uses.

Signature Properties has the exclusive option to build on the Oak-to-Ninth site. Its plan calls for 3,100 apartments and condominiums, along with commercial uses and parking. Slightly less than half of the acreage will be devoted to open space. There are concerns about the plan and whether it provides the most benefit for Oakland residents. That and a completed environmental impact report are factors in delaying any possible groundbreaking for perhaps a year.

In the HOK study, two options were presented for a ballpark development. The West plan put the ballpark on the smaller 5th Ave Terminal/Marina site. This would’ve caused conflict with property owner J.W. Silveira, who owns the only privately-held parcel in the area and has a thriving artist colony on it. Silveira is already suing Oakland because of a lack of disclosure, and it’s possible the same sort of thing would happen with a ballpark on his property.

The East plan put the ballpark on the large 9th Ave Terminal site, where it would’ve run into fewer ownership issues since it’s owned entirely by the Port. Instead, it would’ve run afoul of community interests, would would’ve noted the more than 3,000+ parking spaces and wondered if someone was trying to pass them for open space. There’s also the issue of the 9th Ave Terminal building, which preservationists claim has some historic value and should be preserved. The plan calls for the building to be restored and converted, which wouldn’t be a bad thing considering the success of SF’s Ferry Building conversion.

Unfortunately, it appears that the City and Port have settled on Signature’s proposal. If they hadn’t, they probably would’ve updated the EPP, which definitely needs revision considering the economic changes the Bay Area has gone through. It’s possible that major changes to the plan (which could come from community actions, the Silveira case, or the next District 2 councilmember’s support) could occur. If Signature were forced to pare down its development by 10-15 percent or make a large number of units fit under affordable housing guidelines, they may very well scrap the deal. The next post shows a compromise alternative plan that could satisfy the majority of interests.

Coliseum Site

So far, only the Coliseum has been mentioned as a potential ballpark site. This may change based on economic conditions or property availability. Wolff has said other sites within the city are being considered, but did not elaborate.

Site Overview: Unlike the use discussed in the HOK study, the site being considered is not the Coliseum’s existing north parking lot. Instead, it is the gravel lot immediately south of the south parking lot, and potentially site adjacent to it. The size of the combined properties is around 25-26 acres. The ballpark’s footprint would take up about 1/2 of the site. The rest would be used for mixed development uses and parking.

Advantages: Existing infrastructure. Land may be easily acquired, and once funded, development could occur without too much red tape. Among the plusses for the site:

  1. 10,000+ parking spaces already available. 6,000 adjacent to ballpark in the south lot. Another 4,000 in the north lot on the other side of the Coliseum complex. Small amounts of parking may be available on the project site, but those spaces may be reserved for residents and shoppers.
  2. Proximity to BART. Close, though it’s about twice as far a walk as the distance on the BART bridge from the station to the outfield plaza.
  3. View of Oakland hills returns.
  4. Little-to-no expected impact on other Coliseum/Arena events during construction. This is important because proponents will want to minimize friction from Raiders owner Al Davis as much as possible.
  5. Little impact on other neighborhood businesses during construction.
  6. Alignment along planned Airport People Mover route (Hegenberger).
  7. Low cost of land acquisition and preparation.
  8. No restrictions on ballpark shape, size, or field orientation.
  9. Minimal new infrastructure required.

Disadvantages: East Oakland location is not exactly prime real estate.

  1. Project may have difficulty attracting name retailers and restaurants.
  2. May pull limited redevelopment resources from other neighborhoods or projects that have more pressing economic needs.
  3. If project has a large public financing component to be paid using a TIF-based structure, there is a greater risk of revenue shortfalls because of site’s location in a less highly-prized market. This may in turn affect bonding efforts.
  4. Electrical transmission towers that run through site will need to be moved. Cost is unknown.
  5. Other Oakland sites may have better views, development opportunities, or integration with urban surroundings.

Conclusion: While the Coliseum may be the best option due to its few conflicts and built-in infrastructure, it is also the least sexy/interesting site in the bunch, and is not without risks.

The Red Sox new home is… their old home?

Looks like John Henry, Tom Werner, and company have come to their senses and are going to keep the Red Sox at Fenway for the forseeable future. Thankfully they didn’t go forward with the Fenway 2: Electric Boogaloo stadium concept pushed by previous owner John Harrington. They were able to get extra seats added in any remaining free space in the park and get permission from the city of Boston to close down Yawkey Way outside the park during games for added “concourse” space. This is certainly a welcome change from the trend of building new ballparks, but it’s an anomaly, not the reversal of the trend.

So you’re probably wondering, can the A’s and the JPA do something like that at the Coliseum? The answer to that, sadly, is no. Or at least not as long as the Raiders stay there. The Coliseum was built as a multi-purpose facility, and while it was considered at one point one of the best venues in baseball (circa 1989) and it remains a decent, underrated venue, there’s no retrofit that would really benefit the stadium at this point. The JPA has already added most of the amenities new stadiums have, such as luxury suites and club sections. Certain things such as the circular seating bowl won’t get fixed without basically tearing it down and rebuilding it. Plus there’s still the issue of Mt. Davis, the eastside seating section that seems to always threaten to engulf the outfield. It has 3 decks of suites and the vertigo-inducing upper deck is not a pleasurable baseball experience. I tend to be in agreement with many longtime fans in the idea that if all of the 1995 refurbishment except for Mt. Davis were built, the Coliseum would be more than passable for decades to come. It would have put it on par at least with the improvements made to Busch Stadium or Angel Stadium.

When the Haas family owned the team, they helped renovate the stadium to get it to ideal state it was in during the Bash Brothers era. Field dimensions were stabilized. The concourses got splashes of color, and the stadium itself received a more baseball-tinged identity. While the 1995 refurbishment gave the stadium the forest green seats and updated scoreboards, most of the baseball identity was stripped away. What replaced it were bizarre outfield dimensions, no more views of ice plant or the Oakland hills in the background, and a guarantee that the six weeks of the season or more would be played on chewed up, elephant-trodden sod and dirt.

Now here we are in 2005. What will the new ownership group propose? A now out-of-style retro facade, or a modern or even futuristic one? Restrained field layout or everything-but-the-kitchen sink? Distinctive or hodgepodge generic? My next post will cover those issues and others as I review my own Coliseum South proposal.

San Jose editorials

There’s a brief editorial in today’s Merc about how, er, pathetic the Gonzales/Stone trip to Phoenix appeared, especially after the pictures came out. Gonzales is no Oscar Goodman, though it must be said that Goodman hasn’t gotten MLB running into Sin City’s arms.

Former San Jose mayor Tom McEnery gets a little more detailed about the current mayor’s effort on his blog, which has an interesting note about Santa Clara County’s territorial rights.

Goodman appears ready to strike if the Marlins don’t get the $60 million requested from the state of Florida to finish funding for their new Orange Bowl ballpark. Portland is also ready to make a run if it doesn’t work out for the Marlins in Miami.

More idle speculation

Here’s another mockup of the Coliseum lot.

Should something like this come to fruition, here’s a breakdown of the potential costs

  • 40,000-seat Ballpark – $280 million
  • 288 800-1200 s.f. apartments/condos (blue buildings, 2nd-4th floors) – $60 million
  • 48 900 s.f. apartments/condos overlooking ballpark (red buildings) – $10 million
  • 130,000 s.f. retail/restaurant space (blue and pink buildings, 1st floor) – $30 million
  • 1,400 parking spaces in three garages (purple structures) – $20 million
  • Streetscape and landscape improvements – $15 million
  • Transit plaza construction – $2 million
  • Construction of pedestrian bridges over drainage channels – $3 million
  • Acquisition of neighboring properties required to complete project – $25 million
  • Contingency for delays and cost overruns (soft costs) – $45 million
  • Site preparation – $10-20 million

Total: $500 million without a hotel or other buildings. It also doesn’t include the transmission line rerouting. Most if not all of the non-ballpark areas would be financed by private developers. The City would have to buy the Home Base lot, demolish it and construct the new buildings on it. One place to look for an example is St. Louis, where a Ballpark Village is going to built on the heels of the Cards moving out of old Busch Stadium this fall. The final price tag for the combined project? $650 million.

Oakland = Death Valley for retail?

… or at least that’s what the prevailing sentiment was before the Hegenberger Gateway project broke ground. I drove by HG over the weekend and made a few observations:

  1. It’s not a very big shopping center. Wal-Mart takes up so much space that there is precious little left for other construction.
  2. The strip that faces Wal-Mart along Hegenberger already has its tenants in place. They are Starbucks, Raider Image, Jamba Juice, T-Mobile, Red Brick Pizza, Quizno’s, and Wing Hop. Most of those are fast food establishments.
  3. In-n-Out and Panda Express have standalone buildings that are clearly visible along 880 South.
  4. Simeon Properties is advertising 250,000 square feet available, but it’s not the most ideal location because it’s in back of Wal-Mart. Not exactly a recipe for high visibility. Simeon is looking for a big-box retailer.

While that’s a good start, it barely scratches the surface at providing retail establishments to the woefully underserved Oakland market. Other than Wal-Mart, none of those stores deal with significant overhead or inventory, making them low-risk. Among the retailers that have no current presence in Oakland: Target, Kohl’s, T.J. Maxx, Marshall’s, Old Navy, Best Buy, Circuit City, or even Bay Area-based stores like Ross, Mervyns, or The Good Guys. Oakland has hired consultants to help combat the stigma that comes with urban retail development in historically depressed areas. Whether or not you want such large retailers in Oakland is another matter altogether. If Wolff’s ballpark plan includes retail, you can bet that one or more of those big names will probably be pursued. The question is: Will they have the courage to set up shop in Oakland? If they can’t attract the name retailers, any kind of public financing structure based on tax increment funds will have a hard time pulling its own weight, and that’s when the specter of the Raiders deal starts to appear.

As for Death Valley, it’s amazing what can happen when you sprinkle some rain on the desert