08.08.15
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The 49ers’ grass problem could be solved with restraint

A year ago, the 49ers got the cherry on top of their football stadium sundae, a highly sought-after LEED Gold certification. LEED Gold had never been designated upon a sports venue previously, so with that Levi’s Stadium was considered the environmental belle of the ball, as far as venues go.

Since then, much attention has been paid to the wonderful green roof, the plethora of solar panels, the wise use of gray water – all the buzz words you frequently read about when a building is touted for its environmental bonafides. Yet all of that has been overshadowed by the one thing that everyone sees on TV, the damaged and dangerous grass surface.

After a couple of sod changes, including a change in the type of Bermuda strain, blame was placed squarely on the gravel-sand subsurface used to get the grass to take root. Anyone who has laid out sod in the yard with their dad knows the typical issues: make sure the dirt isn’t rocky or full of clay. Water regularly and at the right times. Grass is not easy to grow, and even harder to maintain. You’d think the grass – just for the sake of the 49ers’ health – would be of paramount importance. But in ownership’s never-ending search for high profile non-football events, the grass has practically become a barrier to revenue generation.

The easy move, of course, would be to switch to artificial turf. It’s plastic and rubber, is a ton easier to maintain than grass, and is easily removed for concerts and other events. The 49ers already installed turf on the fringes of the field, where carts and other equipment are likely to travel. The field remains grass for now, and the fight to keep the grass in place will be fierce, as this is California, where fake turf is anathema (Cal’s Memorial Stadium being a notable exception).

Replenishing and regenerating grass is not exactly the most green of procedures. Besides the grass that is trucked in every spring for initial installation, a completely separate field is maintained at a Central Valley facility, for use when the stadium field is inevitably damaged. Roll upon roll of the replacement stuff is used to repair parts of the stadium field before giving way to a wholesale replacement. The damaged grass is trucked back to Livingston, where it is rehabilitated. And so there’s this constant cycling of grass throughout the football season. The Coliseum goes through its own version of this, with grass planted before the baseball season, the baseball outfield replaced shortly after the second Raiders’ preseason game, and the entire football field usually once more in November. That’s a reasonable schedule, especially compared to the frequent shuttling the 49ers have to do.

At some point the process will become untenable, maybe not for economic reasons, but for environmental reasons. The drought is the biggest player here. More than a dozen fires rage around the state, so it seems incredibly insensitive to use so much water and gas on a single two-acre grass field that is properly utilized fewer than 20 times per year. The Ravens and Patriots both had trouble maintaining grass, switching to turf early on in their respective stadia’s tenures. Unfortunately, turf is plenty of its own issues. It’s not an ideal surface for soccer. There are still concerns about injuries, though bad grass is arguably much worse. Now there are issues with athletes accidentally inhaling the crumb rubber “dirt” under the plastic turf blades, as those tiny pieces tend to go airborne on hard cuts on the surface. A class action lawsuit was filed this year, alleging that the rubber has carcinogens. Considering that much of that rubber comes from old tires, there may be an argument there. Maybe not. Either way it merits study. Plus artificial turf fields tend to run hotter than grass fields during the summer thanks to the rubber’s tendency to insulate.

What do you do, then, when trying to choose between thirsty but preferable grass and lower-maintenance but less desirable turf? Easy. Hold fewer events. It’s okay, 49ers. You won’t go broke. The grass will be allowed to flourish. If you’re going to run a dome-like schedule, give up on the grass. It’s not fair to the players or the grass to do otherwise.

07.30.15
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Wolff looks elsewhere at Coliseum, Alameda County looks to leave JPA

NFL franchise relocation point man Eric Grubman made a visit to Oakland to talk Raiders stadium. Not much emerged from the talks other than Alameda County Supervisor Nate Miley once again expressing a desire for the County to sell its half of the JPA (land and debt) to Oakland. That’s both good and bad – good in that having Oakland as the sole public entity involved would simplify the deal greatly, bad in that Oakland would have to find the cash to buy the County’s half and figure out how to fund infrastructure for Coliseum City. It’s possible that proceeds from the land sale would take care of the debt, but what about everything else? Oakland would effectively be trading one set of hassles for another.

The big scene-stealing news came from Lew Wolff, who walked back the MLB subsidy idea while providing slightly more detail on his plans. Interestingly, Wolff is considering a site he looked at way back when he was not yet an owner, instead working as an executive for Steve Schott and Ken Hofmann. No, it’s not the flea market all over again, nor does it appear to be the existing complex, either directly north or south of the Coliseum. Instead the site of choice may be what I like to call Coliseum South, better known as the Malibu/HomeBase parcels to the south adjacent to the Coliseum complex.

malibu-homebase

21 acres, though option leaves only 12 acres buildable

The City of Oakland bought the HomeBase site in 2010. That and the triangular Malibu lot total 21 acres, City owned, not JPA owned. Other lots in the vicinity (Denny’s and the EDD building) are privately owned and would have to be purchased separately for additional ancillary development. I suggested the possibility of building there in 2005, shortly after I started this blog. Back then the HomeBase site still had an empty shell of a warehouse, which frequently housed the homeless while the parking lot hosted sideshows.

coliseum_south

My 2005 concept which would’ve included a small retail-entertainment district beyond the outfield

21 acres of City-owned land that’s only used as parking? Break ground tomorrow, right? Not so fast. The City had worked hard to bring the County in only recently because of the pre-existing partnership. Should the County exit stage left and the City work out the financials, that would be a major step forward. However, there is a major encumbrance on the Malibu lot that makes it extremely difficult to build there – utilities.

Current assessor's map

Current assessor’s map

The dotted lines running northwest-to-southeast through the Malibu lot represent EBMUD’s sewer interceptor easement, which cannot have anything built on it. Power transmission lines run north-south along the east parcel line, up against the edge of the HomeBase lot. Unless someone is willing to pay the freight for relocating those utilities, chances are that the Malibu lot will remain a parking lot. That leaves 12 acres for a ballpark. The HomeBase parcel is less than 600 feet wide, making for a tight fit for a ballpark. AT&T Park is about 600 feet wide if you extend the first base line out to the promenade and back to King Street. Those constraints obviously go away if the utilities on the Malibu lot can be relocated. Keep in mind that means working with the Public Utilities Commission, EBMUD and PG&E, and chances are that it would mean more than moving them around to simply avoid the Malibu lot. If both utilities are going to be involved, they’ll want projects that are much more long-term, which means much more comprehensive projects. Who knows, it may ultimate prove worth the investment.

07.28.15
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Wolff suggests MLB will help subsidize Oakland ballpark

Tyler Clippard did better as A’s closer than I expected, possibly faint praise in light of the pitiful nature of the rest of the bullpen. After Clippard was traded to the Mets for potential back-of-the-rotation starter Casey Meisner, Billy Beane was asked about the team’s strategy and philosophy. Inevitably the discussion turned to his thoughts on a future ballpark (h/t BANG’s John Hickey), whenever the hell that’s gonna happen.

“It seems the environment maybe is right. It’s not my department… I don’t want to be Pollyannaish. I’m hopeful that something or some progress will be made. It will make it easier to plan from a baseball operations standpoint. If you had a ballpark (in the works), this would probably be the proper approach.”

Beane has echoed similar thoughts before, as the A’s were pushing for ballparks in both Fremont and San Jose. It would be completely acceptable for Billy to be gun-shy considering the failures of the past. Yet Beane seemed practically optimistic, despite there being no specific date to break ground, let alone open a new park.

Backing that optimism was Wolff, who took the notion of an Oakland ballpark further, admitting that he’s – get this – talking it over with Rob Manfred.

Wolff did say that new commissioner Rob Manfred was fully behind the A’s getting a new venue as soon as possible. And the A’s owner said Major League Baseball would likely kick in some money to help the A’s get a stadium done at the Oakland site, public money not being available.

That’s about as big of news as we’ve heard all year on the ballpark front. A private subsidy – that’s what we’re talking about here – is exactly what the A’s will need to make a ballpark in Oakland… wait for it… feasible. Oakland has a hearty albeit small fanbase, and it lacks San Francisco’s or San Jose’s corporate wealth. Money from MLB, which would really be paid by the richer clubs, is the stable revenue stream that the A’s need to stay in Oakland. And since it doesn’t come from Oakland or Alameda taxpayers, it’s politically above board.

The easiest path to that money is MLB to continue to keep the A’s on revenue sharing, which I suggested a week ago. While it doesn’t fulfill the goal of getting the A’s off the dole, it solves the Lodge’s problem of figuring out what to do with the A’s without fighting over territorial rights. Enshrined in the current CBA is language specific to the A’s:

Beginning with (but not before) their first full season of operation in a new stadium, the Oakland Athletics shall be subject to the same-percentage revenue sharing disqualification that applies to other market-disqualified Clubs in the given Revenue Sharing Year.

Those “market-disqualified Clubs” are the top 15 markets (teams) in MLB. The bottom 15 are fully eligible for revenue sharing. As long as the A’s stay in the Coliseum, they straddle that line between the two. The owners and Bud Selig probably thought that the A’s stadium mess would’ve been resolved by the end of the CBA, that’s why the language is in there. Instead, Selig’s successor, Manfred, and those same owners now have the choice of resolving the A’s problem by allowing the A’s to stay on revenue sharing. It’s a compromise plan to be sure, one the owners always had in their back pocket.

Revenue sharing is designed to help the have-nots with player development, not for stadium development. That’s an issue that would have to be worked out internally. I would expect that, as with the current CBA, the A’s place within the revenue sharing recipients pool will have another sunset clause, one that’s perhaps 10 years down the road.

There is an alternative to revenue sharing in the form of MLB’s credit facility, which allows up to $100 million per team for reasons outside of normal baseball operations. Eventually that may be the better way to handle the situation. Use of the credit facility would be more like the NFL’s G-3/G-4 program, in that a loan would be taken out against future TV revenues. It’s a smaller subsidy, but if the ballpark costs a reasonable amount ($600 million), it could be enough to cover those years when stadium revenues are running a little dry.

If you were looking for a sign that Wolff and John Fisher are serious about building in Oakland, this is it, short of a plan unveiling. It shows that ownership is serious, MLB is serious, and Oakland is the main focus. At the same time, there is still the saga of Coliseum City to deal with. Nate Miley suggested today that nothing was happening as far as alternative proposals until Coliseum City ends, so we can look forward to that at some point, maybe in the coming weeks. Until then, this is progress.

07.22.15
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Coliseum renovation for baseball?

Lew Wolff was profiled in the current edition of Athletics magazine. It amounted to a short biography, with some time at the end devoted to how Wolff sees the A’s future. Much attention has been paid to the following passage:

We continue to respect the desire of the Raiders for a new football-only venue, while we of course would like to play in a new or vastly improved baseball-only venue.

New or vastly improved? Wolff referred to a renovated Coliseum recently, perhaps only in passing. This sounds like a renovated Coliseum is a real option. But is it?

—

When most A’s fans think about a rebuilt Coliseum, what they think about most is the old Coliseum, pre-Mount Davis. Knock down the concrete eyesore in the outfield, bring back the bleachers and ice plant, fix up some stuff in the old Coliseum and the A’s are set. Which would be true – if this was 25 years ago. We’re in 2015, and the bar has been raised. Removing the football seats isn’t going to bring in casual fans, the attendees that come to Oakland so inconsistently and infrequently. In California, renovation works on old theaters, where wood and accents connote charm and warmth. A hulking stadium once known as the Oakland Mausoleum has no warmth. It would still lack a purpose-built ballpark’s intimacy. And for Oakland and Alameda County, they’d be stuck with $100 million in remaining debt and nothing to show for it. There is a bright side, however. If the A’s took over the Coliseum after the Raiders left, the A’s could claim and repurpose the Raiders’ locker room, eliminating the legacy clubhouse’s plumbing and sewage issues for good. City and County would still be stuck with the debt, but at least they wouldn’t have to pay the Raiders’ ongoing operating subsidy at the Coliseum, worth $7 million a year.

Cost of return to early 90’s Coliseum: $150 million ($50 million in improvements, $100 million in outstanding debt)

—

Another option could be to repurpose Mt. Davis and replace much of the old stadium, since Mt. Davis is the newest part of the Coliseum. I posted such a concept six years ago to little fanfare, which is exactly what I expected. It’s exactly the compromise plan that you might think it is.

newlook-enlarged-1024x928

It’s sort of the Two-Face of ballparks. The top level of Mt. Davis would be removed, seats replaced on the lower and club levels, plus remodeling of the concourses and suites. New seating decks would be built behind a relocated home plate and first base line. The mezzanine and club levels of the old Coliseum would remain since they fill needs: a restaurant in the outfield and additional seats. The new scoreboards could be assembled into one extremely wide (36′ high x 290′ wide) or large (72′ x 145′) display. No additional major infrastructure other than a revamped field drainage system would be needed. Of course, some issues regarding the sight lines from Mt. Davis would have to be resolved, partly by rearranging the lower bowl and adding new seating options.

Cost of repurposed Mt. Davis-based baseball stadium: $350 million for the A’s, including $100 million Coliseum debt.

—-

A new, bespoke ballpark on the Coliseum grounds is the preferred option for A’s fans and MLB. Is it for Wolff and Fisher? Sure, as long as it pencils out. The idea that Wolff pitched last year was that there was a way to privately finance a ballpark while also addressing the debt by taking it out of the public’s hands. Unfortunately that concept has been hit with two huge doses of reality.

Issue #1 is that it’ll be hard to service the debt of the new stadium and the old stadium using all private sources. Right now Mt. Davis costs low eight figures to service, but imagine if that debt wasn’t serviced by relatively stable sources like taxes, instead paid by stadium revenues. Financing costs would balloon, making an already expensive project even more expensive. That’s why I found it curious that Oakland Mayor Libby Schaaf seems resigned to having the public sector pay off the debt. To go that route would be significant reversal, as one of the goals of Coliseum City was to find ways to wipe away the albatross.

That leads to Issue #2. The sale of the (public) Coliseum land could turn into a political third rail thanks to protests by East Oakland and housing activists. Wolff, like many other developers, is finding that the economics aren’t quite right for a market value project at the Coliseum, where the higher prices are needed to subsidize other project components like the stadium. Even if the pricing worked out, the same aforementioned activists would raise hell over potential gentrification. When the Coliseum City process started, there was an acknowledgement that the various public and private partners would have bargaining chips to play. Slowly, each of those chips is being taken away. We’ll soon be down to the basics: building a stadium privately, with no help.

If a new A’s ballpark can stay reasonably priced, there are ways for it to be financed by Wolff. Like the Giants, there will be some annual set aside for debt service that impacts payroll. Lean years could become extremely lean thanks to the mortgage. The A’s could work a deal with MLB to ensure that they stay on the list of revenue sharing recipients in the next CBA. It would be a reasonable request given the A’s being pigeonholed into Oakland.

Regardless of the difficulty, a new ballpark has to be what MLB and Rob Manfred want for the A’s and Oakland. The old compromises don’t die. They evolve and transform. That’s the new reality.

07.15.15
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Manfred status quo on A’s in Oakland, considers expansion

MLB commissioner Rob Manfred held the first All Star Game press conference of his tenure Tuesday, and he seemed prepared for most every question asked of him. On the recent push for baseball to extend netting near the plate to protect fans, Manfred said that MLB was still studying the issue and can’t formally make any changes until 2016, although individual teams can choose to extend the nets if they wanted.

Manfred referred to a forthcoming domestic violence policy, the difficulty of shortening the schedule to 154 games, even machine-judged balls and strikes. The discussion eventually moved to the subject of franchises and cities. Montreal remains impressive, though trying to project fan support based on a couple exhibition games each year is taking things a bit far. There was a question about the A’s, too.

No change there.

Things got interesting when Manfred was asked about the possibility of expansion. His response?

“Maybe one of the reasons I got this job is, I’m bullish on this game. I think we are a growth business, broadly defined. And over an extended period of time, growth businesses look to get bigger. So yeah, I’m open to the idea that there will be a point in time where expansion may be possible.”

Manfred was careful not to provide a timetable for expansion or put it at a high priority, similar to stadium efforts in St. Petersburg and Oakland. Regardless, this is a major revelation and a complete turnabout from predecessor Bud Selig’s consistent no-expansion stance since the tense 2002 CBA talks.

It’s important not to read too much into Manfred’s statement, but it’s likely that his favorable view on expansion is fueled by a handful of factors:

  1. The American economy (at least capital) is surging, with many cities emerging from the recession potentially ready to entertain new stadium deals.
  2. Montreal functions as both a relocation candidate and an expansion candidate, taking the place of DC, which filled the role for more than three decades.
  3. Manfred’s continued hopeful statements about Oakland may be a sign that a resolution for at least one team (probably not the Rays) is coming.
  4. Like Roger Goodell, Manfred probably has revenue growth goals for MLB. With 28 new ballparks built, national TV deals locked in, and most RSN carriage deals maxed out, few other growth avenues exist. MLB AM is its own juggernaut, one that may spin out and go public in time. The obvious way to achieve bigger growth is to enter new markets by expansion.

Of course, the problem for baseball is that unlike the other three major sports, MLB’s every day scheduling requires that expansion comes in pairs of teams, not single teams. I’ve long been an advocate of a 32-team MLB, with 16 teams per league. It would create smaller, more manageable divisions and eliminate the need for interleague play throughout the entire year, though that would remain an option if The Lodge decided it worked for them economically.

Realignment could work with two leagues of four divisions each with heavily unbalanced schedules, or two leagues of two divisions each – the pre-interleague arrangement – with more balanced schedules.

realign-32

As usual, placement of teams is purely for discussion purposes and not based on any league reports or rumors

Amazingly, the landscape has changed for expansion city candidates. Assuming that Montreal is penciled in as the first expansion franchise, there would be a race to fill the other spot. Unlike the Expos’ barnstorming tour of a decade+ ago, there are far fewer candidates and many more questions to be answered by expansion candidate cities. Portland has given itself over to soccer and would have to build a new stadium in conjunction with landing a franchise, the same way the Dbacks and Chase Field were developed together. Las Vegas is no longer a player thanks to ongoing development, a loss of political will (Oscar Goodman), and a new arena being built on the Strip. Puerto Rico has become America’s own Greece. Monterrey, Mexico seems to have the market size and a ideal temporary stadium, but with some misgivings by the players’ union. Charlotte has a brand new AAA stadium and an overstretched market. Sacramento is now in the firm grasp of the Giants, who would fight any expansion franchise over TV rights (not stadium building rights).

Manfred’s statements are sure to get those dormant expand-to-my-home-city machines going again. And that’s just fine with him, since it will keep baseball in the news year-round. I have confidence that MLB will expand to 32 teams sometime in the next 10 years. If it doesn’t happen, it will be a sign that the owners’ collective greed goes completely unchecked despite an ever-expanding pie.

07.13.15
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Make. Them. Pay.

When HBO announced its own fake news show Last Week Tonight with John Oliver I felt great about Oliver, who did exemplary work at The Daily Show. I also felt rather hesitant at the show’s format: a 30-minute show on Sunday night featuring the previous week’s news. It didn’t take much time for Oliver to prove the format a winner. Instead of the rat-a-tat nature of TDS, The Colbert Report, and other late night shows, Oliver was given the freedom of devoting a lengthy segment every week to a single topic. Those segments, usually ending each episode, have providing cutting and often educational rants on a broad range of topics, from FIFA corruption to race relations to an interview with Edward Snowden. So it shouldn’t have surprised me that this week’s topic was near and dear to my heart: stadium development in America.

nfl_teams_la

Oliver starts and ends the segment with references to soaring locker room speeches. I took the liberty of transcribing his own speech at the end. As you watch the end, read the speech.

For the rest of you I want you to look deep down inside your hearts. I want you dig in there and I want you to find something. And it’s gonna seem tiny but it’s the most powerful thing in the world. And it’s the word “No.” No.

So when a billionaire asks you to buy him a hologram machine that doesn’t exist yet, what are you gonna say?

NO.

That’s right! And when they ask you to build a stadium with public money without opening their books, what are you gonna say to them?

NO!

That’s right! And when they ask you if they can keep all the money for calling their arena “Smoothie King Center” what are you gonna say to them?!?!

NO!!!!!

FUCK NO that’s right ‘cause that’s a stupid name for anything, even a smoothie store!

‘Cause I want you all to get out there. And the next time a team comes around asking for a new stadium I want you to MAKE THEM PAY. What are you gonna do?!?!

MAKE THEM PAY!!

WHAT ARE YOU GONNA DO!!!

MAKE THEM PAY!!!!

WHAT ARE YOU GOING TO DO!!!!!

MAKE THEM PAY!!!!!

CLEAR EYES! FULL HEARTS!

CAN’T LOSE!!!

LET’S GO DO THIS!!!!!!

…

crowd ends in a MAKE THEM PAY! MAKE THEM PAY! chant.

Already my week is made.

07.07.15
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Schaaf talks Oakland sports on CSN

Oakland Mayor Libby Schaaf made an appearance on CSN’s Sports Talk Live program. Her segment, hosted by Jim Kozimor and featuring Ray Ratto and Tim Kawakami, offered the chance for Schaaf to field myriad questions about the respective fates of Oakland sports teams. Schaaf spent much of her studio time not directly answering most of the pointed questions, such as Ratto’s inquiries about choosing one team over another or Kawakami’s question about Howard Terminal.

schaaf

That said, she perked up more than her usual sunny demeanor when describing ballpark talks with the A’s:

She was also quite excitedly described Howard Terminal, though when pressed on putting a ballpark there she was clear about what she wasn’t prepared to do.

Schaaf went on to describe Howard Terminal as a place that could be home to some sort of sports or entertainment development, referring specifically to a concert venue. Port commissioner and former mayoral candidate Bryan Parker advocated for a waterfront arena at HT, either beside or instead of a ballpark.

As for Coliseum City, Schaaf threw her predecessor Quan under the bus while assuring the panel that Floyd Kephart’s final deadline was August 21, and really September if the City Council wanted to extend things further. The NFL has owners meetings starting August 11, and though the NFL could decide on one or two teams to move to LA at that early juncture, it seems more likely that they’ll hold off until at least November or after the football season ends. That would give Oakland, San Diego, and St. Louis more time to work out stadium deals and allow the teams to sell a full season of tickets without an early move announcement hanging over their heads.

The mayor emphasized the potential for other proposals from the Raiders and A’s, having little positive to say about Coliseum City itself. She’s definitely encouraging the ongoing work by the teams apart from Coliseum City, but leaving CC in play allows Schaaf to play the same wait-and-see strategy that Lew Wolff is playing. No rush right now, don’t succumb to the pressure to provide subsidies the way St. Louis and San Diego are, and don’t commit to a team if you can help it. That will probably work throughout the summer, but what happens when the football season starts, or when the NFL decides to play hardball? Then we’ll see well the mayor handles the political calculus of trying to keep two or three sports teams in Oakland.

07.04.15
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Damage Control

Floyd Kephart spent much of the week trying to rescue the badly damaged image of Coliseum City by giving interviews on three radio shows, while also assailing Matthew Artz, the BANG reporter who got access to part of the proposal given to Oakland/Alameda County. It was all flailing and little substance for Kephart, who until the PR disaster had mostly kept his message under control.

Kephart appeared first on Fred Roggin’s show in LA, then with Scott & BR on a podcast for the Mighty 1090 in San Diego, and finally with Damon Bruce on The Game.

Among the notes I gathered from Kephart’s interviews:

  • None of the money from the public land sale will pay off the existing Coliseum debt. If that’s the case, what is paying off the debt?
  • Some of the stadium debt would be repaid from project taxes. We know that different kinds of taxes would be used for infrastructure, though that was for a much larger project. Somehow the infrastructure would be downsized, yet the project would still have 4,000 housing units, a hotel, and large commercial square footage. How does that work?
  • Kephart believes that the proposal excerpt was leaked to kill the deal. Probably true, especially if others would rather start moving forward with an A’s deal. Though in all honesty isn’t the leak simply accelerating the process?
  • When pressed, Kephart refused to talk about buying a 20% stake in the Raiders, citing the confidentiality agreement. Smart on his part, since he’ll have to continue to work with the private equity groups he needs to provide that confidentiality. Everyone else, from municipalities to sports interests, can be thrown under the bus.
  • The point of buying the 20% stake was that private equity was not going to make money on investing directly in the stadium, so having a stake in the team was the only way to get access to the stadium’s (really the team’s) net revenue. In the same breath, Kephart said that New City doesn’t have a “burning desire” to buy into the Raiders.
  • According to Kephart and a number of Raider fans, 81 baseball games can’t possibly compare to 10 football games.

The pretzel logic used to argue that the NFL would be preferred is mindbogglingly awful. Sure, the NFL is the highest profile sport with the greatest cachet – at least in the US. It has bigger ratings and bigger national media coverage. Those factors, however, have absolutely nothing to do with bottom line arguments. The City and County are looking for the option(s) that provide the greatest economic impact. There is no way that hosting the NFL can provide this, with the possible exception of hosting the Super Bowl every year. We know that’s not going to happen, since the Raiders stadium will be too small, Levi’s Stadium already exists as host stadium in the Bay Area, and LA will have its own West Coast option soon.

Not including playoff games, the Raiders will bring in 550,000 per season (55k x 10 games). In a new ballpark, the A’s are projected to get around 2.2 million in attendance per season, 4x the football total. The important thing to remember is that the revenue streams (tickets, concessions, parking) will by-and-large remain with the team. The City and County are set up to recognize very little of gameday revenue. What, then, are football stadium backers relying upon to boost revenue? Out-of-towners. Fans of the Raiders and visiting teams will fly into Oakland, rent cars at OAK, stay at Oakland hotels, eat at Oakland restaurants. Sounds like a reasonable claim. What economic impact does that make?

The NBTA did a 2009 study on the top 50 cities in the US and tax impacts from visitors. It was focused on business travelers, but the basic tenets are the same. The study calculated hotel and car rental taxes, along with sales taxes from meals in each target city. Care was taken to separate downtown (center city) locations from airport locations, since they can have different dynamics.

visitor-taxes

Each city is ranked based on combined taxes, which mostly range from $25-35 per day. Bay Area cities are in the middle of the pack statistically. Oakland comes out at $32.45 per visitor, per day. Now let’s take those 550,000 football fans, and let’s estimate that 10% of them are from out of town and fly in, stay for a night, and eat locally.

55,000 fans x $35 per day (adjusting for inflation) = $19,250,000 per year

55,000 fans x $35 per day (adjusting for inflation) = $1,925,000 per year

Less than $20 $2 million in economic impact? That’s good, but remember that the ongoing debt and operating subsidy for the Coliseum and Raiders is $22 million per year. How is less than $2 million per year supposed to work, especially if the debt isn’t being addressed?

(Ed. – Commenter Victor pointed out my bad math. Corrected it’s even an even worse deal.)

Kephart wondered aloud why so many people had problems with the deal as proposed, claiming that it worked for everyone. If the Raiders are paying the full freight on the stadium and the City/County aren’t getting the old debt addressed, it’s not working for anyone except New City. Frankly, he shouldn’t be surprised at the cold reception.

—

P.S. – Now let’s apply the same economic impact to baseball. Far fewer tourists visit ballparks except during the summer, so it stands to reason that a smaller percentage of attendance could be attributed to baseball fans from out of town. If only 2.5% of fans, or 600-700 per game, fit that tourist description, that’s still 56,250 total visitors, more than the football tally. And while that football total is maxed out, the ballpark still has headroom of 500,000 or more fans per year, which means more tourists. Plus there are 2 million locals and casual fans to boost economic activity per baseball season, compared to 500k football fans.

 

06.28.15
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Giants encroach upon Coliseum property with celebratory billboards

I heard about sightings of Giants ads at the Coliseum last week. I thought it was crazy, then I heard about the context. I asked for Twitter followers to take some photos if they saw such ads, and they didn’t disappoint. Behold:

Thanks to @OaktownMojo capturing those.

If you’re wondering who created those ads, it shouldn’t be a surprise.

The Giants wouldn’t dare create an ad only celebrating their own title and put it into ad inventory for the Coliseum grounds, but put in the a salute to the Warriors and they have a clever way to get a dig in at the neighbor A’s as well. And there’s little the A’s can do about it.

Ads on the Coliseum property not within or attached to the venues are controlled by Outfront Media (check out that caption), the big billboard company that used to be called CBS Outdoor/Viacom. Everything from those tall kiosks to rotating signage above the parking lot entries to the electronic billboards facing the Nimitz are fed data by Outfront. The JPA contracted the signage to CBS Outdoor more than a decade ago, bringing in nearly $1 million a year.

Reactions to the ad ranged from incredulous to foaming-at-the-mouth hostile, as you can imagine. It’s one thing to have a billboard on the Bay Bridge touting rings over splash hits, which the A’s did a while back. Putting the Giants at the Coliseum, regardless of the intent, is a bridge too far. If the Giants want to make it about the Warriors, make it about the Warriors, and reserve your other ad for somewhere other than 7000 Coliseum Way. Like this:

All’s fair in love and baseball, however. I mean, there are territorial rights, but those only cover where a stadium’s built, not where ads go, or team stores, or where local radio or TV affiliates are located, or anything else related to location for that matter. It’s like the current Giants to capitalize on whatever they can to increase their hegemony, and attempt to get involved in seemingly every other sports operation in the Bay Area.

It’s unclear how these ads are vetted. They may require some clearance by the teams, probably not. Maybe the JPA sees all of them, maybe only some. Whatever the amount of review, this is a mistake by whoever cleared these, especially if they’re gonna have the ads within sight of a bunch of Giants-hating A’s fans tailgating during a homestand.

After all, this is Oakland, the city that was worried so much about SF stealing the Warriors’ victory parade, despairing over Steph Curry appearing at a Giants game to the point that Klay Thompson had to show up at an A’s game two days after. Most outsiders will never understand the Bay’s unique form of provincialism. As a person born in SF, brought up in the South Bay, with the A’s the only Bay Area team I follow, frankly I’m amused by it. Then again, there’s nothing the Giants can do about this:

Seems like a good Photoshop opportunity, no?

06.27.15
by

Coliseum City Proposal revealed and it sucks

Try as Floyd Kephart and the City of Oakland tried to keep the Coliseum City proposal away from the public for 20 days, the key summary was revealed by BANG’s Matthew Artz late last night. As you might gather from the action to hide the documents from the public under a confidentiality arrangement, there was plenty to hide and precious little to tout. Kephart’s New City did get the documents to Oakland/Alameda County by the June 21 deadline, which is to be commended (somewhat). Beyond that, the whole thing sucks for a multitude of reasons.

Kephart’s New City Development pitched a $4.2 billion plan, which would include:

  • $900 million Raiders stadium to be owned by team, land underneath to be leased by City to team for $250k per season
  • Sale of public lands (Coliseum and surrounding) to New City for $116 million
  • Proceeds would pay off Mount Davis debt
  • Potential for additional proceeds to fund affordable housing subsidy; if not fully covered, bond issue
  • Land reserved for an A’s ballpark through 2019
  • 4,000 housing units
  • 450,000 square feet of retail, 1.5 million square feet of office/R&D space
  • 400-room hotel
  • $100 million in new infrastructure (BART transit hub, roads), not including…
  • $187 million in parking garages (financed by New City)
  • Stadium and essential infrastructure completed by 2019, hotel by 2020, full buildout by 2022
  • Sale of 20% stake in Raiders to New City for $200 million, half of which goes to into stadium
  • Creation of “Stadium Company” to finance $300 million in debt for stadium (49ers have a similar entity)
  • $500 million from the Raiders and NFL G-4 fund (combined)

The football stadium part of the plan has no magic bullet to cover the $400-500 million funding gap. The NFL and Raiders would their part, probably closer to $400 million. There remains an open question about how likely it is the Raiders would get that $400 million. It’s one thing to award the full $200 million G-4 loan (to be matched by the team) to the 49ers and Levi’s Stadium or the Vikings and Falcons, teams whose projects will certainly host future Super Bowls. The Raiders stadium would be smaller and less capable of hosting a Super Bowl and other big events. Its premium revenue-generating capacity would be much lower than other recently built stadia, which makes me wonder just how well the G-4 loan would be serviced. Chances are that the stadium would qualify for a smaller loan, perhaps closer to the old G-3 cap of $150 million. So when you really start to add it up, it’s much more realistic to expect $350-400 million as the “standard” private contribution from team and league. More than that is rather wishful thinking considering the stadium’s size and scope.

A “Stadium Company” would be created on the private side to manage funneling game revenues towards debt service. Its counterpart would be the Coliseum Authority (JPA) or its successor. If the sides ever got down to real negotiations, the real sticking point would be whether the debt would be issued publicly (tax free) or privately (taxed). On one page the Raiders are said to own the stadium, on another they lease the stadium. The model is similar to what the 49ers created for Levi’s, which means that the same questions would arise during the period leading up to the stadium’s opening. Can the Raiders and the various entities sell enough sponsorships and get a big enough naming rights deal to cover the gap? Or does this sound too much like Mount Davis?

Ancillary development, which has been already been dismissed by Mark Davis and NFL point man Eric Grubman, is still very much in play here. The worst part about it is that the money the ancillary development will generate won’t go towards paying for the stadium, or for affordable housing. New City would get to reap the rewards, pay a little towards infrastructure, not get saddled with the responsibility of financing affordable housing, and get a piece of the Raiders in the process. Sweet deal, eh? No wonder the NFL has been so averse to having “middle men” like Kephart involved in these deals. It prefers to have Goldman Sachs and big banks there as the established partner financing arms instead of deal makers.

The ballpark gets one whole line in the 19-page document:

Parcel 6 for development of the ballpark will be reserved through January 1, 2019.

In the Specific Plan Parcel 6 is to the right on the other side of 880 from the Coliseum

In the Specific Plan Parcel 6 is to the right on the other side of 880 from the Coliseum

I can’t blame Kephart for reducing the A’s to one line considering how Wolff disregarded him and the project at every turn. If Kephart’s gonna go out, he’ll go out guns-a-blazing. Wolff was never going to take part anyway, so this is at least a modest allowance. Yet what is Parcel 6? We’ll find out more in a couple weeks assuming the documents are released as expected. For now we don’t have an updated site plan. If Parcel 6 is the same one identified in the EIR/Specific Plan, it’s the Hegenberger Gateway shopping center anchored by Walmart and other properties along Hegenberger. How does that get repurposed for a ballpark? I’ll let you know when BART builds an Airport Connector station there to service the site, more than a mile away from the Coliseum BART station.

Lastly, there’s the sale of public land. The document cites $116 million as fair market value, though that is entirely dependent on use and density. $116 million is ridiculously cheap, at around $1 million per acre depending on how much is actually used for the ancillary development. Lew Wolff’s Coliseum North plan was derailed because he lowballed local business owners, offering the same value ten years ago. Two weeks ago the City of Oakland pushed through a $5.1 million sale of one acre on East 12th Street overlooking Lake Merritt for housing, with the developer agreeing to provide $8 million towards affordable housing elsewhere. City Council sessions got so heated that housing activists took over the Council Chambers in the first meeting, followed by the City blocking off public access in subsequent meetings. All that because the process was supposed to dictate that the sale of public land in Oakland mandated use for affordable housing (if housing was the intended use). Now we’re looking at an exponentially larger project in the Coliseum area. How’s that gonna go over?

With the stench this deal is serving up miles away from any actual deliberation over its merits, recent revelations about an exit strategy and a backup plan for City/County should come as no surprise. That’s both good and bad, as the millions spent on Coliseum City will have gone to waste while that backup plan will have only a few months to gestate. That’s a great recipe for a terrible deal, one even worse than New City’s vision Coliseum City. There’s always a renovation concept to fall back upon, and Wolff’s biding his time waiting for CC to collapse. Looks like you’ll be on the clock soon, Lew.