30 May 2005

Ray Ratto column

The inimitable Ratto puts the A's and 49ers in a little game called "Survivor: Stadium Edition" which plays out less like the reality TV show and more like a rigged game of Monopoly. Whether you find humor in his column or not, the message is very clear: Getting a new venue for either team is not going to be easy, quick, or cheap. In the end, he still says to bet on the A's, despite the obstacles.

Uptown's price tag rising

From the this isn't exactly a big surprise department: the Oakland Tribune is reporting that new costs may force the city of Oakland to fork over additional subsidies to the Forest City Uptown housing development. Among the rising costs: escalating values of land to be acquired, and cleanup costs for a site that used to house a Chevron station. A Sears Tire and Auto Center also needs to be relocated, which may force Oakland CEDA (Redevelopment) to pay for additional land on which the relocated garage would be placed. The cleanup effort would cost the city $4 million, and the cost to relocate the garage could be as much as $12.5 million. That pushes the total cost of subsidies and ancillary costs to nearly $80 million, or about $80,000 per apartment.

Rising costs are common in projects of this magnitude. It is possible, though not likely, that the subsidies will run high enough to push the Oakland City Council and Mayor Jerry Brown to dump the project. Virtually every important politician in Oakland supports the Uptown project, and it would take some major revelations and negative political sentiment to turn the tide against it.

But what if it did? It could make the land available for a ballpark, since Oakland has already used eminent domain to acquire the majority of the individual properties, allowing them to sink the costs to an extent - though the public may demand the team pay for the land to reimburse the city. Previous property owners who were forced to sell because of eminent domain may have the potential to sue because the city would be using the land for a different purpose than originally intended. The cleanup costs mentioned in the article would still need to be covered, and it would be unclear who would foot the bill. Then there would be the political problem - no one associated with the city outside of Larry Reid has publicly supported spending taxpayer money for a ballpark. Proponents including the A's would probably have to wait until Brown left office and hope that a more friendly face, such as Ignacio de la Fuente, won the next mayoral election. Then the political machine would have to get in gear to line up other support, from the City Administrator Debroah Edgerly to State Senator Don Perata. Why? Because no matter how much many fans would like a privately-funded endeavor, it's much more likely that some public component will be required, whether it's 75% in the Minnesota Twins deal, 33% in the St. Louis Cardinals' new Busch Stadium, or 5% in the Pac Bell Park deal.

27 May 2005

Giants, A's cable ratings down

From Steve Kroner's Chronicle article:

Ratings for Giants telecasts on Fox Sports Net Bay Area and KTVU (Channel 2) and for A's telecasts on FSNBA and KICU (Channel 36) are down approximately one-third from a similar point in 2004.

The Giants are averaging a 3.0 rating on FSNBA, the A's 1.5. While 3.0 is great for a sports broadcast, things would be much better with Barry Bonds around. As for the A's, they are suffering from a severe case of bandwagonism, with few signs of an end to the malaise in sight. Expect the trend to continue until either team goes on a significant tear.

21 May 2005

Startup to timeshare luxury suites

A novel concept to the marketing of luxury suites was launched today by a startup called Owner's Pass. John Arledge and Peter Cochran created the Los Gatos-based firm, which will sell timeshare packages of luxury suites. The packages not only bring down the often prohibitively high cost of suites ($100,000 per year or more), but they'll also offer the opportunity to use a single fee to cover multiple sports. More details are available in an Oakland Tribune article.

When I first saw the article, I thought, "Why hasn't anyone done this before?" Then it occurred to me that the major pro sports franchises are often in competition with one another and do their best to lock their customers into annual or even multiyear deals. Sometimes it even appears that the market is oversaturated. As for the startup, buying leases for the 6 major franchises here in order to timeshare them can cost upwards of $500,000 a year, a risky capital cost for a business whose customer base has potential, but is yet unproven. Still, there are many firms who have a hard time justifying annual leases on suites, and this could very well open up the market significantly for them as well as smaller companies. If the Owner's Pass business model works, they will expand to other markets, and they may become a cornerstone of a huge secondary suite sales market. Good luck to them.

19 May 2005

Ballpark concepts continued...

Fleshing out last night's news a little more is an article from today's Oakland Tribune. Along with talk of design and the architectural players involved, is more information about potential sites: the Estuary site and the now shutdown Oakland Army Base. At some point I'll try to take pictures of the base and the surrounding area. In the meantime, here's a snippet from the article including quotes from Michael Ghielmetti (the president of Signature Properties who met with Wolff over a month ago), regarding the Estuary site and Oakland in general:

Oak-to-Ninth has been discussed as a possible site because of its waterfront location. And Wolff met with Michael Ghielmetti, president of Signature Properties, the firm that owns Oak-to-Ninth.

"Oak-to-Ninth has challenges because it is not very close to transit, and the access to and from the site is very difficult, but I am not going to be the one that says absolutely not," Ghielmetti said Wednesday. "When we met with Lew and his son, we were talking in broad concepts about a variety of locations in Oakland and reasons to stay in Oakland."

Signature has a unique perspective because they've done or are completing 5 separate housing developments in Oakland of varying sizes. Since they were picked to develop the Estuary site, it isn't clear whether they are more interested in building their housing plan (which still has yet to be fully approved) or sharing the site with the A's (which hasn't formally been brought up as an option yet). The key may be Oakland city mandates regarding affordable housing. Debate surrounding minimum amounts of low-income housing are stalling the Uptown deal, and it looks like they might stall Signature's plans as well. For more on the Estuary including a mockup, check out my mockup plan and photo overview.

18 May 2005

Wolff gives some details

The important stuff from John Shea's Chronicle article:

The owner has formed a venue development committee involving two team executives -- President Mike Crowley and Wolff's son, Keith -- and three outside firms, including 360 Architects, Gensler Architects and International Facilities Group.

Committee members have toured several newer ballparks, plus Boston's Fenway Park, and plan to check out other pro sports facilities, including basketball arenas. The mission is to gather information to be better prepared to design a new home, if it gets that far.

"They'll come up with a prototype, and they're thinking outside the box," Wolff said. "With venues, you want the next new one to be better than the last new one."

Wolff isn't as interested in building a park on the Coliseum parking lot and said a downtown site is "probably not in the cards," but he did say he's more open than ever to locations in and around Oakland, preferably with BART access. Public help, he added, is necessary.

Let's pick apart the statements made here.

  • Touring existing facilities comes with the territory. Part of the process is evaluating the designs and architects associated with them, and crib some of the best ideas. Fenway is an unusual example of a refurbishment that is ongoing.
  • Looking at basketball arenas is a good move. Philips Arena has a unique design with the suites stacked on one side of the building and the seating bowl cantilevered around them, making for better, lower sight lines. 360 designed Miami's American Airlines Arena, which is notable for a special innovation: floor suites. Jacobs Field in Cleveland has a version of this in their Dugout Suites, covered front-row seats between the dugouts at the same elevation as the dugouts. Behind the seating area are the individual suites, below the lower seating bowl. This type of seating would most certainly demand a premium.
  • Gensler has a wide ranging portfolio, but little sports venue experience. My guess is that they'll work on concourses, public spaces, and fan-oriented areas. In an effort to escape the drab gray that dominates the Coliseum, a new ballpark would be bright and full of color.
  • "With venues, you want the next new one to be better than the last new one." - The standard-bearer currently is Petco Park, though it's likely that the new DC and Minneapolis ballparks will be completed in the next 3+ years. Better also often means more expensive, which could drive up the price of the project. I can see Wolff trying to limit the amount of concrete that's poured, while maximizing revenue within the space as much as possible.
  • The Coliseum's out based on the power lines issue and conflicts with the Raiders and Warriors. It may also be because he saw the limited development potential and balked, thinking the cost wasn't worth the return. Saying Downtown is not in the cards really means the Uptown site is not feasible. That's probably because it's too far along the development timeline to scrap it.
  • What does that leave? The Estuary site for starters. Then perhaps the OUSD and Laney College sites. All 3 have been profiled here, and all 3 have development issues to overcome. The Kaiser Convention Center just closed down so it may become available, but the site's too small to house a ballpark unless other land is acquired. Howard Terminal is locked into a long-term lease agreement.
  • The old Army Base in west Oakland is a possibility, but it would require a new BART station, site cleanup, and a buyer for the required property. Based on the activity that occured after the closures of Treasure Island, Alameda NAS, and the Presidio, it's not the most expeditious process.
  • There are also sites that may be available that are currently active or in use, such as some of the light industrial area that lines I-880 between Downtown and Jack London Square. Acquisition costs for such properties would be the big issue there.
  • I don't know what to make of the "public help is necessary" comment. I'll ask the reporter myself about that.

17 May 2005

Oakland City Council Seat 2 Election Results

From the Oakland Tribune: Preliminary results indicate that Pat Kernighan won tonight's special election for the Grand Lake-Chinatown City Council seat. Though it's projected she will not receive more than 30% of the vote, there will not be a runoff, and Kernighan will be declared the winner. She was previously chief of staff for Danny Wan, who vacated the seat in January.

Kernighan will have some sway over the fate of the Oak-to-9th Estuary site, profiled here previously. While it isn't likely the property will be the home of a ballpark, it remains a viable option, should all interested properties come to an agreement.

Kernighan has commenteed publicly on development of the Uptown site for a ballpark. This is her statement, first published on the Greater Grand Lake Coalition website:

I am encouraged that Lewis Wolff has the potential wherewithal to finance a new baseball stadium without need of public money. A new A’s ballpark would make a lot of Oaklanders happy, but I am adamantly opposed to spending public dollars to build one when there are so many other unfunded public needs of much higher priority.

She hasn't publicly commented on Oak-to-9th's possible use as a ballpark site.

A harbinger in Florida, sort of

Since Florida's Senate legislators last week refused to take up the Marlins $60 million funding bill, the ballpark near the Orange Bowl is officially in limbo. In the few days since, that $60 million estimate ($30 million in today's dollars) has jumped 50% due to revised estimates for acquiring needed land near the Orange Bowl, which would have certainly caused much consternation on both sides of the divide.

Now MLB has let the other shoe drop. A letter from MLB President Bob DuPuy to Marlins owner Jeffrey Loria as well as the mayors of the City of Miami and Miami/Dade County gives the three until June 9 to "come up with a full financing plan by June 9 to ensure the Marlins move off the list of teams that receive millions in revenue sharing earmarked for financially strapped teams."

Why June 9, a seemingly arbitrary date? The legislative session for the year is over regarding the budget, so Governor Jeb Bush would have to call a special session to get a new bill debated, and since Bush has been steadfastly straddling the fence on this issue, it seems unlikely that it will be taken up anytime soon. MLB wants to push this forward so that if it fails, they can pull out the big guns and talk relocation, which may force one or more of the parties to commit the remaining money (preferably, not Loria or MLB).

Back to the revenue sharing argument. The Marlins, by virtue of less favorable rental agreements than other MLB franchises coupled with a lackluster baseball facility in Dolphins Stadium, reap in millions every year from revenue sharing. MLB's biggest motivation is to get the "welfare teams" (Florida, Tampa Bay, Minnesota, Kansas City, Oakland) who happen to also be playing in older or not ideal facilities off the dole via new stadium deals. The Marlins, Twins, and A's are in similar positions because of their revenue sharing intake, as well as their on-field success, which has probably made several other owners jealous ("Why should I finance ____'s wins, not just my own?").

No details have emerged regarding the A's plans yet, and for good reason - the better to not have any debate it. It is highly likely that the A's path will follow the Twins, Marlins, and Nats closely - don't reveal too many details, keep it out of the voting booth as long as possible. Since the A's won't have to worry about getting help from the Guvernator, any debate would be confined to localities, namely Oakland/Alameda County. That would mean that plans could be debated and approved/rejected much more quickly than if they went through some complex State scenario, but it also means that local opposition groups would wield much more say in the process. Unless the plan involves a Pac Bell Park-type financing structure, I doubt anything will go through on the first try. Shortly thereafter, the locals should expect a nice little letter from Bob DuPuy. That's when the ball will truly be in play.

13 May 2005

Attendance Watch 5/13

The two upcoming series with the Yankees and Red Sox will be important because the six games will bring at least 1/10th of the season's total attendance through the Coliseum's turnstiles. The A's will have two other large-grossing series, June 24-26 vs. the Giants and September 2-4 vs. the Yankees. If the A's are in contention through August, they should be able to hit the 2.1 million figure at the very least. If not, they could drop below 2 million easily. Last season's 2.2 million is slightly off from 2003, and that small (1%) drop can be attributed to the A's losing the division on the 2nd-to-last game of the season.

Currently through 15 dates, the A's total is 309,117, with an average of 20,608 per date. That's down almost 108,000 from 2004, but through 15 dates in 2004, the A's had already played 3 games with the Yanks. This season's drop can be largely blamed on the poor weather seen so far this spring.

It'll be interesting to see how much the agressive season ticket marketing campaign has affected season tickets sales. This was considered Lew Wolff's #1 goal prior to getting a stadium deal in place. Even if the team drops in attendance due to poor performance, an expanded season ticket roll will be a very encouraging sign for the ownership group and peripheral investors as well.

Incidentally, the Giants' current total attendance is 758,618 through 20 dates, with an average of 37,931 per date. Not quite a sellout every game, but they're still on track to 3 million.

12 May 2005

Coliseum Amtrak station to open 5/25

The grand opening for the Oakland Coliseum Intercity Rail Station just outside the stadium will be May 25, according to the East Bay Business Times. Yes, it will be more expensive than BART, but there is at least one nice thing to it: some of the trains have WiFi and Amtrak expects to roll it out further over time.

10 May 2005

Three more Photo Overviews, and other notes

This time, as promised, I present the photo overviews for:

  • Laney College Athletic Fields - Not feasible nor under consideration due to Peralta Community College District's desired land uses.
  • Howard Terminal - Unlikely because of long-term lease with major shipping company Matson.
  • Uptown - Small sliver of hope for a ballpark that requires much political work done over the last three years to be undone, and new political support to be lined up behind it.

Other notes:

  • The East Bay Business Times put out an editorial in this week's issue that does not support large-scale public financing of a ballpark. It steps back slightly on its position towards the end, urging Oakland and Alameda County political leaders to "weigh the economic benefits of the stadium as an investment."
  • On the sidebar to the right, I've added a new feature called The Scorecard. It's there to keep track of how different media outlets (TV, radio, print) and personalities (columnists, talk show hosts) are positioned on the ballpark issue. For now, it will show indicators for two specific public financing questions, though it is likely to expand. If you see, hear, or read anything that can help fill in the Scorecard, please send it in.

NY Times: Impact of a Stadium article

For those that want a non-propagandistic view of the economic impact of sports venues, take a look at Robin Pogrebin's May 7th article from the Arts & Design section of the NY Times. Several individuals from both sides of the divide were interviewed, including Jay Cross, who headed the Air Canada Centre and American Airlines Arena projects. He is currently working on the mammoth Jets stadium project on the West Side of Manhattan. Some interesting (and relatively refreshing) quotes from Cross:

Cross... cautioned that a stadium could not shoulder the entire burden of reviving a neighborhood. "One building can't do it on its own," he said.


The stadium's impact, he added, would take time to determine.

"You've got to give it 20 years," he said. "You've got to be patient. They can help neighborhoods," he said of stadiums, "but they're not instant panaceas. They will neither repel housing or attract it. There still needs to be a bona fide reason to build housing or commercial space as part of a well-thought-through package, because it's largely market driven."

"Times Square had all the good will to clean it up," he continued. "But it needed developers to make commitments."

Keep in mind that the Jets stadium is a multi-use facility which will also function as an extension of the Javits Convention Center, as well as a centerpiece should New York win the 2012 Olympics. Without those, the stadium would have only 8-10 automatically scheduled dates per year in the form of football games. A ballpark would schedule over 10 times that number - 81 games or more. However, even that expanded schedule has holes: 3 months of games spread out over a 6 month span, and what happens during the offseason? Without some guarantee of traffic during that down period in the fall and winter, developers will be hesitant to make commitments.

04 May 2005

Diridon Site Acquisition Illegal?

Courtesy CBS-5 (KPIX)/Bay City News Wire:

Today's news tidbit comes from a recently constructed watchdog group from San José called Ballpark Tax Watchdogs. The group filed a rebuttal to San José City Attorney Richard Doyle's April 22 memorandum, which advised the city and the Redevelopment Agency on how it could proceed to acquire the individual parcels that make up the Diridon South site. The controversy revolves around whether or not the purchase of the Diridon South lots and related expenditures, when used for the eventual construction of a sports facility, requires a referendum.

Doyle's opinion is that the purchase of the land and related costs such as feasibility studies are not subject to a vote. Only actual construction costs, when financed by public means (bonds/taxes), are subject to a vote.

BTW believes that any costs, including site acquisition and exploratory expenditures, do require a referendum.

Who's right? Take a look at San Jose's Municipal Code Section 4.95.010:

4.95.010 Prohibition of the use of tax dollars to build a sports facility

The city of San José may participate in the building of a sports facility using tax dollars only after obtaining a majority vote of the voters of the city of San José approving such expenditure.

A “sports facility” for the purpose of this chapter is to be any structure designed to seat more than five thousand people at any one time for the purpose of viewing a sporting or recreational event.

“Tax dollars” for the purposes of this chapter include, without limitation, any commitment to fund wholly or in part said facility with general fund monies, redevelopment fund monies, bonds, loans, special assessments or any other indebtedness guaranteed by city property, taxing authority or revenues.

Nothing herein shall be construed to limit the city from allowing the construction of a sports facility funded by private investment.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, then the remainder of this chapter and application to other persons or circumstances shall not be affected thereby.

Where one stands on this issue is largely dependent on how one views sports facilities projects and similar redevelopment work in general. In the end, it appears that this ordinance, enacted in 1988, may have been specifically worded (notice the use of the word "building") to allow for planning-related work to occur. The real question here is, "Will the ballpark opponents take this to the next level?" That level, of course, is court. The last line of BTW's home page indicates this threat is possible. Whether or not they follow through on it remains to be seen.

Note: The BTW domain was registered only 2 days ago (5/2), and the rebuttal was submitted on 4/30.

02 May 2005

East Bay Business Times article

Eric Lai wrote a good summary of the development climate in Oakland with regard to the ballpark situation. He contacted me last week, and while I didn't get back to him in time to be quoted, I did respond in time to give the paper permission to use my Coliseum South mockup on the front page. He interviewed Zennie Abraham of Sports Business Simulations, who is the first person I've seen actually discuss the use of redevelopment money (tax increment funds) to finance a ballpark at some length. That's important, because I think there's a misconception that an A's ballpark will be financed the same way that SBC Park was. The chances of that happening are not good. It's best to get the public educated as early as possible about the financial ramifications and costs. Proponents should start early to educate voters on how such a deal would be different from the Raiders' deal, and that kind of outreach could make a difference. At the same time, I will scrutinize such a deal myself to see if it is truly fair for the public. No polls have been taken of the populace, but I would speculate if one were taken now, poll results would be similar to those in the Twin Cities, where the majority of the public is currently against public financing of a ballpark. It would then fall on ballpark proponents to turn that number around in time for a June/November 2006 election.