25 October 2005

San Jose looks to acquire PG&E substation

Barry Witt's report in today's Merc covers San Jose's efforts to get PG&E to study moving a substation located on the Diridon South site. The substation could either be reconfigured or moved. A potential site is the fire training center on the other side of Park Avenue.

The substation is wedged between the old Stephens Meat plant (which closed down last month) and the Union Pacific/Amtrak/Caltrain tracks, towards the northern end of the trapezoid-shaped lot. I have been told that substation, which is roughly the shape of a square that juts into adjacent properties, could be reconfigured to run parallel to the tracks. If that's the case, it would be the most cost-efficient option since it may be possible to move without rerouting the high-tension transmission lines that run above the property.

One more property acquisition may be required for the ballpark to work properly. A small parking lot just north of the substation is used as long term parking for Amtrak riders. If the ballpark were to have a southeast orientation, there might not be enough space put in a proper field without this space. That is, unless the designers want yet another bandbox.

Update (10/26, 10:44): Another article which quotes Santa Clara County Assessor Larry Stone is on the CBS-5/KPIX website.


Georob said...

Well, if San Jose is indeed moving forward, then the territorial rights issue is something they feel can be overcome. But how?

1) Somebody compensates the Giants and the whole Bay Area becomes a shared market

2)You do a swap. South Bay for East Bay. Which makes more sense if the A's move and San Jose tries to get some other team

3)Lew Wolff decides to become Al Davis and sue MLB over the whole issue. (Of course, Al Davis didn't have the anti-trust exemption to deal with in the NFL)

Do we have the late Walter Haas to thank for all this? Didn't he agree to this territory division? Didn't the A's and Giants share the Bay Area before? I'd love to know the background behind this.

Haas may have saved major league baseball in Oakland initially, and his agreement on territories continues to do so now. But if the A's end up leaving the Bay Area because they can't go to San Jose, it will be an ironic legacy for Walter Haas when all is said and done.

Anonymous said...

I don't blame Walter Haas for the Giants territorial rights to San Jose. At the time of the aggrement the Giants were trying to move to San Jose; The territorial rights were put in place for that sole purpose. These rights were somehow upheld when Peter Magowan bought the Giants (even though the Giants remain in Frisco). Peter Magowan (and to some extent MLB) are to blame for these rights being in place. And the sad thing is, these rights aren't even necessary because his arguments (heart of his fan base, corporate sponsorship) are based on fiction. In closing,it's amazing that no one has argued that building SBC Park has stolen A's fans from the East Bay and now threatens their very extistence here!

Marine Layer said...

Wolff has said publicly that he doesn't plan to challenge territorial rights, so a lawsuit is probably not in the cards. The locals are talking swap, but I don't think it's likely either, since it would require some sort of arbitrary valuation system for the three affected counties, and I doubt anyone will come to any real agreement on that. Compensation, at least in cash form, isn't likely either since Wolff probably won't pay that and San Jose isn't about to "pay for its freedom." Not to Magowan, anyway.

If it does happen, it'll be a backroom deal like most of the other backroom deals MLB has brokered during the last 20 years. Didn't you see Lew Wolff partying with Jerry Reinsdorf when the Pale Hose clinched in Anaheim? Could he have been currying favor with the head of the relocation committee? If so, for what location(s)? Inquiring minds want to know.

Georob said...

There's a "relocation committee"? What do they do? Bud Selig would have us believe that MLB franchises are the most stable, as indicated by the fact that prior to Montreal no team moved for 30 years.

So why a relocation committee?

And BTW, I still want to know why Walter Haas agreed to the "territory" agreement. NY, LA, and Chicago don't have one. As for Washington/Baltimore, they've always been considered separate markets by the census bureau and media outlets, which justified that arrangement.

Anonymous said...

I heard this morning on KNBR that Lew Wolff, Jerry Reinsdorf, and Bud Selig are frat buddies from this true? If so, even more reason to believe that territorial "backroom" deals are possible in the future.

Marine Layer said...

I'd get into the "why" of the situation, but it would really be nothing more than conjecture and it wouldn't get anywhere. I'll put it this way - it was the late 80's-early 90's, and the South Bay was still wondering how it was going to deal with the closure of so many defense contractor firms. Little did anyone think that the dot-com boom would more than supplant it. Territorial rights reflect the era in which they were drawn up, which means they don't take into account the dynamics of the Bay Area market over the last decade. I think Haas was truly trying to help keep the Giants in the Bay Area. So he did what he thought was best at the time.

And yes - Reinsdorf, Selig, and Wolff are all frat brothers from Phi Lambda Phi - though I wouldn't read too much into that. In the end it's all about the deal, and Peter Magowan is going to be part of it.

Georob said...
This comment has been removed by a blog administrator.
Georob said...

So, anyone care to guess what a backroom deal would look like? Here's my idea of one, see what you think:

A revenue sharing plan will be agreed upon. It will be based upon an estimate of what the Giants average yearly revenue stream would be over the next 20 years assuming nothing changes. If the Giants drop below this figure in any given year, the A's would have to compensate them for the difference. If not, no money changes hands.

As for the territories, they go away. However, it will be understood that the A's must concentrate their marketing efforts within Santa Clara County, with a nod to their existing fan base in Southern Alameda County. Contra Costa and Northern Alameda become a neutral zone, but would gravitate to the Giants eventually. The opposite could probably be said about Palo Alto and Mountain View in western Santa Clara.

Bottom line is that it will be in the A's best interest that the Giants continue to do well(for 20 years anyway). But if the Giants want to open a "dugout" store at Southland Mall, expect the A's to do the same at Hillsdale or Serramonte.
Tit for Tat.

And what about the citizens of Oakland? Well, unlike when the Raiders left I forsee them dropping the A's like Third Period French (to steal a line from "Ocean's Eleven") The Nimitz corridor between San Leandro and Fremont has always been "ground zero" for A's support, and they should have no problem supporting them in San Jose.

Good ideas? or have I too been channelling Sarah Winchester?

Anonymous said...

You the man GeoRob! Excellent idea's for settling the territorial rights issue. I have always thought that if Magowan/The Giants were given a deal like you described, there would be absolutely no reason for them to hold on to their insane rights (unless Magowan is more greedy, arrogant than we thought). If it could be done for the Orioles, it could be done for the Giants! Now, about getting a deal done in Oakland...

jrbh said...

The "rights" to San Jose remain with the Giants because they insisted that things stay that way while they were putting together financing for their new ballpark. They think about half their fanbase comes from the peninsula and San Jose -- a key reason for locating the park near a CalTrain station, by the way -- and they didn't want to obligate themselves to a $20M annual bond payment without some assurance that they'd continiue to get fans from that area.

It would take a serious numbers -- either in dollars or lawyers -- to get the Giants to move from that position. On the money side, I'd guess at least $100M. On the lawyer side, the Giants made assurances to financiers based on the "right" to San Jose. The people who'd be pissed off by any change in the arrangement would be very rich, very powerful and very willing to send wave after wave of lawyers into court.

Kevin said...

Frankly, I wouldn't pay Magowan and the Giants a penny for the territorial rights. Walter Haas agreed to give the Giants the rights so the Giants could build a ballpark in SC. It was a generous gesture on the part of the A's ownership to help keep the Giants in the Bay Area. Now that the A's are looking for a little help, the Giants are offering squat.

I say don't offer the Giants any financial help. Though a gem, SBC Park will be an anchor around the Giants neck for the next 17 years. Giants investors have seen no return on their investment, this despite sold out games and a World Series appearance. What will their financial picture look like 5 years from now after Bonds has retired and attendance is back below 3mm?

I would rather see a ballpark built in Oakland or Fremont before we offer any financial compensation to the Giants.

Georob said...

By "financiers", I assume JRBH means the private money that went to build Pac Bell Park. However, I don't think anyone at the time would have predicted the enormous success the Giants have had at what is now SBC. And is that success based upon the fact that the Giants exclusive territory includes San Jose? I don't think so, and most reasonable businesspeople would agree.

As I've said before, SBC has enabled the Giants to pull new fans from the East Bay who were either new to the area or not already A's fans. In fact, I'd venture to guess that in the more affluent parts of Contra Costa, the loyalties are split 50/50.

I'd also guess that longtime Giants fans in the South Bay are likely to remain so. The A's can market to a whole new generation of South Bay fans who probably weren't going to go all the way to SF anyway(...of course, they could also do that in Fremont too!)

As much as I dislike the Giants, I think they have a sound business model. And if they keep doing what they've been doing, it won't matter if the A's move to San Jose.

But like you Kevin, I too would rather see Oakland have first shot and then Fremont. But I also don't want this team leaving entirely. And if San Jose is the safety net to keep that from happening, so be it.

Marine Layer said...

Here's the only thing of which I'm certain at this point: the Major League Agreement, which defines the territories and rights under which all teams operate, is scheduled to expire at the end of the 2006 season. It could change, it could stay the same, but regardless, it will have to deal with rewriting at least the DC-Baltimore territorial relationship. As for the Bay Area, who knows? We simply don't know enough to make any kind of prediction about the actions of MLB and the owners.

Kevin said...

Marine Layer, that is a very interesting bit of information. How long has the current agreement been in place?

Maybe this is Wolff's ace. He can come out now saying he won't challenge the Giants' territorial rights, knowing full well that if he's patient, the rights will be granted to him in about a year.

We could only hope.

Marine Layer said...

The MLA runs concurrently with and in conjunction with the Collective Bargaining Agreement, and baseball seems to be comfortable with 4-year terms for those.

A vote would still need to be taken to transfer rights, with the 3/4 aye rule in. The issue is getting a deal in place to even make that vote possible. That would take a lot of work and convincing, since there is potential to affect all other owners, not just the A's and Giants.

harrold painter said...

What many folks fail to understand is this: Wolff decided to purhase the A's knowing full well that the Giants held territorial rights to the South Bay. They didn't somehow change when he took control of the team. Since he is a friend of Selig and we all know what Selig's position is on changing territorial rights, I really don't think Wolff has the south bay in his sights. It also, unfortunately, doesn't seem like the Oakland plan that Mr. Wolff articulated has much substance. I'm left to conclude that he intends to relocate out of the area. Fremont in my mind is not feasible from a corporate sponsorship point of view. My gut feel tells me that he's either looking at Sacramento or Vegas.

Murf said...

I think with the types of business deals that he is known for striking, Wolff must have been viewing this from all perspectives before he made the purchase. I really don't think he's removed any possibility from consideration. It would be unwise to not be flexible to all future homes for the team prior to buying it.

Marine Layer said...

You may be right, Harrold, but you're making certain assumptions that may not be correct. Wolff's and Selig's statements haven't shown to be supportive of any San Jose efforts, yet the San Jose boosters keep going. I've said this before: if Selig wanted to put the kibosh on San Jose, he could have told them directly when he was here that San Jose has no chance. That's not what happened. Now, a cynic might think that it's just a way to keep the San Jose threat in play so that Oakland and Alameda County will be forced to act. But that is yet another assumption that is pure speculation.

Sacramento. There's a situation that bears similarities to Oakland. The Kings are trying to get an arena built and paid for by developing other land. The now-failed North Natomas project was much like what Wolff is proposing, only much larger. Now some developers and landowners are trying to resurrect the idea using an even more rural and controversial piece of land as the starting point. If Sacramento can't get the Kings taken care of, what makes anyone think that it will happen more easily for the A's? If we're talking about adding on to Raley Field, it's not likely. Renovations will cost nearly as much as it would to build a brand new park from scratch.

Las Vegas? Well, there's no financing plan for starters. Plus Wolff's Oakland plan wouldn't automatically work there, at least not without changing a lot of existing development in Oscar Goodman's planned ballpark area downtown.

harrold painter said...

Speaking to the Commonwealth Club of Silicon Valley last night, Selig said the San Francisco Giants privately built their stadium on the understanding that their territory included the San Jose area.

harrold painter said...

Sorry didn't finish that one ... what I meant to say is that Selig did in fact indicate to his SJ audience that night that he is not open to changing the territories that exist in MLB. He went on to say that the Giants built their park with the understanding that no team would relocate to the south bay (see the quote in previous note above). I really don't see him changing this stance. Wolff has to know this - so I'm a bit more pessimistic than most on this I guess.

Marine Layer said...

Not to nitpick, but I don't think Selig was speaking to the Commonwealth Club of Silicon Valley last night. I'm pretty sure he was in Houston handing out a trophy to his frat brother, Jerry Reinsdorf.

I was at the Commonwealth Club event, and I did a recap of the speech and Q&A:

Again, it was the phrasing of his rhetoric that was important. It left a lot of flexibility for him should circumstances in Oakland change. Selig has had a tendency to waver on issues when pressed or when he sees fit to do so. Examples are the steroids issue (first "our system is good," then "we need an independent body"), and contraction (which wilted under the glare of public scrutiny and lawsuits). He's been very positive about the current labor agreement. Don't be surprised if he changes his tune come September 2006, when the next CBA has to be negotiated. Why should territorial rights be any different? If there are some high-minded principles under which MLB operates, I don't see evidence of it. Believe me, I understand that territorial rights are no simple issue to negotiate. But just like virtually all other issues in baseball, they are negotiable.

Georob said...

If anything, the real threat of a San Jose move might get Oakland off its duff. Let's face it, there's been threats of the A's leaving almost as long as they've been here and nothing's happened yet. And it wouldn't surprise me at all if many in Oakland see this as nothing more than crying Wolff(intentional pun)

Frankly, the only way I see Las Vegas getting the A's or any other team is for the casino owners to just build a stadium whether they have a commitment or not. Having a usable(if flawed) RFK Stadium got baseball back to DC, and Oakland had a finished and ready Coliseum to get Finley out of KC in '68. It DOES work sometimes.

And until Vegas gets a team, they could use it for "Hooters Topless Softball", or maybe a baseball version of the XFL. Anything's possible down there.

And Marine Layer, I'd like to take this opportunity to thank you for this blog. I had hoped that AthleticsNation would take on the ballpark issue more vigorously, but there's just too many kids over there that find the topic either boring or unneccesary.

And I can understand, they're baseball fans too. After all, territorial rights and revenue streams are not as exciting to those who'd rather swoon over Huston Street's gluteous maximus. Or to those that are convinced that Ken Macha is the only thing that kept us from a World Series title.