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18 December 2005

The San Jose plan becomes clearer, or does it?

Ray Ratto has an excellent column in today's Chronicle in which he tries to understand what the crux of the deal is in the A's pursuit of the "Earthquakes IV." Much of it has to do with land, but his issue is with the Wolff-Fisher group investing in a historically money-losing MLS franchise. Ratto's conclusion is that it's all part of a leverage deal, with the soccer part of it a necessary pill for the investment group to swallow to get it done.

What Ratto didn't bring up is Silicon Valley Sports & Entertainment (SVS+E), the Sharks' owners who run HP Pavilion, promote other events in San Jose and recently failed as 11th-hour saviors of the Quakes. What is SVS+E's potential role in all of this? SVS+E stands to have a major role managing operations of facilities and parking. If Wolff/Fisher partner with SVS+E, SVS+E will have control of promotions and management of two or three venues and virtually all parking around the area. Wolff/Fisher can infuse SVS+E with new capital to get a piece of the action and move things along more quickly. At the same time, new development will occur around the arena and ballpark that can provide a huge payoff (market rate condos, Santana Row-like mixed development). Does that last sentence sound eerily like Wolff's Coliseum North development plan? I don't believe it's a coincidence.

If one looks at the San Jose ballpark-arena area, it is quite obvious that it is just waiting for an enormous amount of redevelopment to occur. To understand how this can take shape, it's important to first recap other Downtown San Jose development-related news from the past several months:
  • March - Wolff and partners sell a large portion of Park Center Plaza to a group headed by the sons of frequent business partner Phil DiNapoli. SJ Mayor Ron Gonzales stages a little rally in Phoenix outside the A's spring training facility. Meanwhile, the city goes forward with the KB Homes development at Del Monte Plant #51 (Auzerais), making Diridon South the ballpark site by default.
  • March/April - MLB approves the purchase of the A's by the Wolff/Fisher group.
  • August - Wolff unveils the Coliseum North development plan. Ballpark designs are released, which are not site-specific.
  • September - MLB commish Bud Selig visits San Jose to speak at Commonwealth Club, meets with SJ officials prior to speech, repeats the "We are focusing on Oakland, we don't like changing territorial rights" position.
  • October - San Jose Water Company gets entitlements from the City of San Jose to start development of the SJWC parking lots (east of the arena/ballpark). Plans call for mid-rise residential and a high-rise office tower. Once construction starts, parking in the immediate area around the arena for arena events will be significantly reduced, which means that new parking will need to be built nearby to replenish supply. One of the SJWC board members happens to be Phil DiNapoli. SJWC is looking for an experienced development partner for the site instead of developing the site by themselves. (I'll give two guesses as to who might emerge as the likeliest development partner.)
  • November - SJ City Council approves the ballpark study for Diridon South, moves ahead on site acquisition efforts.
  • December - Last minute efforts are launched to save Quakes from moving to Houston. The effort fails, but Wolff/Fisher/the A's emerge as a leading candidate for a new Quakes MLS franchise. Wolff indicates that the Quakes should be in San Jose. Speculation begins on the San Jose ballpark site holding a stadium or stadia for both the Quakes and A's.
The beauty of what Wolff is doing is that the plan is portable. Whether the stadium plan is based on a shared facility or separate facilities, it is portable and could be applied anywhere: San Jose, Fremont, or Oakland. It could be split between cities (where the Quakes stay in San Jose while the A's stay in Oakland), but that would reduce or eliminate potential cost savings and investment value. From a practical standpoint, it's excellent "neutral" positioning. Yet there's a lot of evidence that points directly to San Jose. When looking from the historical perspective at the events that transpired above and the lack of progress in Oakland, everything seems to conveniently dovetail together, no?

16 comments:

Kenny said...

All I know is this... Wolff is setting down some roots in the Bay Area. As much as I don't like the A's moving to San Jose, I am at least relieved that it seems that Wolff is not interested in moving the A's out of the area. I think the A's have finally excorcised the ghosts of Charlie Finley.

It's an inevitability that the A's will play in a new stadium when the next decade starts, and it's going to be in the Bay Area, the only question is, where exactly in the Bay Area.

murf said...

Ratto is a scream. I love his wit.

I agree for the most part kenny, but it's not like Wolff didn't already have investments here. (He's got big time investments in LA and St Louis as well)

Something we haven't given much attention to is that this could all be part of the leverage game. San Jose could be getting used. Nothing catches the attention of a wife like a little flirting with another woman. And if the flirtee is younger, more attractive and drives a bad-ass car, the wife might just grab hubby by the ear and not let go. If Oakland feels threatened, they just might pay more attention.

My guess is that the A's are playing all angles, and if SJ can come through, great. If not, might as well use their interest in acquiring the team to its fullest.

Georob said...

The "smoking guns" look like they're starting to appear for San Jose. Particularly if there is a legal way to break territorial rights after 2006. But as I've said before, a lot has to happen before San Jose becomes a real possibility.

And Oakland is not going down without a fight that could tie things up in the courts for years
(Anyone thought of that?) It gets even more interesting if the Giants go into a rebuilding period after Bonds and THEIR revenues drop.

And after all this, if the A's end up playing at the Coliseum for another 20 years; no one(and I mean NO ONE) will ever take an A's moving threat seriously again. Problem is, too many folks don't take it seriously now.

Oakland Si said...

Actually my suspicion is that the A's owners would prefer to move the A's to San Jose. The Coliseum North site is problematic (lots of small businesses to buy out, no BART). Geographically and historically, Oakland is still the best place for the A's in the Bay Area, but I don't know how much political support there is for the team to stay in Oakland. It's a shame: a downtown ballpark would do wonders for Oakland and the rest of the East Bay.

Anonymous said...

The easiest solution, one that will never happen, is that the Giants share the phone-booth-by-the-bay. This would help ease the Giants debt service woes, and fix the A's stadium concerns without having to expend any public $$$$. On the same note, the Niners and Raiders should share the Coliseum....It's not like the Coliseum and Candlestick are that far from each other, nor PacBell -Coliseum.

tony d. said...

anonymous,
I've actually brought this up before, but I've always felt that any A's deal (territorial rights) with the Giants could include the A's playing at AT&T Park while a SJ ballpark was being built (help out with the debt service for 3 years or so); kind of like the way the Sharks played at the Cow Palace while the SJ Arena was being constructed. One thing that no one really brings up is that Magowan could really make an A's move to SJ work for him in the Giants, ie gauranteed revenue levels/gauranteed franchise value from MLB, obtaining Alameda County and CoCo County for Santa Clara, etc. A while back Georob had a great post about how a possible A's/SJ deal might look for the Giants. In closing, anythings possible (except for maybe the Coliseum North Site).

Anonymous said...

Does anyone remember when Bob Lurie and the Giants had a press conference announcing (without first notifying the Haas family and the A's), that they would be playing in the Coliseum until they found a solution to their ballpark woes?

Anonymous said...

Question for Marinelayer or Georob,
Assuming the A's do look to SJ, how would a possible Oakland lawsuit play out? I know back in the late 80's then-SF Mayor Feinstein threatened to sue SJ for pursuing the Giants, claiming they were violating the Giants lease at Candlestick. I just don't see the legal aspect of a possible Oakland lawsuit...can they sue based on simply being screwed by themselves and/or the A's? I would think not.

Marine Layer said...

You're right. There's no real threat of a lawsuit from Oakland since the lease deal is pretty simple, cut and dried. The lease used to be a big reason why the A's were a serious contraction candidate, since buyout terms were mere pennies compared to the agreements in place for the D-Rays and Twins (which were/are highly inflexible).

Amazingly, in 2009 it will cost less to buy out the lease on the Coliseum than it will to buy out Esteban Loaiza.

Georob said...

Oh yeah, I remember that press conference with Mayor Feinstein proudly proclaiming that the Giants would play in Oakland. Probably one of the few times in her career that DiFi wound up with egg on her face.

And what do I think an Oakland lawsuit looks like? Easy, they take a page from the Al Davis playbook and sue everyone from Bud Selig on down. I also think they'll play the race card and try to paint this as a conspiracy against a "city of color".

It'll be messy.

jrbh said...

Lawyers cost money, and Oakland is in no position financially or politically to enter into another sinkhole lawsuit with a crap-headed sports owner or another civic jurisdiction. There will be no lawsuit about this stuff.

Anonymous said...

There will be no lawsuit by Oakland for very simple reasons. First, the A's have made good faith offers. The city declined to act. That fact alone will diminish their standing in court a great deal. Second, and more importantly, what if they win? The will surely be required to fork over cash/resources to keep the team in addition to legal costs. No, a city in the financial shape of Oakland will rant a bit....but in the end they will be happy to be quits of the whole affair.

Georob said...

Oakland will claim the following:

-They've provided cheap rent for many years

-The Coliseum is a perfectly usable facility, recently updated and able to accomodate more alterations for a fraction of the cost of building a new venue(in their opinion, mind you)

-In addition, the Coliseum is right by 880 and BART, with no other site able to match that infrastructure(ie; smart growth, less pollution)

-The reason for the A's attendance problems are due to ownerships past attempts to sell or move the team compounded by the franchise's unwillingness to invest in player personnel resulting in a less attractive product on the field.

-The growth and income between Alameda and Contra Costa counties should be more than enough to sustain a profitable fan base.

-Therefore this is nothing more than an attempt by the A's to relocate to a more attractive(ie: less urban)community that will write them a blank check and provide luxury suites for wealthy corporate moguls that working class Oakland doesn't have enough of.

Total BS you all say? You're right! But you what? These things are played out in the Court Of Public Opinion as well as courts of law. And to the average citizen out there that doesn't follow the economics of baseball, it's a compelling argument.

Compelling enough to a least slow down a move to San Jose or anywhere else. Am I right?

Kevin said...

georob,

You may be correct in the points you brought up. Unfortunately for the people of Oakland, what they think at this point really doesn't matter. If the A's decide they want to move to SJ, they really could care less what the people of Oakland think. They will not be the ones voting on a new ballpark. Any anger expressed by Oakland will be more than offset by the number of South Bay fans greeting them with open arms. And bottomline, that's all the A's care about.

I do have to disagree with a couple of the points you brought up. How can anyone complain that the A's have not put together a competative team. Without looking, I'm sure they have finished either first or second in their division for the past 5 years. I don't think you can point to the A's business decisions as the reason why we only draw 20K fans on a sunny Sunday afternoon game against Texas.

Second, the corporate season ticketholder is what sustains a professional ballclub. I bet a lot of the 28K or so season tickets sold by the Giants are sold to small businesses and corporations. Alameda and Contra Costa counties can continue to grow, but the A's will still have an attendance problem. The reason, no corporate backing.

Marine Layer said...

Gonna have to disagree with you on this one, Rob. All the reasons you cited matter little in terms of legality. If Oakland/Alameda County really wanted to make sure the A's couldn't leave, they would've negotiated a longer lease with the A's with no escape clauses. The fact is that they didn't or couldn't.

Like I said before, it all comes down to the deal. The current deal sucks for Oakland. That's it.

I suppose Oakland could accuse Wolff of not dealing fairly with them and sue the A's, but I doubt there's some sort of right of first refusal in the contract. It's Wolff that made the right statements, put the ball in Oakland's court. Besides, how are they going to convince the A's to want to stay if they're suing the A's? San Jose and Fremont have little to worry about in this regard.

Anonymous said...

The City of Oakland is about as likely to sue a departing A's team as they are to fully fund and build a park to keep them here. Which is to say, not likely at all, and for the same reason: the Raiders. The fleecing the City took on the Raider return deal makes public stadium construction political suicide for any elected official. And the never-ending (and rarely winning) lawsuits against the Raiders are just the same. The politicos believe Oakland voters want no more of that crap, and though that may be unfair to the A's, that's the perception and therefore that's the reality.

There won't be a City lawsuit to keep the A's in Oakland, no way, no how.