31 March 2005

NBC11 report on San Jose/Oakland

On the late NBC11 newscast, it was reported that the Del Monte Cannery site in San Jose is no longer available, due to San Jose pulling out of negotiations with KB Home on a land swap. Early next week, San Jose's planning commission is due to make a recommendation on KB Home's planned residential community at the cannery, based on a completed environmental impact report. The decision was deferred in early March because the commission felt the need to review new financial documents submitted by KB Home.

That would leave the Diridon South station as the only truly viable ballpark site in San Jose (and the best in my opinion). Much of the other alternative, the FMC site, is already being acquired by the San Jose Airport so it's almost out of the picture.

During the same news report, the Coliseum site was mentioned, but only the old parking lot option, which may not be in play. Oakland City Councilman Ignacio de la Fuente was interviewed, and while he repeated his stance that Oakland and Alameda County don't have $400 million to spend, he did mention that there may be a couple of other sites in Oakland that could be under consideration. A smile curled up from his lips as he finished his statement. The reporter, Christie Smith, said that the Uptown site was not available (I tend to agree with this).

That would leave the Coliseum South site as option #1, and the Estuary as option #2, since Howard Terminal is being used in its entirety by Matson (more on that in a future post).

HOK chosen for DC ballpark

Stadium architectural giant HOK Sport out of Kansas City was selected by the DC Commission to design the Nationals' new ballpark. HOK's winning bid came in at $18.4 million, $4 million less than the next lowest competitor who was not named. That $4 million is quite important, as the revised cost estimate released today by DC CFO Natwar Gandhi just $3.6 million less than the cap set for the part of the project associated with land acquisition and preparation.

HOK has designed 10 out of the last 14 new ballparks. While it made its name with Camden Yards in Baltimore (1992) and SBC Park in San Francisco (2000), HOK also designed the somewhat ill-conceived US Cellular Field in Chicago (1991) and Great American Ball Park in Cincinnati (2003). Their experience is not limited to baseball, however. They've designed arenas like Atlanta's Philips Arena and football stadiums such as Reliant Stadium in Houston.

Over the last few years, HOK has been the recipient of some backlash as it appeared that all of its baseball projects had too many similarities. Among those criticisms:

  1. Overall themes too "retro" with brick facades, quirky dimensions
  2. Upper decks cantilevered too far back to eliminate need for support columns
  3. "Mallification" of concourses, often with gimmicky design elements

I happen to think that these criticisms are largely unfair. Architects design for clients. That's not that difficult for the architect when he's dealing with a single, unified voice, such as a corporation or homeowner. With a stadium, there's no single client. Usually the client has numerous public voices (mayor, city council, community group) and private (team, season ticket base) to deal with. This often forces the architect to compromise or move more towards building a consensus on design issues. What may have started as a clean, unified theme can turn into a disjointed hodgepodge quickly. When you consider how all of the ballparks came into being in the 90's, it's not surprising that they may seem overly retro. That's what most everyone wanted. Of all four major sports, only baseball has a the ability evoke such nostalgic notions. Only in baseball can the venue be so integrated with its environment. Add to that the fact the retro trend started in response to backlash against the numerous multipurpose facilities built in previous decades, and there can be a tendency towards overexposure.

HOK Sport has demonstrated its forward-thinking with many non-baseball projects, many of which were cool, modern glass-and-steel designs. Among these are FedEx Field, Gillette Stadium, and Toyota Center. The parent company, HOK, is considered one of the top architectural firms in the world, and has done airports, high-rises, hospitals, and government buildings. HOK Sport Senior Principal Earl Santee, who is also working on the new St. Louis Cardinals' Busch Stadium, calls the DC ballpark a challenge to make something that's "part monument, part ballpark." With the opportunity to take the retro shackles off, DC should expect good things from HOK.

Lewis Wolff profile

There's also a Chronicle article about Lewis Wolff's background and real estate experience.

The vote yesterday was unanimous, in favor of the Wolff/Fisher group.

John Fisher profile

Good article in the Chronicle about John Fisher, the new majority owner. An excerpt:

The deal went through, and the Fishers became part of a large group of businessmen who owned the Giants.

Harmon Burns, a mutual fund executive, later bought out most of the Fisher family's stake.

John Fisher kept a small stake in the team so he could continue to monitor its financials, his dad recalls. Fisher, 43, recently sold the stake so he could buy the A's.

This time, it seems to be just John Fisher investing in the team.

Fisher may have stuck around long enough to gather knowledge about how Peter Magowan and Co. structured the private financing deal that paved the way for SBC Park. If so, that knowledge would be immeasurable. Whether those lessons could be similarly applied in Oakland is anyone's guess at this point.

MLB, O's reach deal

The seemingly endless negotiations between MLB and O's owner Peter Angelos have finally been completed. From the looks of things, here's the deal:

  1. The two teams will form a "joint venture" or rather a regional cable sports network that will broadcast both teams' games.
  2. This network will be owned and operated by the O's, with backing from MLB.
  3. The O's will pay the Nats "fair market value" for yearly broadcast rights, which may be worth $25 million per year.
  4. Angelos and his group will be guaranteed a minimum price of $365 million should they decide to sell the O's.
A Baltimore Sun article also had this note regarding the Expos move to DC:

Angelos bitterly opposed that move, but said he might be persuaded to go along if his franchise was compensated for expected losses in revenue -- about $30 million.

I'm not clear on what this $30 million figure is. Is it a lump sum or an annual loss? This may have something to do with the speculated annual guaranteed revenue the O's were supposed to get as part of the settlement, somewhere in the neighborhood of $130 million a year. If it's in there, it's the most controversial piece of the whole deal because it strikes at the heart of the revenue sharing agreement. There are already major loopholes that have been opened in the agreement over the last several years, namely the ability to write off stadium construction costs as "operating expenses." This only shrinks the revenue sharing pie further.

There are serious ramifications for MLB. Notice how the Red Sox announced all of the changes that are planned for Fenway Park? It's not just John Henry feeling wistful about the old ballyard, it's that they can write off those improvements agaisnt future revenue sharing contributions. The Yanks are offering to fund half of a new Bronx stadium that will cost around $800 million. Once it's built, they'll spend the next 40 years writing off the costs. The new Busch Stadium is also going to be half-funded by the Cardinals. The new bleachers at Wrigley Field? A write-off for the Cubs. The ongoing improvements to Dodger Stadium? Same story.

Since all of those teams named above pay into the system, the ability to withhold a portion of that yearly payment while also receiving huge benefits along the way (tax write-offs, good local PR, increased franchise value) is huge.

On the other side of the ledger, have-not teams like the Twins, A's, Devil Rays, and Marlins would split an ever smaller revenue sharing funds pool. The idea behind this is that it should motivate the have-nots to more aggressively pursue new ballparks, since they'll get the same write-off benefits the haves get. Eventually I think MLB will move further in this direction, choosing to share a limited amount every year until every team either has a new ballpark or becomes a contraction candidate.