07 November 2005

Upper deck not for sale in 2006?

Update: The A's ticket office has told me that there are no plans to sell any season tickets in the View level, because they say it is difficult to provide the same level of service there as they do in the lower two levels. No decision has been made on whether single-game seats will be sold in the View level. It's possible they might open the View level for select games (Yankees, Giants, fireworks). They might leave it open all season as the "walk up deck." They might leave it closed for the entire season. I can say that as a season ticket fence-sitter, the likelihood of me going for season tickets has increased. It appears that this move is meant partly to motivate fans like me. We'll find out if they get people like me in enough numbers to counter any backlash they may get in the coming months.

Posters on Athletics Nation
are reporting that the View level (euphemism for upper deck) will not be sold next season. I've confirmed that as of now, this only affects season ticket sales. There is no set policy with regard to regular single-game tickets, but if the A's choose not to sell the View level at all, there are serious ramifications:
  • The upper deck held around 12,000. That should knock capacity down to 34-35,000
  • No more View level promotions like "BART Double Play Wednesdays" or "Pepsi can weeknights"
  • No need to staff the upper-upper concourse behind sections 310-325.
  • Far fewer walkup seats for every date
Consider this a trial balloon for Lew Wolff's ballpark plan. If the ticket supply can be constrained enough to force fans to buy season tickets, then a good business model will be in place for the new ballpark with the demand far less elastic than before. There are definite risks with this new pricing plan. Depending on what promotions are planned for 2006, there will be no tickets priced below $10, and the only tickets at $10 will be the bleachers and plaza bleachers.

There is the risk of backlash. Fans may not respond well to the disappearance of cheap walkup seats in the View level. The walkup situation has become something of an institution, and if A's marketing doesn't properly inform fans of this change, they may find fans either confused by the new ticket offerings or even turned away for certain games. The task for the A's is to handle this with as much diplomacy as possible. There are plenty of fans that think the seats in sections 315-320 are perfectly fine (including me). How do the A's convince them that those seats aren't good?

The upshot of all of this is to find out if the season ticket base can expand. If it does, the A's will have a good subscription base from which they can start marketing a new ballpark. If not, it becomes a reason to leave Oakland, since the lack of season ticket sales will "prove" that Oakland is not a ripe market. It's not fair to Oakland, since the Coliseum is not the same as a new ballpark, but Wolff needs some data upon which he can create a business case for a new ballpark, and that makes us guinea pigs.

Diridon South site cost = $80-100 million

A new report in the San Jose Business Journal estimates that the cost to acquire the 14-acre, 12-parcel site could reach the $80-100 million range, based on a value of $125-130 per square foot. And for the first time, at least one property owner has expressed reluctance to sell his property.

The city has budgeted $60.5 million to acquire the land, which makes it well short of $70.8 million in pure real estate value and doesn't include relocation costs for the affected businesses. The businesses include:
  • A PG&E substation (northwest corner next to the railroad tracks)
  • A SBC work center and storage facility
  • One residence
  • A small bar at the corner of W. San Fernando and S. Montgomery
  • A welding supply company south of the bar
  • An imports wholesaler/retailer at the Autumn/Montgomery "fork"
  • A storage facility for Amtrak/Caltrain (northeast corner of the site)
The currently vacant parcels include the former Stephens Meat plant and the former KNTV (NBC-11) studio. The site is in green in the picture below:

All of the parcels are important, and it is unlikely that ballpark could be situated on the site without acquiring every parcel. It might be doable without the PG&E substation, but that would require reconfiguring the street grid by moving Autumn St to the east and acquiring additional land to compensate. Since the plan would eliminate Montgomery Street, Autumn Street would have to be reconfigured as a two-way thoroughfare. That reconfiguration is already in the Diridon/Arena General Plan because of a need to connect the area with the development occurring north of the Arena. That change could take up as much as 1/3 acre from the ballpark site.

Fortunately for the San Jose Redevelopment Agency, there's no talk of eminent domain, which proved to be an extremely divisive issue when the Arena (now HP Pavilion) was built. The parcels will be bought at market rate or at some negotiable rate, which should prevent any lengthy legal trouble. There would only be a problem if one of the owners refused to sell.

One way for the city to bridge that $10-20 million gap is to figure out a way for PG&E to reconfigure the substation. I don't have any knowledge of how this can be done, but when looking just at space, it would make sense to move the substation to the southwest corner of the site and realign it to run parallel with the railroad tracks. That should minimize the impact on available ballpark area. There would undoubtedly be safety and clearance/setback regulations that would have to be addressed, but it would be a way to give PG&E nearly 2 acres of land at the site without forcing them to move power lines. By doing this, the city would save money since it wouldn't have to purchase land from PG&E, only exchange it. That could cut some $5-10 million off the final price tag, depending on how much it costs to move the existing equipment. The $25,000 the city approved last week for PG&E is being used to study this option.

As for SBC/AT&T, they're sitting on some valuable land there, though I'm pretty sure the facility is strictly a work center with no line services coming from it. It has a small maintenance garage and building for storage, but the local central office is downtown on Market and San Fernando, not at this site. The big issue there is vehicle parking, which is scarce downtown. My guess is that in selling the land, SBC will try to work in some deal for parking in the downtown area.

If I were a real estate speculator, I'd look into buying land east of Autumn St next to the ballpark site. Why? Someone could build some nice, expensive condos there, complete with views into the ballpark a la Wrigley Field.

One thing is fairly certain: Diridon South is the most feasible, best-situated ballpark site in San Jose. All others have either been acquired for other development (Del Monte, Coleman Ave) or have infrastructure issues (Spartan/Muni, Reed & Graham).