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?