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27 January 2007

What is infrastructure, anyway?

In the past month we've heard a lot about costs associated with the ballpark village. The $500 million figure for the ballpark itself is quite fuzzy, and depending on the final scope of "A's Town" the final value of the project could be well over $2 billion. It could be very easy to lose sight of the hidden costs of the development. There's much speculation about who is going to foot these hidden costs, but I sense that much of this speculation comes from good old-fashioned FUD (fear, uncertainty, doubt). That's not unfair since we've seen municipalities get burned time and time again over the last 20-30 years on sports facility development. In this case there's less chance of that because a project of this size has to have all details fleshed out before it gets approved. Why? Because if you take away the ballpark, it's simply a housing and retail development, and as such it should get treated like any other housing and retail development.

Don't let the ballpark fool you
The ballpark is the anchor of the development, and it's expected to retain virtually all of its revenue including concessions and parking. Unlike most retail anchors such as department stores, it's not expected to directly benefit the city through significant sales or property tax revenues. That may vary based on who owns the ballpark and land, but for now let's work with the notion that when it comes to sales and property taxes the ballpark represents zero direct net benefit to the City and County. (Ancillary development may brings huge tax revenue for both the City and County but it's too early to project how much.)

Okay, but what about costs associated with the ballpark? Wolff said last week that the A's will pick up the tab for police presence. Is that simply police within the ballpark village area or the ballpark itself? What about traffic management? Or how about public safety at whatever transportation facilities are built there? Fire and emergency services? All of that stuff adds up. It's possible that the A's could capture those costs in their ticket and concessions prices. They could partner with the city on a ticket tax to fund such services, which would be a roundabout way of doing it.

Or they could look at another source of tax revenue within the city itself. Section 5-1206 of the Fremont municipal code covers revenues from recreation and entertainment:
(a) Every person conducting, carrying on or managing any business consisting of entertainment, recreation or amusement shall pay an annual business tax of $1.50 for each $1,000.00 of gross receipts. This classification includes but is not limited to: Archery ranges/instruction, bowling alleys, firearm shooting ranges, golf courses/instruction, ranges, indoor and outdoor motion picture theaters, pool and billiard halls, rental animals for recreation riding, skating rinks, sporting events, swimming pools, theaters at which live entertainment is presented, vehicle courses/racing, game or computing arcades.
That means the tax rate for the A's would be 0.15% in Fremont. That's favorable compared to Oakland's 0.45%, though I don't know whether or not the A's actually pay this tax in their current situation. 0.15% may not sound like much, but when talking about a baseball team, it's actually good revenue. Consider this breakdown:

If Fremont and the A's were to split the cost of gameday police and emergency services, that $171,120 would go along way towards paying for it. Keep in mind that this is tax revenue that would otherwise not go to Fremont. If there's a possible source for these expenses or even a rebate for the A's, this is it.

Permanent infrastructure
There are other types of infrastructure associated with residential or mixed developments. Roads, schools, and parks have great upfront costs, but are ongoing expenses usually covered by existing budgets. In Fremont, the city has had to cut some services and eliminate positions to keep the budget balanced. "A's Town" would bring some nearly 8-10,000 new residents into the city via townhomes and other types of attached housing. Typical residential and commercial developments these days require developers to foot the bill for water, sewer, and other utilities, as well as building of streets within the development. That cost should not be an issue. It's the other stuff that needs to be defined.

Arterial roads and freeways
Two major roads feed into the Pacific Commons area, Auto Mall Parkway from the east, and Cushing Parkway/Boyce Road from the north/south. A major piece of infrastructure was completed a couple of years ago when Cushing Pkwy was extended north from Fremont Blvd, officially connecting the two parts of Fremont's Industrial Redevelopment district. Prior to this, drivers had to take 880 or cross the freeway to get to Auto Mall Pkwy. Cushing is perfect for ballpark traffic as it runs 4-6 lanes and empties directly into 880 South. Auto Mall Pkwy is modern and wide in the Pacific Commons area, but it narrows as you move further east towards 680. It's this portion of Auto Mall that is a concern because it performs double-duty as a commuter corridor. Widening to a full six lanes from 880 to 680 is imperative, and that includes an overpass section that avoids rail lines, including the planned BART extension. Should that widening happen, Auto Mall may be used as a carpool route, which would be helpful for fans coming from 680.

Modern interchanges connecting to 880 in the area are already complete. Pacific Commons is in the middle of a massive redevelopment zone called "Industrial." After the creation of the 3,000-acre zone west of 880, roughly $24 million per year in property taxes was diverted away from their usual destinations, in part, to fund four 880 interchanges: Auto Mall, Fremont, Mission/Warren, and Dixon Landing. All but Mission/Warren are finished, and the Mission/Warren interchange is due sometime in 2008. Debt service on the bonds used to finance the interchanges will run through 2013. Even if the A's were to reverse position and ask for a bond issue - which they haven't - the city would likely be averse to acquiring more short-term debt.

In a previous comment thread, someone asked if perhaps the CHP weigh stations could somehow be used to route traffic coming from 880. That isn't likely with the east side station since it's frequently used and houses other facilities. The station on the west side of 880 (South) is intriguing since it isn't used much at all and is strategically placed adjacent to Pacific Commons. If the developer, city, and state could come to an agreement, it's possible that the station's entrance and exit could be utilized. That would mitigate much traffic that would normally use the Auto Mall exit. The challenges here are A) whether it's actually possible to use a weigh station in this manner, and B) if Wolff can acquire the private parcel needed to complete the road that would run between the weigh station and Christy Street. I doubt a purchase of just the required easement would be feasible, since it would significantly reduce the existing facility's parking. Then again, who knows? The road would only be 600 feet long and covers 1/2 acre.

Parks
The municipal code dictates that for every 1,000 residents, five acres of parkland should be set aside. Using the projected additional population of 8-10,000, that means 40-50 new acres of parks. The developer could pay a "park land dedication fee" in lieu of some amount of land, but good parks tend to raise the value of surrounding neighborhoods, so we should expect some modicum of parkland. It's possible that the developer would dedicate adjacent parcels to the city and Fremont Unified School District to create a shared school/park facility.

Coincidentally, the city owns 40 acres at the west end of Auto Mall, part of it to be used for the ACE/Amtrak station. It's land Wolff covets for parking - and if parking is in its future, a public park isn't. Perhaps a trade is in order...

Schools
The nearest public elementary school is across 880 from Pacific Commons, which makes sense since there is no residential development currently at Pacific Commons. Introducing 8-10,000 new residents means that at the very least a new elementary school is in order. Junior and Senior High Schools are at least 1.5 miles away. Again, the developer will be asked to dedicate land for the construction of a school, some 5-15 acres.

Fire/Hospital
A fairly new fire station is located at Auto Mall and Grimmer Blvd, just across the freeway from Pacific Commons. The hospitals in the area are located closer to city hall and the BART station. No change likely here.

Transportation
This issue is the big elephant in the room. It's worthy of a series of posts to cover potential solutions, so I won't cover that right now. Soon, very soon.



When look at infrastructure, it's important to separate the wheat from the chaff. Sure, there are many details, but many of them are either already addressed (roads) or will be addressed within the auspices of the project's master plan (utilities). While it's easy to be overwhelmed by all of the information that must be studied, once residents get a real visual of the concept it will be easier to appraise. Until then, I'll keep doing whatever I can to help shed light on the process.

28 comments:

Bleacher Dave said...

This on the A's website:

Cisco Field Seating Rights: With the purchase of a full season, Grand Slam package, located in the Plaza Level or better, you will be guaranteed seats to the new Cisco Field in Fremont. Patrons must maintain their account with the A's up until the opening of the new ballpark to qualify. For more information please call (510) 638-GoAs (4627) or email seasontix@oaklandathletics.com.

While I can appreciate the A's trying to sell as many Cadillac packages as they can, that's a slap at the rest of us partial plan holders.

Marine Layer said...

The Giants didn't sell partial season tickets for the first 5 years at China Basin. They also had nearly 30,000 full season ticket holders a couple of years ago.

The A's don't have even half that many subscriptions. If they were getting, oh, 20,000, I might be worried. Right now this is simply an exercise to get fans to jump on the bandwagon early before Cisco Field opens. Imagine that, trying to sell more seats in Oakland. How crazy is that!

FreeSanJose said...

Obviously, this is somewhat unrelated, but what are you thoughts on this Earthquakes/SJSU stadium development. Obviously, actual details are pretty scarce, but any idea how some of this stuff might work in a practical matter?

Marine Layer said...

As I understand it, SJSU will provide the land next to the existing Spartan Stadium. Wolff would pay for the construction cost. Like the ballpark village concept, the financing would come from the sale of housing and perhaps mixed development. The debate about seating capacity is not a big deal. Adding 6-8,000 seats is not difficult, it depends on how innovative they want to be in doing it. I'm a big advocate of portable or telescoping seating like the kind used in arenas.

The financing piece is a bit of a mystery. The housing piece might be covered with the Diridon South land. Or maybe there's a deal involving land in Chuck Reed's old stomping grounds, North San Jose. I'm certain it'll be simpler than "A's Town" by several degrees.

Anonymous said...

BTW Bleacher Dave. if the A's were building the stadium in Oakland, they still be doing the ticket plans that way.

Not that it matters though. For aren't the majority of "Stay In Oakland" fans who share your viewpoint pretty much done as fans once the A's go to Fremont?

I mean, why gripe about a ticket plan that you don't intend to buy anyway? Partial or otherwise.

Oakland Si said...

I'm curious as to the environmental (among other) implications of rezoning the land west of 880 from industrial to residential (a necessity for this project). Cleanup standards for any previous contamination would be more stringent (and expensive) if it was zoned residential. Plus, I'm wondering how much is any of that land is wetlands, and the implications of that for development.

Marine Layer said...

oakland si, please check out the comments thread from this post.

The issue is not a matter of Wolff building on the wetlands, it's more a matter of how close the development will get. There will need to be some sort of buffer to keep the integrity of the preserve. That's the rub.

As far as cleaning up the land, it's probably far less contaminated than the O29 site. Housing is going to be built there. I seriously doubt that Fremont's going to foot any of the remediation cost.

Anonymous said...

Marinelayer,
There was an excellent article in Sunday Mornings Mercury Business (1/28) regarding the Sobrato Family and all the land/property they own in the South Bay. After reading the article I began to wonder...is Lew Wolff "keeping up with the Jones's" in regards to his massive land grab at Pacific Commons (I've personally been puzzled as to why he needs so much property to get a 14 acre ballpark built). And is he positioning himself to do the same in San Jose with his proposed MLS/SJSU stadium? Lew Wolff and Co. appear hungry for South Bay real estate, with Cisco Field and MLS/SJSU stadium the necessary pills to swallow to get the deals done.

Marine Layer said...

$500 million to build a ballpark is not chump change. They're going to need a lot of land to be able to roll the profits into the ballpark if they want to avoid having to pay for it largely through stadium revenues.

The ballpark is definitely a legacy item. Wolff said himself he (paraphrasing) "wants to do it before I die." I doubt it's about keeping up with the Sobratos of the world. On one hand there's John Sobrato. On the other there's a John Arrillaga, who built the new Stanford Stadium and sold off much of his vast Valley holdings.

Anonymous said...

The more I hear and read about all of the infrastructure and transportation issues, the more I fear this project will inevitably tap into the public sector in ways that the Fremont and Alameda taxpayers don't fully understand now and that Wolff is quick to dismiss and try to rush by public scrutiny. In his initial comments listing requirements of any new ballpark in the area, he listed easy BART access and one of the major needs. Well, this proposed site is miles away from BART and there's no way that there will be a new station built within walking distance of the park (in our lifetimes!!!) This park has no easy public transportation - let's face facts. After an initial honeymoon period, people will stop coming due to traffic nightmares on the 880.

Baseball stadiums need convenient public transportation in urban city centers to be viable long term. This site does not qualify in that respetc.

Jeff P said...

Hey, that was me who suggested they use one of the CHP stations as a routing corridor for traffic! Woot woot! Hopefully something will work out that will mitigate some of the traffic concerns and pacify the Auto Mall retailers. I can really understand their point about traffic hurting their business.

I also noticed that the 49's and the Raiders are having "informal" talks about a joint stadium venture. Wonder if that will lead to anything? SF and Oakland may soon learn to fear the slumbering other giant in their backyards. Can you imagine the wails of anguish if Santa Clara/San Jose were to take BOTH NFL franchise's? Migden may die of a stroke on the Senate floor. Can anyone doubt that the Warriors are next on the list of hostile takeovers? SF may have gotten truly lucky with their deal with the Giants. It's pssible that they may soon be the only team in the bay area that does not play close to or in "Silicon Valley". The times...they are a-changin.

Bleacher Dave said...

ML,

How many additional full-season packages do you think the A's are going to sell using this tactic? I'm thinking zero.

The A's have so few season ticket holders that they should guarantee Cisco seats to any and all season ticket package holders up through a certain # (10,000 full-season equivalents?). Why risk alienating some of your best customers by trying an ineffective strategy to grab new customers?

The A's could honor their existing holders, promote loyalty through the rest of their Oakland years, demonstrate their articulated committment to families and kids, and maybe actually craft a policy that helps to sell tickets.

Their current ploy is a transparent, manipulative overreach and an insult to both existing and potential season ticket holders for its sheer ludicrousness.

tony said...

Two teams in the South Bay isn't going to happen, Jeff! The 49'ers obviously cannot afford to do this by themselves or they wouldn't be asking for the Raiders help.

A good chunk of the 49er fanbase is on the Peninsula and a Santa Clara site would work well for them. On the other hand, I doubt there are many Raider fans in Santa Clara County and moving there would put them at a marketing disadvantage.

But who cares, the most important thing is getting San Jose's name on a team, right? Dream on, Jeff.

The Raiders would be very well served by staying in Oakland and having the Niners in the South Bay. Just as the A's would have been helped immeasurably had the Giants followed through with their territorial claims and moved to Santa Clara.

A North Bay/South Bay split of sports franchises makes perfect sense and reflects the new balance of the region. San Francisco may no longer be the only center of the Bay Area, but San Jose isn't going to be either.

Marine Layer said...

BD - I agree that it's a bad ploy. But your rationale isn't a good one. It sounds nice to guarantee season tix rights to partial season tix holders, but to what end? Are they guaranteeing rights to full season tix or partial? If it's the former, how many of those partials are willing to pay the much higher prices (4x)? It's a matter of giving the full subscribers extra implied value. Frankly, I don't know if the 20-game subscriber should get the same rights as the full season guy.

Wolff has been marketing to the well-heeled in the South Bay for a few years now. It's a message to them (and to longtime Oakland subscribers) to get ready. Now if you think season tix sales will be flat or less through the opening of the ballpark, it makes sense to market in a more inclusive way. Wolff isn't. He's already getting South Bay pull and will likely get some Southern Alameda County pull with this tactic.

Heck, we don't even know if PSL's are happening yet (probably).

Jeff P said...

It doesn't matter to me Tony because I don't have a dog in this fight. I don't live in SJ and could really care less if they get all or none of the teams in the area. I'm just betting that they will get them....all, with the exception of the Giants. Look, the NFL is immune from most location criteria as they play so few home games. They can build anywhere within 1 hour from their fan base and fill up their stadium. It makes absolute sense for the Raiders and Niners to enter into a partership as is being reported. The NFL will foot 300 million of their joint costs. That's no trifling amount. If there is such a financial incentive and the Raiders are willing, it's very concievable that this deal may come to fruition. We will see.

And while it doesn't affect me personally, I feel that the city of SF's arrogance and Oaklands ignorence makes this a self fulfilling prophecy. I am disgusted that Oakland can't get their act together and pull of such a simple stunt as keeping the A's. People may blame Brown, but they are the ones who elected the imbecile and then allowed him to destroy any chance of keeping the A's.

Anonymous said...

you should do a full column on the matier and ross story about the raiders and 49ers haring staduim??? I think that would hurt the A's in terms of ads and I would hate driving to SC every sunday. Fremont is easier to acess for those north and east than santa clara. the raiders would be the 2nd team there.

Tony said...

One thing the South Bay boosters seem to forget is that everything they're getting is a result of available land.

I somehow doubt that San Jose and its surrounding communities made smart and straetigic decisions decades ago to convince business leaders and homebuilders to relocate from San Francisco and Oakland, but you wouldn't know that by listening to those who claim to represent the South Bay.

Silicon Valley happened because there was available land near Stanford and less than an hours' drive of San Francisco. Santa Clara County mushroomed in population not because people left the North Bay, but because the North Bay had no available land to grow. Lastly, San Jose became the largest city in the Bay Area only because they were at the edge of the region with available land and no other cities to stop them from annexing it.

But it won't be like that forever. Someday, the South Bay TRULY WILL be built out and any future development will met with questions of what to tear down and objections by NIMBYS who don't want change.

Just as San Francisco and Oakland have had to do for many years now. You can call it arrogrance and ignorance, Jeff; the rest of us will call it reality.

Jeff P said...

Exactly my point Tony. The current reality is that there is room to grow in the south bay. It's a matter of expediency more than anything else. But it's also a reality. True, SF and Oakland are "built out", but there were opportunities to keep their sporting enterprises. It's also true that they chose not to keep them, or at least to expend minimal effort in keeping them. That's why I find it irritating when the "SJ boosters" are maligned for coveting their neighbors "properties". It's ridiculous. SF and Oakland didn't really want the teams, or at least weren't willing to shoulder the burden that would be required to keep them, why should they harbor ill will towards the communities that are willing to step up and at least keep the teams in the same geographical area? All in all, SJ and Santa Clara are doing a service for the entire bay in at least keeping the teams close.

murf said...

Commenting further on the environmental question.

The site in question is not a super fund site, brownsfield, etc and carries no special designation that I'm aware of for cleanup. Unlike, say, Hunter's Point, where they used to hydro-blast nuclear matterial from the bows and ballasts of Naval ships.

Changing the zoning to residential shouldn't effect the clean-up, if any is needed.

Environmental considerations go beyond pollution, contamination cleanup and habitat disruption. They include anything in the "environment" that could be affected, such as traffic, noise and light pollution, management of sediments, debris and dust during construction, and more. All of those issues are somewhat different for residential construction than industrial. The density of the residential project matters, too. Those areas are where we'll see the most significant changes in the environmental considerations of the development.

There will be a preliminary Environmental Determination in the PSR for the development. I suspect that the PSR (Project Study Report) is probably underway, maybe completed. It's not a document that requires a public process, so we probably won't hear about it.

All environmental issues will be discussed publicly through the EIS. NEPA/CEQA requirements make this step a must. This is when the public will be able to better understand what impacts might be. Understandably, the Devil is in the details.

Marine Layer said...

One thing I forgot - The introduction of residential into the area could require a soundwall on the west side of 880 depending on how close the development is.

Bleacher Dave said...

ML,

You think PSL's are coming? I thought that was an idea that would be DOA, but it does make sense. It would seem to be a necessary part of any financing structure.

If PSL's are coming, does that make the A's guarantee of seats to current full-season ticket holders a lie?

The beauty of promising seat rights to partial season holders is exactly as you describe it - how many are going to exercise that right? If average ticket prices double, you're talking about a cost 8x higher, not 4. The A's get the benefit of a goodwill gesture that few people are going to take advantage of.

It also helps the A's generate goodwill at a time when they need to generate as much community support as possible, and do it at very little risk - as you point out - of folks actually taking them up on the promise.

We're so early in the process that I doubt anyone is going to pony up for full season tickets for the next 5+? years solely to guarantee ticket rights to a potential future stadium. Anyone merely wanting to guarantee seats to the new stadium could wait to purchase at least until (if?) ground is broken, unless you think the A's are going to sell out on field level and plaza infield full season tickets at the current facility.

There's no need to guarantee current partial holders the same rights as current full season holders; I agree that full season holders should receive more favor. Partial season holders could have priority behind full season ticket holders - which still provides full season holders extra implied value, and also extends a lesser imnplied value to partial holders, thereby generating greater total implied value.

It also offers another incentive for walk-up buyers to become mini-plan holders. Wolff has talked extensively about how that benefits the franchise. You're going to have greater success converting walk-ups to partial holders rather than directly to full holders.

I think it both wise, equitable, and good business to offer all season holders a guaranteed "opportunity" to purchase seats at any new stadium; it seems a sensible strategy to maintain and strengthen loyalty among all existing and potential long-term customers. Failing to take care of your existing customers in the midst of a grab for new markets is a well-worn cautionary tale.

Marine Layer said...

I'd be surprised if they didn't have PSL's. We're talking 5% or more of the cost of the ballpark. You bring up a good point, BD - Is it a lie? Or a partial truth? However anyone interprets, it's a hollow gesture until we know the full financing details. So are you really that upset over a hollow gesture? This sort of reminds me of the Tejada free agency year, but I digress.

If, during the true run-up to Cisco Field (construction) there were no offers made to partial season ticket holders, then I'd have reason to be upset. We have at least a year before that happens.

Bleacher Dave said...

ML,

Good points.

I agree, I can't see how PSL's won't be part of the equation. I don't see how the financing pencils out, and PSL's are significant potential dollars.

PSL's also makes great sense in the context of an extremely small stadium. The "well-heeled" scenesters are only interested in premium seating and by severely limiting those seats the A's can extract maximum ticket prices AND require PSL purchase for the privilege to pay those premium prices. PSL's also can give them some insulation against the short attendance honeymoons every other new stadium has experienced.

OK, maybe I am hypersensitive over the slight to partials; but they're threatening to move from their long time home in the city of my birth. I may be hypersensitive, but its still a slight - albeit more perceptual than factual.

Is it a partial truth? Or a lie? Well, that depends, of course, on what the meaning of is, is.

Anonymous said...

As has been said before, BD; if the A's were staying in Oakland they'd still be doing the new ticket plans the same way. So as you said, you're being hypersensitive because you're mad about the move to Fremont.

As for the A's "leaving the city of your birth", would it make a difference if they were going to Emeryville, Berkeley, or San Leandro? I think most "Oakland Only" advocates would accept that, but your last comment sounds pretty specific to city limits.

If Oakland were LA, Houston, or even San Jose the A's could move the same distance that they are planning to now and still be within city limits. Would that make a difference? You bet it would.

Remember, the A's have been at the outskirts of Oakland for 38 years, it's not like they've been downtown, you know. But go ahead and continue to compare the Fremont move to the Dodgers moving from Brooklyn to LA. Your argument just doesn't cut it.

Bleacher Dave said...

Anonymous - we don't even know what the ticket plan is for Fremont, much less what the A's would do if they were staying in Oakland, so your assertion that they would be doing the same thing is highly suspect. I suggest that if you want to acheive any credibility or get further responses in the on-going discussion that you give up your anonymity and show the courage of your convictions by becoming a named an ongoing commetor in the thread.

Tony said...

We're all anonymous here, BD. Unless we know the names and faces, a blog name is just that. I mean, how do we know that there aren't five different people in a family or at an office logging in under the name "Bleacher Dave" at various times? We don't.

The very fact that you responded to that post gave it "credibility". If anonymous posts are seen as a problem then they should be ignored or just not permitted. I believe Marine Layer has that power to do that.

It's what was said in that post that bothered you, not the fact that it was anonymous.

Bleacher Dave said...

Tony,

I guess I'm just more trusting than you are. I believe that all the named and regular posters are representing themselves. But hey, maybe you're right and I am 5 different people.

What impresses me the most is that you were able to - simply from reading a post - look into the hearts and minds of all five of us, AND see not only that we were bothered, but exactly what it was that bothered us. It's a good thing that you know our experiences better than we know them ourselves - cuz we didn't even realize these things. And you did it all without even knowing our astrological signs!

You're a miracle worker, Tony!
(And thanks for giving up your anonymity and getting a handle.)

futonboy said...

Bleacher Dave,

The A's website said "New season ticket holders can establish priority seating at Cisco Field with the purchase of a full season...", so there may have a plan for the partial season ticket fan base. You should give your rep a call to find out for sure.

I called about another question, and to my surprise, the A's plan on building their park without PSLs.