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20 April 2007

A's file something with Fremont, Quakes-SJSU deal dies

On Wednesday, the A's rather quietly filed " 'an application to negotiate a development agreement,' Fremont Economic Development Director Daren Fields said." What Fremont mayor Bob Wasserman terms "a double, not a home run" is more like sacrifice bunt made to move a runner into scoring position. So far this season, the A's have had only one player who has shown the ability to lay that bunt down. But I digress.

The A's also dropped off $500K with the application. It falls short of what I've been looking for (the application, not the money), but it's a start. The abrupt nature and timing of the application makes me wonder if there is something to my thought that the San Jose and Fremont development plans are somehow tied. There are plenty of factors in the Fremont deal alone that need to be addressed. An externality like San Jose would severely complicate matters. I'd like to think that the Fremont deal is completely standalone, but maybe it isn't and Wolff is scrambling in light of the recent news in San Jose.

Speaking of San Jose, the shared stadium concept for the Spartans and Quakes has died as neither side could come to an agreement on revenue splits. After looking over the details of the deal, I've come to the conclusion that both sides were right not to budge.

From SJSU's standpoint, Don Kassing had little desire to cede control over a large piece of property to a private party. While it's true that SJSU would not have had to pay for any of the construction, the land itself has significant value despite its mostly deteriorating condition. On the other hand, Earthquakes Soccer, LLC was paying for construction of everything, all they wanted was a cheap land lease to keep overhead low.

The Quakes were willing to pay $1 million guaranteed per year, plus a split of revenue based on the events held. SJSU would get revenue from Spartan events. The Quakes would get revenue from Quakes games. The two parties would split revenue from other events such as concerts.

That $1 million offered per year is essentially a lease payment. If you're the Quakes you think this is a good deal considering the circumstances, and especially in light of other stadium deals in which the team not only doesn't pay for the stadium, but also doesn't pay for anything else like a land lease. If the Quakes have to pay $6 million, that payment severely cuts into the split you were planning with SVS+E, the likely stadium operator. If you're Kassing, you're thinking that $1 million for the Quakes to lease several dozen acres of public/university land is not getting bang for the buck. That may sound like more of a philosophical stand than a hard numbers stand, but Kassing has every right to do it.

In the end the deal has to pencil out for both parties. It obviously didn't in this case, so they both walked away. The Quakes are tied to San Jose if they want to finance the venue since the Edenvale property is the apparent key. There are other site possibilities, but land costs now have to be a concern.

30 comments:

Anonymous said...

Question for ML: when you say: "The abrupt nature and timing of the application makes me wonder if there is something to my thought that the San Jose and Fremont development plans are somehow tied", which land deal in San Jose were you talking about? The SJSU/E-Quakes one, with the Edenvale rezoning? Or something else?

Anonymous said...

Of course the SJ and Fremont "deals" are inter-related. When you're dealing with a con-man like wolff, any deal is inter-related, as long as the dollars end up lining his pockets instead of the city and it's constituents. I predict wolff will sell the a's in a matter of a couple of years. All he's interested in is maximizing his investment and leaving.

Marine Layer said...

anon 11:31 - The Edenvale rezoning. The sale of 1500 additional housing units creates a good deal of headroom for the ballpark/village to be completed regardless of budget.

Anonymous said...

Marinelayer, I believe Barry Witt is wrong in his article. Witt stated that San Jose could not provide a direct subsidy , "including land," for a sports stadium without a public vote. He's right in saying no city taxes or using general fund monies for stadium unless there's a vote...but land? Don't think so. If a team owner wanted to build a PRIVATELY FINANCED stadium on city owned land, that would not require a city-wide vote; just like a vote isn't necessary for someone to build housing or a shopping center on city owned land. Second, anon 1132, Lew Wolff owns ONLY 10% of the A's, with John Fisher and a strong South Bay contingent owning the rest. I'm pretty sure Lew Wolff could sell his stake in a few years, but don't expect the A's to go anywhere. Lastly, this is probably the death of soccer coming back to San Jose. The city isn't going to bend over backwards now to provide expensive land for a MLS venue. MLB or NFL, yes...MLS? Saddly, no (RIP Earthquakes).

Marine Layer said...

I don't think it's the death of the soccer effort yet. There are other viable sites out there but they have uphill battles of their own. The SJSU partnership became #1 because it was considered the path of least resistance: no taxes, no public vote, few NIMBY concerns, free/cheap land, financing mechanism in place. By looking elsewhere, at least one of the attributes will be gone.

SJ Muni Code says nothing about land except as a guarantee against bonds, which wasn't the route being pursued at South Campus and probably won't be the MO going forward.

My suggestion: The city should trade limited (spacewise) development rights to the old city hall on N 1st to the county for development rights on the fairgrounds. The county can complete its expanded government center w/o having to compete with private developers, while space at the fairgrounds is available for the sports complex.

Anonymous said...

To all of you who cried foul when the Giants wouldn't give up territorial rights to San Jose, I say this:

If the "Capital Of Silicon Valley" and the so-called "economic hub of Northern California" can't even get a lousy soccer stadium built, what makes you think they could have put together a baseball venue?

Anonymous said...

Anon 1:27,
Go back and read the article; this development has nothing to do with the City of San Jose. This was an SJSU and Lew Wolff thing! The city was (or is) doing it's part in trying to get land rezoned for Lew Wolff. I for one don't believe the Edenvale story is dead, as funds from the rezoning could go towards the San Jose A's of Fremont ballpark (as Marinelayer has alluded to). As for an MLS venue, this will be more difficult now because land in SJ is expensive and not worth a stadium that seats only 22K and gets used a max. of 15 times per year (8 Quakes games and friendly's /concerts included).

Jeffrey said...

I am so tired of anonymous posts with no facts to back them up.

Con-man who only wants to increase the value to sell the A's? Increase the value of the A's by announcing Cisco Field and the making sure it doesn't happen? Steal tax payers money by developing the area around the park to pay for it and not affect the cities general fund? Those sound like some great ways to make money. People are lining up to buy baseball teams at inflated prices based on non existent stadiums.

Laughable. Have fun on oaklandfans.com where they enjoy self congratulatory horse crap post that have no factual basis. I would appreciate it if you all kept this kind of drivel over there rather than making the thread longer here so I have to waste time trying to find logical post from well informed people.

ano-a-mouse said...

Gee, I don't know. Maybe because people actually care about baseball and largely don't care about soccer? Not to mention this is SJSU, not the city of San Jose.

Anonymous said...

Laughable?

That's what the folks over at "Baseball San Jose" used to say about my posts as well when I kept telling them that there was no way that MLB would ever allow a team to play in SJ. Guess I'm not so "laughable" over there anymore, eh???

Oh, and guess what? You probably won't be calling me laughable anymore over here either when the whole fremont "plan" goes up in smoke. Just don't say I didn't warn you.

p.s. you sound mean and frustrated.

anon-a-mouse said...

Yeah Jeffrey, the oafc-types have been very stale for a long time. That's why I credit ML for putting up with it in such a reasoned manner. My only hope is that they keep their promises to "drop the A's the second they set foot out of Oakland city limits." IMO, our fanbase will be improved markedly the moment that happens.

Marine Layer said...

anon 3:00 - You sound like a flamebaiter. Try to bring something to the table other than vitriolic platitudes.

Anonymous said...

oohh ... big words ... I'm impressed. did you learn them from your pal wolffy the con-man?

Marine Layer said...

I'm still waiting for your first nugget of wisdom. Please. I'm all ears.

Transic said...

This is a wild guess on my part but what if this news opens the way for MLS to move to the East Bay? Maybe even bunch up with the A's, as part of a sports/residential/entertainment complex.

I don't know how they'd finance those youth soccer fields that are popular with some people, though, and whether they would make sense for Fremont.

anon-a-mouse said...

Vitriolic? Platitudes? If those are big words to you, ML will be waiting a very long time for you to add anything insightful.

bbison said...

Anon 1:44 wrote: As for an MLS venue, this will be more difficult now because land in SJ is expensive and not worth a stadium that seats only 22K and gets used a max. of 15 times per year (8 Quakes games and friendly's /concerts included).

I didn't feel like counting 2007 week-by-week, but MLS has been on a 32 game schedule in recent years. So that's 16 games+.

Surprising they couldn't work something out; Spartan Stadium could certainly use a makover or replacement.

Dejean said...

Why do we waste time talking on San Jose? The A's need OAKLAND, not the other way around. And for those who say that that Oakland is just a place in the "Bay Area", I say that the rest of the "Bay Area" might well be no place at all!

The peoples, united, we'll never be defeated!

Anonymous said...

Thanks for the correction BBison. Still, expensive SJ land still not worth a 22k seat venue that gets used a max of 23 times per year: 16 MLS games and the extremely occasional international friendly and concerts. Question Marinelayer: why would the city of SJ allow a rezoning of Edenvale (thus making money for Wolff) if the now-dead stadium was 1) being built on SJSU land with 2) revenues being split between Wolff and SJSU? The city of SJ would not have made money from the joint stadium, yet was going to indirectly fund the venue through the rezoning...doesn't make sense.

Marine Layer said...

anon 4:57 - You sort of answered your own question. The rezoning would have indirectly funded the stadium which is a lot better than having to directly fund the stadium. Plus San Jose would've gotten increased rec areas and development of South Campus without having to spend a dime. Measure P funds wouldn't have been touched. The impact of 1500 new homes on existing infrastructure isn't going to crush a city the size of San Jose, especially if other industrial lands are preserved elsewhere within city limits.

Anonymous said...

DeJean said:"The peoples, united, we'll never be defeated"

Thing is Dejean, the people are, for the most part, UNITED. United in their steadfastness in not wanting to pay for a new ballpark in Oakland. They have prioritized, correctly, IMO, the need for a new ballpark against other needs such as infrastructure improvements and public safety.

DeJean said:

"The A's need OAKLAND, not the other way around"

Well, in response, the A's are willing to risk that you are W.R.O.N.G. Trust me on this - we won't miss the twenty or so of you OAFC types who refuse to set foot outside of Oakland proper.

What a totally moronic, subjective statement. No way to quantify it or back it up in any way.

Go back and report to Shril now that we are all a twiitter that the sky is falling and we are afraid the whole thing is falling apart...snark.

Anon 4:57 said...

Thanks for the response to my question Marinelayer (I guess I did answer my own question). I guess my real point was why the city would go out of their way to indirectly fund an MLS stadium, in which they (SJ) would see no real benefit money wise. This wouldn't have been an economic altering venue like AT&T Park or Camden Yards. I happened to watch a little of the Chicago Fire's (MLS) game last night on HDNet, and there were many an empty seat in that stadium; it definetely wasn't Mexico vs. Ecuador at the Coliseum. Again, unless the venue seats 30K plus, is used a minimum of 81 times a year, and encourages peripheral development like bars, restaurants, condos, I must ask Lew Wolff and the City of SJ....why?

Anonymous said...

Wolff has alienated quite a few folks already with his intention to abandon Oakland. I think the number is a little higher than twenty. Wolff will continue to see a decline in attendance because of his anti Oakland stance.

Wolff underestimates the value and influence that fans place on the "OAKLAND" part of the A's. Those passionate and heartfelt "Let's Go OAKLAND" chants are genuine and come from the heart. Don't dismiss the A's Oakland tradition and the affinity that many fans from even outside of Oakland have for the city as easily as Mr. Wolff does.

Jeffrey said...

OH WOW... Somebody predicted that San Jose wouldn't happen? Couldn't of had anything to do with the territorial rights.

I shall now refer to you only as nostradamus.

Anonymous said...

Alot of crap in the 24 posted comments ML. Please go back to some sort of monitoring so when we see something posted it's worth looking at.

Jeffrey said...

I apologize to everyone for my "crap."

I will ignore anonymous posts going forward. It bugs me to read the posts that have nothing worth reading and I only make it worse by perpetuating the garbage by responding to it. Especially after I complained about it.

Zonis said...

Jeff, I think he was refering to the trolls, not you.

murf said...

It's a mute point, but how come everyone forgets about the Spartans games (multiple sports) that would have taken place at a new Quakes stadium? I mean, the "SJSU-Quakes deal" had SJSU right in the name.

Anon 4:57 said...

Mr. Murf. I don't know if you were referring to my posts, but for the record, I was all for the now dead joint MLS/SJSU stadium BECAUSE of SJSU football. That would have meant 16 home Quakes games, 6-7 Spartan football games, perhaps a bowl game, SJSU soccer, 1-3 international friendly's, and concerts...all with the city of SJ not giving up one acre of valuable property. Now, San Jose would be looking at a venue with a limited number of events possibly being built on very expensive land.

murf said...

Anon 4:57,
Until you stop posting as an Anon, I can't be sure if I've responded to one of your posts. You don't have to register for an account to identify yourself. Simply take responsibility for what you post here by choosing a name and sticking to it. That's the only way anyone who is currently posting as anonymous will be recognized and payed attention to.