10 April 2007

Biz of Baseball's Wolff Interview

Maury Brown dropped a quick note to tell me that his interview with Lew Wolff was going to be up tonight. It's now available. Brown covered a lot of ground with the interview. Wolff, for his part, tackled a couple of pressing topics, though he revealed nothing new about the transportation situation.

Regarding Scott Specialty Gases, Wolff said this:
The Scott Gas issue is one of relocation and not of a soil problem.
Where are those misinformed cries about toxic waste again?

Maury also had a really good question about how the ballpark deal was conceived:

BizBall: In your opinion, is the Ballpark Village concept a unique, large market opportunity, or do you think that this represents the future of stadium construction (and how to fund it), regardless of market size? Or, is it specific to a particular market and situation?

Wolff: Well, that’s a very astute question. I have to say that if a ballpark can be accommodated in the core of a community—in the urban area—I think that has lots of pluses. Like San Francisco, San Diego, some of those parks. In our case we had to sort of create an urban center for two reasons: one, to make it esthetically interesting. We don’t want the ballpark surrounded by parking. We want it to be, as we call it, ‘a sculpture within a project.’ And secondly, since we are not getting the traditional public assistance, we need to have ancillary development to help support the cost of the facility.

This goes back to the idea of creating somewhere out of nowhere. John King's excellent two-part series in the Chronicle covers several urban-type developments in traditionally suburban areas, including some in the Bay Area. (I can already imagine the debate that will ensue.)


Anonymous said...

Interesting note regarding land deals and applications. "Less than 30 days" now seems to be Wolff's magic number; for both his San Jose soccer stadium/land deal and Cisco Field this a coincidence?

Anonymous said...

Wolff seems to be saying that examples like San Francisco and San Diego show that a ballpark in the urban core can be very successful. Why doesn't Wolff see the same potential in Oakland? Why shouldn't Oakland have the same opportunity? Doesn't 40 years of hosting the Oakland A's virtually rent free, count for anything? Where is the loyalty to the host city?

A neighboring city 20 miles south gets to reap the rewards of Oakland's forty year labor? No, that 500 million dollar infusion of capital belongs in downtown Oakland. This ballpark would be a way for the A's to repay Oakland for its forty years of loyalty along with contributing to the renaissance going on in Downtown Oakland today. This ballpark would put Downtown Oakland over the top and make Oakland a truly great city.

Anonymous said...

The only possible site in downtown Oakland was directed to a major housing project long before the current a's ownership.

maury said...

The only possible site in downtown Oakland was directed to a major housing project long before the current a's ownership.Quoted for truth.

Bleacher Dave said...

Only possible site? Naaaaah. Only currently available possible site - maybe.

Marine Layer said...

There is no currently available site in downtown Oakland.

Anonymous said...

Oakland? Loyal to the A's?

By loyalty, do you mean the low attendance? Or do you mean the indifference towards the A's by the city who favors the Raiders much more over the A's? Or do you mean Mt. Davis? Or do you mean how most A's fans are from outside of Oakland?

Oakland hasn't been "loyal" to the A's. Oakland has simply let the A's play there.

Bleacher Dave said...

"Marine Layer said...
There is no currently available site in downtown Oakland. "

Don't you really mean there is no currenly available vacant site in downtown Oakland? After all, everything's negotiable.......

Sixto said...

I've been following this blog religiously for over a year now, and I have to say that truer words have never been spoken than Anonymous 8:05's... I think MarineLayer should highlight them, bold them, underline them, and place them at the top of the main page.

Yet another A's fan outside of Oakland

Bleacher Dave said...

News Flash! Residency isn't required for fandom! I'm gonna go all Nostradamus-like and predict that if the A's move to Fremont, most fans will come from out of town.


Yet another A's from outside of Oakland.......

Jeffrey said...


Is there a site you had in mind in Downtown Oakland or are you just gum flapping for gum flappings sake?

Bleacher Dave said...

"Jeffrey said...

Is there a site you had in mind in Downtown Oakland or are you just gum flapping for gum flappings sake?"

Just flappin' for flappin's sake. Who knows what may happen in the next 10 years?

Anonymous said...

The Ford dealership at 26th & Broadway. They, along with most of "Auto Row," will soon be relocating to the old Oakland Army Base. This is the perfect location for a ballpark. Wolff should be talking to the dealership as we speak.

Marine Layer said...

Problem is most of the Auto Row land is leased to the dealerships. The dealers are being forced out due to rising leases - the creation of Auto Row is a concession to them to keep them within city limits.

Besides that, I've covered the Auto Row site pretty thoroughly, and Nancy Nadel already shot it down.

Now, if someone can come up with the $7 million per acre required to buy up all of the Auto Row land, I'm sure those landowners would be willing to listen. Unfortunately, that price is well out of Wolff's range - at least if the idea is to turn some of the land around to finance the ballpark.

Marine Layer said...

Oops - I meant "The creation of an Auto Mall..." not Auto Row.

Anonymous said...

The Auto Row site would be awesome. Your rendering of a ballpark on that site is fantastic.

I'm sure if Wolff got together with Signature Properties which is developing 400 units at Broadway & Grand, along with the Essex Co. which is developing a 22 story residential tower at 100 Grand Ave., and all of the other residential developers in that area, they could form a partnership and get a ballpark built on that site to compliment their developments.

The residential real estate market has softened quite a bit and these developers are looking for anything that would give their developments a boost. As a matter of fact, Signature Properties recently leased out the Paramount Theater for a free concert to lure prospective buyers to their Broadway & Grand development.

Seven million an acre is doable if Wolff would get creative and partner with these developers to energize that area. The biggest obstacle is the lack of will on the part of Lew Wolff and the Oakland A's. He purchased this team with a South Bay mindset. As long as this remains the case, nothing in Oakland has a chance to materialize.

Marine Layer said...

What exactly would they do with Signature? Split the profit and push the A's half towards the stadium? Ask Oakland to build higher/taller/larger to make the profit higher? The ballpark is a $500 million dollar project. It takes a lot of net profit from every available housing unit to finance that.

$7 million is a lot. The Fremont land is probably getting sold to the A's for $1-2 million per acre. That's the kind of real revenue generation that will be needed. If Oakland's nascent luxury housing market were limitless there might be a case. But the more you build, the more market pressure forces the prices down. And Oakland is no San Francisco in terms of market elasticity.

Anonymous said...

Marinelayer, the "baseball village" idea was never meant for Oakland. Any ballpark in Oakland has to be done without the ballpark village.

The condo developers in that area could become active partners in the ballpark. They could contribute to a ballpark fund which would then be used as seed money to attract additional capital to finance the ballpark. The ballpark would be viewed as an amenity to the developer's residential communities and would no doubt increase their property values, along with stimulating further development.
The increased density would then benefit the Oakland A's by generating additional potential customers at their doorstep.

I think Oakland is still way underdeveloped considering its prominent location as the geographic center of the Bay Area. There is no logical reason why Oakland's medium home price should be $500,000 while San Francisco's is $750,000. We are talking about a fifteen minute BART ride from downtown Oakland to San Francisco's financial center. This gap in medium home prices will narrow considerably in the near future. Oakland's home prices have been artificially held down partly due to the San Francisco media's biased two tiered crime reporting system, as well as a lack of knowledge from Bay Area residents as to what constitutes "Oakland."

Also, Dellums has said that he wants 100,000 residents living downtown. The Auto Row/Broadway corridor will eventually become the Wilshire Blvd. of the Bay Area. The Broadway Corridor has more direct access to the entire region via two BART stations, and a great freeway interchange system, than does Market Street in San Francisco. There is plenty of potential to maximize the height and density of residential projects in that area as well as the revenue. A ballpark would be a catalyst to increased demand for further residential development at prices which would then be closer to San Francisco's medium. It's a win win situation.

Wolff needs to think "urban ballpark" and give up on this suburban ballpark village idea which works only in Disneyland. Oakland, unlike Anaheim, does have a viable downtown to work with. Wolff has to wake up from his Silicon Valley infatuation and realize this.

Marine Layer said...

Why would a developer who already has a project in the pipeline syphon away profit towards a ballpark fund? Right now home construction is in a bad down cycle. The industry could rebound well enough in five years to make it worthwhile, but that's tough to predict.

Can you project the amount that would be required per unit to make this work?

To finance a $500 million ballpark, you'd need to take $100K of 5000 units, or $50K of 10000 units. Either way that's more residents than Jerry Brown envisioned in his 10K plan. Do you honestly think that a developer like Signature, which has several balls in the air already, would accept that diversion knowing how volatile the market is? You're making it sound like all of this private development (including the ballpark) would be a massive public works project to which all developers would willingly contribute. It doesn't work in Oakland because other developers already in the area are at a huge competitive advantage if they don't contribute. The ballpark's economic sphere of influence as it relates to real estate doesn't go far beyond its confines. Put good schools in the area, then you'll see the values rise.

I appreciate your desire to improve Oakland. But frankly, that's the mayor's and city council's job, not Lew Wolff's. If it can be done in a way that pays for itself, great. Throw around some numbers. I'd like to see what's out there.

Anonymous said...

Marinelayer, I wouldn't look at a contribution to a ballpark fund from developers in the Auto Row/Broadway Corridor area as "siphoning away profits." I would look at it as an investment to further increase the property values in the area. It would be a small well spent investment for future profits.

Also, Oakland condo buyers, as well as San Francisco condo buyers, generally don't have children, so improving the schools would not be a factor for these buyers.

What these buyers are looking for is excitement and a certain vibrancy. There are thousands of units under constructions in Downtown Oakland at the moment. There needs to be something for these new residents to do. The Paramount Theater and the newly refurbished Fox Theater will be great, but, that's not enough to make the area truly vibrant. These developers need something which will excite the masses, or they are going to have a lot of unsold inventory on their hands.

This is where the Oakland A's come in. And, this is NOT some sort of charity case, or "public works" project. This is an opportunity for the Oakland A's to build a unique, charming, urban ballpark, in a magnificent setting. The Oakland A's and the city of Oakland compliment each other. Lew Wolff is determined to undervalue the unique opportunities and assets that Oakland can contribute to this ballpark experience. Loyal Oakland A's fans deserve this.

The Oakland A's and their fans deserve better than a ballpark on a parking lot next to a congested highway and without convenient public transportation.

Once that first shovel is in the ground in Fremont, the A's will be forever relegated to the second tier of ballparks in MLB. The Oakland A's will join the Texas Rangers, Anaheim Angels, and Philadelphia Phillies, as suburban step children to the wonderful urban ballparks in Baltimore, San Francisco, Pittsburgh, Detroit, Boston, Chicago, New York, Saint Louis, and San Diego. Once this mistake in Fremont next to 880 is built, the opportunity for a great venue will be forever lost. The Oakland A's and their fans deserve a great urban ballpark just as much as the San Francisco Giants and their fans.

Lew Wolff needs to get creative and work with the developers in Oakland to make this happen. It can be done as long as there is a will on the part of Lew Wolff. In the long run, a charming urban ballpark in Downtown Oakland will add character and value to this franchise. It will give the ball club an identity with its city and its community that a ballpark in Fremont will never be able to duplicate.

Marine Layer said...

You may not consider it problematic for a developer, but to a developer it's a tax. Developers already complain about mandatory 15-20% set-asides for affordable housing. The Uptown project was held up in part because of negotiations about quantities of affordable units and scope. You can be sure all you want that all parties, including Oakland, will benefit and such a project could pay for itself. But it starts with the numbers. Do a pro forma. Factor in variables within the housing market like construction cost, inventory, and median selling price. Remember that the developers have to turnaround their housing stock quickly or else they'll pay dearly in financing costs. Then come back and present something that's feasible.

Besides, what if you ran into one or more developers who decided they didn't want to contribute to this ballpark fund? The city can't force them to do it.

Anonymous said...

Marinelayer, this has to be a partnership between the Oakland A's and the Auto Row/Broadway Corridor developers. It won't work if it were to be imposed on anybody by the City of Oakland. It has to be voluntary.

The developers have to see a benefit in partnering in this ballpark venture. If Lew Wolff were indeed sincere in saying he wanted to build this ballpark in Oakland, he would have been turning over every rock and thinking of every conceivable and creative idea in order to make this ballpark happen in Downtown Oakland. He would have been trying to get the developers and the business community behind the ballpark. Instead he quietly dismissed Dick Spees and told everyone "We want to do it ourselves."

Why aren't we honest here and just say that the reason a ballpark is not currently being considered in Downtown Oakland is because Wolff long ago decided he didn't want to build it in Oakland? That's the bottom line. And frankly, anyone who arrives at the current situation from a different premise is being intellectually dishonest.

Marine Layer said...

Wolff's timing on exercising his option was always suspect in my book. It looks like he waited until all previously available Oakland sites were out of play, thus greasing the skids out of Oakland. Did Wolff play the game well? Probably, because there isn't that much backlash.

The developers would only bite on such a partnership if they could be guaranteed to make as much or more money than their already approved projects. What you're suggesting puts them at greater financial risk. Their development cycle tends to be much faster than a ballpark's, so they can't wait around until a ballpark development is approved. No dice.