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08 May 2007

Economic Impact Report now available

The big takeaway from Wolff's progress report tonight was that the Economic Impact Report for the project is now available. I've only barely scanned through it so far and here are some key points:
  • Ballpark is still 30-34,000 seats, cost = $450 million
  • The 2,900 housing units will be spread over 120 acres, for a density of 24 units per acre. There would be a mix of brownstone-type units and higher density development adjacent to the ballpark, cost = $1.1 billion
  • 550,000 square feet of "high quality mixed-use/retail," the majority of which would be in a "lifestyle center" (a.k.a. outdoor mall); the remainder would be "entertainment retail in a 'Main Street' environment activated by the residential neighborhood and the ballpark. Cost = $198 million
  • High-end boutique hotel with only 100 rooms, cost = $30 million
  • Total project cost would be $1.8 billion
  • Total economic impact (using multipliers) would be $3.2 billion
Next I'll quote verbatim from the report from its summary of economic impacts:
  • The direct economic impact on Alameda County will be approximately $109 million per year from the operations of the Athletics franchise, the operations of concessions within the ballpark, the net new retail spending captured by the Baseball Village retail, and the net new spending captured in the county from the new households in the Ballpark Village.
  • Including the indirect and induced “multiplier” effects, the Ballpark Village will generate over $191 million per year in total economic output for Alameda County, and create approximately $50 million each year in personal earnings, which in turn supports approximately 1,762 incremental jobs within Alameda County.
  • The net present value over the next 30 years of the total expansion in economic output of Alameda County will be between $700 million and $2 billion, depending upon the discount rate used, as a result of implementing the Ballpark Village proposal.
  • Construction of the Ballpark Village is estimated to cost approximately $1.8 billion in today’s dollars. Over the several years it will take to build and absorb the project, over 13,000 full-time equivalent annual jobs will be created, along with almost $600 million in earnings for those workers. Alameda County will experience a one-time economic expansion during the construction period of almost $3.2 billion.
  • For the Fremont Unified School District, over $10 million in development fees will be collected from the project.
  • For the City of Fremont, over $3.6 million per year will be generated after build out in General Fund revenues. While the costs of providing General Fund municipal services cannot be estimated until a formal development application is submitted, these General Fund revenues will be unrestricted in their use for offsetting costs. Additional revenues will be generated for the City in the form of fees and charges to offset non-general fund services provided, and by the Special Services tax levied within the Pacific Commons development area.
  • The Fremont Redevelopment Agency, upon project build out, will be collecting over $15 million per year in today’s dollars in the form of property tax increments and set-aside funds for low- and moderate-income housing.
I need to read more before I post any significant analysis. A couple of notes however:
  • Tax increment is mentioned, though not as a method to pay for the project; rather it's used as positive economic impact for the city and county (the usual skepticism applies).
  • Additional tax revenue sources are identified, though not the gross receipts tax I found earlier.
The report is 60 pages long and is chock full of tables. Enjoy.


Now for a few observations about the progress report:
  • The $500K paid last month was reimbursement for process work
  • The best method for owning the stadium has not yet been determined, whether public, private, or a mix
  • Traffic and environmental impact reports are meant to show that the project would have the same or fewer impacts than the currently planned use (office park)
  • Jane Gothrop was the last of two speakers and expressed her concern about environmental impacts, urging the council to make sure the project had a full, complete, transparent, open review. To that end, Mayor Wasserman replied that the project would indeed have such a review.
  • Council were mostly positive, mostly champing at the bit - especially Anu Natarajan and Bill Harrison, who by trade is a CPA.
I've got some reading to do. BTW, Wolff reads this site. And the comments.

18 comments:

Jeffrey said...

Lew,

Please, pretty please get this thing done.

Thank you,
Jeff August (Oakland native and lifelong A's fan)

Anonymous said...

If the EIR is now complete, when can we expect the groundbreaking for Cisco Field...perhaps this year?

Zonis said...

I think I speak for all of us when I say that we eagerly await your full analysis of the report.

Does it cover the Chemical Processing plant nextdoor's relocation cost? (Scott Gas? I think it was called). That seems like something that would be put into the economic study, right?

Or maybe they are just associating it with building costs.

Marine Layer said...

The term "EIR" does not usually refer to the Economic Impact Report, rather the Environmental Impact Report, which undergoes a lengthy formal process. The statement by the mayor indicates that they're not going to cut corners, so you shouldn't expect groundbreaking this year.

Anonymous said...

Mr. Wolff...and Mr. Fisher and Mr. DiNapoli for that matter,
Please, pretty please...don't give up on downtown San Jose just yet. Work with Mr. Reed and McEnery and give San Jose a chance to get its act together...for the stench of the Gonzales years is behind us now. You have everything at Pacific Commons that you would have had at Diridon South...SVLG support, heavy hitting San Jose corporation for naming rights and an eager South Bay fan base waiting for it's own team. Work with Magowan and MLB to rid San Jose of the "ball and chain" territorial rights and bring the A's to where they belong. Thank you.

Marine Layer said...

So far, the report is simply an economic impact report. It does not go into any detail regarding the financing of the project or associated costs such as existing business relocation. Here is the only text on that aspect:

The Athletics intend to purchase the land for the ballpark and then enter into a long-term arrangement with the City of Fremont and Alameda County to ensure that the team remains in Fremont for the next 30+ years. Under the terms of this arrangement, the Athletics will be responsible for the cost and development of the new ballpark subject to limited negotiated assistance from the City and County. The Athletics intend to pay the City of Fremont an annual amount of $1,000,000 per year in order to further support City services with regard to the Ballpark Village project. The Athletics will be responsible for all costs associated with the direct operation the ballpark throughout the term of the arrangement without any on-going financial obligations required of the City and County to maintain the ballpark.

I take this to mean that it doesn't matter what the relocation of Scott Gas costs, the A's will cover it. Looking at the big picture, something like that shouldn't be a dealbreaker anyway.

Georob said...

Wolff reads the comments? Well, in that case I apologize for calling him a cross between Adolf Hitler and Martha Stewart. Must have been the alcohol.

The question is does he POST here as well? And under what name? That could be the topic for a whole other blog :)

Mark said...

Marine Layer,

The $1M contribution from the A's towards public services costs seems like a drop in the bucket to me. San Diego's current fiscal year budget for Petco Park related expenditures is about $21M.

Do you know if that's a realistic comp for Fremont's annual public service costs (police, fire, traffic, infrastructure, admin)?

I know in an earlier post you mention the SF Giants pay $250,000 a year in overhead for police costs. Surely the city's cost for SFPD at AT&T Park is way way higher. Any insights on this?

Thanks,
Mark

Georob said...

Anon 9:50:

I get accused of San Jose bashing, but the truth is that I think SJ could have gotten the A's had there been a concerted effort made to convince Bud Selig and the other owners that a team in San Jose would have not negatively impacted the Giants.

But the truth is that it DOES hurt them, as it will in Fremont, as it even does in Oakland. You see, it's not that the Giants don't want the A's in the South Bay, it's that they don't want them in the Bay Area, period.

But as the "territorial rights" keep the A's out of San Jose, so do they also prevent the Giants from blocking a stadium in Fremont, which I'm absolutely convinced they would try to do if they could. Even a state of the art venue in Downtown Oakland would have bothered Magowan & Co.

One big reason that the A's can't seem to crack 2.2 million, despite their recent success; may be that the Giants have been able to pull a lot of fans from Contra Costa now that they have a park that is BART accessible. And that could have been a huge component of a San Jose argument to move the A's there.

But like I said, I doubt if it would work. The Giants just want the A's gone, and always have.

Nemesis of Evil said...

I'm no economist, but aren't a lot of the cited benefits (sales taxes, incremental job) from the new development not new at all but replacing sales taxe revenues and existing jobs in other parts of the region?

Anonymous said...

Mr. Marinelayer,
I know this blog is primarily for information/discussions pertaining to the new A's ballpark. However, at times I've seen information here for stories regarding AT&T Park (HD video screen) and the proposed Niners stadium in Santa Clara. I think that's great. I was wondering if you had any insight or further information on the improvements that will happen soon to HP Pavilion. As a Sharks fan :o(, it would be nice to know what exactly is in store for The Tank; thank you.

Anonymous said...

In the SJ Mercury article, there is a photo of Wolff presenting in front of a bug beautiful rendering of the proposed park. Anyone know where to ssee a decent res version of that conceptual illustration?

Anonymous said...

13,000 new jobs and whatever million sounds nice, but it assumes evidently everyone working on this project isn't working at a job in alameda currently, or they are all unemployed or something like that

bottom line is probably most people working on project will go from job A to job b in the county, so its not new jobs and earnings, its a transfer of jobs and earning. The true number of new jobs and earning s is probably far less

Anonymous said...

"The true number of new jobs and earning s is probably far less "

Point taken, but you need to factor in the total number of jobs LOST if the A's were to relocate to another part of the country.

Marine Layer said...

The report makes a distinction between one-time impacts such as construction and ongoing steady revenue streams such as retail sales. I'll go into that further either tonight or tomorrow.

mark - The Giants and SF split the cost of police presence, so the actual amount is $500K. According to San Diego's statements, $1.1 million goes towards police. The rest is either debt service or maintenance/administration costs.

anon 11:39 - Pics are at Cisco's press site. Warning - they are large files (16 MB each).

nemesis - I've already argued that the positive economic impact will be blunted by substitution effect. It seems as though they've taken that into account, which is a good thing.

Mark said...

ML,

Thanks for the info on police costs...do you happen to have the source for the $1.1M in Petco police costs? I'm a grad student at Cal writing a paper on public costs of building stadiums, and I would like to cite your number.

Thanks,
Mark

Marine Layer said...

No problem. The numbers came from the City of San Diego's FY '07 budget doc. Specifically, the revenues and expenses section, page 485.

One thing to note - the police expense was $1,190,000. The Padres reimbursed the city $190,000. That must mean some fixed amount for police services is built into the city's budget.

murf said...

Anon 10:43,

Announcement of the planned upgrades to HP Pavilion are availabe here:
http://www.sjsharks.com/news/news.asp?STORY_ID=3520

Discussion on the topic by Sharks fans available here:
http://www.thefeeder.com/forums/index.php?showtopic=7314&st=0

ML, please check that the links post correctly. I've had trouble posting links here in the past. Thanks!