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31 July 2008

Wolff says project "in flux"

Thanks to longtime reader/commenter Anthony Dominguez, who found an important ballpark blurb buried in the bottom of today's gamewrap (Rick Hurd/Contra Costa Times):

A new venue supposedly would alleviate (attendance) issues, but Wolff acknowledged that such a prospect is closer to limbo than it is reality. Wolff said the team continues to wait for the environmental impact reports to be finished, and that the need to satisfy several constituencies has slowed the progress.

"It is now in flux," Wolff said. "All I can say is we're working hard every day, because our options if we fail, we really haven't thought about those options."

Wolff admitted that the process has frustrated him at times, but that it's been the price of trying to construct something in California. He also said any reports that intimate the team is seeking public money are misrepresented.

"We haven't asked for any money," he said. "And I'm tired of people assuming we are."

From parsing the quotes, it appears that Wolff is pointing the finger at the EIR process. We've gone over how lengthy the process is ad nauseum. There are whispers about the impact of the shuttle service the city/A's may deploy, with city officials concerned that evening drivetime could be especially difficult. I devoted a post to the difficulty of getting a shuttle working when the specific plan was released. In some of the public sessions there was a mention of a similar split of driving vs. transit/walking fans to the current situation at the Coliseum. I expressed doubts about this as I suspect that the number of fans walking from within and near the baseball village will be lower than expected. It's impossible to scrutinize at this point because the transportation study is not yet published.

Of course, it's easy to hide behind the EIR when that's expected. What I think is really hurting Wolff/Fisher right now are the real estate and greater financial markets. Not in terms of their wallets, but their ability to cobble together the village's financing plan. We all know that the Bay Area real estate market has shrunk in many locales - especially the East Bay. Not even the recently signed mortgage bailout bill is expected to completely stem the tide:

U.S. home prices continued their plunge in May, including a 23 percent drop in the Bay Area. Continued declines make banks even less willing to lend, further pressuring home prices, Tyson said, threatening even prime mortgages and credit card debt.
The biggest issue at this point is that no one knows when the economy will bottom out. How bad will it be? How long will the "official recession" last? Fear caused by current economic uncertainty slows everything down from consumer spending to housing starts. And it's those housing starts that are the linchpin to the whole deal. The financial market that Wolff/Fisher are asking to provide money for the village don't want to hear about the ballpark paying for itself. It won't, that's been proven time and time again. They want something more stable to foot the bill. Until the real estate market collapse, that was housing. Without that in place and for a reasonable interest rate, the deal is sunk.

Now it's a matter of when the turnaround occurs. At some point the Bay Area will see a very low inventory of new housing. Market forces will kick in, causing new housing to be built. The question is, when will that happen? And how much will Fremont lag behind the more resilient parts of the Bay Area (SF, Peninsula, Silicon Valley)? East Bay real estate experts I've spoken to have said the area is already turning around. But it's hard to pick out a few data points in the rest of the noise.

25 comments:

Jesse said...

Do we know what kind of Equity they'll have in the land if they get the approvals? How much did they pay, whats it all worth?

Why would Wolff hide behind the EIR if he thought that equity was an issue? Why wouldnt he just come out and say it?

Marine Layer said...

It's hard to say how much given the state of the market. I'll guess for now it's about $500 million and that's lowballing it.

The EIR process is convenient to scapegoat. If Wolff blamed the financial market it would bring up questions about how he could pay for the ballpark. He's already fending off enough misconceptions about public financing.

aml said...

its hard to call the speculation for public money misplaced. the economic analysis was a crock and clearly suggested that there would be indirect subsidies to the project.

Marine Layer said...

aml - Please explain what you are referring to.

Georob said...

No surprise that this article comes via Tony. After all, he's trying to read between the lines to see if he can find "S-A-N--J-O-S-E".

Sorry pal, but my magnifying glass doesn't see it.

Jesse said...

Well if they have 500 million in equity, whats the problem?

Marine Layer said...

jesse - it's all contingent on the approvals. Until then it's just a bunch of industrially zoned land.

Tony D. said...

I knew my post would awaken Rob from his slumber (you still in CC Tex?). Putting on my pro-Pac Commons hat...Rhamesis, I don't get it: Wolff A's have their "sugar daddy" in Cisco, luxury suites probably spoken for by the entire Silicon Valley Leadership Group, $100 million out of their own pockets (or was that just during the Schott/Hoffman era?)...why couldn't they start building the ballpark as soon as the EIR was completed? Couldn't they go to an AT&T Park Charter Seat system to help financing in leau of housing equity? I'd be more than willing to pay a "PSL" for the rights to season tickets at Cisco Field. All this stalling just doesn't make sense, unless....

Jeffrey said...

Is it actually stalling? Being a guy doesn't comprehend the EIR process, I thought that the process was playing out as it should.

Anonymous said...

I can see it now ... welcome to Cisco Field, home of your Silicon Valley a's of Sacramento!!!!!

Anonymous said...

The idiot wasted 3 good years in which the A's and the City of Oakland could have put up a stadium in the parking lot. The greedy bastard is eating shit, and I'm glad....

Marine Layer said...

It's idiotic to think that a ballpark could've been built in three years at the Coliseum with the political climate that existed.

Anonymous said...

it's idiotic to think that this fremont "plan" would ever work out in the first place

reztip said...

I hope the ballpark in Fremont reaches fruition. But those who want a new stadium in Oakland are incedibly selfish and don't give a fig for the City of Oakland. Given it's enormous financial deficits, lack of an adequate police force and concommitant astronomical crime-rate, terrible educational facilities, high unemployment, etc., for the City of Oakland to expend any measure of effort toward a new ballpark or waste any public monies on such is an absurdity.

Those people who say they love this "benighted" city and then want a new stadium are utterly self-centered. They would rather their baseball hobby take precedence in city priorities over its manifestly more important needs.

'Course, some of those who wish the A's to have a new stadium built in Oakland don't even live there. Representative is OAFC head honcho Lil Bartholo, who lives in lily white affluent Marin and regularly calls those who criticize the team moving a few miles south "racist" (includig marinelayer and yours truly).

Marine Layer said...

You've got to be kidding, anon. The big reason why this plan isn't flying along is the state of the real estate market. So by rallying against the project, you're also pushing for continued economic struggles. Is that really what you're doing? Get a grip.

Jeffrey said...

You know, I don't think Sacramento is really an option. The real estate market there is way worse then the Bay Area (ask me I have a house there) and the local politicians won't bend over backwards to fund a baseball stadium there.

The more I think about this, the more I see it as a warning shot. I think it is directed at Fremont City Officials to get them out and voicing support for the project.

Anonymous said...

you're probably right ... he's probably saying "hurry up fremont officials, ram this thing through so we can get moving on this traffic nightmare before Gus gets in office and puts and end to this disaster."

Marine Layer said...

Yep, the same Gus who sold out his anti-development philosophy for Coyote Hills' $200K.

Anonymous said...

I wonder if Lew has seen something in the EIR development that would make him want to put pressure on the process. Would he have access to any details at this point? For example, let's say he's seeing something that Fremont might push for, but will reduce the profitability of the development (hypothetical example: limiting the number of houses due to an environmental concern). Maybe he's saying this to make Fremont's government more acquiescent at some point in the future.

Or, he's just spooked by the real estate meltdown and honestly doesn't see an end in sight.

Marine Layer said...

I'm sure he has pretty good knowledge of what's going on. After all, he's underwriting the study. Keep in mind that the EIR is presented as a series of options and alternatives. Even when it's releaased, it's up to planning to make recommendations, city council to approve them and then certify the document after the comments and final version come in.

Anonymous said...

It seems to me there would be no real reason for Wolff to say the project is in flux unless the project was truly in flux. There's no more pressure to be put on anyone by saying the project is in flux if it really wasn't in flux.

My bet is he's gradually going to put these things out there so the public can be notified that there are real problems with this project so if/when it fails, he doesn't have to spring it on everyone and be made to look like the fall-guy.

- Jack.

Anonymous said...

This would appear to be the latest on the subject: http://www.mercurynews.com/ci_10059133?source=rss

Zonis said...

I have a question; what exactly DOES the EIR entail, and why does it take over a year to complete anyways? That is to say, if the City of Fremont is for it, and the A's are funding it, why couldn't they just go through the EIR quickly and do all the studies/whatever quickly?

Jeffrey said...

Mayor Gus is full of crap. His main reason for opposition has nothing to do with traffic and more to do with his own interest in the farce that is downtown Fremont.

Say what you want about Lew Wolff, but he is pretty straight forward about things and not as deceitful as people like to pretend. For instance "Oakland is not an option."

Georob said...

The anti-Fremont arguments look to be in two groups:

1) Those that have legitimate issues about public transit, freeway traffic, and the fact that the stadium is a good 30 miles farther to the south than the Coliseum. The latter being a significant deterrent to people from say, Contra Costa. Incidentally, I've seen very few posts from people from places like Concord and Walnut Creek, which leads me to believe that Contra Costa has been slowly migrating over to Giants since ATT Park opened (I mean, just look at the BART map)

2)Those with the emotional arguments about taking the "heart and soul away from Oakland", "screwing over the working class", and the "democracy and diversity of the third deck". These folks feel they are part of a crusade to defend the undervalued and disenfranchised. They also have, as I said earlier; a pretty good chip on their shoulders.

Group 1 is where we can engage in a good discourse about the Fremont project and maybe even come up with creative solutions. (For Lew Wolff reads this blog, doesn't he?)

On the other hand, Group 2 is just not worth the effort. For even if Wolff WAS building a stadium in Oakland, it would still be designed like Cisco Field and hopefully not dependent upon walk up ticket sales. In any case, we'd still get complaints about dissing the working class and how Oaklanders won't benefit from the stadium because it will be used only by rich yuppies who don't even live there.

And as I've said ad nauseum, blocking anonymous posters would help, too.