Lucky? San Jose

What you see above is what San Jose Economic Development honcho Paul Krutko might call a “baseball city.” Therein lies the promise of San Jose’s Diridon South site. It’s at the future nexus of Caltrain, BART, High Speed Rail, Light Rail, and bus service. It’s in a downtown locale. And perhaps most important of all, the ballpark planned for the site already has its EIR certified.

Most of the buildings in the foreground are just an artist’s concept, and that’s the point. The area between HP Pavilion and the ballpark site is a relatively blank slate. BART will tunnel underground, leaving plenty of space to develop. It’s just a matter of what type of development the area will see.

Economy
The irony in the whole Fremont/San Jose saga is that what may eventually kill the Fremont concept could make the San Jose concept work. To quote former President Clinton, “It’s the economy, stupid.”

It’s entirely likely that had the housing market not collapsed, we would be moving forward with the Fremont baseball village plan without a Warm Springs alternative, and without most of the hubbub seen Tuesday night at Fremont City Hall. The financing model would be solid and the only remaining issues would be the ones identified well ahead of time: traffic, satisfaction of the Pacific Commons businesses and environmental mitigation. Compared to the messy situation in Fremont now with the differing opinions and multiple conflicts, it would’ve been a cakewalk.

Dual-use infrastructure
The Diridon/Arena area, on the other hand, is destined to get a major infusion of cash. A major overhaul and expansion of the train station will be necessary to support HSR. Mayor Chuck Reed is already on the hunt for funds to improve the area. President-elect Obama’s rising-by-the-week stimulus package will be largely focused on major infrastructure projects. HSR is going to be near the top of the list because much of it is ready to go. I wouldn’t be surprised if movement of PG&E substation on the site was somehow magically appropriated. It certainly wouldn’t be wrong for the substation to be expanded upon its move to accommodate growing demand from BART and HSR.

Parking is the main infrastructure to be built. Additional parking will be needed to handle Caltrain, BART, and HSR users. It’s not known exactly how many spaces we’re talking about, but it will be more than the roughly 800 spaces there now. The beauty of it is that the parking would automatically be dual-use, for transit users and arena/ballpark patrons.

The problem there is that a lot of parking has to be built. San Jose is required to keep 6,650 spaces within a ½-mile radius of the arena. The ballpark has a 1,200-space garage planned to its south. That will help replace some of the spaces that will be lost to future development. Even more has to be built to handle the demand when both a baseball game and an arena event (only 25% are Sharks games) are occurring simultaneously. The good thing is that any new parking in the area can serve both events and transit at different times. Then again, it’s a double-edged sword. Having more parking available invites more drivers. What is currently a manageable system for the arena could turn into gridlock quickly.

The key, then, is to strike a balance. The secret to the traffic success around the arena is that there really isn’t that much parking immediately around it. Most of the area parking is east of Highway 87 in the downtown proper. That parking will continue to be leveraged and may need to be expanded.

In San Jose, the sights are set lower than in Fremont. The dream of serious retail downtown died with the opening of Santana Row. For the moment, housing is a nonstarter. So that basically leaves the ballpark. Chances are that the financing model hinted at by the Wolffs (private funding, additional naming rights and sponsorships – the Giants’ model) will be the one to use for at least the next five years. As much as Selig doesn’t want any team to go down that path, the times dictate alternate methods. It’s no coincidence that the two of the last three major sports venues built in this state within the last decade were privately financed (Staples Center, AT&T Park).

Territorial rights
The unique way the Bay Area is gerrymandered for the two teams is unlike any other two-team market. In May, I advocated for a simple payment of the A’s annual revenue sharing receipt (~$15 million) to the Giants every year until the ballpark opens. That could be $75-105 million depending on the opening date. Beyond that, the A’s could continue to pay some amount until the AT&T Park debt is paid off. Some will argue that this opens a Pandora’s Box regarding T-rights for other times, especially in NYC. However, that view is not the least bit pragmatic. The biggest barrier to entry now is not T-rights. It’s money. To get a team going in, for example, Northern New Jersey, a team will have to pony up close to $1 billion for an adequate ballpark. Where would they build? Can’t be the Meadowlands. Definitely not Newark. Plus if you haven’t noticed, most of the financial institutions that made loans to area MLB and NFL teams are struggling mightily if not belly up. NYC, for all its considerable population and wealth, is tapped out thanks to four (possibly five) new venues along with an on-the-table revamped Madison Square Garden. Teams also had to undergo huge lobbying efforts to get favorable legislation through. Territorial rights as a tool have become obsolete. That’s not to say that MLB will get rid of T-rights tomorrow. As long as they have an antitrust exemption they’re going to use it. This time however, there’s little milk left in that cow.

Think about it this way. What if T-rights ended tomorrow? What would happen? The A’s could try to get a ballpark deal done in San Francisco. What land could they conceivably build upon? How much would it cost? How would they know they could siphon enough of the Giants’ fanbase away to make it worthwhile? In reality, they couldn’t. It’s bad leveraging of the market. Politically, it’s not doable due to a populace and pols who won’t bend for the 49ers, let alone some new baseball team.

Let’s not forget that T-rights are entirely wrapped up in the Major League Constitution, which bars teams from suing either the league or each other. Any disagreements have to be wrapped up within The Lodge (though Bill Neukom didn’t earn his reputation as being soft).

Political will
Nothing gets built without a champion. Reed may be a fiscally conservative Democrat from Kansas, but he’s got former Mayor Tom McEnery in his ear. McEnery’s Siliicon Valley Sports & Entertainment owns the Sharks and just signed a deal to operate the Earthquakes’ new stadium. McEnery, Sharks president Greg Jamison, and Lew Wolff are good friends from way back. McEnery has long advocated bringing a baseball team to San Jose. If there’s a power behind the throne to get this done, it’s him. Even in City Hall there are able and willing participants. Dave Cortese, the current Vice Mayor, is about to step into a new County Supervisor role. He also is a major proponent of MLB-to-San Jose, HSR, and BART, and may look at all three with the same vision. Krutko plays the role of Robert Bobb in San Jose. From this Merc article, they're both quite excited about the prospects. That's just the tip of the iceberg. There’s no telling how many other high-powered proponents, such as the Silicon Valley Leadership Group, will come out of the woodwork should a real proposal become public.

It’s amazing how the landscape has changed in such a short time. The economic collapse has hit many of us or our friends and family, yet the A’s and San Jose may benefit in an odd way. I didn’t see the Warm Springs alternative coming, and while I understand why it’s out there I could also see the opposition coming from a mile away. I don’t think San Jose would’ve opened up as a possibility if Santa Clara County Measure B had not passed. Proposition 1A had some pull as well, as it opens up the floodgates to federal transportation funds and private investment. It has taken a rather unusual, unforeseen set of circumstances to make San Jose a possibility, and I think we’re on the cusp of that moment.