25 March 2009

Drip drip drip

Earlier today, A's GM/minority partner Billy Beane was interviewed by the Baseball Tonight crew on a range of topics, first being the state of the ballpark chase. When asked where Lew Wolff was going next, Beane kept the party line by saying Wolff was "looking at options." Ooooookay.

If you haven't been living under a rock, you've probably heard that San Jose is the most likely next option. And though Wolff broke and then kept his promise to wait until Opening Day to talk ballparks, that hasn't stopped him from sending others to work out some other details. According to Soccer Silicon Valley founder Colin McCarthy (via BigSoccer), Keith Wolff and Michael Crowley were both at a SJ City Council session tonight to discuss last year's Airport West land deal for an Earthquakes stadium. The 75-acre former FMC site is sandwiched between SJC and SCU. Parking and additional commercial development would flank the stadium. Public transit is good here as fans would be serviced by both Caltrain and a future BART terminus if/when that extension gets built.

Since the $132 million deal was negotiated, several things have changed. The world, for starters. Real estate values have dropped, and while a drop in median home prices doesn't translate into a similarly precipitous drop for commercial real estate, it's possible that the fair market value for the land is substantially below the initial price. With that in mind, Lew's seen fit to try to get a better price for the land. I've actually heard this has been a mutually agreeable situation on both sides for some time, so this isn't surprising.

In addition, the economic downturn has made the Edenvale/iStar housing development a poor financing route at this time. For now it's not being pursued, and the Earthquakes' planned stadium has been downsized in accordance with the lower than previously expected funds. The new stadium is expected to seat 15,000 and may have few luxury suites. Design-wise, it may also be difficult to expand, though I don't think this is as much of a problem as some fans think.

Now if you've ever had the feeling that in buying the Earthquakes, Lew got a nice back door into San Jose City Hall, you're not alone. I've felt that from the beginning. Yes, the entire ownership group may be nouveau soccer fans, but that only makes their work more enjoyable, I suppose. What we're seeing now are precedents that will set the tone for negotiations with the A's side of the business when the time comes. Consider that acquisition of both the Airport West and Diridon South sites started in 2005-06. A fair market 2009 land valuation would be applicable to both sites. Since Diridon South is worth more per acre and was "slated for housing," the potential discount could be greater than at Airport West. These days, every dollar saved is important, especially if the savings could be used elsewhere - say a relocated PG&E substation.

----------Begin speculative section of post----------

All this Earthquakes/A's talk allows me to segue into what I think the overall strategy is. I see this as a three-pronged, multiphase project in which some of the key steps have already been completed. Here's an informal timeline (per Dan's request, separated by team/sport activity - green for A's, blue for Quakes):
  • April 2005 - Wolff/Fisher group assumes ownership of the A's, Beane/Crowley given extensions and small slices of team
  • August 2005 - Coliseum North plan is unveiled
  • January 2006 - Oakland officials admit that Coliseum North plan is going nowhere
  • February 2007 - San Jose publishes Ballpark Draft EIR
  • May 2006 - Wolff/Fisher group and MLS announce plan to resurrect Earthquakes
  • November 2006 - Fremont plan is unveiled
  • March 2007 - San Jose certifies EIR
  • April 2007 - Talks between SJSU and Quakes break down
  • October 2007 - Earthquakes and SCU announce deal for renovated Buck Shaw Stadium
  • 2007-08 - A's and Fremont continue to work on Cisco Field/baseball village concept
  • July 2008 - Earthquakes and San Jose agree on terms for Airport West property
  • November 2008 - Santa Clara County Measure B passes
  • January 2009 - Sharks agree to purchase 15% of Quakes
  • February 2009 - Fremont deal falls apart
  • March 2009 - Lew quashes any hopes of staying in Oakland
Notice how all of these events had a tendency to dribble out over time? I don't think that's a coincidence. Part of that can be attributed to process (EIR, land acquisitions) and part of it appears to be by design. Assuming that Lew & Co. can navigate all of the remaining obstacles - and there are plenty - this is how I think all of this works out:
  • Quakes play at new stadium starting in 2010-11.
  • A's play at Diridon South ballpark in 2014.
  • SVS+E, owners of the Sharks and operators of HP Pavilion, make a deal with the A's/Quakes to operate both of their venues. Inherent in any deal is the understanding that neither stadium competes for certain events with the Pavilion. (I think this is one reason why no stage is planned for the Quakes' stadium.)
  • A's/Quakes work with San Jose to get development rights to the 8 blocks between Pavilion and ballpark. A's promise to build enough parking to handle demand at all venues, for transit use, etc.
As with the previous timeline, there is some sequencing of events. By building the Quakes' stadium first and the ballpark second, general contractor services can be bid in a "packaged deal." Such an extended development schedule would be amenable to contractors, labor, and the sports franchises. All of that would be completed in time for San Jose and the Sharks to figure what major renovations needed to be done for HP Pavilion or whatever it's called at that point. No wonder the City is trying to raise its Redevelopment Agency's debt ceiling from $7.5 billion to $15 billion.

The SJ Giants would be moved and its owners compensated (I'm thinking North Bay). That would leave the Quakes as the less expensive, family-friendly option and the A's as the bigger ticket with more in-house diversions.


Georob said...

ML, it's sounds like you're implying that Wolff's plan all along was to move to San Jose but that he had to go through all these other steps (ie: Coliseum North and Fremont) knowing full well that they wouldn't pan out.

Yes, Wolff wanted to keep his options open in San Jose, but I refuse to believe the conspiracy theories that SJ was always the ONLY solution.

I think the bigger question that now needs to be answered is what do Selig and the other owners feel about the Bay Area continuing as a two team market. I've always felt that the Giants ultimate goal was to have the Bay Area to themselves.

Selig himself has said in the past that it was a mistake to move the A's to Northern California, and you have to wonder how many owners see this as an opportunity to finally fix that problem.

And since Florida and Minnesota are now off the critical list, all MLB has to do now is find JUST ONE market that doesn't have a team to move the A's to.

Marine Layer said...

You're half right, Georob. What I'm implying is that the Plan B/C in San Jose was always there under the surface just in case things didn't pan out in Alameda County. That's the disingenuous part.

Regarding moving the A's out of the Bay Area - if the owners really wanted that, they wouldn't have approved the Wolff/Fisher group, which has such strong ties to the region. They would've sold to someone else, as was done with the Seattle SuperSonics. If you're right, the last few years have been a needlessly expensive charade ($50 million in revenue sharing and growing, $150 million through 2014).

Paul said...

One thing working in our favor against relocation is there are no superior markets to go to. Las Vegas? Will they build a stadium (which would need to be domed because its 110 degrees there all summer) and fill the seats? I don't think so. Portland, Sacramento are lesser markets. And that's about it. Baseball has to ask itself: does it want to keep giving the A's revenue-sharing or let the A's be a big money maker by moving to San Jose. Are the Giants supposed to keep those so-called territorial rights for eternity when they have no intention to move here ever? It's obvious what needs to be done here. Letting the Giants hold onto those "rights" forever makes as much sense as building a highway today that is restricted to horse-and-buggy-traffic only. Things have changed and baseball needs to recognize that.

gojohn10 said...

I'm in Tampa for a meeting and I stumbled across this article in the St. Pete Times: Miami deal puts the Bay Area at bat. I think Bay Area should have been plural.

"With the Marlins out of the way, Tampa Bay and Oakland will become the MLB's neediest franchises, writes John Romano."

Interesting read, especially the plea for public financing.

Anonymous said...

ML--any insight into whether or not the city of SJ has been able to acquire the last peice of property in Diridon South?

Also, I believe that they were pursuing stimulus funds for the Autumn Pkwy revamp--any idea how this worked out?

Both are key to meeting the timing you outlined which I agree with--

Anonymous said...

Marinelayer, I get that you are for the South Bay and I love the site, but why did you not post the column from the Trib a few days about the A's in Oakland?

Marine Layer said...

Anon 9:21 - If you're referring to the Dave Newhouse article, you're right. My rationale for not linking that article and yesterday's Ann Killion column is in the "I smell a soap opera coming" post from last week.

Marine Layer said...

Anon 8:48 - I don't have an updated status on the last parcel. Part of the Autumn Parkway project - the extension to Coleman - is out to bid. The City wants to get that and related demolition work done within a couple of years. Autumn Pkwy has been identified as a long-term stimulus item, so it's not considered "shovel ready."

Dan said...

On thing that you might want to adjust with your speculative section is to differentiate between the Quakes and A's more. While owned by some of the same people they're not the same entity and are not operated as such to date.

Tony D. said...

The Bay Area is a lot different, population and wealth wise, than it was 40 years ago. So while it might have been a mistake for the A's to move here back in the day, the Bay Area now is more than capable of supporting two MLB teams.

Anonymous said...

Something I read on ESPN if it has any interest to post...

A's owner shows he's far removed from fan base

daveinsm said...

just came back from my spring training trip.

unfortunately I did not see BB or LW but I did hear a lot of buzz about a potential San Jose ballpark during the A's/Giants game on Saturday.

most of the folks there wanted a new ballpark but there are a few who wants to keep the A's in oakland. a good thing

FC said...

Gotta wonder what's going through Wolff's mind right now, what with pounding he's taking in the media.

I'm sure he's working his a** off trying to get this ballpark built, but I have to agree with some of what Killion said regarding his relationship with the fans. Perhaps it would be a good idea for the A's to bring someone on board who can deal with the politicians, media, and fans. Someone who can map out a PR strategy which will involve not only promoting the ballclub, but the ballpark plan as well. Wolff is a very successful developer, but it's become obvious that he lacks the ability to deal with the PR side of things. A PR guy would go a long way in promoting the A's baseball team, as well as the A's organization.

Marine Layer said...

Not a bad idea. The A's did hire former Giants PR man Bob Rose almost a year ago, yet you rarely hear from the guy.

daveinsm said...

I completely agree with FC
Having reside in southern California for the past 10 years there is one thing I noticed more than anything else when it comes to a product
Car companies, sport franchises, restaurants, luxury goods, economic goods…… Every thing has a brand (name) recognition.
There is no doubt that Los Angeles one of the if not the largest melting pot in the world; companies have to be able to attract people's attention in order to survive.
Most people down here have no ties to LA. No history…they don’t have the so-called sense of pride that is derived from originating from LA. (i.e. I’m from New York) Every 10 new people I meet, maybe 3-4 were originally born or raised in Los Angeles. So what companies do down here is they grab your attention so you can at least think about purchasing their product.
The A's need a new/young person to run their brand management/PR sides of things. Keep talking about the past (4 WS or 6 AL pennants) is great but it won't grab someone by their shirt and say, "HEY we're the A's, come watch us"
Two companies that comes to my mind when I think of successful PR giants are Nike and Apple. Nike can ductape two pieces of cardboard and paste a rubber pad underneath and still be able to sell it for $100.
Apple superfluously packages their quality low apple products with "over the top" methods and materials. when I got a I-pod as a gift a few years back, I had to open up two high quality boxes and then a velvet sleeve just to see a mp3 player. (sorry guys I love apple products only because they look sexy, I’ve had two laptops and one ipod that died on me in the past 4 yrs)

The person or team who is heading the PR for the A's needs to start taking some notes from other companies and start to think outside the box.

Anonymous said...

I don't understand why you don't post everything that is written from both sides. It is a soap opera and that is what makes it interesting! If Lew really wanted to, he could attempt to woo the South Bay people up to Oakland for games and make his money, he is an SJ guy through and through and has no desire to keep the team in Oakland. That article from Newhouse shows how logical it would be to put them right where they are.

You should also link the article about the St. Louis "ballpark village" that is now going to be parking lots due to the economy. It is looking like the A's are going to be in the horrible situation they are in for quite some time thanks to Mayor Moonbeam.

Anonymous said...

The A's PR used to be amazing. I'll never forget when they pitted the A's against the Giants and created the

"Zero Splash Hit, Four World Titles"

moto. They even put it on the sail of a boat in McCovey cove during a Fox game. Now that was marketing. The A's need to deal with the fact that they missed the boat on moving and try their best to win a title and get people to be in the stadium, success is how you get people to build you a new stadium. At the same time, SJ or Oakland shouldn't be giving away money to them because we all can see that stadium building is one of the great con jobs of the last 20 years as most teams with new ballparks have been far less successful than the A's.

Anonymous said...

Another article I just came across on the Seattle Times...

"Stadia Mania"

Marine Layer said...

If I really thought those articles would add anything to the discussion I'd link them. There's nothing new there and it would simply lead to the same back-and-forth seen the last few weeks. Let's be focused on actual events, new ideas (Coliseum South is not new, I pitched it three years ago).

JT said...

Keep an eye on this one:

The Senate is looking at the antitrust implications of college football's BCS system. In a statement released Wednesday announcing the hearings, the Senate Judiciary Committee's subcommittee on antitrust, competition policy and consumer rights, the current (BCS) system "leaves nearly half of all the teams in college football at a competitive disadvantage when it comes to qualifying for the millions of dollars paid out every year."

We should all recall that our newly elected president expressed his dissatisfaction with the BCS system. And did it very publicly. The A's could turn out to be huge Obama fans; it's not a real stretch to imagine the Senate also looking at the 1920s antitrust exemption enjoyed by baseball. That's where the Giants get their "territorial rights," which of course place the A's at a "competitive disadvantage."

The antitrust exemption can be eliminated by an act of Congress. Elimination would mean the A's would be able to move anywhere they wanted. Just like the Raiders were able to move to L.A. and back to Oakland without the consent of the NFL. Just like teams in the other professional sports can move wherever they believe makes business sense. Just like every other business in America, except MLB.

You can bet MLB is watching this very closely and will do some intense lobbying. Write your senators and representatives.