14 May 2009

Reed moving swiftly

While I was walking an always enthusiastic JoJo on Tuesday morning prior to the Wolff chat, Wolff was having breakfast with San Jose Mayor Chuck Reed. (So that explains why he wasn't hungry...) Perhaps they were exchanging info, perhaps not. It was a busy day for Lew, as he mentioned that he was headed up to Oakland as our discussion ended.

Anyway, Reed is playing this like he's running a two minute drill. He wants the City to be prepared to put some kind of ballpark measure on the ballot in November. There's all sorts of speculation about what language such a measure might contain. Let's take a look at the options:
  • Vote to approve site prep and land to be sold at market price
  • Vote to approve site prep and land to be sold below market price
  • Vote to approve site prep and land to be leased at or below market price
  • Vote to approve site prep, land, and TBD off-site infrastructure work (PG&E substation, Fire Training site relocations)
The site is not ready to build. Buildings will need to be demolished, utilities will have to be relocated, and some site remediation may be required IIRC. Option #1 might not trigger a referendum since those steps would be taken for any big development. Options #2 & #4 definitely would trigger. #3 is conditional.

There's also some question as to whether or not such a measure would be truly binding or not. The City of Santa Clara wrestled with this very matter before deciding to make its still-delayed 49ers vote non-binding. Obviously, the structure of the deal (money outlay) would be the big determinant. There may be legal wiggle room if one of the less costly options above were chosen.

If we can project, it becomes apparent which steps are likely along with the endgame. (Color coding: orange = 60-90 days, blue = 90-120 days, green = 120-150 days, red = 150-180 days)
  • Continued land acquisitions throughout the summer
  • Release of "blue ribbon committee" report
  • Release of updated draft EIR, start of review period
  • Release of ballpark economic impact report
  • Determination of required site changes
  • Shaping of November ballot measure and official placement on ballot
  • Release of final EIR and certification
  • Pro-ballpark advertising blitz (may/may not include official participation by the A's?)
  • Election
  • Baseball winter meetings, action on T-rights/relocation
  • A's and San Jose are allowed to officially start negotiating business terms
I suppose this could be interpreted as both San Jose and MLB meeting each other halfway. San Jose sets the table, lines up public and private support, preps a site, and shows its hand financially. MLB gets to wait to decide until all of these issues are addressed. Can San Jose really work this quickly? It'll be a major feather in Reed's cap if he can pull it off. Fortunately for him, a lot of important San Jose people, including the City Council, are right behind him.

Speaking of the Niners, there's a chance that the Santa Clara stadium will be on that city's November ballot. That would create a situation in which both measures
inevitably would be compared in the media. One of them will come out looking worse, and while they wouldn't compete with each other at the ballot box, some voters undoubtedly will consider the other city's measure as a point of comparison.


Anonymous said...

I believe that the last day the council can vote to place a measure on the ballot is August 7th. That is about 85 days from now. Two minute drill indeed!

FC said...

The comments to the Merc's article make it pretty clear that the voters in SJ are in no mood to help subsidize this project. In order to get this measure passed, the A's will have to agree to pick up the tab on everything, including the election. But then if this were the case, then it wouldn't be necessary to put it to a voter, right?

Mark, the Dad said...

Without getting all Clintonian, it depends on what the definition of public money is. Also, can that definition be modified based on future guaranteed municipal earnings from the project?

(Also, I'm anon 8:16, trying to figure out the status of my google account.)

Anonymous said...

FC---Voters are in no mood for tax increases that they will be directly responsible for or exposing the general fund to any risk. Providing land via the redevelopment agency to support a project that will be a net contributor to the general fund may resonate with those who realize the importance of diversifying the economy to include a broader array of entertainment options--not to mention union workers who will benefit from the jobs provided by the ballpark construction.

Also keep in mind that this type of deal is what supported Adobe moving their headquarters to downtown SJ--

Daniel Twombly said...

FC, not necessarily. At least one SJ City Councilman has indicated that the stadium project is so big that it would likely be put to a vote anyway. Though I imagine it could be a non binding vote if no city money is going toward the stadium.

Anonymous said...

I don't know if any historians remember but as I recall the city of SF provided the Giants with cheap lease as well as infrastructure improvements in their ballot measure that, as I recall, received more than 80% support at the ballot box---would be interesting to compare what was approved in SF to what might be proposed in SJ--

Anonymous said...

Comments on news stories are beyond useless for determining the communities thoughts on anything. Look at the MIJ. If you went by the idiotic comments on there, you'd assume Marin was a bastion of red neck, right wing extremism.

Excellent point about the two measures getting contrasted against each other. That's exactly what would happen. Based on what I know today, I'd say the Niners will look really bad in comparison to the A's. Both in terms of what it will cost the city and in the expected return.

FC said...

Anon 8:49

"Comments on news stories are beyond useless for determining the communities thoughts on anything..."

I hear ya, but you have to admit the A's and SJ have a major task ahead of themselves educating the voters. There those out there that simply won't vote for a deal if it looks as though the city will have to spend any money.

While there are a lot of voters that would be in favor of a ballpark, there are also a lot against. Why take a chance on a binding vote. Agree to pay for everything, avoid the ballot box, and come out looking like a hero.

gojohn10 said...

I hesitate to bring up Oakland again, but I'm still trying to work through all this emotionally and (hopefully) rationally...

I think that even if Oakland city leaders got their act together and put together a similar plan to the one SJ has offered, an Oakland ballot measure would fail. Perhaps that is why Oakland is feigning interest in keeping the A's. To keep the issue in the narrow context of sports venues, Oakland had the Raiders fiasco while SJ has benefitted from HP Pavilion.

Regarding the SJ situation, I thought it was poignant that the former SJ mayor and opponent of the HP Pavilion admitted she was wrong about the HP and came out in favor of the ballpark. Clearly it depends upon the language of the measure, but I expect the SJ vote to pass by a fairly wide margin.

Old Blue said...

Back in the 90s, the Giants wanted the citizens of San Jose to pay for the whole ball of wax. I voted against it and I'd do it again. However, the A's are proposing an entirely different approach, actually putting a considerable sum of their own money at risk. It seems the buy-in asked by the A's and the city of the citizens of San Jose would be similar to that asked of the citizens of San Francisco.

I no longer reside in San Jose, but if I still did, and if San Jose were to approach its contribution the way San Francisco approached its contribution, I'm fairly certain I would vote to make the commitment. San Jose has an ideal climate for baseball and the proposed location fits the downtown paradigm. I think MLB there will be a winner.

Sorry, Oakland. I like your city a lot, but it seems you've got nothing nearly so attractive to offer. It may be that, as some have said, the Coliseum location suppressed A's attendance over the years. How/why would Coliseum south be any different? I think building a park anywhere near its present location would be foolhardy and the A's aren't run by fools.

Get on board San Jose or watch the A's leave the Bay Area when the economy improves.

Anonymous said...

Keep the A's in Oakland

Jeffrey said...

I think everyone can agree that no matter which city the A's end up playing ball in... the funding of the stadium will be expected to mirror the Giants stadium. So how was the Giants stadium funded:

$357 Million (excluding land costs):

$170 million loan from Chase Bank (48%)
$102 million in naming rights (28%)
$70 million from PSL's (20%)
$15 million in TIF (4%)

Figure a new stadium will cost about $450 million (this is a debatable figure but just for arguments sake).

The A's have Cisco on board with $120 million, which is 26% of $450 million.

I imagine the other 74% will be made up of a huge loan, PSL's and TIF.

Jeffrey said...

I just went to the letsgooakland site... if you expect people to sign up you might want to have some details, I am generally interested in these sorts of things but I am not putting my email address into some web site to get spam from unless I know who is sending it.

LeAndre said...

the Lets Go Oakland Site is just a support site, its basically the same as the A's To Fremont Site...

Its basically like signing a support list, and I think they mail and email you updates on the topic...I say "I think" because I never signed up for neither...there's just something about giving my address over the net I just don't like, but that's just me, well and you I guess. lol

Anonymous said...

Why are you hating Jefferey?!? If you don't want to sign it then don't, but no need to comment to keep others from doing it!

Anonymous said...

Well--based upon these last few posts guess you could say that Oakland must have been less than impressive yesterday---gotta laugh at Jeffrey being accused of "hating"---one of the few guys who stays mostly neutral on here-

Personally, I have to question anyone who says they are an A's fan yet is resisting their move to stay in the Bay Area--oh well---time to be partisan now--as a A's fan I hope that SJ is successful and sooner rather than later--

Jesse said...

Anon 6:34 it seems like whenever something doesnt go well in Oakland there is a leak because one side wants to call the other side out. but, nothing is coming in on my Google News search so there may be some traction in Oakland.

I just hope it's not Coliseum south because I would take DT SJ over Coli south all day long.

If ML's timeline is accurate, that's pretty tasty. That means after a 9 month delay we pick up where we left off with Fremont.

But my gut is telling me though that Oakland is going to come up with something sweet downtown and that it will be a late inning surprise to everyone.

From a purely selfish (no politics or corporate this and that involved) A's fan standpoint here is my preference list

1) Waterfront Oakland
2)Downtown SJ
3)Somewhere in contra cost cnty
4) Coliseum South

i'd be interested to know what some of your preferences are.

Anonymous said...

Jesse--I give you credit for your eternal optimism---remember--its not just about identifying a potential site its about buying the land--$70+M is a reasonable budget, typically from multiple land owners----SJ has been working on acquiring Diridon parcels for 3+ years,completing an EIR---18 months is a typical EIR cycle--and having a having a owner who is willing to invest $500M of private capital---Wolff has indicated his preference for SJ over Oakland---

Add up the timeframe above and best case scenario for Oakland is 3-4 years in getting a downtown site ready to move forward and begin to build a ballpark---I'm a realist--Oakland doesn't have the resources---Raiders want a new stadium also, and I don't have the time to wait another 15 years for Oakland to spin in circles--while the A's play in a dump in front of 10,000 fans.

My preference--move forward on SJ--and no different than SJ has done these past 3 years--Oakland should be prepared with an alternate site in the event SJ doesnt work out--

LeAndre said...

I'm really bummed about this presentation Oakland is giving to the A's...I wish it was open to the public. I wanted to see some cool renderings or some proposed drawings, but maybe I'm speaking too soon...I'm still hoping for the best...

Jesse, I hope your right about a late inning surprise and I pretty much agree with your list.

Anonymous said...

To the above writer no disrespect but With all the land purchased already by SJ there is no way the A's deal will be better than Niners. Whatever inside source you may have.

City of Santa Clara owns acres and acres of land and has infrastructure aleady in place because of its convention center and industries.


Anonymous said...

Anon 10:54P

With all due respect.....

The Santa Clara deal for the Niners is looking to ask the City of Santa Clara citizens to fork over $90-$100M. That, my friend, is a non-starter in San Jose (and most of the United States), but maybe Santa Clara citizens are wealthier and more gullible and want to dish out that kind of cash for 8 events per year.

Read and be informed before you post.

Jesse said...

a nice long multi-segment discussion with Larry Baer and Lawyer Steve Moskowitz regarding t-rights and what legal right Gigantes would have on Chronicle Live. I know this is going to sound weird observation on my part but, seems like Baer began to stutter and stammer and choose his words more carefully when the subject came up.

Baer says he thinks this a 2 team market with the A's in east bay. he was asked multiple times about legal rights, but never would say that yes we would sue MLB. He said he would not sale rights.

But, Moskowitz came on and said that if he were representing the Giants he would challenge the MLB antitrust exemption which would hold up the process for several years. Finally he said that he thinks a deal will be done between Giants and MLB because the Giants would have to reveal a lot of things they dont want to open up to the public in any litigation.

I believe thats been discussed here before, the reasons why the Giants wouldnt want to sue MLB.

Anonymous said...


If you need a course on Mello-Ross and know the real numbers of RDA funds that will be invested I would be real suprised. Sounds like you get your news from the Merc. For your information Santa Clara does not sell land. Knowing Santa Clara they will get a General Fund contribution out of their deal from a land lease payment on land they have owned for decades.

Santa Clarans are smart that is why they have lowest utilites rates in the Bay Area, great roads, and will support a deal that is a good deal and my friend it will be a great deal and that is the Santa Clara way.

Just watch the money Lew gets from San Jose. He just saved 40 million on his last purchase of SJ

Marine Layer said...

It's a bit premature to compare the two deals since we haven't seen completed terms for either yet. However, there is one fundamental difference.

San Jose is not raising a single dime for construction. Santa Clara may raise upwards of $400 million for construction - the $90 million direct subsidy and ~$330 million from the city-created stadium authority. The Authority's funding sources are going to be naming and pouring rights, PSL's, ticket taxes, etc. If the Authority falls short of revenue projections, guess who gets stuck with the bill? Santa Clara in all likelihood. It's the Raiders debacle all over again.

Anonymous said...

So now we're going to get infested with Santa Clara boosters too? When will the madness end?

Jeffrey said...

The whole "sue MLB" thing is stupid. A bunch of reasons:

The reason that Baer stutters and stammers is because he CAN'T sue MLB. In the MLB constituition, and all personal services contracts, it is expressly written that the clubs cannot sue each toher or the commissioner.

Steve Moskowitz is a tax attorney... I am not sure how that relates to anti trust law, but the idea that the Giants would sue to block the A's from moving to the Giants assigned territory under the premise that they want to revoke the only thing that is blocking the A's from moving to that assigned territory is ridiculous.

On the "hating"... I was just explaining how you might get mroe people, including me, to sign up for updates. I am nto partisan, I want the A's to have a enw stadium and I don't care where it is as long as it is in the Bay Area. As a result I joined Baseball San Jose and would join a a productive effort to keep the A's in Oakland (the OAFC doesn't count).

Marine Layer said...

Taking this further, here's a quick breakdown of the stadium authority's possible revenue/debt scenario.

$330 million - PSL (avg. $10k for 10,000 seats) = $230 million loan$230 million @ 6% over 40 years = $15.3 million per year in debt service.

Naming rights = $4 million/year
Pouring rights = $3 million/year
Corporate sponsorships (5 x $200k/year + 20 x $100k/year) = $3 million/year
Ticket tax ($2/ticket for 10 games) = $1.5 million/year
Other revenues = $1 million/year

Total revenues are $12.5 million. Luxury suite revenue is a team/NFL revenue source so it doesn't fit here. That means the Authority could be short nearly $3 million/year. Yet the City is projecting a revenue surplus. Unfortunately, the City is not showing how it's arriving at its totals. If I were a SC resident I'd be very uncomfortable about this.

Anonymous said...

ML---I believe that the '9ers will have a lease payment to the city of SC--this would help close the gap--

Marine Layer said...

That sounds good but it's not how the P/L projections are laid out. There is no debt service breakdown, it only says that there will be a surplus. The stadium lease, along with this surplus, is expected to go towards stadium operations expenses.

Anonymous said...

Some similarities between the proposed A's stadium site in SJ and the 49ers' stadium site in SC:

*Have a utility/substation to relocate
*Are approximately 37 miles from their current stadiums
*Have majority support from their respective cities' councils
*Will be on the ballot most likely in 2010

Anonymous said...

So when do we find out what happened with Oakland and the blue ribbon panel on the 12th?

Marine Layer said...

It might take a few weeks. It wouldn't surprise me if we first heard right around the time the report is released.