Subsidies and Realities

In light of the Merc article containing economist feedback on the economic impact report, there's been a small amount of blowback from San Jose and other media. While I haven't trumpeted or killed the report critically, I feel that it has enough realism and conservatism baked in to pass muster with the public.

During the City Council session yesterday, there were some comments about omissions in the report. Some of the unknowns:

• How much parking will be built on site and how much will it cost? Will the City foot some/all of the bill?
• What is the fiscal impact of sales of construction materials for the ballpark?
• No mention is made of land lease terms, or the cost of additional land acquisition.
  

It's been understood for some time that new infrastructure in the area, including parking, will be for the benefit of the transit hub and the downtown community as well as the ballpark and arena. Future demands are too great to have exclusivity, especially for a parking garage.

In the report, the alternative development plan involves a new corporate campus, or up to 1 million square feet of mostly office and some retail. The space is expected to be built out over two-plus decades, with the final space available in 2038. That's a major departure from a ballpark, which would be completely open in 2014. Height restrictions prevent buildings of 20 stories or more, so the chances of building anything as architecturally iconic as a ballpark are slim. You need not look further than the Adobe headquarters for proof:

The only thing memorable about the HOK-designed complex is the art installation on the north exterior, otherwise known as the San Jose Semaphore project.

Speaking of Adobe, they didn't exactly start out in San Jose. Originally a Mountain View-based company, Adobe was lured downtown with a $33 million subsidy and favorable lease terms. Most of the land in the picture above is owned by SJ Redevelopment, not Adobe. In hindsight, it's proven to be a good deal because as of this moment, Adobe is the only Fortune 1000 company located downtown. In the past few years, several companies have left, leaving a massive vacancy rate in their wake. Knight-Ridder was acquired by MediaNews, with the Bay Area papers absorbed by BANG. Power producer Calpine emerged from bankruptcy and promptly moved to Houston. Even new deals were sunk, as City tried for years to bring middleware maker BEA down from the northside, only to have Oracle acquire them after the deal was consummated. The target building, Sobrato Tower, remains vacant as City tries to find a tenant yet again. Finally, Adobe bought the old San Jose Water Company site, but there's no telling if/when anything will be built there.

To better illustrate downtown's plight, here's a map showing where the city's six Fortune 1000 companies reside in blue, along with a red/black square denoting the ballpark site's location:

These companies have little incentive to move. They have full control over their parking, are just as close if not closer to where their employees live as downtown, and for the most part don't need downtown amenities, such as they are. It also doesn't hurt that for the companies that have large, long-held real estate portfolios, they also have Prop 13 on their side. It wasn't that long ago that much of north and south San Jose was cheap farmland, ready to shape however the developer saw fit.

Faced with this un-downtown-like reality, it's no wonder why SJRA projects all the way to 2038 for office space. Downtown will always have smaller businesses, law firms, and media companies there. There's nothing wrong with pursuing more large corporations, but city fathers should also understand that there are other ways to enhance downtown. A ballpark is Exhibit A in doing just that.

To that end, they're focusing on this hub concept, for both transit and entertainment. Retail went with Santana Row and a series of expansions to Valley Fair, so the best things left are transit (coming with BART and HSR) and entertainment (sports, arts). As mixed up and broad as their vision for downtown has been for the last 20 years, it's good to see it coalesce around a more focused set of objectives.

Mayor(s) Press Conference

Mayor Chuck Reed introduces former mayor Susan Hammer, who speaks in support. Next up, County Assessor Larry Stone.
City Council meeting is next and will take up the economic impact report.

SVLG head Carl Guardino announced that SVLG officially supports the move.

Reed's last quote:

"I'd like to thank Lew Wolff and the A's. It's Lew's vision that makes it possible for us to build a ballpark in San Jose."

Mark Purdy is headed inside to talk to some of the featured speakers.

1:45 - Council hearing Econ impact report now.

2:25 - Council unanimously approved report.

Mayor Reed Press Conference Tuesday @ 1 pm

For those who are wondering where all the South Bay community leaders are regarding the San Jose ballpark project, they'll be at City Hall tomorrow at 1 p.m. for Mayor Chuck Reed's press conference. Reed will undoubtedly tout the revenue and growth potential cited by the week-old economic impact report. Here's the press release:

Mayor Reed to Discuss Economic Benefits of a Proposed Major League Ballpark in San Jose

Event:
This Tuesday, Mayor Reed will host a press conference to discuss the findings of an Economic Impact Analysis for a Proposed Major League Ballpark, and highlight the estimated General Fund tax revenue and job generation benefits that the City and other local agencies stand to gain. Key baseball supporters, business leaders and labor representatives will be available for interviews. Following the press conference, the San Jose City Council is expected to accept the economic impact report at the Council Meeting.

When:
Tuesday, September 15, 2009
1:00 p.m. to 1:30 p.m.

Where:
San Jose City Hall, Wing Room 120
200 E. Santa Clara Street, San Jose, CA 95113

Who:
Mayor Chuck Reed
Former Mayor Susan Hammer, Pro Baseball San Jose
Larry Stone, Santa Clara County Assessor
Pat Dando, President & CEO, San Jose Silicon Valley Chamber of Commerce
Neil Struthers, Chief Executive Officer, Santa Clara & San Benito Counties Building Trades Council
Carl Guardino, President & CEO, Silicon Valley Leadership Group
Michael Mulcahy, business leader, Pro Baseball San Jose

Other prominent community leaders and supporters of Major League Baseball will also be in attendance.


Background:
In May, the San Jose City Council unanimously approved Negotiating Principles for a proposed Major League Ballpark in downtown San Jose. These included requirements that construction and operation of a stadium be privately financed, and that the proposed project have a positive impact on the City’s General Fund. An Economic Impact Report released earlier this month found that the proposed ballpark could annually generate $1.5 million for the City of San Jose, $1.5 million for the San Jose Redevelopment Agency, as well as $2 million for Santa Clara County and other local agencies. The report also estimated that a stadium would generate 350 new construction jobs (annually for three years) and 980 net new jobs as well.


Interviews:
Mayor Reed, event speakers and other civic leaders will be available for one-on-one interviews immediately following the event.

I think I'll be scheduling a late lunch to cover the event myself.

Cutting through the B.S.

The Merc's Tracy Seipel has a new article featuring quotes from economists questioning some of the projections in the San Jose Economic Impact Report. Here's one of the better takeaways from the article:

But experts who study the economics of ballparks reviewed the numbers for the Mercury News and raised plenty of concerns. Chief among them: The cost for the city land the ballpark would be built upon is significant, they said. With three more parcels to buy, acquiring the land for the stadium over the years could amount to at least $42 million, according to a Mercury News analysis.

"You can't come out saying that this doesn't have a cost if all we're supplying them (the A's) is the land," said Victor Matheson, associate professor of economics at the College of the Holy Cross in Worcester, Mass. "The land is very valuable real estate."

Rather than be redundant, I'm reposting the "Cutting through the B.S." entry from last week, which covers much of the same ground.

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First, I'll start off with some context on the report. The media has published several figures that sound good, but further understanding is in order.

• $130 million per year in direct spending in San Jose. This is based on what's called a "stabilized" year, which for the purposes of the report is 2018. This acknowledges that much of the newness of the ballpark will wear off over time, allowing attendance to settle just under 2 million/year (24,300/game). This breaks down to $82.8 million of spending in the ballpark, $40.5 million outside the ballpark, $1.8 million by the various visiting teams, and $5.2 million for non-MLB events. There are some odd ratios used to get to these totals. For instance, the study assumes that 10% of players will live in San Jose, and that 10% will spend 50% of their income in the city. What? The other 90% will live outside San Jose and will spend only 5% of their income in the city. All-in-all, some 5.1 million (7%) will be spent within the city. Another $50 million would come from spending directly related to ballpark and team operations. Compare the $130 million figure to projections for the 49ers stadium, which were $72 million and $160 million for the City and County, respectively. I'm skeptical about these numbers, but CSLI claims they're based on information from MLB teams, other sports franchises, and surveys. There must be some correlation, but the numbers described within the text don't always match up with what's in the tables.
  
• Nearly 1000 jobs will be created outside of construction. Granted, moving team operations from Oakland to San Jose will net dozens, if not hundreds of new jobs. From a greater regional standpoint, it's really just displacement. Moreover, there will be displacement of the low-paying jobs. Many of the Aramark-sourced vendors in Oakland will lose a seasonal baseball gig, while Aramark-sourced vendors in San Jose will gain one. For years many of these vendors have worked multiple venues to help make ends meet, which makes sense since we have the luxury of having six local pro sports teams combining to cover the entire calendar year. And if the 49ers and/or Raiders move to Santa Clara, there will be even more displacement. Many vendors won't be willing to travel 40 miles to work food or janitorial service. So it's great for South Bay workers, terrible for East Bay workers. Not that I needed to explain that in great detail.
  
• Per capita spending. The study separates fans into different groups in order to properly establish their spending patterns. For A's games, in-ballpark spending is projected to be $49 per person per game. That sounds high until you break it down into its components: $30 for a ticket, $15 for food and beverage ($6 nachos + $7 beer + $3 dessert = $16), $3 merchandise (part of more expensive item spread out over multiple visits), $1 parking (3 people per car, 30% of fans using available parking). The Coliseum's 2009 Fan Cost Index is $46.81 per person per game, and that includes a child discount on tickets. Many fans (including myself) go quite cheap by finding free parking, or by bringing in outside food. Still, I pay $13 for a bleacher seat, $7.20 roundtrip from Fremont BART to the Coliseum, $3 in gas, plus $7 for a large sandwich and drink from somewhere else. It adds up.
• That hint. In the afternoon post, I mentioned there was a hint at the deal. In the general fund revenue section is this sentence, "Under the Ballpark Development Scenario, the hard
  construction costs of the stadium are used as a proxy for the assessed value." Assuming there are no appraisal shenanigans like the kind the Giants pulled in SF, the figure points to an assessment of the ballpark only, which means that the land will remain City property while the A's will lease it for the stadium. In other words, it's a repeat of the Giants' land deal.
  

What you, gentle reader, want to know is: Are these realistic numbers? The strange breakdown of player spending and the projections of property tax pass throughs to school districts are specious. Other numbers appear to be realistic, in some cases conservative. The study projects $1.5 million in tax revenue. It's not high, and there's a good reference point in HP Pavilion. Sharks games produce between $1.2 and $2 million per year in taxes with fewer games and less overall attendance (though greater ticket prices). That said, $1.5 million is a drop in the bucket for a city of 1 million people. Claims of making money from the deal are key for Mayor Chuck Reed, as he wants to uphold his fiscal conservative credentials. Given the litany of bad stadium deals listed in the last appendix in the report, it would be a great victory if the project were simply revenue neutral. Not sexy, but a little more realistic.

Media coverage of the economic impact report and reactions:
The money: Wolff connects the dots @ Bloomberg, talks T-rights @ Forbes
The lede @ the Merc and SFGate
The tube: KTVU and KGO stories

Can San Jose meet the demand?

Tonight's contribution comes from frequent commenter gojohn, who in a previous thread had some thoughts on the future makeup of a San Jose A's fanbase. I told him that it looked like he needed some room to flesh out the concept, so I gave him this post to do it. I'll add my own thoughts at the end of the post.

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Thanks to Marine Layer for allowing me to do this guest post. Half of it was written while sporting my 1929 A’s hat at the game today. I didn’t want to be “that guy” with a laptop at the game, but I figured I was exempt since I was writing about the A’s. I was stuck in the Stomper Fun Zone most of the game anyway.

When I was looking over the San Jose Economic Impact Report the table below stood out to me. 

I was a bit surprised to see it estimated that 50% of the ballpark attendees would be coming from San Jose. So, I attempted to come up with my own number based upon the only data that I know of that is publically available. That would be the table below from the Fremont Economic Impact Report.

This table breaks down the advance ticket sales by county for the 2005 Oakland Athletics season. Ticket sales per county should vary mainly based on the population of that county and its distance from the Oakland Coliseum. Below is scatter plot of the % county population attending games by the distance of each county from the ballpark (I assumed only one game a person. Obviously not right, but I made that assumption for all counties so it shouldn’t affect the slope of the line).

Allow me to make a few observations from this graph before moving forward. First, Napa County loves the A’s. Those fans take the long haul to the park in numbers that far exceed expectations. If the A’s move south, Napa County might be the biggest losers. Second, Alameda County attendance is slightly above expected, but Santa Clara County is a bit lagging. Doesn’t really fit with the notion that the South Bay is deserving of a new ballpark more than Alameda County because the former will support the team more. Maybe they’re better Giants fans? Obviously, there are many issues unrelated to attendance alone that factor into the decision to move the team South, and the purpose of this post isn’t to reignite the Oakland vs. San Jose debate. I’m just sayin’, if you are going to talk the talk…

To estimate how the placement of the ballpark in San Jose might affect the relative attendance values from surrounding counties, I took the trendline formula from the scatter plot above and plugged in the distance of the counties from Diridon (I’m not a statistician, but I believe this is regression analysis). Using that formula, a Diridon ballpark would result in 433K less fans per year than the Coliseum, demonstrating that having a centrally located ballpark does have a significant positive affect on attendance. Keep in mind, this assumes no increase in fan interest from the 2005 values, it is only taking the ballpark from one location and putting it in another. I had to increase the y-intercept value (aka: the fan interest index) 34% to get an attendance value equal to the Coliseum numbers. In other words, a San Jose ballpark may indeed generate more interest than an Oakland one, but the interest needs to be ~34% higher to make up for the asymmetrical location of the ballpark in the Bay Area.

The graph below shows the percentage each county would be expected to contribute to Diridon ballpark attendance. To the right of the pie graph is a bar graph that breaks down each individual city in Santa Clara County.

The 18.6% value from “other California or out of state” is taken directly from the 2005 values in Oakland. Alameda County attendees would be expected to drop by ~160K fans, while Santa Clara county would be up 570K. Of note is San Jose, which I project to consist of only about a quarter of all ballpark attendees (470K fans/year). My number is half of the estimate stated in the San Jose economic report. I can’t quite reconcile how the two values are so far off. Perhaps the report relied more on figures from Sharks games and other MLB venues. Maybe they don’t think the relationship between attendance and distance from the ballpark is linear. It’s even possible they fudged a bit. It’s tough to say without knowing their method and having access to the numbers they do. I can only say my numbers seem reasonable and that’s good enough for me.

I would think that my numbers are much more encouraging to a future ballpark in San Jose than those outlined in the report. One million fans from San Jose may be difficult to achieve. However, since I think it is unlikely the report would want to come up with estimates that would suggest a ballpark is not feasible in San Jose, I can only assume they believe 1 million fans from San Jose is reasonable. Perhaps it would be driven by a huge influx of local corporate ticket sales. If 1 million fans truly end up coming from San Jose alone, based on my estimates, the Diridon ballpark is going to be a huge success. I realize I’m beating a dead horse here, but if I’m right I hope the demand for tickets will justify adding more seats to the venue sooner rather than later.

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Ed.: My only criticism is of gojohn's acceptance of the 2005 distribution as a transferable system. The layout and population distribution of the Bay Area makes that difficult, just as it's hard for a newcomer to the area to understand our microclimates. A truly thorough analysis (which to his credit gojohn clearly says he is not doing) would go into at least city-based figures and at best ZIP code level granularity. To understand this complexity, I went to the USGS to get a recent Bay Area population density map (PDF map from 2000). I then overlaid 20-mile radius circles around the three locales: AT&T Park (orange), the Coliseum (yellow), and Diridon South (blue). Click on the map for a larger (1.5 MB) version.

Both the orange and yellow circles represent approximately 4 million residents. Within the blue circle there are 2 million residents. The overlap of the orange and yellow circles makes product centrally located within the Bay Area, yet also inefficient in its availability. Of the blue circle's 2 million residents, half are in San Jose. That's probably where the 50% comes from. That doesn't necessarily mean 50% of game attendees will naturally come from San Jose. I expect a lower percentage due to higher ticket prices and the greater affluence of nearby communities and likely higher corporate patronage, much of which is not in San Jose proper.

Note: I neglected to mention where the 20-mile radius came from. I had previously seen a presentation showing that the vast majority of ticket buyers for a future ballpark will come from within a 18-20 mile radius. The current Coliseum location defies this convention thanks in large part to BART.

FAQ/Talking Points

While everyone's focused on the economic impact report (and rightly so), the City of San Jose managed to slip in one other document under the radar. This one's a Frequently Asked Questions (PDF) document, which seems to be timed specifically to provide ballpark proponents two new weapons for their arsenal. You can download the document from the provided link, or simply read on for the whole shebang.

Potential Ballpark
Frequently Asked Questions
1. How will the City of San Jose and the South Bay benefit economically from having a ballpark?
People throughout San Jose will benefit from the $2.9 billion in economic output from the Ballpark.
Employees will benefit from thousands of new job opportunities created by the construction and operation of the Ballpark.
Residents will benefit from City services supported by the additional $1.5 million a year in General Fund revenues from the Ballpark.
Local business will benefit form the $130 million annual economic output driven by spending from new visitors to downtown, and the spending of the team itself for their business operations and service providers for the operation of the ballpark itself.
The entire local economy will benefit from the stimulus of new spending and investment during a time of global economic downturn.
2. How many new jobs will the project create?
The Ballpark would generate almost 1,000 new jobs a year, once in operation, on top of some 350 new construction jobs in San Jose for each of three years. These jobs include full, part time, and seasonal positions.
3. Who is paying for the new ballpark? How much will the ballpark cost the public?
The Major League Baseball team to be responsible for the cost of constructing and operating the ballpark facility.
4. Is there a plan to deal with the increase traffic and noise?
The Mayor and City Council have directed the initiation of a community engagement process and the formation of a Good Neighbor Committee for the Diridon Station Area (the area around the ballpark site). The purpose of this committee is to provide a forum to work collaboratively in addressing the issues and opportunities that arise from proposed projects in the Diridon Area, including a Major League Baseball ballpark.
5. Why was the Diridon site chosen as a potential ballpark site? Why not another (existing) site?
The site was chosen because it is the only identified site in downtown San Jose that is large enough for a Major League Baseball facility that is readily accessible by freeways and major public transportation facilities including Caltrain, VTA bus and light rail.
Access to the project will be further enhanced with the planned BART and High Speed Rail connections at Diridon Station. With the addition of BART and High Speed Rail to Diridon Station the site represents one of the best development sites in the entire Bay Area.
6. What is the timeline for the project?
There are many milestones to accomplished for a project like the baseball stadium to constructed and opened. The first step is for Major League Baseball to come to a conclusion on territorial rights. Pending a favorable conclusion, a vote by the citizens of San Jose will be necessary. It is anticipated that this will be necessary. It is anticipated that this will occur in 2010. If all goes well, the earliest a ballpark would open is Spring 2014.

SJ Economic Impact Report

I'll get into the nitty gritty later tonight. For now I'll make a few observations on the new Economic Impact Report:

1. The firm used for this version, Conventions Sports & Leisure, is the same one used by the City of Santa Clara for their 49ers stadium study. I will be looking carefully for unrealistic projections.

2. Cost of the 32,000-seat ballpark is projected to be $461 million in 2009 dollars, $489 million in 2011 dollars. Ballpark would open in 2014.

3. The City's projected impact is ~$1.5 million in additional general fund revenue, net of increased city service costs ($45k). The A's would pay for all gameday police, emergency and traffic expenses.

4. Projected 2.1 million in attendance plus 3 non-baseball events.

5. 50% of attendees would not be from
San Jose and would be coming in solely for an A's game.

6. Jobs - 350 during construction period, 980 net new jobs including 138 ballpark-specific jobs. I'll get into why I'm skeptical about this later.

7. There are hints about what kind of deal could be struck within the numbers. Think property taxes.

8. An alternative development scenario projects just over 1 million new s.f. In office space. It could produce nearly 3x the number of post-construction jobs but yield $300k less tax revenue annually. The difference here is that completion of the construction would occur some 20 years after a ballpark due to commercial market conditions.

9. Yes, there is a section devoted to indirect impacts, which I will largely ignore.

10. This is the first official analysis from the City which refers to the A's by name (88 instances).

Upcoming San Jose calendar

A bunch of planning/ballpark-related activity is on tap for the next month+ in San Jose, including tonight's Diridon site walking tour. The full list:

• Wednesday, August 19, 6 PM: Walking tour of development area at Diridon Station.
• Saturday, September 12, 9 AM-12 PM @ Parkside Hall, Room B (180 Park Ave., next to the Tech Museum). Meeting notice (PDF).
• Thursday, September 24, 6 PM @ TBD. Good Neighbor Committee Meeting. Tentative agenda items include A) Major League Baseball 101, B) Proposed Major League Ballpark Economic Impact Analysis
  

I'll report back from the walking tour later tonight. I may even test out the blog's new Twitter account while on the tour (@newballpark).

Chuck Reed on Chronicle Live

Chuck Reed was interviewed by Greg Papa on Monday night's edition of Chronicle Live. I haven't had a chance to watch the full hour, but I did catch several clips of the interview that were made available on the show's website.

It's no secret that Reed and Lew Wolff have been meeting on a fairly regular basis for some time. Nothing wrong with this, as there has been real business to discuss on the Quakes front. A few extra words on the A's situation sprinkled here and there have made it so that the two are effectively on the same page, with Reed working from one column, Wolff the other.

When Papa asked Reed if there were communications between local pols and the Giants and/or MLB, Reed insisted that any changes in territorial rights were "inside baseball" and had to be done within the realm of MLB. Ever the poker face, Reed has never said anything to indicate that he's either fearful or overconfident about the chances for such a change.

T-rights was also linked to rationale, as Reed noted that the biggest reasons for the A's to move south were financial, with the potential to move the team from a net drag to a net positive for MLB.

So many fans and readers have been wondering what the next steps were and why it has been taking so long to get moving. Stadium building isn't like watching a telenovela. Much of the work is done behind the scenes and most of the product isn't consumed by most people. Honestly, are you going to read the entire environmental impact report when it's released this Thursday? Or even the shorter economic impact report? The release of those two documents will start a small flurry of activity which will culminate with additional proclamations by pols and the MLB panel's report. While we still don't have the date for the report, we have a new key date in the process: August 4. That's when the SJ City Council is expected to act on staff recommendations, notes gathered during the Good Neighbor meetings, and the MLB panel report. It promises to be a pretty active month.

San Jose public vote pushed back to 2010

When certain San Jose supporters privately told me several months ago about a possible November ballot measure for an A's ballpark, I was nearly incredulous. It seemed to be a rapid ramp-up period following a potentially hasty vetting process. Thankfully, cooler heads have prevailed as the City of San Jose is pushing back any public vote until March 2010 at the earliest. At this point a spring special election has to be a given, as neither the mayor nor city council members up for reelection in 2010 want any part of a ballpark vote distracting voters in November. There's talk of a special election that might be underwritten by the A's in March. Why not just use the upcoming primary election instead?

The vote will probably share the same buzz space as the 49ers' stadium vote in Santa Clara, though the vote will be restricted only to Santa Clara citizens and San Jose citizens for the A's ballpark vote. Despite this separation, there will be some measure of comparison between the two comparisons. And although Councilman Kevin Moore got a sneaky shot in at San Jose for "giving away land, something that Santa Clara doesn't do" during the marathon session on June 2, the two populaces are sophisticated enough to know that appraisal of both deals comes down to a lot more than placing a dollar value on some property.

Denis C. Theriault's article reveals that both the revised environmental impact report and economic impact report will be released on July 2. (Happy reading on the Fourth of July weekend, everyone!)

While it may seem that I am painting the situation as competitive, clearly there are many of the same supporters for both plans, including prominent county pols and SVLG. Even Wolff/Fisher have stated their support in hopes of working out a deal to make a new 49ers stadium the Quakes' new "large" venue. These numerous forces are in league, even though the two plans aren't exactly joined at the hip.

Fireworks start early in Santa Clara

There's no shortage of different perspectives going into tonight's Santa Clara City Council vote. While the vote itself appears to be something of a formality (I don't expect more than 1-2 dissenting votes), all interested parties are positioning themselves for the nearly year long campaign ahead.

Noted Stanford sports economist Roger Noll weighed in with a similar tone to his appraisal of the Fremont plan. Remember that a couple of years ago, Noll proclaimed the Fremont plan more viable than Santa Clara. Now that Fremont has bitten the dust and it's a bit early to know what all the details of the A's-to-San Jose are, the 49ers' plan will avoid the direct comparison. Noll goes on to say that "you're still going to end up with a better deal than just about any other city has received." The public vote that will occur next spring is really a question of whether or not that's good enough for Santa Clara.

Field of Schemes' Neil de Mause also chimes in, properly raising the $330 million question about the stadium authority, which to me is the chief concern. Most of the other issues directly related to the stadium deal have been reasonably well addressed, especially concerns about cost overruns and revenue shortfalls outside the $330 million Authority portion.

I'd love to comment on the letter of support from Santa Clara Unified School District ($141 million in positive impact potential), but I honestly can't make heads or tails of the economic impact projections stemming from use of the RDA passthrough mechanism and state "Basic Aid" payments.

Mark Purdy, by far the biggest supporter of moving teams to the South Bay, has a few choice words for opponents of the stadium plan. He's not afraid to get himself a little dirty here. I wouldn't be surprised if he was waving an American flag while writing the piece.

SF Mayor Gavin Newsom may have misfired with his rather provincial sounding advice for Santa Clara. I have to wonder if his prime motivation is not so much the Niners as it is to keep developer Lennar going at Hunters Point.

A few hours ago, Ohio-based theme park operator Cedar Fair yelled out like an aggrieved ex-boyfriend crashing a wedding. They'd prefer that the Council vote take place after Cedar Fair talks Great America with the City and the 49ers a week from now. I thought the timing was strange when I looked at the Council schedule, and now I think it's pretty clear: the City won't allow Cedar Fair to be more than a detail in the deal.

I'll end this post with a little friendly advice for the anti-stadium crowd: Focus on the costs of the plan, not on what profits the team will make. The clearest, most rational way to go about this is to talk in terms of costs and benefits. There are some anti-corporate, anti-business sentiments creeping up, and making those a main thrust is a good way to turn off the voters. Stick with the facts.

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.

KQED Interview up

Earlier today I was interviewed by KQED Radio's Cy Musiker regarding the A's and San Jose. Check out my dulcet nasal tones in the podcast. I talk about the money that Mayor Reed wants the city to make, NIMBYs, chicken-and-egg scenarios, and yes, hope for Oakland.

Listeners will get an easter egg for their time: the correct pronunciation of my real name! Discuss away.

One more thing: the economic impact report I cited in the interview can be found here (PDF).

Saperstein's other letter

Zennie Abraham just posted a second letter from A's minority partner Guy Saperstein. This time, the message was addressed to Senator Barbara Boxer. He posted it in its entirety, and so will I. The tone is markedly different from the public rebuttal to John Russo.

April 2, 2009
Senator Barbara Boxer
1700 Montgomery St. Suite 240
San Francisco, CA 94111

Dear Barbara:

As you know, Jeanine and I have long supported you and we plan to continue doing so. However, we were very disappointed about the letter you sent to Commissioner Selig. I realize you have a lot on your plate in the United States Senate, but if you are going to weigh in with such resolute conclusions about the A's, I wish you had made a greater effort to determine the facts. You made no inquiries to the Oakland Athletics about efforts they have made to find a stadium site in Oakland and your letter cites almost no relevant facts. Doug has known for a long time that I am part of the Wolff ownership group, so if you didn't want to call the A's directly, you easily could have called me with your concerns. Perhaps after hearing more of the facts, you would have offered a more balanced assessment to the Commissioner.

Your letter cites some of the past history of the A's in Oakland, but it glosses over and ignores many important facts. It is true the A's had great baseball teams in the 1970s---experts say some of the best teams in baseball history---but you neglect to mention how Oakland fans responded to these great teams. Not very well. These teams drew less than a million fans per year and that number dwindled to 306,000 in 1979. The A's couldn't even sell out the World Series! I remember this because I could walk up on the day of each game and buy a ticket. I'm willing to bet this never has happened before or since in MLB history in any other city. The second thing that should be noted about 1970s is that it preceded free agency. Thus, the A's owner, Charles Finley, didn't have to compete with other teams for players by paying them competitive salaries; they were bound to the team by the so-called "reserve clause." Because of this form of indentured servitude, even small-market teams like Oakland could remain competitive for years. Today, with free agency, the economics of baseball are fundamentally different and small-market teams have fundamentally different challenges.

Your letter also cites the Haas Family era, another period of excellent teams, and even good attendance. But you neglect to note that the Haas' were losing $10-$15 million per year with those teams in an effort to pay competitive salaries. They were a winning, attractive team which paid big salaries to big stars, but that was because the Haas family was willing to lose millions every year. While we can all thank the Haas family for their beneficence, their model of ownership was and is unsustainable and you cannot expect the Wolff ownership, or any ownership, to operate as a community sports charity.

Not only do the A's draw far fewer fans than the Giants, but the A's average ticket price paid is one of the lowest in MLB---approximately half of what Giants fans pay for tickets. The A's have 8,000 full and partial season ticket holders, compared to the Giants' 24,000 full season ticket-holders. This is even worse than it appears, because when you rely mainly on game-day walk-up sales, you never know how fans are going to show up that day and, consequently, you don't know how many vendors to hire, ticket takers, food workers, etc. So you overstaff and overpay, due to uncertainty. By contrast, if you are the Giants and know that 35,000 fans are going to attend every game, you staff properly. Added to these major economic disadvantages, the A's income from the sale of luxury boxes is one of the lowest in MLB and just a small fraction of what Giants fans pay. This is largely the product of the unpleasant but inescapable fact that Oakland lacks a vibrant business community. When you add all this up, it would be hard to find any MLB owner who would characterize this as strong fan support.

Let me present a few more relevant facts---facts that any ownership must contend with. When Charles Finley brought the A's to Oakland from Kansas City, Oakland had a population of 367,000 [1960 census] and San Jose a population of 204,000. Forty-one years later, San Jose's population is 989,000---now the 10th largest city in America---and Oakland's is 401,000. Which is the more vibrant, growing city? And, while you are promoting Oakland as the only possible site of a new stadium, please note that only 19% of A's fans come from Oakland.

As currently situated, the San Francisco Giants control 2/3 of the Bay Area market and are located just 12 miles away from the A's. If the new baseball stadium were to be built in Oakland, it would replicate this imbalance; if it were built in San Jose, 50 miles away from the Giants stadium, the market imbalance would be adjusted and the A's could be more competitive.

While it is easy to scapegoat the A's for the ills of Oakland, a fairer assessment of what ails Oakland would start with its inept political leadership---some of whom you prominently endorsed, supported and rarely criticize. Without naming names, let me recall just a few more salient facts.

The long-range planning and leadership of the Oakland Coliseum Authority has been almost non-existent. This group made mistakes of judgment which would be almost beyond imagination except for the fact that they actually happened. They spent $140 million to build Mount Davis at the Oakland Coliseum, then entered into a contract which not only costs the taxpayers of Oakland nearly $20 million per year, but which term is only ten years. So, ten years later, Al Davis and the Raiders are whining about a new stadium---which, predictably, they want the taxpayers to pay for. And what do the taxpayers of Oakland get for this almost unbelievable beneficence? Eight home games a year! Then the Coliseum Authority dropped $100+ million into the laps of the Golden State Warriors, who also play far fewer games than the A's and have far less economic impacts on the city. Along came the Oakland A's in 2005, under its new ownership, and in recognition that the A's were playing in what is basically a football stadium, and now a decrepit one at that, and requested that the Coliseum Authority split the cost for a $500,000 feasibility study for a new stadium. The Coliseum Authority couldn't even scrape together $250,000 to try to keep its biggest asset! The Authority has allowed the Raiders and Warriors to bankrupt it and there is nothing left for the A's, despite the fact that the A's, unlike the Raiders, Warriors and 49'ers, always have been willing to pay for building their own stadium. To put it another way, the A's may be the only sports franchise left in the Bay Area, and perhaps America, willing to pay for their own stadium, but the Coliseum Authority hasn't lifted a finger to help the A's and now politicians like you and Doug [and there probably will be others] are quick to pillory the A's for even thinking of moving.

Nor has the Oakland political structure helped. Despite the many business reasons to move to San Jose, the A's explored all options to stay in Oakland. Lew and the A's can give you the full picture if and when you want to hear it, but I can tell you I have been involved since Day One and when Lew first asked me to become part of the ownership, I said I would love to do it, but I didn't want to be part of an ownership which just bought and moved the team. Lew assured me that he would make a full effort to stay in Oakland and I don't think he and his son, Keith, have left a single stone unturned in their efforts to make Oakland work for the A's. I recall specifically Lew proposing to build a 3,000+ unit housing project and several hundred thousand feet of retail space near the Coliseum and taking the profits from this development to finance a stadium at little or no cost to the taxpayers of Oakland. This would have been the biggest economic development in Oakland since Liberty ships were built during World War II, but the only Oakland City Council Member who showed any enthusiasm was Larry Reid. Give Larry a call and ask him why no one else got behind this plan. And in case anyone might suggest forward thinking and planning was not possible, while Oakland was doing nothing, San Jose bought land in downtown and put together a 50-acre parcel, zoned it for a sports stadium and completed an Environmental Impact Report for the stadium. If they want a baseball team, they are ready for it. You were elected to represent all the cities and citizens of California, not act as surrogate Mayor of Oakland. You have a responsibility to try to determine what is best for the state, for the Bay Area, and, yes, for Oakland AND San Jose. Your letter to the Commissioner plays into the hands of the San Francisco Giants, who have long contended the Bay Area is a one-team region and whose game plan is nothing less than driving the A's out of the Bay Area. I think you need to rethink your strategy and begin by making sure the A's are able to stay in the Bay Area.

Like you and Doug, I find it convenient to have a team located 20 minutes from my house and, like you, I will be inconvenienced if the A's move to San Jose. But should an investment of half a billion dollars for a new stadium to meet the needs of present and future Bay Area baseball fans be based on your, my and/or Doug's convenience or on a sound economic foundation? I think the answer is obvious and I hope you will begin to review the facts and evidence before making more pronouncements which operate to undermine the A's opportunities to build a sustainable future.

Lastly, despite serious reservations about the ability of Oakland to provide help in the quest for a new stadium, Lew and I will be meeting with Mayor Dellums in two weeks in an effort to make certain that we have not overlooked any viable site. And, of course, Lew, Keith and I remain available at any time to provide you with additional information about all options.

Best Regards,
Guy T. Saperstein GTS/ht

The immediate observation to be made is that this is the first time anyone from the ownership group has come close to "connecting the dots" regarding the A's and San Jose. Maybe that was intentional, maybe not. I'm surprised to be reading it. I thought San Jose was like Fight Club. For those who still don't think San Jose's the next step I have to ask, Really? Come on, now.

Next up is the issue of the feasibility study the A's asked for when Wolff took over. According to Saperstein, the $500k cost was to be split between the two parties, but the Coliseum Authority was too tapped out to help. All the while the Authority was finalizing the deal to get rid of Raider PSL's forever and hiring multiple consultants to get a naming rights deal for the Arena. If this feasibility study assertion is true, you can be sure that it will end up in the Blue Ribbon report.

What I don't get is Zennie's response. He rants about Saperstein's pointing out the 70's attendance woes. It's no secret that the A's weren't a big draw then, just as they aren't now. The facts are these:

• The A's averaged 764,660 per season during the decade
• The A's were as high as 5th in AL attendance once (1972)
• The A's topped 1 million twice during the era
• The A's were last in AL attendance twice and second-to-last twice
  
• Average annual attendance for all AL teams during the 70's was 1,194,395

When your biggest argument is semantic, you don't have much of an argument.

I'm also not sure what Saperstein has to apologize to the Haas family about. Nothing he wrote denigrated Wally Haas. He held up Haas as a paragon to which no future ownership group can be favorably compared. At the same time, yes, Haas was losing money. That can't be disputed. Why so sensitive then?

Now, there are things to quibble about. Russo mentioned in his letter that the Coliseum North proposal would've required eminent domain, which is right. Wolff was willing to pay no more than $1 million an acre, a ludicrous amount at the time. When the plan collapsed, Wolff then resubmitted Schott's old Coliseum parking lot plan, in which the A's would contribute $100 million. Does anyone remember that?

One of the big keys for any political campaign, even the kind we're witnessing here, is message discipline. It doesn't matter if you're Karl Rove or David Axelrod, Doug Boxer or Lew Wolff. I sense a serious lack of message discipline on both fronts, and it isn't very becoming for either side.

Mark it down: April 7th

San José's Rules Committee just passed a motion to have the A's on the April 7 Council meeting agenda. The timing, as pointed out here and by Michael Mulcahy just a few minutes ago, coincides with the start of the regular season. The preliminary steps will look like this:

The Agenda language for a joint City and Redevelopment Agency item should read as follows:
1. Discuss actions that San José can take to prepare for the possibility that Major League Baseball (MLB) makes a decision allowing the Athletics (A’s) to consider relocating to San José.
2. Direct staff to prepare and return to Council with a Resolution indicating the desire of the City of San José to support the A’s if MLB favors a relocation of the A’s to San José; and, indicating that the City is willing to accommodate the A’s on the site at Park Avenue and Autumn/Montgomery Streets.
3. Direct a team of City and Redevelopment Agency staff to assess what steps may need to be taken to prepare the site at Park Avenue and Autumn/Montgomery Streets for potential consideration, and develop an outreach program to neighboring residents and businesses.
4. Direct staff to provide a status report and recommendations for additional actions that may need Council authorization to the Community and Economic Development Committee within two months of the April 7th Council hearing followed by a discussion at the City Council.

So there's your site and your initial timetable, including a report from CEDC due within two months of the 4/7 session.

The possibility of a public poll has been raised to gauge interest. Vice Mayor Judy Chirco wants no part in the City paying for such a poll, saying that it would be funded with OPM (other people's money). It appears that the poll would be well within the scope of the A's to San Jose Study Group's mission. Mulcahy mentioned that the group has already raised money, though he did not say which specific activities the money would be used for.

I wonder if the Study Group would also fund an economic impact report of the type Mark Purdy wanted last week. After all, outside of MLB, the Study Group would be well equipped as it has access to dozens, if not hundreds, of Valley business leaders. Plus, noted sports economist Roger Noll is up the street at Stanford for consulting purposes - though they may not eventually like what he has to say.

Mayor Chuck Reed, who gave San Jose a better than 50/50 chance to land the A's (I really hate enumerating odds in this manner) re-emphasized the one voice mantra he's been giving, going so far as to say this about territorial rights:

It's up to Mr. Wolff because it's truly a case of "inside baseball." It requires him to take the lead. There may be a role for us to play. He'll happily let us know if there is.

Several speakers were on hand. Most were positive, saying that they fully support the effort as long as no public money is involved. One speaker felt a better deal could be had at the Fairgrounds. Two members of the Shasta/Hanchett neighborhood voiced their disapproval and trepidation, especially when considering the combined effects from construction of a ballpark, underground BART, and overhead HSR. A member of the San José Downtown Residents Association spoke in support of the ballpark. So we may have the Shasta/Hanchett folks on side and the Downtown Residents on the other.

I believe the quiet period starts now at lasts through Opening Day. I'll have posts every few days, probably nothing major.

New FAQ

This is the new FAQ. The old FAQ has been renamed "Fremont FAQ." It has not been edited or amended. The new FAQ leads off with a post-mortem on the Fremont plan. It is followed by a review of candidate cities, including Oakland, San Jose, and others. Information is subject to change and will be updated on a regular basis. BTW, comments are closed for the FAQ post. Send any info requests or corrections/clarifications to newballpark@gmail.com.

Fremont post-mortem
1. What caused the Fremont plan to fail?
A confluence of events created an environment that was not favorable for the ballpark plan. On the business side, the A's experienced conflicts with big box stores at the existing and adjacent Pacific Commons shopping center (Costco, Kohl's, Lowe's). The two sides, with PC landowner ProLogis/Catellus acting as the intermediary, tried to negotiate a parking protection and mitigation plan but were unable to come to a proper compromise. The stores inevitably held veto power over the deal and in voting their disapproval, killed the original Pacific Commons concept.
The A's were also adversely affected by changing economic conditions, namely the slumping housing market and the credit crunch. Financing of the ballpark was expected to be based largely on sales of housing development rights. Without a known recovery period, such financing had to be put on hold indefinitely. In addition, new stadium projects faced high interest rates, often several points higher than in previous years.
When the A's changed their focus on the Warm Springs alternative, they quickly gained a huge adversary in the organized populace of the Warm Springs and Weibel neighborhoods. Those residents, worried about traffic and quality of life issues, visibly and vigilantly opposed a ballpark within 1/4 mile of an area school. When A's owner Lew Wolff called on Fremont to stop all EIR work, he pointed to this opposition and the negative press that came with it as a major reason for cessation. NUMMI, the GM/Toyota auto plant near the site, also voiced its disapproval of the alternative.
2. What was the Warm Springs alternative?
A major rethinking of the baseball village concept. In the alternative, the ballpark would have been decoupled from the retail/residential areas. The new location of the ballpark would have been near the planned Warm Springs BART station, 1.25 miles east of Pacific Commons. The WS alternative would have required additional land acquisitions, possibly including land from owners not willing to sell. Decoupling of the village would have meant the higher-end lifestyle center shopping center would not have been feasible.
3. What will happen to the baseball village land?
Given current and near-term economic conditions, it's unlikely that anything will be built on the land soon. Lew Wolff has expressed interest in moving forward at some point with development of the retail and residential vision, though this would appear to be a difficult sell to city leaders without an anchor such as a ballpark. The land is currently zoned for over 4 million square feet of office space. Additional land was purchased, including upwards of $24 million in sunk costs.
4. Is Cisco Systems still involved?
During the early December Fremont work session, a representative of Cisco's real estate group expressed support for the baseball village, and beyond that, support for the A's staying in the Bay Area. That appeared to indicate Cisco's ongoing sponsorship of a ballpark in the Bay Area, wherever the final site may be.
5. If the ballpark can't be financed with real estate proceeds, how would it be financed?
The A's probably devised the original concept to cover two financial structural issues. Financial institutions preferred not to tie bonds and loans to revenue obtained directly from the ballpark because those revenues tended to fluctuate. By tying to an external and presumably more stable source, more favorable loan terms may have been available. The A's will now have to revert to ballpark sources, which will likely drive the cost of borrowing up. A additional benefit the A's may have been projecting was additional revenue that could have been used for payroll or player development, since it wasn't going to be used for a mortgage payment.

Next steps
6. What will the A's do in the near term?
The A's maintain a lease at the Oakland-Alameda County Coliseum through 2010, with annual extensions through 2013.
7. What about long term?
Officials from Oakland, San Jose, and Sacramento have shown their interest in either retaining or moving the A's. Other cities which have been engaged in MLB team pursuits in the past include Portland, Las Vegas, San Antonio, Charlotte, Monterrey (MX), and the Norfolk/Hampton Roads area. Only San Jose officials have spoken with the A's so far.
8. When would a new ballpark open?
Given the political and economic climate, it's unlikely that any new facility would open before 2014. Any deal between the A's and a city would take at least a year to settle, perhaps more if a public vote is required.

Candidate Cities
Oakland
9. What advantages does Oakland have over other cities?
Oakland has been the A's home for over 40 years, and the sense of tradition and history there is valuable and intangible. It is strategically placed within the Bay Area, centrally within the region's 7 million residents. It maintains its status as a de facto transit nexus. The Coliseum has never had an issue with transit or parking infrastructure, and expectations about traffic loads and management were baked into the development of the complex. If a new ballpark site is found in or near downtown Oakland, there's a good chance it would also benefit from good infrastructure, as parking is plentiful and BART runs through all but the waterfront/Jack London Square area.
10. What disadvantages does Oakland have?
Oakland has generally lacked the corporate support necessary to bump up revenue for the A's from sponsorships to premium seat and suite clientele. This has forced them to do more with less, as has been famously chronicled in Michael Lewis's book Moneyball). While the Coliseum is convenient for those who drive or take BART, it is situated in a lackluster industrial neighborhood, which does little to invite or retain A's fans.
11. What is right/wrong with the Coliseum?
See the Deconstructing the Coliseum series (Part I/Part II) for an explanation.
12. What was the HOK study?
In 2000, the City of Oakland commissioned a study from noted ballpark architect HOK to look into future sites for an A's ballpark. Candidates included the Coliseum, Howard Terminal, Uptown, Oak-to-9th (O29 or Estuary), Laney College, and two sites outside Oakland city limits, Fremont (Warm Springs) and Pleasanton.
13. What happened to the sites in the study?
Several sites ended up being developed or acquired for non-stadium uses. Howard Terminal was acquired to consolidate operations for shipping giant Matson. Uptown ended up being a centerpiece for then-Mayor Jerry Brown's 10K housing plan, a mix of market rate and affordable apartments and condominiums. Oak-to-9th has been stuck in legal and development hell for several years. Peralta Community College District has shown no desire to develop Laney for a strictly commercial endeavor such as a ballpark. The Fremont site faced the challenges described previously, whereas the Pleasanton site, a.k.a. Staples Ranch, has been master planned for several phases of mixed use development.
14. Are there other sites in Oakland?
Several sites exist that have not been publicly or officially discussed as possible ballpark sites. The list includes the Broadway Auto Row Triangle, bordered by 27th St, 24th St, and Broadway. Another site frequently mentioned is the northeast corner of the decommissioned Oakland Army Base. Other sites which have been discussed include the Oakport site near the Coliseum, Oak Knoll Naval Hospital, and the 66th Ave/High St area, a.k.a. Coliseum North on this blog.
15. What happened to the Coliseum North plan?
Coliseum North was Lew Wolff's trial balloon for a development similar to what eventually was planned for Fremont. It would have included a ballpark, retail, and residential development on over 100 acres north of the existing Coliseum. The plan would have utilized some of the existing parking at the Coliseum complex. The ballpark site was anywhere from 1/2 mile to 1 mile from the existing Coliseum BART station, which Wolff felt merited a new station (cost: $75 million). The plan fell apart when area landowners, many of whom had active businesses on their parcels, balked at selling, especially at lowball prices.
16. What is the Raiders' status in Oakland?
In 2005, the Raiders and the Coliseum Joint Powers Authority negotiated a settlement which ended the team's lease in 2010. The two parties have been in talks to explore a new venue at the Coliseum.

San Jose
17. What advantages does San Jose have over other cities?
San Jose has experienced enormous growth over the last 30 years, making it the 10th largest city (population) in the US. San Jose is also a major component of Silicon Valley, where dozens of Fortune 500/1000 companies are headquartered. Silicon Valley/Santa Clara County has somewhat untapped potential for sports franchises, as only the NHL's Sharks call the area home despite the area's wealth.
18. What disadvantages does San Jose have?
The San Francisco Giants currently have territorial rights to Santa Clara County. The A's can't move to the area unless 3/4 of MLB owners vote to change T-rights. In addition, San Jose's charter is set up so that no public money could be set aside for construction or site acquisition without a public vote. San Jose's South Bay locale is less central to the Bay Area than other cities. Transit links between San Jose and the A's existing East Bay fanbase are quite limited, at least until BART is extended to the South Bay.
19. What is the status of the BART-to-Silicon Valley project?
In the November 2008 election, Santa Clara County Measure B, which proposed a 1/8-cent sales tax increase on top of a 1/4-cent sales tax increase approved in 2000. The project's Environmental Impact Report is still undergoing revision based on value engineering changes implemented in 2007. The project itself is still in its Design Phase. Construction is not scheduled to begin until later this year at the earliest, with service not scheduled to begin until at least 2018, up to 4 years after a ballpark opens in San Jose. Recently projected sales tax revenue shortfalls threaten to push out service until 2025, as VTA takes a phased approach to extending the line.
20. What is the Diridon South site?
Diridon South is a 14-acre site covering three large city blocks in the Greater Downtown San Jose area. It is located two blocks south of HP Pavilion, and immediately southwest of Diridon Station, the transit hub served by Caltrain, Amtrak, and VTA light rail and bus service. For more about the Diridon South ballpark site, click here and here.
21. What additional information do you have on San Jose?
See the posts "Lucky? San Jose" and "San Jose Looms on the Horizon" for more on the political situation.
22. What if the A's try to move to San Jose and the deal either falls through or MLB doesn't approve the move?
It is expected that the team would start to look outside the Bay Area and perhaps outside Northern California for a new home.

Santa Clara
23. What advantages does Santa Clara have over other cities?
Santa Clara is also a major component of Silicon Valley. It has a defined entertainment district, which contains the Great America theme park, plus a site for at least one stadium. Santa Clara also has its own city-owned power company, which can provide a team lower power rates and increased public borrowing potential.
24. What disadvantages does Santa Clara have?
The 49ers are working on a stadium with Santa Clara. Already, the A's and 49ers have a sort of gentleman's agreement in place to prevent either party from interfering in each other's stadium efforts. It is also unclear if Santa Clara has enough space for both 49ers and A's venues plus the required parking for both and Great America. Great America, which is owned by Ohio park operator Cedar Fair, has expressed its disapproval of the plan while offering to sell the park to the 49ers for a price.
25. What is the current status of the 49ers' stadium plan?
The City of Santa Clara is pursuing a change to the EIR which would include a doubling of use from 10 to 20 days per year. This would presumably accommodate the Oakland Raiders, who could potentially share a stadium with the 49ers.

Sacramento
26. What advantages does Sacramento have over other cities?
Sacramento has a good track record of fan support. The NBA Kings had consistent sellouts in the 80's and 90's despite terrible teams. Fandom reached a peak in the early 2000's, though it has fallen off as of late. The Sacramento River Cats, the A's AAA affiliate, have been at the top of minor league baseball attendance since the opening of Raley Field. Raley Field could conceivably be expanded to accommodate a MLB franchise.
27. What disadvantages does Sacramento have?
Sacramento is already contending with a volatile situation with the Kings, whose owners are looking for a new, privately financed arena. The citizens voted down a publicly-financed arena in 2006. While Raley Field is a premier AAA venue, the cost to expand and renovate to modern MLB standards could be upwards of $200 million. Sacramento's market is smaller than 1/2 of the Bay Area. It also lacks the corporate dollars other markets have that are considered necessary to keep a major league franchise competitive. A longer treatise on Sacramento can be found here.
28. What about the RiverCats?
The River Cats are owned by former Sharks CEO Art Savage, who is a friend of Lew Wolff from before their baseball ownership stints. Savage brokered the innovative financing deal that built Raley Field. Savage would have to be compensated by the A's if the A's moved to Sacramento. The Cats would also have to be relocated to another market, where they would have to put together another ballpark deal and would probably face a less lucrative financial situation than the one they had in Sacramento.
29. How interested is Sacramento?
New mayor Kevin Johnson (formerly of the Phoenix Suns and Cal) is working out the details of new arena plan at Cal Expo. Should that plan fail and the Kings leave town in the future, he has indicated he will work to get another major pro franchise in Sacramento. The A's are at the top of the list. The Kings are doing badly financially in their current home, ARCO Arena, but there is no clear cut relocation city on deck. Candidates include Kansas City (which has a new arena and once was home to the Kings) and Las Vegas (which has no arena deal at the moment).

Other cities
30. Portland?
During the Montreal Expos' flirtations with other cities, Portland became a leading candidate to its well-organized, well-presented bid. At this point, however, Portland's leaders are focused on two smaller projects: a new soccer stadium for a MLS franchise, and a new ballpark for the AAA Portland Beavers.
31. Las Vegas?
Mayor Oscar Goodman led the charge for a retractable dome MLB stadium. At the time, gaming interests expressed disapproval over the possibility of a private enterprise such as a MLB team getting public funds while competing with the casinos for the entertainment dollar. Goodman eventually backed away when he felt that Las Vegas was forever being used as a stalking horse. Right now the economic climate in Las Vegas is perhaps less favorable than any other market in the nation.
32. Charlotte?
Even prior to the economic collapse, Charlotte was considered an overextended market in terms of pro sports support. The Research Triangle may be more suitable as it only has one franchise and fewer sports alternatives. Both are considered medium-sized markets.
33. San Antonio?
San Antonio was another suitor in the bidding for the Expos. The effort was derailed when supporters couldn't come to an agreement as to where a ballpark should be located. Some argued for a downtown ballpark, others wanted to leverage more of the metro population by placing it closer to Austin.
34. Monterrey, MX or San Juan, PR?
Both are Spanish-language markets with large enough interim venues. Unfortunately, the bar for supporting a MLB franchise is so high that it is uncertain that either market could work in the long run, especially without brand new ballparks.

Other outcomes
35. Is there a chance of contraction?
Contraction is a situation in which one or more teams are shut down by MLB. Due to the almost everyday scheduling during the MLB season, two teams would have to be contracted. The cost to buy out two teams would run $500 million by the time the next window for contraction could occur, which would cost each remaining team $16 million. MLB would also probably face lawsuits and a threat to its antitrust exemption, which it has sought to maintain at any cost. Unless MLB experiences massive revenue reduction over the next several years, it would be hard for the league to justify contraction to the public.

Live blog - SJ Chamber breakfast

Watch this space for frequent updates. Comments are in brackets [].

8:00 - Mostly full, at least 150 people
Pat Dando addresses meeting - informal conversation

Council members: Constant, Kaira, Liccardo, Chu
Redev head Mavrogenes
Comerica Bank

KCBS reporter present

8:07 - Lew speaks
Business is not business as usual
We can't wait out the recession
We need to use the few assets we have to at least get projects teed up

I hope SJ won't tolerate the kind of self-interest delays that threaten projects

No public money/Union built soccer stadium - We plan to use union labor because that would be the best use for the project. It's not about trying to deliver a block of votes.

"I guess I'm a lobbyist"

All of my projects are union-built and didn't use a single lobbyist.

I shouldn't have to hire somebody to talk to the council. The current law is strange to me.

8:13 - Baseball

Cisco Field will do what the Arena and the Sharks have done for the region.

A few self-interested and in my view absurd voices have used double-speak to derail the process.

On this wild traffic situation, it isn't anywhere near the alternative use for the alternative site [not specified].

We think issues should be fully aired, but not forever. A "No" answer is as good as a "Yes" answer for those of us who want to move forward.

There are ways for the city to smooth the process without reaching into their pocket.

The process is killing California. How is the stimulus package going to stimulate things?

Let's help the city. Let's not fight every little thing. Let's support people who want to create jobs.

Forget about my baseball and soccer desires. [cue up cancer analogy] The process is the end product. We've gotta get to an end.

8:19 - The cost of indecision

The cost of not doing something is greater than the cost of going forward.

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Q&A begins

When he moved to LA, Lew talked about the Arena. People asked him where San Jose was. He bought a bunch of 45's of "Do You Know The Way To San Jose" and handed them out. When the Sharks came to town, the city got on the map.

When we open the soccer stadium, the naysayers will go away. The Arena and the Sharks have been the single biggest stimulus for the city.

Dando cites several cities who have benefited from having sports teams.

Studies fail to cite how a stadium is financed. A city going out of pocket is far different from a private developer who wants to build it himself. Protesters like to say we're trying to tag the city - we're not. In terms of economic impact, I'd love to debate anyone from these schools (Cal, Stanford) [is Roger Noll available?].

8:30 - The Earthquakes have been great for the community since we brought them back. [Dando thanks Lew for bringing the team back, Lew thanks John Fisher. Dando asks about Beckham.]

Dando: Talk about bringing back one of the Giambi boys.
Wolff: We have a lot of young pitchers, and it's important to try to get them more than 3 runs a game. It's going to be tough but the teams will be more comparable (compared to last year).

Dando: Talk about the soccer stadium.
Wolff: We're piecing things together without any public money.
Dando: Any timing we can look at?
Wolff: In the next year we should be able to see something. I don't see the need for luxury boxes. It's going to be a user friendly stadium, with seats as close to the pitch as possible.
Dando: Has the real estate market changed the financing?
Wolff: We've always had at least two gameplans. We'll have some income streams coming in to the A's that weren't expected that'll help with the stadium. I won't go into anymore detail on that.

Dando: Let's talk about the A's in Fremont. What are some of the obstacles you may have to overcome if it doesn't work?
Wolff: From the day we've started I haven't entertained any "what if's." We're trying to earn our way to be in a city. I didn't think it would be this difficult.
Dando: What do you see happening with T-rights if Fremont doesn't work?
Wolff: If I even entertain those thought it keeps me from working on Fremont. I want to build a stadium. It's small, it's doable, and it's financeable even in this crazy market. I'm gonna go crazy if I can't get it done... I feel that there should be a time limit on environmental impact studies, which was the case when we first started out [I can't verify this].

Dando: What do you feel this soccer stadium will do to put us on the international stage?
Wolff: The more distribution we have - we want to get to about 20 cities - the better is for the soccer community. You look at regions in terms of number of soccer players, and Northern California is #1, followed by 8 states, then Southern California.

Wolff: We had a meeting in Phoenix about the spring training facility (PHX Muni). There were 8 public employees at the table. We came up with a concept in which we'd pay for it upfront and either the city could pay us back or we'd get lower rent. They said they couldn't do it for various reasons even though there wasn't any specific reason at all. They came back to us in a month much more willing to discuss it, because they realized they were doing things "the old way."

Dando: I think there should be a standard on how many projects succeed, not how many fail.

Wolff: I dropped out of developing here for a while. Phil DiNapoli and I had a project to build a Marriott Courtyard where you get off the freeway here downtown. The land is still undeveloped. We had 40 meetings. We spent $1.2 million. Finally I asked the redev head if we were done, she said "Yes we are done." I got a call over the weekend about the roofline. Some elected official didn't like the roofline, now you have to change it. I said we're not doing it. Goodbye.

We have to stop doing that. The process benefited the project, but we could've done everything in 10 meetings. [I vaguely remember the Courtyard project and wondered why it disappeared.]

9:00 Dando: Is there a particularly design you're trying to do in Fremont like Camden Yards?
Wolff: We don't want to do retro. We have foul poles running through (luxury) boxes. It's so intimate that we have to have a few columns [big acknowledgement]. We have a few things and Cisco has a few things that we'll be bringing to the table. [cites oft-mentioned technology]

Dando: What do you see happening along with the soccer stadium?
Wolff: We don't see a lot of ancillary uses right now. We see a lot of civic uses - graduations and such. If Apple has a product demonstration we'd like to have it happen there. San Jose lacks a modern outdoor venue [Spartan is old].

Dando thanks Wolff. Wolff mentions that even though he doesn't officially live in San Jose, he's here a lot as his daughter and grandchildren live here. Wolff is headed to Treasure Island to do the Giants-A's joint media session.