Oakland stadiums still at least $750 million short of becoming reality

SFGate has attempted to calculate how much additional money would be needed to get new stadiums built in Oakland for the A’s and Raiders, and the answer is: a whole hell of a lot of money.

– A new Raiders stadium is expected to cost roughly $1 billion. A new A’s stadium could run $400 million to $600 million.

— It will cost at least $150 million to tear up the sprawling O.coColiseum parking lots to build the new streets, water pipes and sewers needed to lure hotels, condos and restaurants that will help subsidize the stadium.

— Roughly $100 million is needed to pay off the bond debt still attached to the Coliseum after the city and Alameda County paid for major upgrades in 1995. And everyone in the mix – city officials, county officials and team owners – is fighting with someone. If they don’t learn to get along, one or both teams could still leave the city.

Calling this $1.75 billion in needed funds, as SFGate does, isn’t quite fair: That $100 million to pay off the rest of the Coliseum is a sunk cost (it needs to be paid regardless of whether new stadiums are built), and A’s owner Lew Wolff has said he’ll privately fund his own stadium costs — though whether that includes land and infrastructure costs is as yet unknown, and when asked where he’d come up with private funds, he replied only, “We’re studying that right now.” The Raiders ownership has promised $200 million toward a stadium, plus could likely get another $200 million in NFL G-4 funding, leaving probably a $600 million gap there.

Still, that’s at least $750 million that would have to come from “TBD” in order to get a pair of stadiums built, if you could even get the two teams to agree on who would get control of the broader Coliseum site for redevelopment. And SFGate doesn’t even get into the value of the land itself once improved by that $150 million in infrastructure spending, or whether the stadiums and other development would pay standard property tax rates … really, we have no damn clue how much this would really cost, or who would pay for it. It’s a crazy expensive project (or two projects), though, so hopefully somebody will actually start putting real numbers to paper sometime in the near future.


19 comments on “Oakland stadiums still at least $750 million short of becoming reality

  1. This is exactly the point I was trying to make in earlier posts. All this talk of a grand A’s and/or Raiders new stadium is just talk. There’s no way they’ll come up with the money for either of these in the near term. The best the City of Oakland can do is to hope no other city has the resources to make the teams a decent move offer.

  2. Hey Neil,

    The $100MM bond debt is Coliseum only. Susan Murasimi?, the Alameda county administrator, put the debt for both facilities at $184MM last week

  3. Best thing the city can do is partner with Lew Wolff if he guarantees he can pay for it completely privately. He’s saying he can, and it will presumably be paid in part by giving him access to the land. If that isn’t an option Oakland’s cost will probably rise even more.

  4. Dave: Either way, sunk cost.

    Dan: How will Oakland’s cost rise even more if Wolff doesn’t build a stadium? Or are you saying that it’s better to give Wolff free land for a stadium than to have to pay money toward construction costs?

  5. What a mess. Toodles then or pay for it yourself. An NFL stadium doesn’t need to cost a billion dollars.

  6. Neil, I’m saying that it’s better for the city to give access to use city owned land that is currently generating no funds (as it’s nothing more than a parking lot) to develop and help pay for a new venue while also generating its own tax revenues. Than it is to have to pay Wolff and/or Davis public funding directly for a new stadium. I know you consider public land a subsidy, but frankly I’ve never had an issue with it when compared to giving direct funds to a team.

    With the Raiders they’re going to have to directly fund the stadium to some extent or the Raiders won’t qualify for NFL G4 funding. With the A’s, they don’t have to give them any public funds directly and the land would quite possibly be enough.

    Of course there is always the alternative of giving neither team anything, but that will of course result in Oakland no longer having any major league franchises and reverting to being nothing but North Fremont or East San Francisco.

  7. Dan,

    My impression is that Wolff doesn’t like Oakland and wants to move. His behavior certainly fosters that assumption. I could see him making a long-term commitment to Oakland if he were given a sweet deal. I do not see him paying the whole deal for something he’s not really that happy with.

    Plus, that would then rule out SJ. I think he’s still hoping that MLB will do something for him in that regard. Of course, his best case scenario is that he gets a wealthier city as a home (i.e. one that can afford better subsidies and is a better market overall). If MLB gives this to him for free, all the better.

  8. Dan:

    “With the Raiders they’re going to have to directly fund the stadium to some extent or the Raiders won’t qualify for NFL G4 funding.”

    Actually, that doesn’t appear to be true. The Eagles are getting G4 money for renovations without any public funds.

    “Of course there is always the alternative of giving neither team anything, but that will of course result in Oakland no longer having any major league franchises and reverting to being nothing but North Fremont or East San Francisco.”

    Or South Berkeley. Which doesn’t sound bad at all.

    I don’t think that booting the A’s and Raiders is necessarily the best idea. But the only way to do an apples-to-apples comparison is to figure out how Oakland would make out if it were to turn the Coliseum site over entirely to private developers (in exchange for rent, taxes, the usual), and then compare it to what Wolff and Davis want. Then you can always say, “Sure, it’s $100 million less, but we get to keep the A’s,” and that might be a reasonable tradeoff. But giving away land for free, even land that’s not currently generating revenue, is always at least an opportunity cost.

  9. Neil, I’m with Dan on this one. The current Coliseum location seems to have only one useful purpose. I can’t envision a developer wanting that land other than to build a new stadium. If it means “giving away” the land so that Wolff/Davis can build new stadiums, I am for it. In the end, both sides need to give a little to get a little, so to speak.

    A partnership with Wolff on the current Coliseum site seems the most sensible approach. It would help if Davis spent time with Wolff and not in San Antonio to come up with a plan that works for both as opposed to Davis hoping something falls in his lap…

  10. Nothing smooths over the hurt feelings of wrangling billionaire sports owners like a nice injection of public stadium cash, good citizens of Oakland… Hint hint!

  11. So if no developers want the Coliseum land for anything other than a stadium, why do Wolff and Davis want development rights to it for other uses?

  12. Just a note – I’ve seen the $100M and $180M ($188M) figures floated around for how much debt remains on the Coliseum. Both figures are correct. The $100M is for the Coliseum itself while the $180M (or $188M) is for the entire complex including the arena.

    Yes, I believe if you are a developer that land has good access and if you have an anchor tenant (a sports team, for instance) can become a good development location. Without a ballpark/stadium/arena it won’t be as note-worthy but would still work if the land were cheap (or free).

  13. Baseball and especially football stadiums are pretty terrible value-adds for development, since they’re dark so often. It might help boost foot traffic a little, but it’s hard to picture a stadium making the difference between a successful development and an unsuccessful one.

  14. Neil, I have yet to read anything definitive from Wolff or Davis suggesting they wish to develop the land in and around the current Coliseum site for anything other than stadiums. You are clearly closer to this situation than I am so perhaps you have more insight into the plans Wolff and Davis have for this location.

    FYI – Interesting use of words in your earlier post “Sunk Cost” given that the Coliseum playing field is 4 feet below sea level…

  15. Davis is partnered with Coliseum City, which in at least one plan would include 6,000 units of housing and 14 million square feet of commercial and retail space:

    http://www.bizjournals.com/sanfrancisco/blog/2013/10/oakland-coliseum-city-colonycapital.html?page=all

    As for Wolff, he’s been hazier about his plans, but has talked about seeking a broad deal for development at the Coliseum site, and touted his own building of ancillary development for the Earthquakes stadium:

    http://www.scribd.com/doc/234389473/Wolff-Letter

  16. @Neil- The Raiders revenue is far higher than the A’s currently. Even development and a new stadium would not bridge the gap between the two teams revenue wise. Even though the A’s play far more games, from a tax revenue perspective the Raiders pay more because of their higher overall revenue.

    The only additional revenue to be gained from development from the A’s and Raiders would be from bars/restaurants on game days. The real revenue is from the residential piece where people would pay monthly rent to live in condos on the site.

    If the A’s get their stadium/development then that means residents of these new condos would have to deal with 81 A’s games a year of traffic and most of which are during the week. While a Raiders stadium would be 10 games a year but with 60k of fans vs. 30k for the A’s but on Sunday’s for the most part.

    Residents will not want to deal with the consistent traffic of an A’s stadium and will pay less rent because of it vs. a Raiders stadium with fewer games.

    The caveat here is funding the NFL stadium which is double the cost. Mark Davis refuses to raise money like Jed York did in Santa Clara. He is a rich kid who was born with a silver spoon in his mouth. I could raise 300M easy if he hired me via naming rights, SBLs (lifetime rights), suites, and club seating.

    If Jed York could raise 1B, Mark Davis could not raise 30% of that in the wealthiest market in the NFL?

    Sheer and utter laziness on Davis’ part……dude wants a handout. With 300M + 400M (Raiders + NFL) + 100M (JPA)= 800M, now Davis sells a part of the team to make up the delta. This is not hard math to do.

    As for Wolff, he is only looking at the Coliseum now because the Bay Area economy and housing market recovered and the Warriors are on the way out. It was the Raiders/Warriors who have always blocked the A’s from building in the parking lot.

    This plus in San Jose, Wolff gets no development around his ballpark which was his vision in Fremont and Oakland (Coliseum North). If he can get the Coliseum land to himself, why would he move to San Jose for a ballpark only?

    This is why Wolff is willing to make a “good faith effort” to stay now. Question is will Oakland grab the olive branch he is extending to them?

    My bet is no…….A’s end up in San Jose after they win their appeal vs. MLB. About to be heard on August 12th.

  17. Wait. Unless all of the Raiders and A’s revenue is taxable sales (it’s not) or Alameda County has its own corporate income tax (it doesn’t), I don’t think you can necessarily say that the Raiders pay more in taxes just because they bring in more revenue.

    As for condos, I’m not sure there’s evidence that being near a busier stadium dampens property values (there are examples in both directions). But regardless, iif that’s where the real revenue comes from, shouldn’t the city/county just forget about stadiums and build condos?

  18. So the condo’s around AT&T Park in SF and Petco Park in SD are being sold at a discount?

    I do not pretend to know Mark Davis. I’ve seen him “around town” a few times out here in the East Bay, largely before his father passed away. He never came across as privileged or as someone born with a silver spoon in his mouth. He seemed like a regular guy.

  19. FYI.

    http://www.eastbayexpress.com/SevenDays/archives/2014/08/06/as-co-owner-renews-interest-in-building-new-oakland-ballpark

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