A’s owner buys half of Coliseum site for $85m, this is definitely either a good deal or a massive swindle

It’s even more officially official now: The Oakland A’s owners have bought out Alameda County’s 50% stake in the Oakland Coliseum site for $85 million, signing the deal yesterday, 18 months after a tentative deal was first announced, and 10 months after it was supposedly finalized. (The wheels of real estate grind exceedingly slow.) If team owner John Fisher is successful in acquiring the other half share of ownership from the city of Oakland — negotiations for that piece remain underway — then he’ll have control of the entire 155-acre site to do with as he pleases, whether it’s for residential development or a new stadium or a giant Ferris wheel or what have you.

What you want to know, I’m sure, is whether this is a good deal for the public or a massive giveaway, and I am here to tell you: Man, these are hard questions! There are definitely benefits to unloading the Coliseum land, which includes the stadium, the Oracle Arena, and surrounding parking lots — Fisher would be on the hook for $5 million a year in operating costs if they maintain the current setup, plus would have pay property taxes on the site, which the county doesn’t. But since any buyer would be in the same boat, really the question remains whether this is a fair price for the land.

And as we’ve seen again and again, setting a fair-market value for land is way more art than science, especially if you don’t put it up for public bidding and instead just hand it to the guy who happens to be standing next to you. A study of land sales in Oakland from 2005-2010 puts the average price at $1.4 million an acre, which would mean Fisher would be getting about a $50 million discount; on the other hand, home values have been soaring in Oakland in recent years, so maybe a decade-old study isn’t the best way to determine current values? It’s almost like sports team owners/real estate developers like to get land instead of cash because it’s so hard to tell whether this represents a public subsidy!

In fact, the A’s land deal is even more convoluted than that, since the Coliseum site purchase is still coupled with a plan to build a new stadium at Howard Terminal about four miles away, which would require maybe $200 million for “transportation and other infrastructure” that would be paid for with city tax kickbacks. It’s really the kind of thing where you’d want to negotiate everything at once, including what Fisher would be allowed (or required) to do with each parcel and how much public infrastructure money would be provided — but the county is strapped for cash right now and has been wanting to get out of the stadium business for a while, so it’s tapping out. This leaves it up to Oakland Mayor Libby Schaaf to ensure she negotiates the best deal possible for the public, and she’s been very quiet of late. Hopefully before any city deal is finalized, we’ll have some better appraisals of both the Coliseum land value and the infrastructure costs; though if past history is any guide, that’s not too likely unless the mayor demands it. Schaaf used to draw a hard enough line to be considered part of the Gang of Four of city mayors who wouldn’t kowtow to team owner demands — this will be a good test of whether she’s going to end up a Tait or a Nenshi.

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9 comments on “A’s owner buys half of Coliseum site for $85m, this is definitely either a good deal or a massive swindle

  1. So is it considered one plot of land and both parties have a 50% interest or is it 2 adjoining plots that have one owner each?

      1. As I recall, the county and the city administer the site through a JPA. This may not matter if Fisher ultimately buys out the city as well (though his agreement with the county was, IIRC, to pay $85m over five years), but in the interim I guess the question is “what has he bought”?

        Does he now have the seats on the board the county used to control? Or has the board been abolished and the city and Fisher work directly together or ???

        The joint powers authority would have to be unwound to give them direct control wouldn’t it?

  2. I’m going to assume that the current zoning is either commercial or municipal reserve/recreational use.

    As you’ve said there are many questions left unanswered, among them whether the land will be rezoned and what the city will rezone it to if it does approve a change in zoning. Those decisions could either make Fisher tens (maybe hundreds) of millions or leave him stuck with a site he can’t use for anything other than sporting pursuits and now has to pay property tax on (though it is not clear to me, if he were to refuse to pay, who would bid on this heavily encumbered land in a tax recovery auction).

    One of the unquestionably ‘good’ things about Alameda county selling 50% ownership in the site to Fisher is that he will be heavily motivated to make a deal with the city to either redevelop or improve the site – something he can’t do without their consent at present (unless he buys them out too, in which case they can impose caveats if needed).

    I think it’s a good step for both parties. Fisher can either partner with the city to redevelop the site (either with or without an arena, with or without a stadium etc) or buy them out. The most likely scenario in my view is still that the new partners come to an agreement to rebuild the site for baseball only (the familiar “build it in the parking lot” plan), possibly including a reconfigured arena for concerts etc.

    As you said, Oakland today is not what it was 20 years ago. This area appears to be booming and options exist for this land that would not have been viable in 2000. Maybe they will build housing and commercial on the property, make hundreds of millions and then funnel that into a problematic HT site.

    But I have my doubts, not least because doing so would mean a lot of things have to fall into place on multiple projects (each of which appears to depend on the successful completion of concurrent or sequential projects). It’s a big ask.

    If Fisher & co have control of the coliseum site, it is much easier and cheaper to just build the baseball stadium you want right there. If the city wants to reimagine (urrrgh) Howard Terminal they can either kick in some money to make it viable for a private consortium to do this, or do it themselves. They don’t have any money to do this, so ummm….

  3. There are a couple of things about the Coliseum property I think are worth mentioning when it comes to development potential (thus value) not already discussed. On the plus side, there is probably no available parcel its size anywhere in the Bay Area with comparable freeway and transit access. On the other hand, the parcel has acute exposure to sea level rise – you might recall the Coliseum playing surface is below sea level. It’s also criss-crossed by utility corridors you don’t really notice now but vastly complicate future uses. I think Alameda County is happy to have this off their plate.

  4. If I recall correctly the A’s signed a 10 year lease a few years ago. Depending on how much time is left on that lease it may diminish the market value of the land because if you bought it, you couldn’t really do what you want since you have to wait for them to leave

    1. The A’s lease runs through 2024. That’s not much of an encumbrance, given how long it would take a developer to buy the land and get any project through the public approval process.

  5. Well, three of the four mayors (or at least their cities) ended up handing over big piles of cash and/or discounted land deals to sports teams, so being a member of that Gang probably doesn’t mean much.

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