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April 08, 2009

San Jose cuts Quakes land price

In what the San Jose Mercury News calls an effort to "speed along a San Jose Earthquakes soccer stadium threatened by the cratering economy — now that doesn't sound promising — the city of San Jose has agreed to cut their asking price for the proposed stadium site from $132 million to $89 million. There are two ways to look at this, of course: as the city offering the Quakes a gift of $43 million, or as a reflection of the fact that California land isn't worth the paper it's printed on right now. City councilmember Sam Liccardo, whose district includes the stadium site, took the latter view: "Prices have come back to earth, and we have to face that reality. Doing something beats doing nothing in this economy."

While the council is expected to approve the land sale next month, it's still uncertain how the stadium would be financed; Earthquakes owner Lew Wolff (remember him?) originally proposed one of his patented development-rights swap deals, but with development not so much a going concern in California anymore, that plan is now "on hiatus," according to the Merc News. Last word from Wolff was that "we're trying to piece it together and I think we're going to get there."

In other Wolff-related news, the San Jose city council voted unanimously last night to move ahead with attempts to lure the Oakland A's to their city, with councilmembers calling for a study group and new environmental impact report for their proposed stadium site near the Diridon rail station. San Francisco Giants exec Bill Neukom responded on a local TV news show: "Those are our [territorial] rights, and we will continue to defend them."

COMMENTS

A 43 million dollar drop in the price (roughly 33%) is pretty much in line with the value of land in the San Jose area these days. Housing values and other land values have fallen by roughly equal percentage wise amounts as well. 89 million does very likely represent the true market value of that land these days. But the positives that existed before still exist. The project will remove a blighted piece of land that's remained unused and costing the city of San Jose 7 million dollars annually. The new purchase price still recoups the city's original purchase price of 80 million. And the site will now be an income generator with the city getting taxes from the stadium, hotels, commercial and R&D.

Posted by Dan on April 8, 2009 11:33 AM

They do have to supply services as well, though, that they don't for undeveloped land: police, fire, roads, etc.

Posted by Neil on April 8, 2009 11:37 AM

That would be the case with any development that moved into the land, just as they're doing with the Lowe's that's going in to the adjoining parcel between the FMC site and I-880. Just as they did all those years FMC was on the site. They won't need to expand the fire, police, power or water coverage since it already covers the site and has for decades. As for roads, they're already in place, the Coleman interchange was recently upgraded for the airport, and the existing road is a 6 land boulevard.

Posted by Dan on April 8, 2009 11:47 AM

Oh, agreed that it'd be necessary for any development. I just see tax revenues from a development project too often cited as an unmitigated good, as if there were no costs as well.

This could still well be a good deal for San Jose when all the pieces stop moving, but it's important to include everything on both sides of the ledger.

Posted by Neil on April 8, 2009 11:56 AM

I hope the A's can move to San Jose, this team deserves a stadium of its own, after essentially being 100 year gypsys, wandering from Philadelphia to Kansas City to Oakland, and in most cases, sharing the facility with someone else.
It seems like the sports stadium stuff is finally breaking in Northern California: The Cal Bears are constructing their facility upgrades (After beating the City and tree huggers in court), and the Niners are moving closer to Santa Clara. If the A's and MLB can overcome the Giants objections, and the A's and Niners win referendums, all that will remain is the Raiders to be dealt with. It will be interesting.

Posted by Januz on April 9, 2009 05:42 AM

As a baseball fan, getting the situation with the A's resolved, could finally be the beginning of the end of one of baseball's problems: The Stadium construction issue: That along with labor unrest, steroids, criminal behavior, salary expansion, and negative media coverage have plagued this sport for the past 30 years, while the NFL, NBA & NHL have had the same problems, but because the media coverage has been focused in on baseball, they did not take similiar hits.
The settling of the A's Stadium issue could very well mean that except maybe Tampa Bay, no more BASEBALL stadium construction issues on the horizon. Think about it, five years from now, Kansas City will have a remodeled Kauffman Stadium, the Twins will be in a new Stadium, the Marlins will have a new Stadium, Dodger Stadium will be remodeled, and the Yankee Stadium area will have new parks. Every team except the Cubs & Red Sox will have state of the art facilities, and this issue, at least for baseball, will be gone for many years.... I for one can't wait.

Posted by Januz on April 9, 2009 08:24 AM

That'd be nice, but I wrote the same thing in 2002, and boy, was I wrong. I suspect after the A's and Rays, you'll have the Cubs, Jays, and maybe the White Sox next in line. That's the problem with "state of the art" - as soon as somebody else builds a newer one, yours is suddenly obsolete.

Posted by Neil on April 9, 2009 08:55 AM

The Jays found that out in 1992. They thought they had just built the state of the art in the Skydome and then Camden Yards blew them out of the water.

Posted by Greg on April 9, 2009 12:40 PM

The White Sox are still renovating the Cell, with the money they got from the naming rights deal with U.S. Cellular. So there isn't a pressing need yet for a new stadium. And it's 100 times cleaner than that dump on the North Side. I wouldn't put it past the Blue Jays to push it, and the Cubs will eventually have to deal with the Wrigley issue, which I think everything but the outfield section torn down and rebuilt. I bet there will be even bigger plans to buy adjacent land and turn them into generating team revenue.

Posted by Mark on April 9, 2009 12:55 PM

The problem for the Jays is that this isn't 1989. They were pretty much top dog in Toronto back then so they got a publically financed park for $570m. A lot of people in TO remember that when Ted Rogers bought the stadium for $25m he gloated how the public had built it and he was getting it for a song. Since then the Expos have left Montreal because they couldn't get a publicly financed park and the Canucks, Leafs and Canadiens have all paid out of their own pockets to build new arenas. So more than likely if the Jays want a new park, at least in Toronto, they'll have to pay for it themselves.

Posted by Greg on April 9, 2009 04:23 PM

The problem for the Jaysthem is that this isn't 1989. They were top dog in Toronto back then so government shelled out for the Skydome. A lot of people in TO remember that when Ted Rogers bought that %570m stadium for $25m he gloated how the public had built it and he was getting it for a song. Canadian governments haven't built any big league stadia since then (though the Oilers are gunning for a new rink). The Expos left Montreal because they couldn't get a publicly financed park and the Canucks, Leafs and Canadiens all paid out of their own pockets to build new arenas. So more than likely if the Jays want a new park, at least in Toronto, they'll have to pay for it themselves.

Posted by Greg on April 9, 2009 04:39 PM

There is a decent possibility that the 2012 Olympics will come to Chicago. If that happens, they could do what happened in Atlanta, for the Cubs (Converting an Olympic Stadium). That would be the only way Wrigley will come down in the near future. They could also use US Celluar Field for the games, and those improvements would also help the White Sox.
I am not necessarily of the opinion that stadiums become obsolete, once the next one is built. The reason being, no one can afford $1.5 BILLION to do another Yankee Stadium (Which because of its historical nature, and the construction costs associated with New York City, this will be the most expensive baseball stadium ever built, and likely NEVER to be topped). Because of that cost (along with the park replacement and everything else), cities will never again allow teams to get everything they could possibly want and more. The Dodger and Kauffman Stadium upgrades after several decades of use, will become the rule rather than the execption.

Posted by Januz on April 9, 2009 06:34 PM

I'd say the White Sox are still 5-10 years away, but I pretty much expect they'll be back asking for something, especially if the Cubs get a new/upgraded stadium in the interim. The Yankees did renovations in the '80s/'90s, too, and that didn't stop them from turning around and asking for a new stadium anyway.

It's never about *needing* a new one, it's about what you can get away with. As Rod Fort said, if I'm a sports team owner, there's nothing wrong with getting a new stadium every year if I'm not the one paying for it.

Posted by Neil on April 10, 2009 12:33 AM

I am of the opinion that teams (and colleges for that matter) will find it much more difficult in the future to get funding for sports facilities (Places like Seattle (Key Arena and Husky Stadium) and Minnesota (Vikings Stadium) are examples of this).
I don't think it is not about "never" needing a new facility or upgrade. I do think there are places that need new or upgraded facilities (Berkeley where Cal Stadium is on top of a fault line comes to mind). But they are the execption rather than the rule.
As for Chicago, tearing down Wrigley, will create such a political backlash, that it will be difficult to accomplish. Again, the Olympics could determine if this will happen (Because of the cost and history involved).

Posted by Januz on April 10, 2009 07:12 AM

Chicago (which is up for the 2016 games, not 2012, btw) is talking about building a temporary stadium in Washington Park near Soldier Field, so that wouldn't work for the Cubs — both because it would need to be returned to parkland after the Olympics, and because there's no way the Cubs move to the South Side. I agree that a renovated Wrigley is more likely, but the big questions there are who pays for it, and whether it's a Fenway-style expansion/restoration or a Soldier Field-style "build a new thing on the old site."

Either way, there will be some challenges, as unlike at Fenway, there's no easy way to expand out into adjacent properties.

Posted by Neil on April 10, 2009 10:06 AM

I did not realize they were talking about a temporary stadium. I thought Soldier Field would have been the Olympic Stadium, with the "Cell" hosting some events, and those improvements for the games, eventually being used to satisfy the Sox, then the Cub issue, would be dealt with.
I think a Fenway type solution is what will be in the cards for Wrigley, it is the most cost effective (Exclusive of doing nothing), and perhaps most important, politically viable.

Posted by Januz on April 10, 2009 12:03 PM

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