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May 11, 2009
San Jose mayor: No subsidies for A's, except...
With the San Jose city council set to take its first steps toward luring the Oakland A's, tomorrow, city mayor Chuck Reed has declared that A's owner Lew Wolff "needs to pay for his own stadium" — though according to the San Jose Mercury News, that wouldn't preclude giving the team free or discounted land, something that would require a voter referendum.
Reed, meanwhile, seemed to draw an even tougher line in the sand about what would be needed for an A's deal, though his choice of examples could raise some eyebrows:
In fact, at the top of the city's list is a requirement that any ballpark actually make the city money — "millions of dollars," Reed said — instead of merely not costing it any.
"We've seen it with" HP Pavilion, Reed said, "so we know it can be done." The San Jose Redevelopment Agency spent $135 million in the early 1990s to help build the arena, which brings the city's general fund an estimated $5.8 million a year.
Er... what? Even at a dirt-cheap 5% interest rate, $135 million in debt would mean the SJRA has to make $8.8 million in bond payments a year, which would mean the arena is running at least a $3 million annual loss. With cash cows like that, who needs money pits? [UPDATE: After further investigation, the arena's finances actually look to be better than that, with the public at least breaking even, if not necessarily earning "millions" &mdash see comments below.]
That figure does not include the $7.5 million in rent the Sharks pay for the arena and practice facility, or the $1.5 million in naming rights from HP. It mostly consists of sales and hotel taxes from visitors who aren't from San Jose and come specifically for arena events.
Posted by Marine Layer on May 11, 2009 01:40 PM
Thanks — I spent some time this morning trying to find revenue figures for the arena, but couldn't find anything solid online.
Digging more, it looks like the Sharks pay $5 million in arena rent (let's exclude the practice facility for now, since it comes with its own costs), plus the city gets $1.5 million a year from HP, and $5.4 million in tax revenue. That last is pretty nebulous — it's always hard to tell when people are visiting "just for an event" — but I'll agree that looks closer to being in the black, at least.
Posted by Neil on May 11, 2009 02:26 PM
Just looked up the San Jose arena on Judith Grant Long's site (see Resources at left), and see that she also has it costing $3.3 million a year in forgone property taxes, and $2 million a year in city services (fire, police, etc.), which would put it back in the red.
Posted by Neil on May 11, 2009 07:53 PM
REMEMBER THAT KEEPING THE A's FROM MOVING TO SAN JOSE IS NOT ONLY GOOD FOR OAKLAND, BUT GOOD FOR THE GIANTS TOO!! Let's Go Oakland! is a group of A's fans, business people, labor leaders, and government officials who are committed to keeping the A's in Oakland. But it's about much more than just building a ballpark. As part of a larger plan to build new hotels, restaurants, and cafes, a new destination stadium will attract visitors from all over the region. Like AT&T Park in Mission Bay did for San Francisco, our ballpark will be a catalyst to bring new investment and jobs to Oakland, kick-starting the next phase of our community's successful economic development. If you support Oakland -- if you support the A's -- we hope you'll stand with us. Sign our petition, and urge Major League Baseball and team ownership to keep the A's in Oakland! letsgooakland.com
Posted by OAKLANDathletics on May 17, 2009 07:29 PM