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January 20, 2011

Jerry Brown's RDA threat could blow up A's stadium plans

If you've been ignoring the latest iteration of California's budget crisis — thanks, Prop 13! — you've missed what could be big news for the Oakland A's plans to build a new stadium in San Jose. From today's San Francisco Chronicle:

Under [Governor Jerry] Brown's proposal, existing redevelopment agencies - which oversee urban renewal in blighted areas and are funded through property taxes - would cease to exist beginning July 1. Instead, that $1.7 billion in property tax money would be used to help plug a $25.4 billion deficit in the general fund for one year and in future years would be directly distributed to counties, cities and school districts. Backers of redevelopment agencies say they are critical economic drivers, but the nonpartisan Legislative Analyst's Office has been a major critic of them and in a report published this week reiterated the conclusion that "there is no reliable evidence that redevelopment projects attract business to the state or increase overall economic development in California."

And what, exactly, does this have to do with the A's? Recall that it was the San Jose RDA that's supposed to be buying the land for A's owner Lew Wolff's stadium project, and there's still about $20 million worth of parcels to go. While that's not an insurmountable sum — the RDA is already working on selling some other land to raise cash, with one of the bidders, ironically enough, being Wolff — it's going to be awfully hard for the RDA to write checks once Gov. Brown waves his hand and makes it go poof. And while it conceivably could rush to beat the July 1 deadline, knowing that they're on the clock is going to give a lot of pricing leverage to the landowners who have so far reufsed to sell — who, let's not forget, include the San Francisco Giants' ballpark naming rights sponsor, AT&T, who might have a vested interest in not wanting to see a San Jose A's move go through.

The alternative, obviously, is for Wolff himself to buy the land, though he might not be so eager to throw $20 million at a project that could end up too rich for his blood anyway, unless Bud Selig breaks character and forces Giants owner Bill Neukom to cough up territorial rights for next to nothing. Though given that Oakland's latest stadium plan would be even more hamstrung by the death of RDAs, Wolff might not have any other options, unless you count sitting tight at the Oakland Coliseum or trying to get stadium talks going in some smaller non-California town (Portland? Las Vegas?) as viable alternatives. If MLB would really let him buy the Dodgers and make the A's the league's problem, now might be the time to consider it.


Neil, I think you and the anti-SJ biased Chronicle overestimate the problem for San Jose. The city's ReDev agency has already fast tracked this project starting with their meeting last night. And as you said, it's only 20 million in land left which they will soon have the money to purchase prior to the July deadline. And of course this all hinges on Brown's budget getting approved, which won't happen. He's not cutting enough in the areas voters want and wants to extend taxes that were scheduled to sunset (and which a similar extension was just shot down last year by voters 2-1).

Posted by Dan on January 20, 2011 10:47 AM

can we say KA-BOOM?
everybody's against poor ol' SJ, aren't they?
this is typical thinking in the bay area, SF doesn't get enough national media exposure so they have to go to NYC to get it and SJ is the rodney dangerfield of the region.
face it, it's not a 2 team market and the a's are the odd man out with the clock running out.

Posted by paul w. on January 20, 2011 01:36 PM

lol---Paul--can you cite your facts such as where the SJ Metropolitn area is in terms of overall media market, per capita income, number of fortune 500 companies etc--show that these demographics don't constitute a 2 team market than I might by your theory--it has nothing to do with being a 2 team market and everything to do with one baseball team trying to be the only team in the market

Posted by SanJoseA's on January 20, 2011 02:35 PM

Neil, do you know what prop 13 did? Do you know how we got in this mess? It wasn't prop 13. It was the ridiculous pensions given to workers. It was the spending that had no payback, like state funded stem cell research. It was a huge influx of school kids who don't speak English that need to be educated. But it wasn't a lack of funding. Spending in the last 15 years has rapidly outpaced revenue growth and population growth. Prop 13 is 32 years old.

But nice throwaway line though.

Posted by John on January 20, 2011 04:01 PM

Big meeting in Sacramento to talk more about which direction their arena bid should go.

Just giving you a heads-up (and trying to hijack a thread while I'm at it).

Posted by MikeM on January 20, 2011 11:38 PM

Anti-SJ Chronicle? That's a stretch. They've been pretty neutral. The quote doesn't even say ballpark.

Posted by Joe on January 20, 2011 11:56 PM

John: Yes, I'm very well aware of what Prop 13 did. That's why I linked to the Time article about its effects.

Posted by Neil deMause on January 21, 2011 12:03 AM

The redevelopment agencies are an excellent example of the process by which money is redistributed upwards, from the general taxpaying public to well-connected and very wealthy people. Subsidized sports facilities are the perfect vehicle for this: very wealthy team owners and very wealthy athletes benefit enormously - and their benefit is guaranteed - while any supposed benefits to the general public are nebulous and couched in emotional rather than financial terms. While some redevelopment projects may have produced a net public benefit, the overall effect is almost certainly negative. Gov. Brown is to be applauded if he is serious about ending this regime of organized theft.

(I write from Arizona, where sports teams have looted the public to an astonishing degree, including the recent gift of nearly $200 million to a wealthy Chicagoan to pay for his 'purchase' of a hockey team.)

Posted by Dave Boz on January 21, 2011 11:05 AM

SJ is attached at the hip with Frisco, totally dependent on each other.
in almost all economic measurements of the area both are combined. you may want them to be separate, but they're not.

each place has one weak newspaper, few 50k watt radio stations.
as far as tv goes, SJ has one tv station, the rest are to the north.
the a's (as in daze) radio station goes off the air at sundown.

the flow of corporate $$$'s will be dependent on NASDAQ and tech business. not a diversified customer base.

it's not like the Philly/NY proximity where there's a 12 million+
population base between them.
there's not enough of a population base in the bay area to keep 2 franchises prosperous, that's been obvious during the last 40+ years.
the a's are the odd man out and billy bow-tie is smiling all the way to the bank.

Posted by Paul w. on January 21, 2011 01:26 PM

Wonderful post Dave Boz--wish I wrote it.

Hopefully Brown's plan will be another hurdle for the SC stadium plan.

Posted by santa clara jay on January 21, 2011 02:20 PM

Oh, boy. The team in Sacramento chose one of the alternatives that their panel considered non-responsive. The statement from their website is,
"Project concepts must address the topics of team qualifications; project design; general financing plans; development schedule; proposed location and site control status; potential to incorporate green design and building features; and expected economic and community impact."

Going with a technically non-responsive plan seems like just a really bad idea. I'm actually sort of stunned.

What a blunder.

Posted by MikeM on January 21, 2011 07:31 PM

Actually Paul San Jose and SF aren't measured together. They're both in separate statistical areas and have been for a long time.

Posted by Dan on January 21, 2011 07:55 PM

@Neil- You are incorrect on ATT as they just struck a deal with San Jose to have some land re-zoned in West San Jose as a compromise to move out of their Downtown SJ facility...Therefore ATT could care less about the Giants vs. A's. They in fact sponsor both teams.

@Paul- You are incorrect that SJ and SF are the same city. They are 50 miles apart and Oakland is in fact closer to San Jose at 40 miles apart.

The Bay Area has 8 million people that is more than enough to support 2 teams but when one is in the best ballpark in MLB ( while the other is in a decaying facility 12 miles away why would any owner build in Oakland when they can build in a much larger more prosperous city in the same general market in San Jose?

San Jose is a different metro area while Oakland/SF share the same. MLB incorrectly placed the A's years ago. But in their defense who could have seen San Jose blow up like it did in the past 20 years?

With RDA's about to go San Jose only needs $20 million to complete the ballpark land and only a welding station is needed to be moved from the site.

Oakland needs to float 100M+ in bonds and kick out 16 businesses on the site itself. Problem is without an EIR (They just started) they cannot float the bonds before their RDA is raided by the state.

It is San Jose or bust for MLB and the A's. Oakland had a chance if they only saw it two years ago when the BRC was appointed.

Posted by Sid on January 21, 2011 08:28 PM

Mike, the choice is clear, they're not building an Arena in Sacramento. This move was just lip service to make it look like they're trying to stay while they quietly figure out which city they're moving to...

Posted by Dan on January 21, 2011 09:22 PM

Actually, Sid, AT&T still hasn't committed to selling its land:

I agree with you that that's a small enough piece of the puzzle that it shouldn't be a huge holdup. But bigger deals have fallen apart over more trivial things.

Posted by Neil deMause on January 21, 2011 09:47 PM

The Kings are doomed in Sacramento; it is only a matter of when and where they move. Maybe instead of the Warriors it will be the Kings (renamed) in downtown San Francisco in a sparkling new facility adjacent to San Francisco Giants Ballpark in China Basin. Otherwise the Kings are headed out of state. As for the Athletics and Raiders, their days in California are numbered; the Athletics still have a chance to be in San Jose if the Silicon Valley business community steps up and rallies support to get the team. The Raiders are in limbo until Al Davis passes away: then things will get interesting. The situation with the San Diego Chargers is increasingly unsettled. These new circumstances will likely push the Chargers north to where they were born, into the new football stadium in downtown Los Angeles currently in the serious planning stages. As for the 49ers, what impact this will have on their plans and dreams seems somewhat uncertain, but it is still better than 50/50 they will end up in an exciting new facility in Santa Clara; the chances for a new facility in San Francisco proper look much less likely now.

All in all, this significant change being planned for and directed by Jerry Brown is the most important change to the entrenched modus operandi in regard to public financing of sports facilities that has been in place since at least the 1950s and 1960s: it also amounts to an endorsement and validation of the positions Neil de Mause and others have long espoused.

Posted by Kelly on January 21, 2011 09:47 PM

Well said, Dave Boz. Thank you.

Posted by John Bladen on January 22, 2011 12:03 AM

Spendacrats got us into this mess. Who cares about the A's, the B's and the whatever...

Posted by Tim on January 22, 2011 03:21 AM

Hi Tim,

Don't let the obvious get in the way of your convictions, buddy: this is an article about a "Spendacrat" putting an end to the stadium gravy train. PLS REFUDIATE

"Real America"

Posted by Anderson on January 22, 2011 02:47 PM

@Neil- I stand corrected. SJ has most of its pieces in place, the land issue that is left is a far easier hurdle to overcome than the numerous issues Oakland has.

ATT would be smart to get what they can as if "push comes to shove" the City can use Eminent Domain and give them fair market value and kick them out...Not as easy as it sounds but it has been done before.

Posted by Sid on January 24, 2011 01:39 AM

I find this interplay here between conservative and liberal partisans interesting.

I suggest this is much more complex than GOP versus DEM. It really depends on who is in power in your local jurisdiction; those are the ones the developers try to "back."

And by "back," what I really mean is "Find palms to grease." Because that's really what's going on here. In some areas of California, a developer that stands to gain tens of millions of dollars will back a conservative Council, while in others they back a liberal Council.

This is off-topic, but I applaud what Brown's doing here. He will make cuts. We already know this is a given. I'm glad he's doing this to RDA's; they deserve it.

Brown is the first politician I've seen in a very long time who is telling people what they don't want to hear. In CA, we passed a lot of stuff over the last 30 years. We now can either pay for it, or default. I'm leaning towards being a responsible borrower and paying for it.

46 States have deficits, Florida one of the worst. I don't think for a second the problems go away when you move from CA to FL.

If stopping "sports and entertainment facilities" is part of the program, well, here we go. If we don't take our meds, we're never gonna get better.

Posted by MikeM on January 24, 2011 07:54 PM

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