December 30, 2011
California's RDA ruling could affect A's, 49ers, Chargers stadium plans
As if the umpteen stadium and arena battles ongoing in California needed more drama, the state's supreme court handed down this yesterday:
The court ruled unanimously in favor of a state law passed last summer that abolished redevelopment agencies and voted 6 to 1 to strike down a companion measure that would have allowed the agencies to continue if they shared their revenues.
More than 400 redevelopment agencies will cease to exist after Feb. 1. Authorized by law since 1945, the agencies have been responsible for such success stories as Old Pasadena and San Diego's Gaslamp Quarter but also plagued by projects that some argued had little public benefit.
First, some brief backstory: After Gov. Jerry Brown declared his intentions earlier this year to stop allowing city redevelopment agencies to siphon off property tax proceeds for local development projects, the state legislature offered a compromise of sorts: If RDAs would cut the state in on a share of the boodle, they'd be allowed to continue. Yesterday's court ruling struck down that deal, saying that while the state could shut down RDAs it couldn't attach strings to them; and so, as of a month and two days from now, all RDAs will cease to exist. (Ironically, the court was ruling on a lawsuit filed by a bunch of cities and their RDAs, which were trying to knock down only the piece of legislation that would eliminate RDAs, not the one that would allow them to continue. Whoopsie.)
This is big news for the sports world because, as you might imagine, cities have been thrilled to hand out development dollars when it's not really their money they're spending. (While technically RDA spending is just a straight-up TIF — any new tax revenue gets diverted to pay for the project — in practice, at least according to Brown, the state has ended up filling the gaps in school spending and other local services that have resulted.) So pretty much every sports construction project now underway or in the planning stages in California has involved RDAs, which means many of them may now be in jeopardy.
A quick scorecard, from north to south:
- Oakland's Victory Court plan for an A's stadium appears to now be out the window, since that relied on an RDA-based TIF. However, its second "Coliseum City" plan for the A's and Raiders could still move ahead, according to Newballpark.org, as Oakland's existing stadium site is "part of a separate joint-powers agreement which allows the Coliseum Authority to raise money for its own projects."
- Any thoughts of moving the Golden State Warriors to a new arena in San Francisco will likely be hampered by the ruling.
- Santa Clara's stadium funding was thought to be already in place — barring a last-minute petition drive — but $40 million of that was supposed to come from the city's RDA, which now must turn it over to the state instead. (I'm not clear on what happens to the $4 million the city RDA already pre-paid to the 49ers last March.) That's not a huge sum to be made up on a $1 billion project, but given how the whole financing plan is already held together by spit and baling wire, you never know what could turn out to be its striped bass.
- San Jose's RDA already completed its part in the city's proposed A's stadium plan, giving team owner Lew Wolff an option to buy RDA-owned land for the project last month. Yet a lawsuit filed earlier this month by the Giants-funded Stand For San Jose charges, among other things, that San Jose illegally jumped the gun by agreeing to sell the land before going before a public vote; if a court agrees, then San Jose could be forced to go back and hold a referendum before selling the land — except at that point the RDA would no longer exist to do the sale.
- AEG's downtown Los Angeles football stadium project would use a TIF, but it seems that it's one that doesn't require an RDA. (I think this is because rather than actually redirecting the money, the city would just be totaling up the new tax benefits and hoping they're enough to pay off the stadium bonds, but don't quote me on that.) Still, this could give a minor boost to Ed Roski's City of Industry stadium plan in the race for first place among L.A. stadium plans that don't have a snowball's chance in hell of getting approved by the NFL or attracting an existing team owner.
- The San Diego Chargers, whose stadium chief previously said that without RDA money, their stadium plans are "done, finished," are indeed completely hosed. But they kind of knew that already.
In any case, before anyone gets too excited about it being a new day in Baltimore, the state legislature — which, you'll recall, started off this whole mess by trying to save RDAs while reclaiming a share of their money — can always pass new legislation reestablishing some form of local redevelopment agencies. This being the California state legislature, of course, that will inevitably be a long and painful process — which is why I told the San Diego Union Tribune that my prediction is for "gridlock," as team owners wait to see how the new world order shakes out.
The interesting bits here in the short run will be how the 49ers (and, if necessary, the A's) handle the potential new speed bumps in their stadium campaigns. More news to come in the new year, I'm sure.
December 12, 2011
Oakland plans second vaportecture stadium for A's
Oakland Mayor Jean Quan, not content to have one A's stadium plan with no real idea how to pay for it, announced on Friday that "we are sending today a letter to Commissioner Selig to make it pretty clear that Oakland wants the A's, that we have two sites for the A's that are viable that could be delivered by 2014."
Site #2 is, in fact, the current site of the Oakland Coliseum (I can't be bothered to remember its latest corporate name — nice investment, whoever owns naming rights this week!), which would be replaced by a new A's baseball stadium, a new Raiders football stadium, and a new hotel under the latest plan. (Not-very-detailed renderings available at Newballpark.org.) This "Coliseum City" would be paid for by ... okay, Quan didn't actually mention that part, but the city has a Request For Proposals out for the project, which ... actually asks the developers to submit "a description of its approach to developing financing measures." Three guesses how many of the six developers who've reportedly responded to the RFP will be proposing to fund the whole project themselves?
Coliseum City, incidentally, would also include a renovated arena for the Golden State Warriors, which is significant because the Warriors owners last week met with San Francisco Mayor Ed Lee and Giants CEO Larry Baer to discuss a new arena near AT&T Park to open in 2017, the year the Warriors' lease at Oracle Arena — which was completely rebuilt in 1996 for $121 million — runs out.
One more item from the Quan news conference: She said that the Giants claim they can use legal measures to delay any A's move to San Jose for as much as ten years. Which is exactly what they would say, and exactly what she would say, but just passing it along.
September 16, 2011
Meet the new Giants boss, same as the old boss
For anyone hoping that the news of Bill Neukom stepping down as lead owner of the San Francisco Giants would lead to a break in the impasse with the Oakland A's over territorial rights to San Jose, you can stop hoping:
Larry Baer, who is becoming CEO when Bill Neukom retires at the end of the year, said Thursday that the Giants' stance on territorial rights in the Bay Area is fixed.
"There is no change on that position," Baer told reporters Thursday. "It's a position Bill's had, a position our board has had, a position I have."
A's owner Lew Wolff told the San Francisco Chronicle he'd have no comment on his nemesis Neukom's departure, then opined: ""If I were the Giants, I'd feel more confident the longer it takes. I don't think they'd be right." Asked what he thinks about prospects for a resolution overall, he replied: "I have no idea." Does this count as depression or acceptance?
May 24, 2011
Why won't the Giants negotiate an A's stadium solution?
Great piece at Newballpark.org on the likely options for San Francisco Giants owner Bill Neukom in his never-ending standoff with Oakland A's owner Lew Wolff over the A's future home. As site proprietor Marine Layer writes, Neukom can basically go three ways:
- Refuse to bargain over territorial rights to San Jose, and hope the A's move out of town. He asserts that Neukom would then be forced to compensate Wolff for the territorial rights to the East Bay; I'm less certain that that's part of MLB bylaws, but I'm sure that Wolff would attempt to work that into any deal to relocate.
- Refuse to bargain, and keep paying revenue sharing to the A's while the team stays put in Oakland.
- Take a payoff from Wolff to allow the A's to move to San Jose. Newballpark.org estimates the cost to the Giants as maybe $12.5 million a year in lost revenues, which would mean an up-front payment in the $100-150m range should be enough to make it worth Neukom's while (caution: extremely back-of-the-envelope math at work here). The question, as I've raised here before, is whether that kind of price tag would be worth Wolff's while — presumably not, or else the A's wouldn't be stuck in this holding pattern.
Marine Layer concludes that "No matter what Neukom decides, it looks like he’ll have to pay," which is a bit harsh: He'd get benefits from each scenario as well, don't forget (sole rights to the Bay Area, a continued monopoly on all the rich bits of the region, or a pile of territorial rights cash, respectively). But clearly Neukom doesn't see Door #3 as a preferred option, at least not at the price Wolff is willing to pay. Of such decision matrices is gridlock made.
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.
November 04, 2010
Does Giants' win affect San Jose A's calculus?
"Experts: Giants' World Series success could boost chances for A's move to San Jose" was the headline in yesterday's San Jose Mercury News. It's certainly a provocative premise: How, exactly, would the Giants' on-field success affect the long-running off-field soap opera around A's owner Lew Wolff's attempts to relocate, and Giants' ownership's insistance that they won't give up the South Bay rights they got from the A's two decades ago without a fight, or at least a substantial cash settlement?
Unfortunately, the promised "experts" turn out to be a single expert who actually espouses the promised point of view. And who is that masked man?
"To the extent that the commissioner's office would be concerned about the Giants' financial well-being if the A's were allowed to move to San Jose," said Andrew Zimbalist, a Smith College economist and baseball expert, "that concern would by allayed given the success the Giants have had."
Zimbalist estimates the Giants will net from $13 million to $16 million from their share of ticket sales and concessions for the postseason and World Series.
"The owners want (a team) to be as economically successful as it can be," said Zimbalist of the A's proposed move.
"And I think fundamentally that is what Selig is looking at -- if he thinks it's a plus economically."
Zimbalist actually has some props in this department — he wrote a whole book about Selig, after all — so I'd be inclined to think he knows what he's talking about. That said, it's a fairly bizarre argument: The issue in the San Jose move is over what marginal revenue loss there would be to the Giants as the result of an A's move, and that doesn't change regardless of whether the Giants are filthy rich or desperately poor — if the A's relocation would cost the Giants (pulling a number out of the air) $5 million a year, that's still $5 million a year. Moreover, it would be weird for MLB to make a long-term decision based on a one-year income bump from the Series win, unless Selig thinks that Edgar Renteria is going to do this every year.
The article also notes that the A's relocation committee report that Selig commissioned 20 months ago is likely to be performing "an analysis of what kind of fan base shift might occur should the A's move to San Jose." Actually, it's pretty likely that that analysis is long since done — Zimbalist himself did one for the New Jersey Nets' move to Brooklyn in a third the time, though admittedly he took some shortcuts — but it won't be released until the Giants and A's owners have negotiated an acceptable settlement behind closed doors. Maybe it'd help if Wolff agrees to start wearing bowties.
July 28, 2010
MLB offers to pay for San Jose A's referendum if it's delayed
Apparently Bud Selig really doesn't want San Jose jumping the gun and holding an Oakland A's stadium vote before MLB has decided if the team can move there. Yesterday league officials told San Jose Mayor Chuck Reed that they'd pay the $1 million-plus cost of holding a special election next spring, if the city agrees to put it off until after MLB's relocation task force has finished its report.
Reed hinted yesterday that he'd be amenable to such a plan, saying, "I want to think about it, and talk to [A's owner] Lew Wolff, and he and I and [MLB president] Bob DuPuy will talk again." The San Francisco Chronicle's political gossipmongers Matier and Ross say they expect an announcement today that San Jose is putting off the stadium vote.
So, it seems like this whole kerfuffle will likely go down as a bit of gamesmanship to push the A's situation to a conclusion, though from here it's hard to say exactly who's behind the game: Reed, who was apparently frustrated that an August 3 deadline for putting a stadium on the November ballot was nearing, and DuPuy was on vacation and not returning his phone calls? Maybe Wolff, who yesterday again expressed frustration with the slow pace of MLB's decision-making process, saying, "It's been 16 months, and I have 130 employees who need to know where they are headed"? We probably won't know the full story until DuPuy writes his tell-all book about what's really going on inside those meetings (or email exchanges, or Farmville chat sessions or however they're exchanging ultimatums these days) between Wolff and San Francisco Giants owner Bill Neukom.
July 23, 2010
Selig "disappointed" San Jose moving ahead on A's without him
Okay, so much for my theory that Bud Selig secretly gave San Jose the go-ahead to move ahead with a stadium vote in order to pressure the Oakland A's and San Francisco Giants into reaching a territorial rights settlement. Selig responded to the news of the potential San Jose referendum today by saying he was "surprised and disappointed" that Mayor Chuck Reed wants to set a November vote on a stadium plan, stating, "We were not part of the process and had no knowledge that a decision to proceed with the election had been made. A ballot referendum is premature."
Unless, of course, Selig just wants everyone to think he doesn't want San Jose to have a vote. But then, the Giants owners would probably know he knows they know he knows...
December 16, 2009
Santa Clara okays 49ers-sponsored referendum; San Jose Giants fight San Jose A's
It was another action-packed day yesterday in Northern California's South Bay, as the Santa Clara city council resolved its dueling stadium referenda quandary by putting on hold its own ballot measure for a $937 million 49ers stadium, and instead endorsing the ballot initiative being pushed by the 49ers. If the team referendum can't gather enough signatures by March, the council would still have the option of putting its own measure up for vote.
In addition to enabling the 49ers to avoid any legal challenges to the vote on environmental-oversight grounds — as stadium site landholder Great America is trying to do in its lawsuit — the team-sponsored ballot item is seen as being worded more favorably to (duh) the team, with no mention of several pieces of the financing, including $330 million in bonds that would be sold by the stadium authority and hopefully repaid by the team. There were also some complaints about the title of the initiative: The Santa Clara Stadium Taxpayer Protection and Economic Progress Act. "I don't think the city should defer to allow an advocacy piece to go before the voters," said Will Kennedy, one of two councilmembers to vote against the measure.
Meanwhile, the possible relocation of the Oakland A's to nearby San Jose got an unexpected opponent yesterday: the San Jose Giants minor-league baseball team, which is helping form a group called Stand Up For San Jose to oppose using public funds for a new stadium. While they make some good points — including that land and infrastructure costs weren't included in the city's economic impact study — it's worth noting that the San Jose Giants, in addition to being in line to be displaced by the A's, are also one-quarter owned by the San Francisco Giants, who are trying to avoid losing control of the San Jose market. Looks like we could be in for another elephant-fight-by-proxy.
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."