Matthew Artz of the San Jose Mercury News revealed some of the details of Floyd Kephart’s Oakland Raiders officially secret stadium plan on Saturday (full plan is here), and immediately turned to stadium experts to evaluate how good a deal it is. Well, one stadium expert. Actually, Marc Ganis, a paid consultant for the NFL who immediately declared Kephart’s plan to be “the worst stadium proposal I’ve seen … by far” — because the Raiders owners wouldn’t get many public subsidies:
The proposed $900 million, 55,000-seat facility adjacent to the O.co Coliseum would be financed entirely by the Raiders, the NFL and future stadium revenues. The Raiders would have to dip into sponsorship revenue and naming rights fees to help repay $300 million in loans needed to offset an estimated funding gap.
And, other than parking garages, the stadium would get no subsidy from the surrounding “live-work-play” technology campus Kephart plans to build on the rest of the sprawling Coliseum complex. The plan includes 4,000 homes, a shopping center, 400 hotel rooms and several office buildings.
“I can’t think of any sports team owner that would take a proposal like this even remotely seriously,” Ganis said, noting that San Diego has proposed a major public subsidy for a new Chargers football stadium. “It’s so one-sided and so bad, that it’s almost as if local leaders are saying ‘we can’t really do anything, so go ahead and leave.’ “
Finally, toward the end of the article, Artz gets around to explaining the Kephart proposal, which is this:
- The Raiders would pay for a $900 million stadium via $200 million from personal seat license sales, $200 million in NFL G-4 funding, $100 million in cash, $300 million borrowed (from somewhere, paid back somehow, possibly from naming rights and other revenues), and $100 million from the sale of 20% of the team to Kephart for $200 million.
- Kephart would buy 90 acres of the Coliseum site from the city and county for $116 million, then develop it into apartments, shopping, a hotel, and office buildings.
- The city and county would spend about $80 million of that on new parking garages, while paying off $100 million in remaining Coliseum debt from … somewhere.
- $100 million in infrastructure improvements would come from “grants.”
- The A’s would have space (somewhere) reserved to build a new stadium until 2019.
Admittedly, that’s a pretty bad deal for the Raiders, though not an awful lot worse than the team’s one in Carson, which would likewise require the team to pay for the stadium with its own revenues. (The upside of Carson would mostly be that things like naming rights should bring in somewhat more money in the larger L.A. market.) It would also potentially be a bad deal for Oakland, which would sell 90 acres of land for only a little over $1 million an acre, which Newballpark.org notes is “ridiculously cheap” given how much other nearby parcels have gone for. In fact, the only clear beneficiary of Kephart’s plan would be, let’s see, who would end up with all the proceeds from development on land that he got a dirt-cheap price … oh, right, Kephart!
The real question here is why Oakland and Alameda County thought that a private developer could somehow come up with a way to turn a project with more than $1 billion in costs and nowhere near that much in potential new revenues into a win-win for all concerned, via elfin magic or something. Mayor Libby Schaaf’s whole “have the Raiders and A’s submit bids for the Coliseum site and take whichever one is more” plan is looking better and better.
“The real question here is why Oakland and Alameda County thought that a private developer could somehow come up with a way to turn a project with more than $1 billion in costs and nowhere near that much in potential new revenues into a win-win for all concerned, via elfin magic or something.”
Best move for the City-County would be to gift partitions of the land to the Raiders and A’s under a master development plan. There is enough land for both facilities, the surrounding area is primed for development in the current Bay Area real estate market, the City-County would eliminate/minimize out of pocket costs, and the franchises would benefit from the land gift. The franchises have been neighbors/co-tenants for decades. The leadership of the franchises and City-County should come together for the good of all entities, love thy neighbor as thyself, and create such a plan that benefits all and they can all take pride in, without crippling the City-County and their taxpayers, while allowing the franchises to thrive and help redevelop an area that is poised for a renaissance. Can known commentators on this subject push this plan a bit?
The idea of putting 2 new stadiums on the site has effectively been dismissed by MLB, the A’s, the NFL, and the Raiders. It doesn’t pencil out for any of those parties. A shared site can’t be done profitably for either the A’s or Raiders and would only require further spending by the city/county for the additional infrastructure needed on top of what would already be required for a single new venue. Everyone operating in reality, as opposed to the land of wishful thinking and fantasy, has understood for years that Oakland is going to have to choose one or the other or risk losing both.
“I can’t think of any sports team owner that would take a proposal like this even remotely seriously,” Ganis said.
Don’t you wish he’d said “15th century hereditary Monarch”, or “19th century railroad/robber baron” instead of sports team owner? I know I do.
Handwriting is on the wall, Oakland will choose the 82 game schedule A’s who can afford to build their own ballpark as long as they are given the same deal the city offered the Raiders, and the Raiders are gone.
“help redevelop an area that is poised for a renaissance”
If it’s poised for a renaissance, then the gov’t shouldn’t need to get involved in helping to redevelop. Market should work just fine.
Not enough public stadium cash in that sucker. But the dirt cheap land is a nice idea if you like making your NFL team a handmaiden to some sleazy real estate guy.
Oh wait, that kinda describes my business, doesn’t it… too much 100 year old cognac tonight has me running off at the mouth!
There’s been a lot of talk about the ‘housing development’ again being used as a revenue generator to help make a stadium more affordable (sort of)… a bit like Lew Wolff’s original plan for the Quakes (if you can remember back that far).
My question to the Oakland locals is this: Is there actually that much demand for housing and commercial property in the areas in question?
It’s all well and good to portray a stadium as being “free” in a raging real estate market, real interest rates hovering near zero and a mortgage qualification process capped at “can you fog a mirror?”, but in the present broader market its a different thing entirely.
So, Oaklanders (ites?), is there actually enough demand in your area to make the housing and commercial real estate saleable and profitable enough to “help” with a stadium (indirectly, in this case)?
Ouch. Maybe Kephart could sell tents to the droves of people wanting to buy a psl to fantasy city, they could go for 100k apiece…im surprised the plan isnt for 400m in psl fees…or 900.?……wheres my pegasus, i.ll be right there lmfao
@ John Bladen – in Montclair, Rockridge, Temescal…sure.
In East Oakland, next to the train tracks? Reply hazy, check back later.
The Bay Area is so expensive even Oakland’s real estate is booming.
The Raiders under this arrangement would pay zero rent since they would own the stadium. Chargers on the other hand would pay 1M per game for rent.
Raiders only pay 250k a year for the land, people have to see this is a starting point.
The 49ers dipped into SBL, Suites, and sponsorhips to pay of their debt. Their stadium turned out great ,under budget and not much to pay off going forward…..Why shouldn’t Raiders on some level do the same?
If I am Mark Davis I counter with this:
-20% for 200M? Are you smoking Kephart? When the stadium is done that piece will be worth 300M-350M, so pay that to me and we can start to talk.
-Zero proceed from the development help pay for the stadium? Why do I need you then Kephart? Without you throwing something into the pot from the development, what is the point?
Davis, should come back to the table with Kephart and get this done.
The city/county has around 100 million in debt on the property. All of the plans thus far assume they still maintain most of that debt and give away the property. Instead, they should just sell the land for 100 million to whomever wants it, perhaps developers unrelated to sports. The sports teams would leave but Oakland has a 1 billion unfunded pension liability so they need the money back.