Amid all the move threats and inciteful tweets, the prize that Oakland A’s execs are keeping their eyes on is the Oakland city council, and how it will vote on the team’s $855 million infrastructure subsidy plan on July 20. (And beyond, since that’s only a preliminary vote, but you always want to get that first win.) We got our first hints of what councilmember are thinking late last week, and the results are … let’s call it mixed:
The July 1 report from interim assistant city administrator Betsy Lake … recommends the city approve just one of the tax districts, recognizing that “the cost of those improvements is beyond what can be borne by the city and developer alone. Investing new project-generated revenues into public infrastructure and benefits, without putting either the County or City’s General Funds at risk, is a responsible way to maximize the public benefits of this transformative development.”
The report further recommends that the city should require a 45-year non-relocation pledge, with specified penalties the A’s break it. It would also require that Alameda County, which co-owned the A’s current Coliseum with the city, be required to match any city contributions to the Howard Stadium project.
That is an odd mix of hills to die on. Extending the A’s non-relocation pledge from 20 to 45 years — the length of time the tax kickback districts would be in place — makes sense, and isn’t likely to be much skin off A’s execs’ noses: Team president Dave Kaval, in fact, said Friday that he was “completely comfortable doing a non-relocation agreement,” though he didn’t explicitly endorse a 45-year term. Asking Alameda County to kick in half the public cost, meanwhile, looks like a Hail Mary considering that county officials have previously expressed zero interest in rushing to hand over tax money for the project, not even taking it up for discussion until September.
Then there’s the issue of cutting the two tax districts to one, which may sound simple but actually is a huge deal. As a reminder, here are the two areas where future increases in property tax collections would go to pay for new roads, overpasses, seismic protection, sea level rise protection, and other stuff to generally turn it from a crappy place to build to a lucrative one:
The grey area is where A’s owner John Fisher wants to build his stadium and $12 billion of surrounding development, maybe, if he feels like it. (Fisher’s proposed term sheet includes a clause about how “the Developer will retain the right to develop the vertical development in such order and time as it determines in the exercise of its business judgment.”) That’s legitimately new development that wouldn’t happen without the infrastructure subsidies, so while one can debate whether pay-your-taxes-and-keep-them-too is good development policy or poking Swiss-cheese-sized holes in your city tax map, at least it partly addresses the but-for problem.
The red area, meanwhile, is a huge swath of downtown Oakland, and while much of it may benefit from all the new stuff the Fisher wants Oakland to build for him, a lot of it is already getting built up, so the city would be running the risk of taking tax money it would get even without the A’s development and siphoning it off for Fisher’s pet infrastructure projects.
The grey tax district is projected to supply $495 million worth of future taxes, the red one $360 million, so Lake’s report is proposing to cut the A’s subsidy almost in half. And the smaller tax district would draw from both city and county taxes, the larger one city only, so the Oakland council is basically saying, “Okay, we’ll give you some tax money, but not as much as you want, and only the part that the county would pay for half of, really leave us out of this as much as possible,” which is very much where you want to start negotiations if you’re a city official trying not to say “no, $855 million, are you crazy, just no” but rather hoping to “yes and” your way to a compromise that keeps your costs as low as possible.
Still, it’s not an outright “no,” and Fisher and Kaval have to be pleased that they’ve at least successfully made the debate over how much tax money will be thrown their way, not over whether they should get subsidies at all. Kaval said Friday that ditching the $360 million tax district was a “major area of disagreement” and “we think it’s a necessary piece,” which of course he’s gonna say, since it’s $360 million that he and his bosses would no longer get to play with. All the signs here are for everyone concerned to eventually meet somewhere in the middle — that’s certainly where things usually end up when people start haggling over the price — but it’s also possible that if Alameda puts its foot down and Oakland won’t budge on its contribution and Fisher decides that building a $1 billion stadium isn’t worth it without at least half a billion dollars in public spending, the whole thing could fall apart. That’s the kind of thing that Kaval undoubtedly wants to avoid at all costs, so he’d better get tweeting — oh, he’s already on it, clearly somebody read the handbook.
Alameda County SHOULD put its foot down NdM! Why should the citizens/voters of other county municipalities have their hard earned tax dollars supporting Oakland’s fantasy? What benefit is it to them? And speaking of voters, surprised that something this big would not go to a public vote.
I expect the A’s/Kaval to hold the line on the “major area of disagreement” $360 million; could be their ticket out of The O!
I don’t think anyone (apart from Oakland city council) has suggested that Alameda county should pay for any of this.
Secondly, I would point out that the A’s don’t need a “ticket” out of the coliseum, all they need to do is not renew/extend the lease and leave. There is literally nothing holding them there now that MLB has consented to them exploring other locations (which doesn’t mean they weren’t doing that all along… Wolff started doing so more or less the same day he became part owner of the club… which is 15+ years ago now).
From my (non Oakland taxpayer) point of view, the city’s report is not unreasonable.
1. Only allow tax increases from the ‘grey’ area to be used to fund the ballpark and other Fisher/A’s related items.
2. Limit the city taxpayer’s exposure to roughly half of what ownership is asking (I’d be more comfortable with an absolute cap of $200m, but given that the city pushed the A’s to consider HT/JLS in the first place….)
3. Require an iron clad long term non relocation agreement so some city administrators/elected officials 25 years from now aren’t stuck with trying to figure out how to pay for the NEW, new A’s stadium while still struggling to pay the shortfalls on the current ‘new’ one.
The only thing I would add to this were I the city negotiators is that, as part of the subsidy deal, Fisher surrenders his interest in the coliseum site to the city, or otherwise compensates them (IE: buys out the city for significantly more than he paid for the county’s interest).
It’s awfully easy when playing a shell game against a professional to wind up guessing which shell the money is under when there is no money under any of the shells.
Ignacio De La Fuente’s House of 3 Cardy Montey, you say ?
Why do people always say “hard earned tax dollars?” Sure, most taxed income is hard earned, but there’s a lot that’s just earned through minimal or average effort at best. “Hard earned” seems to be leading the witness a bit.
They should move to Sacramento. That city/metro is growing rapidly. Oakland is fading. Much of the A’s fanbase has already migrated east of the Bay Area. Meanwhile, Oakland increasingly consists of transplants with no ties to the region or team. I think they’re doomed if they sign a non-relocation agreement for 45 years. They’re going to end up like the Marlins: drawing 9,000 people a night in a new stadium.
Where’s the public funding going to come from?
City’s coffers already looted for Golden 1 Center, Sacramento Convention Center (expansion and renovation. Now there’s a money making idea. Summer began early in Sactown the year. Been in the 100’s since June. Will be so until October. Still want to hold your convention here?), SAFE Credit Union Performing Arts Center (formerly the Sacramento Community Center Theater. Here in Sacramento, everything gets a corporate named plastered to it. After all, the craze began here in 1985 with Arco Arena 1, before it spread throughout the land) and the Memorial Auditorium (reconfiguration while the theater was out of commission).
Lastly, Sacramentan’s are no more likely to put up with spending $100’s of millions (on top of the above) in public monies for a new ballpark than Oaklanders are (it’s why Sacramento’s MLS deal collapsed. The most Sacramento Republic FC could get out of the city for a new soccer specific stadium was a $33 million tif).
If John J. Fisher wants half as much from Sactown as he wants from Oaktown, still not happening.
Couldn’t they do a special tax district there
I’m now a HUGE fan of TIF districts! According to pro Howard Terminal advocates and many an A’s fan, IT’S ALL FREE MONEY that would never exist without said stadium development! Just draw lines encompassing large areas of a city, pick the amount you want ($855 million or whatever) and watch the money just fall from the sky. What a deal!!
Absolutely. I am waiting for the first ‘stacked’ TIF/CRL/BRZ, where every building within the district can be demolished and it’s shiny new replacement paid for by the newly created money that TIFs always produce.
The only thing preventing us from building a space elevator is that we haven’t drawn a TIF zone big enough.
TIF not generating enough money? Simple! Just keep expanding it until it encompasses the entire city (or country. Why does Mexico get away with not paying for our stadiums? They’ve been allowed to rip us off for too long I tell you…).
And TIFs aren’t like other taxes that are a drain on the economy… they are just like credit card and bank fees, they actually produce wealth and generate jobs, whereas we all know that a 0.1% increase in income tax on the wealthy only kills jobs and economies and create global depressions…
No public funding necessary. If the A’s moved to Sacramento, they’d move into Sutter Health Park. It’s optimally situated with its view of Tower Bridge. You won’t find a better location than that. Many have speculated that the next generation of MLB parks will be retro-jewel boxes with far less seating but a more premium experience. Adding seats to an already existing stadium to get it to 25,000 will be much, much cheaper than building from scratch on a whole new site. Sutter was built using private bonds. I can guarantee you the bank syndicate holding the bonds would approve a refinancing to increase their commitment in order to finance the renovations in return for a higher profile tenant with TV rights. That’s the beauty of Sacramento. The biggest hurdle is finding the site, getting permits and approvals, etc. Sacramento already has that. Building out outfield seating and a second deck is nothing compared to that.
Everything about this idea is just factually incorrect. The Rivercats’ stadium is not expandable to meet MLB scale or other requirements, and even trying to rebuild it from the ground up on site to be an MLB stadium wouldn’t really be any cheaper than doing it on any other green or brown field site.