The Oakland city council held a “study session” on the A’s Howard Terminal stadium plan yesterday, which acted as a sort of preview of where all the sides stand before the council’s upcoming July 20 official meeting to discuss the proposal and its $855 million public price tag. The answer: Pretty damn far apart!
- Councilmembers said they oppose the second, larger tax-kickback district proposed by the team for the area around Jack London Square, citing the July 1 report by interim assistant city administrator Betsy Lake saying 90% of the tax revenues it would be siphoning off would happen with or without the ballpark. They also expressed concern about the development project’s impact on displacement, traffic, and air pollution, and about the A’s desire to be freed from a requirement that 15% of housing built on the site be affordable, while also backing Lake’s conclusion that A’s owner John Fisher should agree to more than a 20-year nonrelocation clause.
- A’s president Dave Kaval retorted the team would not accept a dramatically revised Howard Terminal plan, saying that while “we can tweak it around the margins,” it can’t be an “organ transplant.” And after saying last Friday that he was “completely comfortable doing a non-relocation agreement,” Kaval pushed back against extending it to 45 years as the council would like, on the grounds that the stadium itself is being privately financed.
Much of this, needless to say, is likely posturing: Kaval wants to see how much of Fisher’s initial ask he can get away with demanding, and the councilmembers want to see how much they can whittle away at it before A’s execs balk at it and … do something else, even if that something else isn’t entirely clear. (Yes, “move to Las Vegas” is the public threat, but right now the A’s aren’t even at the haggling over the price stage with Vegas regarding a stadium there.) Crunch time will be on the 20th, when we’ll see if the Oakland council is actually willing to vote for a reduced subsidy plan that Fisher and Kaval may reject as overly tweaked; and then if that happens, as is likely, we’ll see where Kaval threatens to take his ball and go.
The big stumbling blocks would appear to be that second tax increment financing district, which is supposed to generate nearly half of the tax kickbacks that the A’s execs are seeking; and possibly the affordable-housing requirement, since getting a pass to build only market-rate housing would massively increase the profits that Fisher could generate from a Howard Terminal development. The big question is how much of those tax kickbacks and housing profits Fisher actually needs — or thinks he needs — and without seeing his own projections for how much he’s expecting to make on the project, it’s tough to say at what point he would prefer to walk away. Getting $495 million in tax kickbacks from the more limited TIF district wouldn’t be chicken feed, but then, spending $1 billion out of pocket on a stadium would be a tough hole to climb out of: The A’s would need to increase their annual revenues by around $60-70 million just to break even, and given that only one team in baseball (the Los Angeles Dodgers) brings in that much more revenue than the A’s do currently, that could indeed be difficult to achieve without a pile of public subsidies.
We could be looking, in other words, at a lose-lose proposition, where it’s less a matter of figuring out how the A’s and Oakland (and Alameda County, which so far wants nothing to do with this whole mess) would split up the revenue pie than who’ll be left holding the bag for a project that can’t even repay its own costs. (We haven’t even gotten into the issue of the $10.3 million a year that Oakland would have to spend on city services to the Howard Terminal project — without the help of property taxes, which would be redirected to that public infrastructure fund.) Which is the case for most stadium projects, so it shouldn’t come as any surprise here, but it does help explain why the two sides are so far apart at the bargaining table.
On Tuesday, meanwhile, in a real meeting, the Oakland council voted unanimously to allow the mayor’s office to start negotiations with the five groups — Fisher and a bunch of others — that are interested in buying the Oakland Coliseum site, which would be one possible fallback plan for the A’s if Howard Terminal crashes and burns. Kaval has previously said the Coliseum site is a non-starter, in an effort to keep all eyes on Howard Terminal; putting all the A’s stadium eggs in one basket could come back to haunt him, though, if Oakland decides to sell off its share of the Coliseum site and Fisher is left with nothing. Brinksmanship! It sure is exciting, and would be lots of mindless fun to watch if hundreds of millions of taxpayer dollars and sports fans’ hearts weren’t at stake.
“…It sure is exciting, and would be lots of mindless fun to watch if hundreds of millions of taxpayer dollars and sports fans’ hearts weren’t at stake…”
Amen to that!
I hope the city digs in on the HT funding (if offering up nearly half a billion dollars in subsidies can be said to be digging in… I’m not sure it can).
Since the alleged infrastructure improvements at HT will be required for both the stadium and Fisher’s planned private development, I see no reason why the city should pay the lion’s share of those costs. At best, it should be a split (and not an even split at that, given that he apparently plans to build several times the ballpark’s cost worth of private development). As for the AH or other public use requirements, if he doesn’t want to build them, maybe he should do what other for profit developers do and pay all the costs himself…
The A’s best option remains to build at the coliseum. Some infrastructure improvements would be necessary, but nothing like the spending required to make HT viable. It will, therefore, be interesting to see how hard Fisher bids on the 50% (ish) of that site he doesn’t already have an agreement to purchase.
His much ballyhooed “third option” is to get a land deal from Vegas (maybe) and then pay all costs himself. I can understand why Kaval wants to paint that as the best option out there, but anyone who looks at it with a critical eye will see it is by far Fisher’s worst option (pretty much any way you look at it… it will cost more. The market is dramatically smaller. The market has much more sports – and other – competition for discretionary spending. etc etc)
It’s just really a shame that the money we are talking about really should be going to fund infrastructure maintenance, schools, public health facilities and emergency services… not into the pockets of a billionaire.
JB,
I still say the A’s “best option” is to go 35 miles down the East Bay/Silicon Valley BART line to $an Jo$e. That however would require MLB to take its blinders off and allow common sense to come into play; nothing’s impossible. (as for HT, what a %$#@! mess!)
If we’re dealing in contrafactuals, the best option is for the A’s to move to New York City. In 1958.
MLB couldn’t even convince the Orioles to give up TV rights to the Nats when they moved from Montreal, and San Jose is a matter of territorial franchise rights, not just TV rights. I would put my money on “Rob Manfred uses Pym particles to invent time travel” before the A’s end up in San Jose.
NdM,
For the record, I live in $J. I can tell you from my 50+ years in existence here (save for 4 years in the military) that 1) there are both A’s and Giants fans in $J/SCCo, 2) there’s no territorial concrete barrier at the Alameda/SCCo line that prevents movement to/from and 3) $J/SCCo has a recent 1992 history of being a shared territory (despite efforts by folks trying to portray the Giants territorial rights as an 11th Commandment). So all of this talk about “time travel” and dealing with “contrafactuals” is ridiculous when talking about a hypothetical A’s relocation 35 miles within the SAME region. If you want to defend the idiocy of MLB’s territorial stance re the Bay Area that’s fine; as someone in the trenches I can tell you it’s ridiculous and shameful! THE A’S AND GIANTS ARE ALREADY HERE TOGETHER! SHARE THE TERRITORY! Respectfully.
I’m not defending it. Just saying that yelling “shameful!” at MLB when teams’ self-proclaimed property rights are at stake has never gotten anyone anywhere.
Sure, Rob Manfred could order the Giants to agree to shared rights to San Jose with the A’s. But that’s not going to happen, because none of the other MLB owners want to risk someone from trying to use the precedent to move onto their doorstep. And “But San Jose is different!” isn’t likely to convince them otherwise.
50+ years.
Now that really hurts. My bell bottom jeans and tie dyed T-shirts are older.
Call me old and I’m driving down to South Bay to track you down.
None of this would have happened if the A’s had just stayed in Philadelphia…
Another classic, JB.
They were thinking about Denver in the late 70’s/ early 80’s
Not thinking. Was. In 1980, Charlie Finley was going to sell the A’s to Marvin Davis, with Davis intent to move the A’s to Denver. Oakland Coliseum trustees refused to release Finley from the 10 years remaining on his lease, forcing the A’s sale to Walter Haas Jr.
Sure John, when all else fails, blame Cornelius McGillicuddy. :-)
“The market is dramatically smaller.”
Market size isn’t dispositive. In MLB, the Reds and Braves play in the smallest markets. The Cincinatti CSA has 2.3m people. The Milwaukee CSA has 2.0m people. Since 2001, neither team has had a season where average game attendance is below 20,000.
In contrast, the SF Bay Area CSA has over 9m people in it and the Athletics have had 6 seasons since 2001 where average game attendance is below 20,000. The Miami metro CSA has 6.9m people and the Marlins are drawing an average of 6,000 people per game this season, which is lower than the seasons leading up to the Expos move to DC.
The Cards are somewhere between a small-market and medium-market team, yet they’re consistently top 5 for attendance, together with the LA teams, the Yankees and the Cubs.
If market size were dispositive with regard to financial success, then we wouldn’t be having this conversation, because the A’s already play in one of the largest major metro areas in America.
With respect to Las Vegas, I note that Nate Silver wrote an article about how expanding the NHL to Vegas would be a “disaster”, largely predicated on market-size analysis. He suggested secondary Canadian markets instead. Yet the Golden Knights are clearly the NHL’s most successful expansion team since the Lightning and Sharks back in 92/91. They’re certainly much more financially stable and profitable than the Coyotes, who also play in warm weather but who play in a much larger market.
There are cultural and social aspects that explain this. On that last point, a much larger percentage of Las Vegas’s population consists of East Coast transplants as compared to Phoenix. Thus, there’s a larger hockey-familiar population in LV than PHX, even though, overall, PHX is much larger.
Staying in Oakland or moving to San Jose would be a disaster for the A’s. Their fan base has been displaced out of the Bay Area. As compared to the Giants, the A’s always had a more working class fan base and a larger percentage of their fans were Black.
Due to the tech boom and gentrification, the East Bay’s Black population went down by something like a third as compared to the 1980s. Millions of working class people were priced out of the region. They definitely did not go to San Jose, which is even more expensive and gentrified than Oakland. The A’s fan base has migrated east of the Bay Area and to places like Sacramento, Redding and inland NorCal, Oregon and the Mountain West (Utah, Denver).
On that basis, Portland, OR and Sacramento probably make the most sense of all as relocation cities. That keeps them close to their fanbase, while also breaching new territory. Las Vegas would then be third. Staying anywhere in the actual Bay Area proper would be considerably below that. The suggestion below that they become a third team in the NYC metro area (maybe in northern NJ) makes more sense than Oakland. Culturally, the Bay Area is shifting away from baseball and football toward basketball. Basketball is what the tech bro transplants actually pay for.
I would bet money that the Athletics would generate much more revenue in a renovated Cashman Field in the much smaller LV market than they would in a brand new stadium at Howard Terminal. Again, if it were all about population, the Expos would still be playing in Montreal, the Marlins would be playing in a packed house and the Cards and Reds would’ve busted long ago, instead of being successful franchises.
I’m not sure St. Louis is really the comp you want to go with for Las Vegas, unless you want to argue that Nevada has a long tradition of baseball fandom that would let it punch above its demographic weight.
Vegas has a bunch of reasons — relatively low-income population, lots of people on swing shifts, ungodly heat during the season when baseball is played — that would make one think it’s not ideal for selling baseball tickets in particular. But even if the Vegas A’s sold more tickets than the Oakland A’s, it would still be tough to make up for the unbelievably crappy local TV deal they would get in a city surrounded by endless miles of desert.
The only way this might pencil out would be if MLB agreed to let the A’s move to Vegas and start collecting revenue-sharing checks again. Which would be even more stupid and self-destructive than I expect MLB owners to be, but they do like to surprise me.
Chris: As noted on a previous A’s thread…
Oakland avg attendance 1981-2000: 21,932
Oakland avg attendance 2001-2019: 22,229
If their fan base has moved, it does not show up in the attendance numbers.
Four of the six seasons you mentioned of sub 20k avg attendance were 87-93 loss seasons. That matters.
Market size certainly does matter to owners. The Cardinals generate large market revenues precisely because parts of six states are counted among their “home” markets. Montreal no longer has a team because there was literally no-one willing to own it.
What will Fisher hold as a home market if he moves to Las Vegas? Henderson and, if he’s lucky, Reno and Carson?
“I would bet money that the Athletics would generate much more revenue in a renovated Cashman Field in the much smaller LV market than they would in a brand new stadium at Howard Terminal.”
That would be an all-time terrible bet.
I’d agree. Al Davis told the NFL to go to he’ll, and just moved the Raiders, and got away with it. Why can’t John Fisher do the same and move to SJ?
MLB has a broad antitrust exemption. The NFL doesn’t.
Antonio: That may be the best option for the A’s (San Jose), however it is NOT an option they have the ability to take thanks to MLB.
Many of us may feel our best option would be to marry Julia Roberts. However, unless Ms. Roberts feels the same way, um….
The game will kick into high gear when the A’s start working on a fully flushed financing agreement with Vegas. If those negotiations do not go very well then the city of Oakland might swoop in a provide some concessions provided the A’s follow suit.
I think the A’s should take a page out of the Ray’s playbook and play in the summer in Vancouver BC or Portland, spring/fall in Oakland. Maybe make all teams do this and that way MLB doubles the amount of subsidies they get.
Tongue firmly in cheek.
LOL. If Mark Davis’ ‘visiting fans’ play works out in Vegas then all leagues should move all their teams there. Why try to lure the fans in the market to come to you when they all go to Vegas….
I still think HT would be good for Oakland in the long run, with a coupla caveats:
1) just build the affordable housing. It’s the law, HT district only requires 8%, not 10%, and asking for a waiver is hella skeezy.
2) coliseum needs to be on the table. Even if the “art of the deal” requires tough guy posturing about HT, taking the coli off the table is just a cruel, bad faith gesture.
In context the IFD/kickback thing seems eminently negotiable. The A’s are going to make the site buildable and habitable, which is the city’s job anyway, and get paid back over 50 years (or not – they claim if the money doesn’t materialize they are going to take the risk). For those who saw the City’s presentation yesterday, they are certainly aware of the massively ballooning boatloads of tax revenue this project will generate (73K today becomes 23MM tomorrow, and will increase the land value of the entire city incrementally over time). I think they will do the deal for that reason alone.
RE: The Las Vegas/Phoenix hockey comparison
Ignoring for a moment whose transplants come from where (lots of Midwesterners – who, at last report, have an affinity for hockey – seem to alight in Greater Phoenix, and Vegas also has a strong population of Hawaiians, who usually do not), there are reasons the Knights have been successful and the Coyotes have not.
First and foremost, the Coyotes have no idea what they are doing. No stability, every new owner plumbs different depths of ineptitude. They couldn’t sell Andrew Cuomo a time machine, much less sell hockey in the desert.
The Coyotes are on the wrong side of town, and have been for years. That is a lesser concern, but still a concern.
And they’re completely nondescript. Name four Arizona Coyotes. I live here and cannot. They have no one worth paying to see, no one to care about. They invited their most popular player to breakfast and told him to get out before the menus came.
At the beginning – as is happening in Vegas – the Coyotes were a good team with name players and it was an exciting thing. The Knights seem to be way more on the ball than the Coyotes, but they are new and win. Vegas would be going from basically no teams to three teams in a very short period of time. And while Clark County is growing, it is still not a big market. I don’t know what would happen if the VGK went into a period of prolonged ineptitude on the ice.
Oakland should absolutely tell Kaval and company to go pound desert sand. (As should any municipality threatened with loss of a team unless it gets a ton of public money, even for a “privately financed” venue.) Even if “there’s no there there,” as was famously said about Oakland, losing a pro sports team does not blight a community.
Agreed on the Knights. Ownership should be congratulated for marketing the hell out of it. They have made it the in place to be. But it’s early days… lets see how fans stay connected to the team in year 10 or 12, when the playoffs aren’t a right of spring but a distant memory… and the ticket prices are the same or (more likely) higher.
Lots of teams have seen bumps from new stadia, only to see the fans who were so excited at the new building not renew in year 3, 5 or 7. It’s a lot of money and you have to really want to be there. Maybe Vegas will be different, but I won’t be surprised if by 2027 they look a lot more like the Coyotes and Blue Jackets than what they are today.
Just when you think Kaval’s flirting with Vegas couldn’t get any more clownish:
https://www.sfgate.com/athletics/article/oakland-as-relocating-vegas-nevada-stadium-16307412.php
But hey, at least from what I understand, Vegas didn’t have to pay for the conventional center Loop and Boring is on the hook for a bunch of costs if the system doesn’t meet performance metrics — none of which it has met or likely will meet. So a barely-functional vanity infrastructure project that provides vastly less value than a regular subway somehow seems poised to not screw local taxpayers more than another stadium project. Wild.
It is preparing A’s fans for a 6-12 month long haggling with Vegas