Man, do I hate multiverse journalism:
The impetus for all this breathless headlining yesterday afternoon was this article in the Nevada Independent, which alleged that the owners of the Oakland A’s have agreed to accept “significantly less” than the $500 million in public money they initially asked for in Las Vegas, according to your old friends and mine, “sources with knowledge of the discussions.” The agreement is reportedly with “major state officials,” and maybe Clark County officials as well — the story mentions them as being involved in the discussions but not as part of the agreement, and obviously county officials are not state officials, so who really knows.
How much less than $500 million? Those unnameables said:
The public financing package that will be presented to lawmakers will be lower than the initial threshold of $195 million in transferable tax credits the state set last week, and see a similar reduction from the initial request of $200 million in bonds backed by Clark County.
So that’s $X lower than $195 million in tax credits, plus another $X lower than $200 million in mega-TIF money, for a total of $(395–2x) million.
The Las Vegas Review-Journal, meanwhile, has the revised figure as down a whole $15 million to $380 million total: $180 million from the state (with half of that repaid over time, though it’s not clear if with interest or not), $150 million from the county, plus $50 million in, uh, stuff — all cited to “a person with knowledge of the negotiations.” We’ll see when a bill is finally introduced, but for now it’s certainly clear why stadium advocates might want to get that “significantly less” verbiage into the paper before actually revealing the fine print.
If A’s owner John Fisher actually is agreeing to take a lot less money to move to Vegas, then he will be completing a remarkable self-own, in which he secured more than $700 million in infrastructure money in Oakland, blew that deal up by announcing a “binding” land purchase in Vegas that was anything but, then accepted a fraction of that value from Nevada officials while putting up more than $1 billion himself for a stadium in order to save face. It would also be a rare case of a state playing relative hardball with a sports franchise with no leverage, though giving away $380 million or even $(395–2x) million is still not exactly chicken feed.
If the eventual bill comes packed with hidden subsidies, meanwhile, the narrative is somewhat different: Fisher taking advantage of the end of the Nevada legislative session to play a desperate Hail Mary that could end up nabbing him a huge subsidy from Nevada, all for a baseball team that nobody wants to see because it can’t really play baseball after Fisher sold off all its best players.
Yet another unnamed source tells KVVU-TV that a “joint statement” could be issued “as soon as” today. If so, maybe we’ll soon know more, though also there’s no guarantee any statement will include detailed financial and lease figures. What we really need to see is legislation, which by law needs to be introduced by Friday — doing so late in the afternoon right before Memorial Day weekend would be the most egregious kind of Friday news dump, so hopefully it’ll be before that, but if not, I have no plans then, so meet you back here whenever.
While we have some rough numbers of the public side- how are the A’s going to handle their financing?
My guess is that if Fisher and Kaval move the team, it’s because they couldn’t pay for their share of Howard Terminal- no matter what the public subsidy was going to be.
In Vegas they are getting an ok subsidy, not what they asked for but enough AND they have a new sugar Daddy with Ballys- how much of the private financing is actually coming from them?
Ballys is a third tier gaming company, they were the only bidder for the big Chicago casino in Riverwest, which seems like a pretty bad deal for everyone (huge public subsidy, state of illinois has high gaming taxes which is going to make it difficult for any operator, there’s a perception amongst illinois politicians that this single casino is going to balance their books).
Using valuable strip real estate for a stadium seems like something a loser company would do. Tearing down/rebranding a casino that has one of the busiest streets in town named after it also seems foolish.
But it seems as if cash-poor Fisher has found his sugar daddy.
Not that we really know anything for sure, but it sounds like Bally’s is just providing free land, not any stadium cash. There’s been one report of “up to” $175 million in “improvements” in exchange for “a commensurate rent increase,” which would amount to a $175 million loan from Bally’s to Fisher, which wouldn’t really be worth all that much.
As for how Fisher would cover his private costs, that’s a good question, but seeing as we still don’t know how much the stadium would actually cost or how much he’d be getting from the state and county, it’s hard to even guess right now.
This saga just gets curiouser and curiouser…..
There were multiple bidders for the Chicago casino-
-Bally’s offered proposals in two different locations
-Rivers offered proposals in two different locations
-Hard Rock offered a single proposal
Bally’s proposal at Freedom Center was selected after several months of presentations and negotiations
The proceeds from the casino are to be used to help cover pension obligations, no misconceptions that it will “balance the books”.
But don’t let facts get in your way, bro.
Wouldn’t MLB want to go where the subsidy is best in order to hold up other communities accordingly?
In the abstract, sure. But MLB is 30 different billionaires, each of whom has their reasons.
Yes. Unless that would be Oakland, I guess, because they have offered a lot more money than anyone else.
“… Listen, Oakland, if you don’t up your offer from $700m+ for a new stadium – possibly on land we already own – we will take our Single A baseball team off to another city with about a third of Oakland’s regional population, build our own more expensive stadium (with a roof because it’s 130 degrees there sometimes) on land we are renting from a casino company while probably giving the casino company the ancillary commercial development that makes a new stadium worthwhile, and we’ll do it because they are offering a subsidy of $350m (maybe)”
Man, that Dave Kaval is one genius negotiator.
And if there was any evidence needed (beyond Bezos and Musk) that being a billionaire doesn’t necessarily require intelligence, Fisher just conclusively proved it.
Perhaps Mayor Thao has been approaching this incorrectly. If what A’s ownership really wants is not $495m or $775m in subsidy, but $350m, she should just offer that. Sounds like they would accept.
Can Oakland regain control of the Coliseum land? If they can get that back on the tax books with something more useful than a stadium, they should move quick before the next new stadium scheme riles up the locals.
I am not familiar with California law on this sort of thing, but as a general rule “yes”. When you are the municipal or regional authority, you always have methods of obtaining control of land from a private (or in this case joint power) land owner if you really need it.
It could be very expensive. But it can be done.
In the specific case of Fisher and the city, they appear to be joint owners (it has never been made clear whether Fisher bought out a portion of the coliseum land or just took over the exact role the Alameda county authority had within the lands on which the coliseum sits). At one time there was a “joint powers authority” that governed the sports site. I would be very surprised if Fisher now holds Alameda county’s place on that authority, given that he is not a government entity (although he does appear to want the power of taxation…)
That said, we don’t even know if he has actually exercised his option to purchase the Alameda county portion of the jointly owned property, nor how one would go about doing that given that the site was originally governed under an agreement between two government entities.
I know the public was told he had “bought Alameda County’s share” for, iirc $85m. But what exactly he bought has never been made clear. It can’t be shares in the company that owns the site as there doesn’t appear to be one. Nor does he appear to own a specific portion of the property itself (I would doubt there is a specific title or titles to this land given the way it was governed/owned from 1966 on).
This is why I wonder if he actually has anything more than an agreement to buy out Alameda’s interest (possibly conditional on also acquiring Oakland’s interest)?
Others have suggested he clearly bought and paid for it. Yet I haven’t seen any hard evidence this actually happened beyond newspaper articles claiming it was so. The last firm info I have is from Oct 2020, when the County board of supervisors said this:
“I want to report the county’s sale of its interests in the Coliseum property continues to move forward. Yesterday, after completing a lengthy due diligence period, Coliseum Way Partners confirmed its commitment to the deal and deposited funds required to proceed.”
What does “deposited the funds required to proceed” mean? Are we talking a deposit? A downpayment? Could it be the standard token amount used in contracts, $1?
The Board of Supervisors also said at the time that the corporation (Fisher) was negotiating to purchase the remainder of the site from the city of Oakland.
Has anyone else heard anything concrete since then?
I haven’t.
You raise a really good question. My understanding is that it was half owned by City/County, now City/Fisher. Of course, Fisher was hoping for a quick steal of the other half to fully own some really valuable real estate. (The surrounding neighborhood is bad but prime for gentrification.)
I do recall hearing that they only had the option to buy it. But that was years ago. I don’t see how such an option could just remain open for years. It wouldn’t surprise me if Alameda County wrote such a bad deal that Fisher is sitting on land without having to actually pay for it.
The only info I have found “after” the Oct 2022 BoS statement was a column from Daniel Borenstein in the Merc.
He said Fisher (coliseum way partners, inc) had negotiated an agreement with Alameda and would make payments on the land until 2026, at which time the “title” would be transferred.
I have no idea if this was based on a reading of the actual agreement, third party info provided by people who had seen the agreement, or just rumours circulated by interested parties (or otherwise). No sources were named. No schedule of payments/dates was released either. It is entirely possible that Fisher isn’t required to place anything but a deposit on the property until 2025/26. We just don’t know.
Unless the parcel has been titled in such a way that it can be sold in blocks, I don’t see how a title transfer is possible unless the sale agreement also stipulated that FisherCo’s offer was contingent on reaching a deal with Oakland for the other half of the property. My understanding is that the site was developed as a whole under the JPA and that if it has a title at all, it is a single title administered under the JPA with the city and Alameda county sharing ownership and costs under what amounts to a gentlemen’s agreement.
Further, Borenstein states that ‘this means Fisher can block any future development on the coliseum site whether the A’s are playing there or not’.
This assumes facts not in evidence. For one thing, most partnership agreements include language preventing one partner from blockading the other in the event one wants to develop and one does not. Shotgun (or other buyout) clauses are also not uncommon and prices – including methods for obtaining fair market assessments – are sometimes agreed in advance based on what the original partners have invested.
The one main advantage Oakland has is that they are the regulatory body for the parcel. They have the ability to do things like rezone it or (perhaps more beneficially) undertake a major development on the property that would require their recalcitrant partner to either invest a hefty sum into the improvements up front (demolition and subdivision of the parcel, installation of roads and utilities sufficient to support a light commercial and residential development around the arena, for example) to maintain ownership or sell.
Owning half of the coliseum lands may not be the hostage situation some are painting it out to be for Fisher, in other words.
If the city chooses to play hardball, they can certainly make it very expensive for Fisher to continue to own a notional “50%” of the development. Once passed, any zoning change or project development by the city or it’s chosen contractor would require any partner to commit the same amount of capital as the city is doing to the project. The city can apply to the feds for funding for their portion of the subsurface utilities and surface improvements (which could run into the hundreds of millions if they plan it right). John Fisher cannot.
If he applies to subdivide the parcel so he actually owns a specific portion of the property, the city is under no obligation to accept or approve the application.
I have seen no evidence that the city of Oakland could conceive of playing hardball like this… but there’s a first time for everything. And, if anyone deserves it, IMO it is this particular billionaire.