Land Sharks

San Jose hockey franchise aims to corner the market, and jack up the prices, for recreational skating in the East Bay.

The City of Oakland is mulling negotiations to hand over management of the Oakland Ice Center to the San Jose Sharks, which would go a long way toward giving the team a monopoly on ice rink operations in the East Bay.

Such a development might be cool for the legions of new skaters the Sharks group claims it can attract to the perennially struggling two-rink complex by painting its hockey-stick-chomping mascot at center ice. And on the outside of the rink. And on the boards. And probably several other places to boot. But it would be a costly switch for Oakland’s roughly 650 adult league hockey players, who would end up paying through their broken noses.

The Sharks are predicting a 37 percent increase in revenues at Oakland Ice, nearly all of it on the backs of hockey players. Recreational hockey is already prohibitively expensive for some would-be players. At Oakland Ice, a season of twenty games plus playoffs now costs $515 per person — most teams carrying around ten players, plus a goalie. “Sharks Ice at Oakland” would charge a flat team rate of $7,900 per season, meaning either that individuals will have to fork over a lot more, or teams will need to pile on the new players, resulting in less ice time for everyone (in hockey, each line consists of five players plus the goalie, who traditionally plays for free.) Under the Sharks’ proposal, actual time on the ice would cost at least $65 per hour per player — enough, as it were, to score a decent seat at a Sharks game.

The Sharks’ facility-management arm, San Jose Arena Management, thinks players will pay the higher rates. It is confident of this because, well, local skaters have few options. The Sharks already runs Logitech Ice in San Jose and Sharks Ice in Fremont, which charge similar prices. The team is also in talks with Pleasanton officials to build a behemoth four-surface rink, which will very likely put the aging, single-surface Dublin Iceland out of business. Berkeley Iceland closes next month, and if Oakland Ice goes to the Sharks, they will have snapped up the last available East Bay rink.

Or, in the official Oakland staff-reportese: “This means that options for adult hockey players in the Bay Area appear to be somewhat limited, giving OIC management more pricing discretion.”

Claudia Cappio runs Oakland’s Community and Economic Development Agency, which analyzed and ranked the proposals to run the rink. In her view, more Sharks-owned rinks would be good for Oakland — and ice enthusiasts everywhere. “It will give them economies of scale to really do great things,” she said. “They’ll have a critical mass of things to do in the East Bay.”

The Sharks management team, however, resorted to a power play to muscle its way into the top negotiation slot. Indeed, in a report released last October, CEDA staffers recommended that the city deal with the Sharks’ rival, Virginia-based Rink Management Services Corporation, which is the country’s largest manager of recreational ice rinks. They ranked San Jose a distant second, only slightly ahead of Iceoplex, which currently manages Oakland Ice.

The staff liked almost everything about Rink Management’s proposal, from its extensive experience to its careful plan to attract those Oaklanders for whom skating was never a consideration. The company has met with Oakland church leaders, the Girl Scouts, the YMCA, and managers from Big Brothers Big Sisters. Tom Hillgrove, Rink Management’s president, predicted his group could bring more than twenty thousand kids to the rink in its three-year management reign. His company predicts a modest revenue increase. “I’m not saying we’re not going to go up [in price],” he said. “We just don’t think it’s right to go from $5,000 to $7,900.”

But at an October meeting of the Council Community and Economic Development Committee, city leaders, responding to “concerns that were raised by SJAM representatives,” asked Cappio’s staff to collect more information on those two bidders. “It was obvious that we had to correct some information, that there had been some inaccuracies,” Cappio said.

The Sharks’ concerns were wide-ranging. SJAM officials complained about the way their bid was evaluated — charging, among other things, that one staffer was biased because he had children who skated at Oakland Ice, and that staff did not properly appreciate the “overriding importance of brand recognition.” They also criticized the rival proposal, nit-picking its financial package and labeling Rink Management as a marketing “unknown.”

Hillgrove said he was puzzled by the Sharks’ aggressive tactics. “Clearly in the municipal rink operation environment, we have a lot more experience,” he said. “But they seem pretty hell-bent on it. They’re pulling the stops out. Lobbyists and all that.”

All’s fair in the competitive process, according to Cappio. “In a good game, you’re going to do what you can to make yourself the better candidate,” she said.

After meeting with the Sharks in early January, CEDA staff declared that RMSC “still ranked higher, but by a smaller margin.” But when they brought that recommendation back to the committee on January 23, council members ordered the staff to draw up a plan for negotiations with San Jose.

The City Council was set to vote on exclusive talks with the Sharks last week, but Hillgrove stepped in, asking councilmembers to hold off on voting so he could attend their February 20 meeting and plead his company’s case. “[The Sharks] said, as the core of their presentation, ‘It’s our intention to extend our brand,'” Hillgrove said. “How does that benefit the City of Oakland?”

Despite the Sharks’ rosy revenue predictions, the city’s decision may ultimately hinge on its inbred fear of losing money. Which perhaps isn’t so unreasonable, given the Ice Center’s shaky history. The developers who built Oakland Ice in 1996 defaulted on their city loans after the rink had been open just three months, forcing the redevelopment agency to take over the complex. Iceoplex took over management in 2000, but has struggled to turn a profit for the city. The center lost $70,000 from June 2004 to June 2005, and scraped out only minuscule gains the following fiscal year.

Add to the financial struggles a problematic parking situation. The Oakland School for the Arts moved in across the street last year, taking up most of the rink’s free parking and forcing skaters to park in expensive hourly garages nearby. Both issues gave the city reason to be cautious. Basically, Cappio and her staff looked at a lot of other ice rinks and discovered they don’t make money. “We did not want to get too confident,” she said. “We’re in the position of wanting to make sure the council doesn’t go too overboard on some wild projection.”

Under the Sharks’ proposal, if the rink brings in less than $200,000 in annual revenue — far below the predictions of both bidders — the failure would cost the city less than under the Rink Management proposal. If, on the other hand, revenue is anywhere near San Jose’s targets, the city would get less than under the rival plan.

In effect, city staffers are betting that neither bidder will succeed, and for that reason, they’re recommending the Sharks.

At the rink on Sunday morning, hockey players in the over-forty league — most of whom, judging by their play, had a reason for asking to remain anonymous — called the fee increase outrageous and suggested there might be an exodus. One half-undressed skater from the B-league’s Jokers thumbed his orange sweater, swigged his beer, and asked to speak generally for his team.

“The members would like to say they’re unhappy about the price change,” he said. “And if we have to bring our lobbying power to bear …”

He trailed off there, no doubt pondering the upcoming hip-check to his pocketbook.

Full disclosure: The author plays hockey in Dublin; his father plays at Oakland Ice.

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