Oakland’s Play for the A’s

Unlike San Jose, Oakland's redevelopment agency can finance land acquisition and infrastructure upgrades needed for a new ballpark -- and Major League Baseball knows it.

Oakland A’s co-owner Lew Wolff wants to move his team to San Jose so badly, he’s offered to loan that city money to make it happen. San Jose probably will need Wolff’s help because its redevelopment agency is in financial trouble. But if Wolff were to give Oakland another shot, he could save his cash. The reason is that Oakland’s redevelopment agency is in much better financial shape than San Jose’s, according to interviews and city financial documents, and won’t need assistance from the A’s to assemble land and make infrastructure upgrades for a new ballpark in Jack London Square.

Oakland, in essence, is offering the same deal to the A’s as is San Jose. Both cities say they plan to use redevelopment funds — money earmarked for revitalization — to acquire the land needed for a new ballpark and pay for infrastructure improvements. It will be up to the A’s, Major League Baseball, and corporate sponsors to pay for the $450 million ballpark itself.

But while San Jose’s plan is hindered by financial woes, Oakland’s is not. Budget documents show that Oakland’s redevelopment fund for the Downtown/Jack London Square area, also known as the city’s Central District, will have a projected $20 million total surplus in its operations and capital accounts next year. In addition, City Administrator Dan Lindheim, who also manages the redevelopment agency, says the Central District has plenty of bonding capacity to finance what’s needed for the ballpark.

In fact, Major League Baseball’s blue ribbon task force has combed through the financial records of Oakland’s redevelopment agency in recent months to confirm that the city’s ballpark plan pencils out, Lindheim said. The league also brought in noted stadium architects Populous, the designers of AT&T Park in San Francisco, to examine Oakland’s planned site for the new stadium in Jack London Square, known as Victory Court. Populous, formerly known as HOK Sports, analyzed East Bay ballpark sites during former City Manager Robert Bobb‘s tenure. “They’ve spent an enormous amount of money on high-priced consultants to go through this,” Lindheim said, referring to the league’s task force.

Under Oakland’s plan, the Central District of the city’s redevelopment agency would sell twenty- to thirty-year bonds to finance the land purchases and infrastructure upgrades. The bonds would then be paid back with property tax revenue generated by the ballpark and the surrounding planned development, which is to include housing, retail, and office space. The proposed deal also could turn out to be a boon for the redevelopment agency, because the ballpark is expected to jumpstart the stalled nearby Oak-to-Ninth housing development and the foundering Jack London Square development, which both promise to generate hefty property tax revenues. Michael Ghielmetti, president of Signature Properties, co-developer of Oak-to-Ninth, is a strong backer of the ballpark plan.

Mayor-elect Jean Quan also is an ardent supporter of a 39,000-seat stadium at Victory Court. “I think it will help bring us out of the recession,” she said. As a longtime member of the Oakland City Council, which oversees the redevelopment agency, Quan also agrees with Lindheim that the Central District can afford it. “It’s in relatively good shape,” she said.

However, Quan said that she intends to make sure that the Central District also has enough bonding capacity to finance a proposed large retail development in the Upper Broadway area, known as the Valdez Triangle. The mayor-elect believes that the ballpark and the retail project represent Oakland’s two best hopes for turning around its economy. “We just have to make sure we don’t starve retail,” she said. “It’s my goal that we have enough to do both.”

Lindheim, who is staying on while Quan conducts a national search for a new city administrator, said there’s enough money for both projects. However, he said that the ballpark project could delay the Valdez retail plan. He said that shouldn’t be a problem because the retail proposal is nowhere near as fully developed as the ballpark plan. “It’s not like we’re going to be spending a lot of money on that right away,” he said of the Valdez retail proposal. “It’s not going to happen immediately.”

Last week, the city Planning Commission embarked on an environmental impact report for the ballpark. However, the city council must still appropriate the $750,000 needed to pay for the study. At this point, there appears to be enough votes on the eight-member council to approve it. Along with Quan, Councilmembers Jane Brunner, Larry Reid, Pat Kernighan, and Rebecca Kaplan all appear to be on board. Councilmembers Nancy Nadel and Ignacio De La Fuente are the most probable “no” votes. At minimum, the council likely will approve the traffic study portion of the environmental report. That way, if Major League Baseball were to approve the A’s planned move to San Jose, then Oakland would not have wasted money because the city could still use the traffic study for other proposed Jack London Square projects.

Originally, Oakland submitted four sites — three in Jack London Square and the Oakland-Alameda County Coliseum parking lot — to Major League Baseball’s task force for consideration. The league’s experts selected the Victory Court site as the most viable spot for a new ballpark. It’s not far from downtown, it’s close to BART, and it’s on Oakland’s waterfront — and thus met major criteria set out by the league. “They like the waterfront site,” Lindheim noted.

City officials do not consider a somewhat recent proposal to build the ballpark on top of Interstate 980 near downtown to be viable. It also would disrupt the city’s ability to build a new ballpark by the opening of the 2015 season — as requested by the Major League Baseball — and thus would likely kill Oakland’s chances of keeping the A’s from leaving town.

Oakland currently owns some of the land at Victory Court, but would still need to purchase numerous parcels and pay for the relocation of businesses. But if the city can’t reach settlement deals with property owners, then it would have to use eminent domain — a prospect also facing San Jose. Among the larger land owners on the Victory Court site is Peerless Coffee, a longtime family-owned company. Last week, Peerless President George Vukasin Jr. said in an interview that his company doesn’t want to sell and that other property owners on the site feel the same way. Building a new coffee roasting facility elsewhere might cost at least $30 million.

Oakland also would likely need to add an off-ramp lane from Interstate 880, and build another pedestrian bridge over the railroad tracks to connect with Jack London Square. The total price-tag for the redevelopment agency is expected to range from $80 million to $100 million. The city’s general fund, which is used to pay police, fire, library, parks, and other basic services, would not be encumbered by the deal.

Although traffic and eminent domain are sure to be the thorniest issues facing the ballpark project, parking may not be. The city plans to build 2,500 parking spots on the Victory Court site, and the rest will be off-site. One of the leading options is to turn vacant parcels underneath I-880 into surface parking lots. Such a move would give the city at least 10,000 parking spaces within five-eighths of a mile of the ballpark.

Off-site parking also would be better for local retail stores, restaurants, and bars because the ballpark is expected each year to attract 2.5 million to 3 million fans — who would walk right past those businesses before and after each game. It also would relieve the city from having to build parking garages. “They initially thought we would have to build massive parking structures all over the place,” Lindheim said of Major League Baseball’s task force. “But we basically convinced them that we won’t have to do that.”

It’s unclear when the task force will make its final recommendations and when the league will decide the A’s fate. Oakland officials believe their plan, which has been thoroughly vetted by the task force, will make it more difficult for the league and baseball Commissioner Bud Selig to set aside the San Francisco Giants‘ territorial rights over the South Bay. The Giants have adamantly opposed the A’s planned move to San Jose, and it would take three-fourths of the league’s owners to overcome the Giants’ objections.

In other words, for the A’s to move to San Jose, the league must conclude that Oakland’s ballpark plan is unviable. At this point, that doesn’t appear to be the case.


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