“Oakland Raiders, Oakland Elected Officials” is worth reading for anyone who’s following the Oakland Coliseum City story. It comes from what I reported as a “history of animosity” but, in the hope for a better future, left the that negative term out of the title, this time.
The text is based on a report I originally wrote while I worked as Economic Adviser To Oakland Mayor Elihu Harris in late 1998. (As a note, Amy Trask, pictured here, was Raiders CEO during the history presented. I’m not blaming her for the situation, just stating a fact.)
In 2003, I then reprinted it, with additional information, after I stated my first blog network as part of the Sports Business Simulations website.
Now, here it is, but in a more readable form online than ever before:
A History of Animosity Between The Raiders and Oakland Elected Officials.
The 1979 argument starts it all: A proposed $54 million deal to add 10,000 seats to the Oakland Coliseum and install luxury boxes was killed by the Coliseum Board and then president, Robert Nahas and another board member, the late Joe Bort.
1981: Oakland tries to keep Raiders in Oakland using “eminent domain” claim — fails in court.
1989: Oakland officials begin planning phase of project to build the Coliseum into a “Raiders specific stadium.” By 1991, Personal Seat License-based deal proposal skyrocketed to $600 million.
1993: Oakland hosts a preseason game between the Houston Oilers and the LA Raiders, attracting over 50,000 people (near capacity at the time). Talk of moving back to Oakland reaches the public’s ear.
1994: Oakland Officials redesign the $600 million 1989 deal and come up with a scaled down “$190 milllion” version. The NFL, fearing the loss of a team in the largest TV market in the country, develop an alternative deal using Hollywood Park Race Track as a site. The City of Oakland used the material from the $600 million deal, including an Economic Research Associates study that projected as much as $60 million from the sale of PSLs in the Bay Area market. That study was released in 1989, and never updated to 1994 conditions.
1995: Talks between Oakland Officials and The Raiders became more serious and frequent, but so do talks between the Raiders and Hollywood Park Officials. Then-Oakland / Alameda County Coliseum Board President George Vukasin complains “we’re losing time that could be spent selling tickets.”
August 6, 1995: Al Davis signs the deal that brings the Raiders back to Oakland. But there are problems:
1) Marc Ganis: The sports marketing specialist was unable to deliver on the sale of luxury boxes and PSLs. As of August 25, 1995, it was reported that the 31,213 PSLs sold were far short of the 55,968 PSL total. But the full implications of this fact were not known to either Oakland Officials or Alameda County Officials until one year later. Ganis is fired and another sports marketing specialist, Max Muleman, is brought in. He is no more successful than Ganis.
2) August 10 1995: Oakland Alameda County Coliseum Joint Powers Authority is established. The Oakland City Manager (then Craig Kocian) and the Alameda County Supervisor (then Steven Szalay and now Susan Muranishi) are the joint members of the JPA. The JPA’s job is to manage the Oakland Coliseum. The JPA’s meetings were seldom placed on public notice, and few seemed to know what was going on.
3) October 1995: Seattle Seahawks game marks the first blackout of Raiders home games. This, in spite of an extension in the NFL’s sellout deadline to 6 PM on that Friday because 4,000 new seats were constructed to transfer the stadium from a baseball configuration to a football setup.
December 9, 1995: Oakland Elected Officials are briefed on a startling discovery by Coliseum Financial Advisor David Stephens of Stephens McCarthy Kuenzel. He tells them that by 1998 the City and the County will be responsible for the payment of debt service on the Raider Bonds. Further, he tells them that payment obligation could extend 25-years and escalate to over $400 million in payments. The required level of PSL sales was $80 million; only $57 million in PSLs were actually sold in 1995.
February 1996 – Councilmember Ignacio De La Fuente becomes Chairman of the City of Oakland Community Economic Development and Housing Committee of the Oakland City Council. He becomes the unofficial head of a five-member voting bloc called by some observers “The Peratatistas” because of their political relationship with then Alameda County Supervisor, and now California State Senator Don Perata. (Yes, the name “Peratatistas” came from “Sandanistas”) Mayor Harris steps away from the Coliseum, siting “lack of control” and begins to concentrate on a strong-mayor initiative. De La Fuente seeks council control of the Coliseum because “it’s our money now” (refering to the PSL bond issue and the City and County’s responsibility to pay debt) Later that year, problems with the stadium sound system and the seat replacement device (to ease the switch from baseball to football and back again) drive up the cost of the stadium improvements to over $200 million. Cost overruns eventually drive the total expense to 32 percent over the orginal estimate.
July 16, 1996: Stephens sends a memo outlining bond deficit options to the City of Oakland’s Treasurer (at the time) Jan Mazyck.
December 17, 1996: JPA enabiling agreement is amended to place power in the hands of four elected officials: two representing the City of Oakland and two from the County of Alameda. It also calls for 10 members from the private sector, but that part of the new resolution is not acted upon.
February 1997: the first debt service payment of $14 million is due from the City and County (a 50-50 split) As of the writing of this document (October 28, 1998) 23,000 PSLs remained unsold.
How this all materialized into a lawsuit (new material added after 10-28-1998): my view as Economic Advisor The entire matter started over the now-failed deal to place the name “UMAX” on the Coliseum stadium. The Raiders objected to the planned placement of the name on signage, and also to the responsibility over the flow of payments to certain parties, specifically an OFMA Luxury Suite Sales Specialist named Lynn Longmire. Longmire claimed that she was owed $1.9 million or 10 percent of the $19 million that UMAX would have spent for the naming rights over 20 years. Longmire worked under a verbal contract with the OFMA and her boss, Jim Otto, also a Raider Legend.
When the Raiders met with Coliseum and City and County Officials to talk about the UMAX deal, the Raiders asked the City to pay for her part of the monies, while the City looked to the Raiders. If the UMAX deal were consumated,according to my copy of the Master Lease Agreement, Section 5.5 “Stadium Name” reads that the Raiders would have been entitled to share revenues with the Coliseum from the stadium name, after relevant expenses were deducted. (That section of the lease agreement does not provide a specific percentage share.)
Thus, there was a disagreement over what the Raiders were entitled to, and who would pay Ms. Longmire. All of these disagreements did not seem to stop the movement of the deal to completion, as the new Coliseum Authority had set up a press conference at the West Side Club of the Coliseum stadium to annouce the new UMAX deal.
At the time, Oakland Mayor Harris was in China, which placed De La Fuente in command as President of the Oakland City Council. It was mid- 1997 as well, and as 1998 was an election year, De La Fuente was runnning for Mayor. The press conference provided a good platform for his candidacy as Harris was out of town. The Raiders met with De La Fuente and Coliseum Officlals just before the press conference.
Exiting from the meeting, the Raiders left the building under the impression that the press conference was cancelled. I came to the Coliseum because I asked De La Fuente to wait until Mayor Harris returned from China before any event annoucing the deal was produced. But after the Raiders departed, De La Fuente ordered the press conference to start.
The shocked Raiders hit the ceiling and their anger was reflected in a letter from the organization’s CEO, Amy Trask. The letter did not specifically state that the Raiders would move from Oakland, but it did threten that the team would seek to terminate the Master Lease if the City and the County didn’t act in the sprit of the agreement.
Oakland City Attorney Jane Williams, acting with Coliseum Interim Administrator Denna McClain, decided to sue the Raiders before the Raiders sued them. It was a first strike tatic, even though the team didn’t actually state that it would sue the city, period. The Raiders countersued the City of Oakland for fraud, which led to the lawsuit before the jury today (in 2003).
Stay tuned.