Coliseum City Oakland Gets Bay Investment Group: Rashid Al Malik, Colony Capital LLC – UPDATE
My source’s information, combined with the recent story of Ed Roski and Mark Davis seen out in public together, give real weight to the chance the organization, or at least a portion of it, could be sold.
Roski Long A Part Of Raiders To LA Talks
Ed Roski Is the President and Chairman of the Board of Majestic Realty Co., and has been a part of talks to bring a team to the Los Angeles Basin since 1998, or when this blogger called him to learn more about how that effort was coming along, when I was in the roll of Economic Adviser to Oakland Mayor Elihu Harris. At the time, Mr. Roski had, and still has to this day, 600 acres in the City Of Industry that he’s stated he’s willing to give, without payment, to an NFL LA franchise.
At the time there were two groups that were working to bring the NFL back to Los Angeles: one, featuring famed sports agent Leigh Steinberg, favored an inner city stadium location at the LA Coliseum. The other, led by Mr. Roski, picked a location in City Of Industry, California.
According to my source in our conversation today, the City Of Industry is still the favored location, although the source did not eliminate Torrance from our conversation. But my source did point at Ed Roski as the business man at the center of the Raiders-To-LA inertia.
Ed Roski Could Buy Part Of The Oakland Raiders
For some time, Mr. Roski has sought an ownership stake in the anchor tenant for a planned Los Angeles Stadium. In the case of the Oakland Raiders, Mark Davis inherited a 47 percent stake in the organization from his father Al Davis when he passed away.
According to various reports, Mark Davis has wanted to sell 17 percent of the team – far from the 30 percent Mr. Roski has sought to have what the NFL requires for managing ownership control, but available.
But, to the presumed end of working toward a deal, on April 14th 2013, Mark Davis attended an LA Clippers Game with Mr. Roski, as reported by Vic Tafur of The San Francisco Chronicle.
Mark Davis is reportedly an LA Clippers Fan (which theoretically places him out of the running of people to pursue to help keep the Golden State Warriors in Oakland), but it’s interesting that, of all of the people to go to an LA Clippers game with, his viewing friend would be Ed Roski.
That lends credibility to the view that Mark Davis is looking to solve the $121 million tax problem he gained by inheriting his father’s stake in the Oakland Raiders by selling part of the Raiders – and here sits Ed Roski at The LA Clippers Game. And just as we approach the end of 2013, and the end date of the Oakland Raiders lease at the O.co Coliseum.
At that point, the Oakland Raiders would have arguably satisfied the NFL’s 12 factor considerations for franchise relocation, according to the NFL’s Constitution:
1.
The extent to which the club has satisfied, particularly in the last four years, its principal obligation of effectively representing the NFL and serving the fans in its current community; whether the club has previously relocated and the circumstances of such prior relocation;
2.
The extent to which fan loyalty to and support for the club has been demonstrated during the team’s tenure in the current community;
3.
The adequacy of the stadium in which the club played its home games in the
previous season; the willingness of the stadium authority or the community to remedy any deficiencies in or to replace such facility, including whether there are legislative or referenda proposals pending to address these issues; and the characteristics of the stadium in the proposed new community;
4.
The extent to which the club, directly or indirectly, received public financial support by means of any publicly financed playing facility, special tax treatment, or any other form of public financial support and the views of the stadium authority (if public) in the current community;
5.
The club’s financial performance, particularly whether the club has incurred net operating losses (on an accrual basis of accounting), exclusive of depreciation and amortization, sufficient to threaten the continued financial viability of the club, as well as the club’s financial prospects in its current community;
6.
The degree to which the club has engaged in good faith negotiations (and enlisted the League office to assist in such negotiations) with appropriate persons concerning terms and conditions under which the club would remain in its current home territory and afforded that community a reasonable amount of time to address pertinent proposals;
7.
The degree to which the owners or managers of the club have contributed to
circumstances which might demonstrate the need for such relocation;
8.
Whether any other member club of the League is located in the community in which the club is currently located;
9.
Whether the club proposes to relocate to a community or region in which no other member club of the League is located; and the demographics of the community to which the team proposes to move;
10.
The degree to which the interests reflected in the League’s collectively negotiated contracts and obligations (e.g., labor agreements, broadcast agreements) might be advanced or adversely affected by the proposed relocation, either standing alone or considered on a cumulative basis with other completed or proposed relocations;
11.
The effect of the proposed relocation on NFL scheduling patterns, travel
requirements, divisional alignments, traditional rivalries, and fan and public perceptions of the NFL and its member clubs; and 09/09
12.
Whether the proposed relocation, for example, from a larger to a smaller television market, would adversely affect a current or anticipated League revenue or expense stream (for example, network television) and, if so, the extent to which the club proposing to transfer is prepared to remedy that adverse effect.
The sticking point is that where Ed Roski has the land and some of the money, the downtown LA Stadium has the $700 million naming rights agreement. If the two groups could be fused into one, the result would be a package the Oakland Raiders would be hard pressed to pass up.
Especially since obtaining financing for the planned Coliseum City Development is a hard road to navigate, according to my source.
Oakland Coliseum City Development: Too Much Cost Chasing Not Enough Money
According to my talk with my source today, the planned, 800-acre Oakland Coliseum City Development is the victim of being too much development cost chasing not enough money to build it, but the focus at this point is not development of the total acreage, but of the 150-acres that make up the Oakland Raiders stadium site itself. That’s first-priority, according to my source.
In an era where California Redevelopment Agencies (CRA) using Tax Increment Financing Revenue was active, this would not be the case, as the captured property tax revenue, spread and accumulated over a 40-year-period, would produce the gap financing required to build a stadium for the Oakland Raiders. But, thanks to California Governor and former Oakland Mayor Jerry Brown, the CRA-TIF tool is not easily available. (I say “easily” because San Francisco has used it for the Trans Bay Transit Center Development Project, currently under construction)
My source says that every financing combination is being considered, but the hang-up appears to be how much can be raised from personal seat licenses – right now, my source says that the expected revenue gain is about $110 million.
Ironically, that revenue base reads a lot like the one AEG used for its original set of revenue and cost estimates for the LA – NFL Stadium. And it’s the same one I attacked as being an incorrect approach.
Naming rights deal scenarios are also being analyzed, and a firm with experience in that area has been commissioned. No, not the Denver-based Bonham Group, which worked on what’s now called Oracle Arena, but Spectrum. This is a change from past Oakland stadium naming rights deals, which were managed by Oakland-Alameda County Coliseum executives, with the input of consultants – this one is consultant-managed with final approval by the City of Oakland and The County Of Alameda.
As to what can be raised from naming rights really depends on how the stadium is packaged as a marketing entity. Historically, from a stadium naming rights perspective, the Oakland Coliseum has not been sold well at all.
Indeed, the current Oakland-Alameda County Coliseum naming rights deal, signed in 2008 for a total of just $7.2 million over six years, is actually for less from an annual payment view adjusted for inflation, than the Network Associates Coliseum deal that was signed in 1998 ($5.8 million for five years), and then renewed in 2003 (five years for $6 million), ten years before.
(By contrast, the naming rights scenario I designed in to the Super Bowl- Oakland bid for the 2005 game called for a $200 million agreement, and such that both the stadium, and the field itself were named. For example, Oakland Corporate XYZ Coliseum, at Corporate ABC field. And by “field,” I’m referring to the grounds around the outside stadium, and out to the parking lot areas, not the field of play itself.)
So, the objective is to reduce the cost of the stadium, and gain financing at the same time. On the matter of cost reductions, the switch from a retractable roofed stadium to an open-air one wasn’t because of cost, but because of the Oakland Raiders.
The Silver And Black prefers an open-air stadium, and the only workable design is in Arizona, and the roll-in, roll-out surface adds to the total, from my source’s point of view. I offered the new Minnesota Vikings glass-roofed design as an alternative, which my source said they “were looking at.” (The Arizona Cardinals Stadium costs just $455 million to build ($513 million in 2013 dollars), but then Arizona’s labor and construction costs and requirements are less, and there are no seismic considerations to add in.)
It must be noted here, that while the National Football League is still pushing for the Raiders to play in the San Francisco 49ers Levi’s Stadium, set to open for the 2014 NFL Season, Mark Davis has said that he doesn’t want to be “a visiting team in his home region” or words to that effect, like the LA Clippers are at Staples Center, which is considered more the home of the LA Lakers than the LA Clippers.
“We don’t have a rich person around who can just plop down some money,” my source said. But, that said, they may have a rich group of people that hopefully can do the same.
My source says one possibility is with the same team that has partial ownership of the airline organization Emirates, and who don’t see “investing in East Oakland as a challenge, considering what they did in Dubai.” My source is convinced this is a very really possibility. “It’s just a matter of time, but we’ll get it done,” the source said.