The Coliseum City Project Proposal, which if successfully developed will result in new stadium homes for the Oakland Raiders and either the Oakland A’s and The Golden State Warriors, or just one or the other, is on the agenda for the City of Oakland’s Oakland City Council Closed Session for Tuesday, October 1st. Here’s what the official agenda looks like:
Special Closed Session Agenda
Tuesday, October 1, 2013
3. Pursuant to California Government Code Section 54956.8:
(a) CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Coliseum City Properties (various properties bounded by
San Leandro Street, 66”‘ Avenue, Eclgewater and
City Negotiators: I Fred Blackwell, Gregory Hunter, Larry Gallegos, Daniel
. Rossi –
I. Developer Negotiators: _ Bay Investment Group, JRDV Architects Inc; HKS
_ Architects, Inc., and Forest City Real Estate Services
Under Negotiations: ‘Price and terms for disposition of the property
The meeting concerns trying to come to an agreement on what the “Exclusive Negotiating Agreement” will look like, and in order to get to that point, ideally the developer negotiators should have financing assembled to purchase the property and go ahead with construction.
That’s not to say that the meeting is an indication that financing has been secured as of this writing.
Oakland Coliseum City Study Flawed
If the financing plan for the Coliseum City Project Proposal is at all based on the study prepared by JRDV International, then the project is doomed to failure. As stated on page 16 of the document presented below, Tax Increment Financing is presented as one of the revenue “sources and uses” that will pay for the development of Coliseum City.
Tax Increment Financing is simply collecting property tax revenue by way of a formula that causes money to accumulate faster than if it were collected on a straight-line, year-to-year basis. Much of Oakland’s flatlands have been converted to TIF zones, called “Redevelopment Projects Areas,” and the resultant money has been employed for the revitalization of Downtown Oakland and for the Oakland Coliseum business district.
But former Oakland Mayor and California Governor Jerry Brown waged war on California Redevelopment all the way to the California Supreme Court, and effectively killed any new call for TIF revenues. The study calls for $31.2 million in TIF revenue for the stadium, even though, on page 6, the same document notes that Governor Brown worked to kill TIF in California.
The other problem is the inaccurate and “cookie-cutter” approach to the determination of “Personal Seat License” revenue. The study refers to $133 million in “membership equity fees” and another set of reports have PSLs as being priced as $10,000 per unit – that’s a fee that’s much higher than that for the vast majority of NFL stadiums. Moreover, that price point, and the number of PSL seats, 10,000, looks a lot like what was developed for the proposed Los Angeles Downtown Stadium.
Look at it this way: in 1995, before the return of the Oakland Raiders to Oakland from Los Angeles, a market study survey was created that was specific to the San Francisco Bay Area, and in particular the East Bay, for PSLs. You would think that 17 years later a market study survey would be something done right off the bat, but that’s not the case.
Unless the developers have a unique new financing vehicle, it’s looking less and less likely that the Coliseum City project is feasible.
Oakland, in this blogger’s view, should file a lawsuit against the State of California. Jerry Brown has deliberately and effectively prevented Oakland from growing into a viable city with a balance of private investment and government revenues to afford needed services.
If Redevelopment were left alone, Oakland would have been able to maintain a larger police force. Now, as we have seen, that’s not possible.