County of Alameda, Tired Of Dysfunctional Oakland, Asked For Coliseum Share Sale

UPDATE:NFL’s Eric Grubman Called Oakland Coliseum City Meeting Not Claudia Cappio

According to sources who don’t wish to be named – friends I’ve known for over 20 years and close to the process involving the effort to retain the Oakland Raiders, Oakland Athletics and Golden State Warriors, as well as the Coliseum City project – in May, the County of Alameda Board of Supervisors collectively elected to propose a deal to the City of Oakland, where Oakland could buy out the County of Alameda’s share of the Coliseum. As it turned out, the reason wasn’t as Alameda County Supervisor Nate Miley said in his July 29th 2015 press release (issued after the NFL / City / County / Raiders Meeting at Raiders Headquarters) when he wrote:

“The County and the City are in different positions.  The County loses money each year while the City has more revenue generating opportunities to offset costs and losses associated with property development and sports venues,” Miley said.  “The County believed, when it entered this arrangement in 1995, that it would get revenues from operations of the facilities, but they never fully materialized.  Thus, we believe it’s wise to sell our interest to the City, retire our debt, and focus on what we do best—providing our residents with beneficial programs like healthcare and social services.”

The real reason the County of Alameda collectively wanted out of dealing with Oakland regarding the Coliseum can be summed up in two words: Oakland’s dysfunction. Alameda County representatives on the Oakland-Alameda County Joint Powers Authority (JPA), along with Alameda County staffers and retired employees who worked on the Coliseum City effort grew more angry and more frustrated with what one of my sources called “the passing number of city people” involved with Coliseum City, the lack of a single leader or Oakland point person (Oakland Mayor Libby Schaaf was invited to sit on the JPA along with the current two Oakland City Council representatives last fall after she won her race to be mayor – thus giving Oakland prime voting power – but turned down the invitation, reportedly saying she would come to important meetings when needed) as well as Oakland’s lack of desire to cut ties with Coliseum City ENA holder New City Development LLC and its boss, Floyd Kephart.

When Oakland Planning Director Claudia Cappio called the July 29th meeting with the City of Oakland, the County of Alameda, and the Oakland Raiders, the County of Alameda’s reaction was “Why are we doing this? We have met? There was nothing to meet about.” Indeed, the meeting was called only because, according to another source (but not confirmed by Ms. Cappio), Claudia herself called it “just so she could be better informed about what was going on. It was all for her.”

Claudia’s timing could not have been worse: not only did the call for the meeting piss off the County of Alameda, the July 29th gathering at Raiders Headquarters came on the heals of the City of San Diego’s own very successful gathering with NFL Executive Vice President Eric Grubman and other NFL representatives, and city and county officials and experts the previous July 28th day. The result was Mr. Grubman’s observation to San Diego media that, while there was a long way to go, and the meeting was “not a negotiation”, San Diego put together stadium concepts that were “exciting” and “everyone was at the table.”

So Eric flies up to Oakland the next day, Wednesday, and for a meeting called by Cappio, that neither the County of Alameda, nor the Oakland Raiders wanted to have, but set up the perfect storm for the public primal scream from Alameda County, one launched in the form of Nate Miley’s press release, and all because Alameda County Supervisors had had enough of Oakland’s rudderless, directionless behavior, not just with respect to Coliseum City, but in general with all Coliseum-related matters. Alameda County wanted out.
For its part, the City of Oakland Councilmembers were equally frustrated with the County of Alameda, though, to date, not collectively willing to vent their spleen, unlike a number of County officials have done with me this week. And the reason is basically simple: while the City of Oakland agreed with the County’s idea to sell its share of the Coliseum to the City, it wasn’t so jack-bull intent on doing it. Alameda County is.

Cappio’s ill-timed meeting wasn’t the only reason why the Alameda County Board of Supervisors took its action. Oakland City Attorney Barbara Parker upset County officials when she insisted on a read of the Ralph M. Brown Act such that the JPA could not be used as the main meeting point for City and County joint conversations and Coliseum City matters. One of my County sources said “The County Counsel disagreed with Barbara’s reading of the law, but Barbara insisted on it, even though that’s not how we’ve done it in the past.” If Barbara had not forced that reading of the Brown Act, the JPA could have been used as the focal point of negotiation, thus smoothing over the bumpy City – County relationship.

And then there’s Oakland Mayor Libby Schaaf. We all really love Libby, me and my sources (so let this be her wake up call), but for them she was too distant from the playing field of talks and matters with respect to Coliseum City. I know Libby wanted Claudia to be her representative on the project, but the County’s overall perception of Oakland is not just that Claudia’s arrival was late, and her need to have a meeting poorly timed, but there was no Oakland point person before her entry into the Coliseum City talks, but that between the Mayor and the City Council “and all of the (Oakland) Chief Administrative Officers (CAOs) and staff coming and going, It’s difficult to tell who’s in charge,” my source said. “We had Fred Blackwell as CAO and then Deanna Santana and Henry Gardner and John Flores. (And now new Oakland CAO Sabrina Landreth) Over time we didn’t know who we were dealing with. We love and support Libby, but with respect to this (Coliseum matter) we’re disappointed. We expected some stability.”

Oakland’s Strong Mayor / Ranked Choice Voting System Of Government Partly To Blame

Much of the “stability” problem really comes from the “Strong Mayor” system that was installed via voter approval of “Measure X” in 1998 (giving the Mayor the power to hire and fire the Chief Administrative Officer) and along with the election of Jerry Brown as Oakland’s 47th Mayor. Prior to that, Oakland could be counted on to have, for all practical purposes, a ‘fixed’ set of public officials. Before Strong Mayor and then-Mayor and now Governor Brown, Oakland had Robert Bobb, Kofi Bonner (who was Interim City Manager before Bobb was hired in 1997), Craig Kocian, and Henry Gardner as Oakland’s “city managers” working back from 1999 (When Brown took office as Oakland’s Mayor, and Bobb became CAO) to 1981 – Gardner was Oakland’s City Manager from 1981 to 1993, and during that time was voted the best in America.

Since Brown took office in 1999 and the Strong Mayor system was installed, Oakland has had Bobb, Deborah Edgerly, Dan Lindheim, P Lamont Ewell, Deanna Santana, Fred Blackwell, Henry Gardner again, John Flores, and now the newly hired Landreth: that’s nine CAO’s since then, or an average of one new CAO every 1.77 years over that period from 1999 to 2015 (to date).

And when you add to that the change in Oakland economic development officials, including the wholesale departure of Blackwell and Bobb protege Gregory Hunter in 2014 (Hunter’s jumping for joy that he’s out of Oakland and in the private sector), then mix in the changing array of Oakland City Council leaders, and add to that, for the first time in Oakland’s post-war history and due in part to Rank Choice voting, three mayors, Dellums, Quan, and now Schaaf, in for all of one term each (Libby was just elected), versus three terms for Lionel Wilson, two terms for Elihu Harris, and two terms for Jerry Brown, just to list some of the recent examples of long term Oakland mayorship, and you get the collective state of Oakland leadership flux that, mixed in with the problems with Kephart’s Oakland Coliseum City plan and you come up with the place Alameda County’s leadership is in where one source said to me just a moment ago “We’re done. We don’t want to deal with Oakland anymore.”

Alameda County Wanted Kephart’s Coliseum City Plan Booted Last Fall

That Floyd Kephart and the New City Development LLC plan hung around for this long is the fault of Oakland, according to my Alameda County friends. They’d hoped new Mayor Schaaf would have pulled the trigger and parted ways with his complicated plan, but she didn’t do that. Kephart’s Coliseum City concept, which follows the directions of the City of Oakland’s plan as laid out in the 2011 request for developer proposals, was 800 acres. The problem is the County of Alameda was never a partner in that RFP, and so the land that belonged to Alameda County but in that plan was never secured and a cost and financing plan was never created – doing so was left to whatever developer was selected.

Add to that, much of the plan was for uses that didn’t focus on sports stadiums, leading to more land entitlement work (where rights to build on the properties had to be secured) and the NFL’s Grubman’s deadpan comment to City and County officials earlier this year that “you’re working on a land deal, not a stadium deal.”

Then, with all that, Kephart hasn’t come up with any kind of financing. In other word, he has not landed an investment banker, or investor, according to my sources. But this is where I disagree with my sources: the problem was neither Floyd nor the County or the City of Oakland understands that one can fashion a stadium financing plan that doesn’t call for, for example, an investment from the Prince of Dubai, and that Coliseum City was too large to easily finance and needed to be completely rethought. That’s why, in 2014, a desperate Oakland Mayor Jean Quan, fighting for reelection, went out and announced the Prince of Dubai was getting involved in Coliseum City as an investor.

He wasn’t.

Coliseum City was, at 800 acres, too big to finance, and Kephart knew it. When it became obvious that it was going to take time to get Alameda County to the table in a way that satisfied Barbara Parker’s legal concerns, the housing activists started protesting public meetings on Coliseum City, Floyd and his team began to change the size, downsizing it to around 200 acres. Still, there was no sound stadium financing plan, let alone financing plan for the proposed city-within-a-city; much of the time was taken up with forming the general plan for Coliseum City. And that lasted problem through early 2015.

Then, when rough outlines of Kephart’s plan were made available to the public, what stuck out to Alameda County Officials was the same bugaboo that I saw: Floyd Kephart working to have his New City LLC own 20 percent of the Oakland Raiders, and yet Kephart chastising Oakland and Alameda County for not agreeing to a public subsidy. “He’s asking us to put public money in so he can do a deal that makes him an owner of the Raiders. Why Oakland would allow that was beyond me, as it looks bad,” my source said.

The clock was ticking, and the County of Alameda Officials, who were, at first, ready to give new Mayor Schaaf the benefit of the doubt, started to see the same leadership problems that plagued the City’s and County’s lease negotiations with the Oakland A’s in 2014. The call to part with the City of Oakland started in May, with Cappio’s afforementioned July 29th meeting that no one wanted to have except her and Oakland Mayor Libby Schaaf, the straw that broke the County’s back.

Miley fired off his press release.

Next Steps For Coliseum City, Oakland, and Alameda and the JPA

Right now, the County of Alameda is on recess and will not meet again until September 15th – then they will start to look at the Oakland financing plans to purchase Alameda County’s share of the Coliseum that they expect to see from Claudia Cappio. Fortunately for Oakland, Alameda County only wants Oakland to pay off its debt, and not some portion of the assessed value of the Coliseum. “We could pay down that debt ourselves,” one of my sources said, and referring to Alameda County’s comparatively vast wealth, “but we want Oakland to show us a plan.” When I asked if that financing plan could be included as part of a Coliseum City plan like the one I created for Oakland Raiders Owner Mark Davis at his request, my friend said “yes.” Then my friend paused and said “We just want to get out.”

The County May Back Off The Coliseum Sale, But…

Having Alameda County out of the Coliseum picture will impact the ratings of bonds floated by a reconstituted JPA. In my last blog post on Coliseum City, and reporting the fiscal impact of the County’s Coliseum share sale, I found that Fitch Ratings based much of its AA- rating for the 2015 JPA bond refinancing on the County of Alameda’s county and fiscal power; the City of Oakland wasn’t mentioned, and the problems maintaining the sports teams were. My source agreed that was a problem and did say there’s still an open chance the County of Alameda may elect to stay in the game of developing Coliseum City. But Oakland will have to make some definitive changes and send an olive branch to the Alameda County Board of Supervisors.

But the clock is ticking.

The NFL Meeting on the league’s effort to get a franchise to move to Los Angeles, is August 11th, and this blogger will be there in Chicago. Oakland has nothing to show in that meeting, and so is woefully behind San Diego, Carson, Inglewood, and St. Louis. Oakland officials say the Raiders are giving them to the end of the year to come up with a plan, but given where the City is right now, a lot of focused work has yet to be done.

Fortunately, the City of Oakland does have a workable plan, mine, and I created it because of the problems I wrote about just now. In my “Coliseum Reboot” plan there’s enough surplus revenue to buy out the County with room to spare. I knew there was a lot of uneven behavior, but I could not prove it beyond a shadow of doubt. But what happened this week was several Alameda County friends elected to call me and give me the nice August 4th birthday present of a full explanation of what happened that led to the County’s call to get away from dealing with Oakland as a Coliseum partner on July 29th.

It’s Darkest Before The Dawn Of An Oakland NFL, MLB Stadium Complex

While, right now, the days seem dark, all of my friends with Oakland and Alameda County feel this is the best move: “It gets Oakland a way to do deals and they get to keep a lot of tax money,” one of my sources said.

“And we get out of this thing.”

An Oakland Stadium task force for this would have allowed us to avoid these problems, along with a more liberal reading of The Ralph M. Brown Act on the part of Barbara Parker.

Stay tuned.