A’s offer to purchase Coliseum site wins East Bay officials’ hearts

The Oakland's A's stadium is pictured at the Oakland Alameda Coliseum on Monday, March 26, 2018, in Oakland. The Oakland's A's stadium is pictured at the Oakland Alameda Coliseum on Monday, March 26, 2018, in Oakland. Photo: Noah Berger / Special To The Chronicle Photo: Noah Berger / Special To The Chronicle Image 1 of / 8 Caption Close A’s offer to purchase Coliseum site wins East Bay officials’ hearts 1 / 8 Back to Gallery

Oakland and Alameda County officials quickly warmed Monday to the A’s offer to buy the publicly owned 130-acre Coliseum site, but some cautioned that a deal would be more complex than swapping debt for land, as the team proposed.

A’s President Dave Kaval sent Oakland Mayor Libby Schaaf, the City Council and the Alameda County Board of Supervisors a letter over the weekend with an opening bid: The team would assume full control and ownership of the Coliseum sports complex and surrounding land — including Oracle Arena — in exchange for paying off the nearly $137 million in debt owed by the city and county.

“We’d take on the entire debt, and the city and county wouldn’t have to be burdened with those payments,” Kaval told The Chronicle on Monday. “That saves the general fund money that can go to homelessness or crime prevention or whatever else the city and county think make sense.”

East Bay leaders applauded the overture. Councilwoman Desley Brooks said she was “excited that they, too, see East Oakland’s appeal and potential.” Councilwoman Rebecca Kaplan said she was “very grateful” for the A’s “very positive step.”

To lose Oakland’s remaining professional sports team would be a “travesty,” as Alameda County Supervisor Scott Haggerty put it, and a “black eye on the city,” in the words of Supervisor Nate Miley. Both sit on the Coliseum Authority board.

Photo: Gabrielle Lurie, The Chronicle Worker Jose Brargas washes the seats while the field is being...

Schaaf was expected to meet with Kaval on Wednesday for an annual A’s flag-raising at City Hall to mark the start of the season. The mayor said she looked forward to reviewing the offer and was also “excited” by the A’s commitment to build a privately financed ballpark in Oakland.

But all the excitement doesn’t mean a deal will be easy or quick. For one, the city’s negotiators are likely to challenge the team’s opening offer. A recent appraisal put the land’s value at $150 million. Issues of infrastructure and community benefits provisions could also factor into an agreement.

Daniel Rascher, a professor who directs the University of San Francisco’s Sport Management Program, said the valuation won’t be clear-cut.

“In a sense, there’s at least two different values,” he said. “There’s the value as is with those buildings on it, and then there’s the value with what you can do on the land. And then a developer can say, ‘What’s the best use, and what’s that worth?’”

While local officials would be smart to see what other developers are willing to pay, Rascher said, they may well sell the site to the A’s for an under-market value, given the importance they place on keeping the team in Oakland.

Andy Dolich, a former A’s executive, said if the team wants to develop the site surrounding the ballpark, the undertaking will be a matter of billions, not millions, of dollars.

Kaval said the team is still considering building a ballpark at the Port of Oakland in addition to the Coliseum site. No matter where the team builds, Kaval said, he wants the area to become a “ballpark district” with “housing, bars, nightlife, areas for small businesses — the whole gamut.”

Complicating matters is the joint-ownership agreement between the city and county. Oakland City Council President Larry Reid, whose district encompasses the Coliseum, said that needs to be settled before hammering out an arrangement with the team.

“The first step for the city is to figure how to acquire the entire site from the county so that there’s only one entity the A’s have to deal with,” said Reid, who’s vice chair of the Coliseum Authority. “That’s got to take place before any other discussions on the land.”

Haggerty said the deal doesn’t have to be complicated.

“All we have to do is agree on the price and tell them which bank to deposit the money to,” he said. “The city and the county should get out of the sports business and do the work we’re elected to do.”

Photo: Noah Berger, Special To The Chronicle A scoreboard displays results from Sunday’s Giants vs. A’s game...

And while Haggerty and Miley, like other county officials, are eager to back out of their half-ownership stake in the land, they questioned whether the city actually has the money to buy them out. For that reason, a sale to the A’s may be likely to involve the trio of public agencies: Oakland, Alameda County and the Coliseum Authority.

If the A’s ultimately control the land, Reid predicted that firms will be “knocking down their door” to partner with them as developers. He pointed out that the site has already cleared regulatory hurdles, including an environmental impact report, and acts as a transportation hub, with easy access to BART, the Oakland airport, AC Transit, Amtrak, Capitol Corridor and the freeway.

Last year, the team set out to pick a ballpark from three site options. Its first choice, near Lake Merritt and Laney College, was roundly rejected by the Peralta Community College District, which owns the land. The team also toyed with the idea, favored by Schaaf, of building at the Port of Oakland’s Howard Terminal. Despite major transportation hurdles and the complications of building at an industrial waterfront, Kaval said Monday that it’s still on the table to “preserve optionality.”

For the most part, city officials have been pushing the team to stay put and build anew at its East Oakland home, arguing that it wouldn’t require the same shoehorning as the other two sites. Kaval previously told The Chronicle that privately financing a stadium there wouldn’t be feasible. He said Monday the site would still be a “challenge,” but that “it depends on how these negotiations end up.”

“What we learned from Peralta is that we need to have options and carry forward those options to a logical conclusion,” he said. “We need an economic deal in place by the end of this year to meet our 2023 opening date. Time is of the essence. It’s taken too long. We want to advance this forward.”

Kaval stressed that owning the land wouldn’t mean freewheeling command of its future. The team would go through the same permitting and public approval process as any other developer in the city.

If the A’s get their way, they would be part of a trend across the country in which professional sports teams are increasingly becoming owners of their facilities and land, Rascher said.

“It used to be they wanted their city or county to own. That way, they wouldn’t have to pay property taxes,” he said. “Nowadays, teams, partly because of the increase in franchise values, they’re willing to own their ballparks or stadiums and market and use them for events outside of games.”

But the Oracle Arena side of the sports complex, if owned by the A’s, presents challenges, Rascher added. Not only does the departure of the Warriors leave the arena without a main tenant, but their new home in San Francisco will become a lucrative venue that can compete with Oakland’s for shows and concerts.

Roger Noll, an economics professor emeritus at Stanford University, questioned whether the A’s proposal would go anywhere, but said it would be in Oakland’s interest to seriously consider it.

“The city is in a terrible position,” he said. “Their bargaining position is not strong here. They renovated Oracle, and then the Warriors leave. They renovated the Coliseum to get their Raiders back, and now the Raiders leave. Both of those decisions made the site less desirable for the A’s. ... (The A’s) have a long experience of being the third-place finisher in terms of the concerns of the city and county. It’s easy to see why they want this.”