Stakes high in Peralta Poker
On Sept. 13, Oakland A’s President Dave Kaval announced the team had selected the Peralta Colleges site in Oakland as its choice for a new ballpark. If all goes according to plan, the A’s will be playing ball there in 2023.
“Finally, we’ve got our site,” Kaval said. “It’s really the strongest location when it comes to private financing, and that’s really an important component to be successful.”
The Athletics have been searching for years for the perfect location, investing significant time and money. John Fisher and the rest of the ownership have seen artists’ renderings and scale models of proposed ballyards at Cisco Field in Fremont, Diridon Station in San Jose and Howard Terminal, Victory Court, Coliseum City and Laney College in Oakland.
Now the team has initiated a bigtime public gamble by anteing up the Peralta site (which it doesn’t yet own or lease). Over 12 years, Fisher has seen his original investment of $180 million appreciate to around $900 million, according to Forbes. The ownership is ready to wager all of Fisher’s billion-dollar pile of chips in Peralta Poker.
The significant players are Oakland Mayor Libby Schaaf, Alameda County Supervisor Scott Haggerty, Peralta College Chancellor Jowel Laguerre, “the Neighborhood” (Peralta neighbors), and most likely a deep-pocketed developer to named be later.
Site selection is just one card in the deck, however.
A’s fans, taxpayers, media, fellow Major League Baseball owners, Baseball Commissioner Rob Manfred or anyone else watching the players around the green-and-gold-felt-topped poker table will want to know: Who holds the best hand? Who’s bluffing? Who’s raising? How big will the final pot be? And who will fold?
Schaaf favored the Howard Terminal site. The Peralta site is a bit of a curious place to build a 35,000-seat anything. Laney College operates a full program, which means there are several thousand students coming and going. Every parking space is taken all day and well into the evening five days a week. Bordering the site are railroad lines, the Nimitz Freeway and a BART maintenance facility, residences and small businesses.
Laguerre holds a fantastic hand: The team has to buy or lease the property. How much is that worth? When will the A’s be ready to play that purchase card?
Schaaf and Haggerty have been consistent in their position that no public money will go to build the ballpark. I believe they will continue to support the overall project, if it is 100 percent privately funded.
But what about the costs of traffic remediation, relocation, environmental impact (the Golden Gate Audubon Society already has announced its opposition), trade union local-hire agreements to construct the park, Caltrans concerns, legal challenges, not to mention bureaucratic roadblocks?
Where will additional investment for any of these substantial costs come from? From fans, to whom the team will sell seat licenses? From a corporation that will step up to write a big check to have its name on the stadium?
Typically, teams partner with an experienced developer. Would that developer plan to add retail, transportation, residential or youth sports facilities to the stadium site? How many hundreds of millions of dollars will that entity be willing to put up?
Right now, the A’s are playing with house money, in this case Major League Baseball’s revenue-sharing, which allows the team to turn a yearly profit by pocketing $30 million-plus from their fellow team owners. That program is coming to an end. The bonus will be reduced by 25 percent annually until it hits zero in 2020.
For years, A’s management has told fans that increased revenue from a new ballpark would give the franchise the resources to compete with higherrevenue teams. Will it?
It’s time to play Peralta Poker: Who’s in?
Andy Dolich is a sports business consultant in Los Altos who formerly was an executive for the Oakland A’s, the San Francisco 49ers and the Golden State Warriors. To comment submit your letter to the editor at SFChronicle.com/letters.