The A’s and MLB care about profits, not about Oakland

The A’s and Major League Baseball threatened this week that if they don’t get their way they will pack up and leave the Bay Area.

The team has thrown down a greedy and opaque demand that the city of Oakland approve a $12 billion residential and commercial waterfront development project that happens to include a new ballpark, and requires a massive taxpayer subsidy.

If that’s the best the A’s can offer, the city should let them go.

Few people want to end the team’s 53-year stay in Oakland. Bay Area residents have fond memories of the decades of exciting, and sometimes championship, play. But the A’s and MLB are trying to pressure city officials into a bad deal.

The team’s demand would require the city to recklessly mortgage future tax revenues to bolster profits for the A’s. Despite team President Dave Kaval’s claims that the A’s would provide a privately financed ballpark, taxpayers would cover the cost of the infrastructure. And the more than $1 billion of city and community benefits Kaval keeps touting would also come from property taxes.

We already saw Alameda County supervisors get suckered by Kaval when they agreed in 2019 to sell the A’s a half interest in the Oakland Coliseum property. It was a sweetheart deal, with no public bidding, for valuable public land the team wants to develop to help fund the waterfront ballpark six miles away.

County supervisors said the Coliseum deal was aimed at keeping the A’s in town. But there was no requirement that the team would stay. The latest threat by MLB and the A’s to leave town shows what gullible fools the supervisors were.

Oakland city officials shouldn’t make the same mistake.

The city owns the other half of the Coliseum property. They should carefully guard it. And City Council members should not let themselves be bullied by MLB Commissioner Rob Manfred, A’s owner John Fisher and Kaval to approve a bad deal for waterfront development at Howard Terminal on the eastern tip of the Port of Oakland.

The team and its backers like to point across the bay to the Giants’ success reviving the waterfront around their new ballpark. What that ignores is that San Francisco had only a minimal port while Oakland has the 10th busiest operation in the nation.

Kaval claims the A’s waterfront project would include $12 billion of residential and commercial development, including a $1 billion stadium. But the team’s proposal calls for creation of two new financing districts that for 45 years would use tax money from a 1½ mile swath of property around the site and the new development itself to pay for the project’s infrastructure and community benefits.

That’s right: For all the talk from Kaval about the team providing community benefits, they don’t plan to put up a dime of it. That would all come from future tax revenues.

Exactly how much this would cost taxpayers remains a mystery. The deal is currently indecipherable. The devil is in the financial detail, which Kaval isn’t providing.

And, like a high-pressure salesman, the numbers he does throw around mix short-term expenditures with expected tax revenues over more than four decades without adjusting for the lost value due to inflation.

No rational businessperson would enter such an agreement without a careful analysis. And neither should the city. The City Council and the public first deserve a thorough independent financial evaluation of the A’s offer, alternative uses of the land and the effect on port operations.

Anything less risks piling more debt on an already deeply indebted city, endangering the ability of city officials to provide the services and progressive programs they say they want.

Finally, city officials should not be fooled by the notion that sports teams are revenue generators. Sports teams do not pay their way, says Roger Noll, a sports economist at Stanford University. They may enhance civic pride, but the common arguments for public subsidies “are based on the idea that a sports team is a magnet for other things. That’s the part that’s not true.”

So, if Manfred, Fisher and Kaval continue to demand that Oakland cave to their demands, the city should show them the door. It’s clear that they don’t care about the welfare of the city — only the profits of the team and MLB.