Coliseum project at stake as legal fight shakes development group
A group tapped by the city to help develop a $5 billion plan to transform the forsaken Coliseum complex into a hub of live sports and entertainment appears to be fracturing, with two of the founding members suing the others.
The legal complaint filed this month ensnares one of the six partner organizations in the African-American Sports and Entertainment Group. Two of the eight members within the flagship entity are alleging their equity shares in the project were unfairly diluted.
None of the parties involved in the complaint — filed in the Alameda County court — agreed to be interviewed on the record, but documents and video evidence obtained from the group paint a starkly different picture than the one presented in the complaint, calling its central claims into question.
The group ultimately plans to acquire Oakland's share of the Coliseum property for $115 million and earlier this year it unsuccessfully tried to buy the site's other half-ownership share, which belongs to the likely departing A's.
Last month, it whiffed on one of its most prominent goals of securing a long-anticipated WNBA expansion franchise. The league instead opted to partner with the Warriors and establish a women's basketball team in San Francisco.
But the whole legal ordeal could strain AASEG's commitment to a locally driven, community-based project, one that remains rooted among Oakland residents and keeps outside corporate interests at the door.
It also could pose another hurdle to AASEG as it gears up to meet key deliverables in an agreement with the city to convert the ballpark, Oakland arena and intervening parking space into new restaurants, nightlife,
retail shops, hotels and housing.
“We will fully participate in the legal process and will show the complaint to be without merit,” co-founder Ray Bobbitt said in a statement responding to the complaint. “In the meantime, the AASEG is hyperfocused on the tremendous task, responsibility and commitment we have to our community to redevelop and revitalize East Oakland and the Coliseum Site.”
The dispute is contained within AASEG's flagship group, which is comprised of eight Oakland natives who collectively did not have much prior real estate experience before they became involved in one of the East Bay's largest commercial redevelopments.
The other partners include billion-dollar Blackowned investment firm Loop Capital, prominent sports agent Bill Duffy and a business-consulting group run by former Oakland City Manager Robert Bobb.
The origins of AASEG trace back to Bobbitt, a local businessman, and Levant Ogbulie, an education administrator, who began looking into how major professional sports could return to Oakland following the departures of the Warriors and Raiders.
Among the other founding members they recruited were fellow grieving Raiders fans Brien Dixon and Karim Muhammad — the
two men who are now threatening to sue Bobbitt, Ogbulie and the larger consortium for damages.
Dixon and Muhammad allege their shares in AASEG were wrongfully diluted when Bobbitt brought four new members into the fold without their approval.
The eight members, including Bobbitt and Ogbulie, equally own 12.5% of the flagship entity, which itself may hold as little as 5% of the overall development once outside pre-capital investments arrive ahead of construction.
Still, the complainants accuse Bobbitt of unfairly designating himself the project's lead decisionmaker and “deceptively” creating separate LLCs in Delaware that could be interchanged with the official AASEG branding — part of a larger effort to consolidate power.
“Not only is this a patent violation of Bobbitt's obligations to AASEG and the other three members, it usurps a business opportunity from AASEG and could also be considered as an act of fraud committed against the City of Oakland,” the complaint said.
Documents reviewed by this news organization rebut this point: An email sent to Dixon and Muhammad in late 2021, for instance, specifically outlines how those various LLCs would interact and streamline future investments, contradicting
the notion that Bobbitt established the other companies secretly.
The complaint alleges that Muhammad only learned during a late 2021 company retreat that four new members — Samantha Wise, John Jones III, Jonathan Jones and LaNiece Jones — had been promised equity in AASEG by Bobbitt and that he eventually muscled them into the group by overruling the complainants.
All of the four members are Oakland residents. Perhaps the most prominent is Jones III, a violence prevention advocate in the community.
Video of a December 2021 team meeting — which took place two months after their
addition — paints a different picture. In it, Dixon and Muhammad offer high praise for Bobbitt's work on the project, reflecting positively on the earlier company retreat.
The eight members took votes together with no apparent objections and Bobbitt is listed on the meeting's agenda as AASEG's “managing member,” a title that the complaint alleges he assigned himself months later in an operating agreement.
Whatever the outcome of the legal complaint, it marks a divide within the flagship group, which has spent several years building relationships with Oakland's leaders, helping AASEG to secure the Coliseum redevelopment
among tough competition from other bidders.
AASEG also is in negotiations with the Roots and Soul, upstart men's and women's soccer franchises that want to build a temporary stadium by 2025 in one of the Coliseum parking lots. Those discussions alone created tension within AASEG's flagship entity as not everyone was on board.
It is yet another sign that in its quest to complete one of the largest-scale commercial redevelopments in recent East Bay history, AASEG — originally a group of fellow grieving Raiders fans who decided to start a business together — must also reckon with its smalltown origins.