SF biz times article Feb 8 - 14
OAFC BBS - All Topics: Archive: SF biz times article Feb 8 - 14
| By ramjet1 on Friday, February 08, 2002 - 05:27 pm:|
Ron Leuty of the SF Business Times has a new article out on page 3 of the latest issue (2/8 - 2/14) about the city treasurer looking at soft taxes to help finance an Oakland ballpark. Unfortunately, they dont have this issue on line yet but it may be up by tomorrow. I dont have time right now but I will try and post it later this evening.
| By ramjet1 on Monday, February 11, 2002 - 10:07 am:|
Here's the latest SF business times article
City officials admit they're in the early stages of exploring funding possibilities, but they say taxes on essentially tourist-related activities may prove a keen way to package public financing. That also would please bond ratings agencies who see Oakland pitching near its limit for bond debt.
But new local taxes likely would need voter approval -- and that's a whole other ballgame.
"We're trying to figure out what other cities have done," said city Treasurer Joe Yew. "Some of these may require (voter approval), some of these may not."
HOK Sport Inc. later this month is expected to deliver to city officials its final report on the feasibility of seven potential Alameda County sites. But it's clear from the Kansas City-based design firm's December draft that two sites -- Uptown, between San Pablo and Telegraph avenues, and the Howard Terminal, west of Jack London Square -- are the early favorites.
Uptown's plan, which HOK ranked highest in areas such as design, land acquisition and proximity to transportation, would cost about $385.1 million. Spending at the Howard Terminal site would rise to $517.35 million, largely due to parking and traffic improvement expenses.
Nonetheless, the timeline is tight. The A's year-to-year lease at Network Associates Coliseum -- the team's home since moving from Kansas City in 1968 -- runs out after the 2004 season. The new ballpark proposals assembled by HOK assume that a new stadium would open in spring 2006.
Wallets are even tighter.
A's President Mike Crowley said it's too early to talk about the team's potential financial contribution toward a new stadium. Meanwhile, Oakland Mayor Jerry Brown and City Manager Robert Bobb have skirted questions about the city's possible involvement, and port officials said financing raises too many questions at this point.
Soft money contributions
Soft taxes could shift the responsibility for repaying bonds from taxpayers or stadium sources to visitors who rent a car or a hotel room. In Arizona, a Maricopa County rental car tax -- structured to hit visitors exclusively -- is being used to finance renovations and new construction at spring training facilities.
A three-year sales tax financed construction of Bank One Ballpark, home of the Arizona Diamondbacks.
But those taxes could require voter approval and could drive business elsewhere if the tax rates aren't comparable with San Francisco and San Jose, said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.
The city is expected to hire a law firm to study whether a rental car tax, for example, would need voter approval, said city treasurer Yew. Proposition 218, passed by California voters in 1996, requires that voters OK new local taxes.
Soft taxes have recently come under fire in places like San Antonio, where tax opponents argue that locals rent cars more often than tourists.
"What needs to happen to get a new stadium is that the A's and the private sector has to drum up public support," said City Councilman Danny Wan, a member of the Joint Powers Authority that oversees the coliseum. "I don't see them doing that, and I haven't heard the A's say anything publicly."
Selling bonds for new stadium construction would be tricky on many fronts. The city already carries $1.4 billion in outstanding bond debt -- one of the highest levels in the state -- said Yew. Two bond initiatives totaling another $59 million are on the March ballot.
Pushing the city's bonded debt level higher could affect its standing with bond ratings agencies whose opinions on the safety of a bond can make or break an issue. The city's general obligation bonds are rated toward the middle of the pack, "A+", by Fitch; the port's revenue bonds are rated "AA-".
The port carries about $1 billion in outstanding debt, according to port chief financial officer Fred Rickert.
What's more, general obligation bonds pledging city tax revenues require two-thirds voter approval, an unlikely victory anywhere. Revenue bonds, however, don't require voter approval, but are more risky because they generally rely on the sale of corporate sponsorships, corporate suites or personal seat licenses (PSLs).
A self-supporting stadium would be viewed skeptically by bond ratings agencies, said Amy Doppelt, managing director for bond rating agency Fitch Ratings in San Francisco. Plus, an uncertain economy, Oakland's dearth of Fortune 500-level sponsors, baseball's labor troubles and the A's standing as a candidate for contraction by Major League Baseball all could spell doom for a revenue bond.
"Who issues the bonds isn't important," Doppelt said, "but the collateral is."
Port Executive Director Tay Yoshitani said the port doesn't want to lose valuable land along the waterfront. Port Commission President Phil Tagami said the board hasn't determined "the ability, feasibility or desire to participate in the proposed ballpark deal."
The most fiscally responsible financial package for a new ballpark in Oakland -- barring the unlikely scenario of a 100 percent, privately funded plan -- would have the city's redevelopment agency issue a tax increment bond, City Councilman Wan said.
But that, he said, would likely cover only land acquisition and site improvement costs. Tax increment financing doesn't need voter approval, but Wan said the city should put it before voters "as a matter of policy."
Tax increment financing was used to improve the China Basin area of San Francisco as the San Francisco Giants moved into their new, mostly privately funded Pacific Bell Park two years ago.
Improvements to the Oakland coliseum have cost city and county taxpayers an estimated $130.8 million from general fund coffers due to cost overruns and weak PSL sales.
"Given the controversy surrounding the coliseum, I can't see voters wanting this it at this time, and we as politicians do what the public wants," Wan said.
Yet the A's remain as noncommittal as ever. Team president Crowley said he has yet to meet with team owners, including Managing General Partner Steve Schott and Ken Hofmann, about the HOK report.
The A's, who were reportedly set to be sold last summer, asked the Santa Clara City Council in November to indefinitely delay discussions about building a new stadium next to Great America amusement park.
Ron Leuty covers sports business and Jessica Materna covers East Bay real estate for the San Francisco Business Times.
| By diamond_lil on Monday, February 11, 2002 - 12:05 pm:|
They are all playing a cat and mouse game...
I think it will take HOK and Horrow to bring them to the table to stop playing the hiding game.
Ron Leuty has a well written piece, but why did he only get quotes from the most negative member of the JPA. I would have liked to hear from some of the others members who don't feel so negative about the possibilities of this project. Where are the statements from John Russo, and Robert Bobb who have been actively putting together a financial plan for the ballpark?
City Councilman, and member of the JPA, Danny Wan is always pointing out that Schotmann have shown no interest and I can't say he isn't right. Gail Steele is even more irritated from her past dealings with all the sports ownerships in Oakland.
After all, they saw that Schott and Crowley went to the City Council meetings in Santa Clara, making all kinds of overtures and foreplay while so far, they have ignored Oakland's efforts re the ballpark.
But at the HOK presentation, I reminded Mr. Wann that Schotmann are temporary stewards of the Oakland A's and that MLB and the game belongs to the fans and the city. I also reminded him that as representatives of the people, he should remember that the A's drew 2.+ million people, in spite of being told "the A's had no future in Oakland"...
So we have to keep rallying to let the representatives know that we want to fight to keep our team and we expect them to take the necessary steps, according to the wishes of their constituents,in spite of Schotmann's lack of interest.