10 takeaways from Oakland’s updated term sheet for A’s new ballpark
This feels real.
As a kid who grew up in East Bay going to A’s games at the Coliseum since the early 90s, I am able to picture the team building a new stadium in Oakland for the first time in my life.
On Friday, the City published an updated term sheet for the A’s proposed waterfront development at Howard Terminal, though this is very much an ongoing negotiation. Still, I am cautiously optimistic about both sides coming to an agreement and wouldn’t be surprised if the negotiations occur over the weekend, heading into the ballyhooed non-binding City Council vote on Tuesday.
The July 20 vote will provide everyone a lot of clarity on the A’s new stadium push at Howard Terminal, as the eight City Councilmembers will declare whether or not they approve the $12 billion project. While A’s president Dave Kaval has framed it as a do-or-die moment for Oakland to keep the team, it’s a non-binding vote and the Environmental Impact Report likely won’t be certified until November. There’s still time before all this is worked out.
I don’t think a ‘no’ vote means the A’s completely drop the Howard Terminal project and put all their eggs into a Vegas basket. It’s worth noting, however, Kaval and A’s rep(s) are reportedly scheduled to travel to Las Vegas on July 21, as they continue to do their public homework on ballpark sites.
So, Kaval is literally packing up his bags and going to Sin City a day after the vote, but I don’t think the franchise would. Oakland Mayor Libby Schaff also revealed that six other teams could be in the mix if a ‘no’ vote is made, so be prepared for that power move by MLB next week.
A ‘yes’ vote, however, would be a massive, unprecedented step in this 20-year saga, as the City would show a public commitment — albeit non-binding — to push this project to completion.
I believe the City and the A’s truly want to make this deal happen, they just have to iron out some details at the negotiating table. If done right, it would be a huge win for all parties involved. The A’s would get stupid rich, West Oakland/Downtown/Jack London Square would be revitalized and the fans would have a sick ballpark to go to instead of the classic Coliseum experience. Plus all the new public parks, 3,500-seat theater and economic stimulus pumping out of a place that’s currently a parking lot.
Ultimately, I think the “non-binding” part of the vote could help ease the pressure off councilmembers — who could vote ‘yes’ in support of the current framework project on Tuesday, but reserve the right to really vote ‘no’ if all their demands aren’t met.
If you need to get caught up to speed on this super complex negotiation, I suggest reading some explainers from the June 15 meeting with Alameda County and the July 7 study session from Oakland City Council. Those two articles break down where the negotiation has changed in the past few weeks, while providing lengthy explanations for technical questions.
OK, off my soapbox, here are the facts, Jack! Check out 10 takeaways from the updated term sheet.
1. Term sheet timeline
Here are some key dates for the A’s new stadium search at Howard Terminal:
February 2020
A’s formally applied for a Development Agreement for Howard Terminal
April 2020
The A’s and Oakland started negotiating a Development Agreement term sheet
April 23, 2021
A’s published their term sheet to get the ball rolling after perceived inaction from Oakland
June 15, 2021
The Alameda County Board of Supervisors hosted the A’s and City of Oakland officials for a 6.5-hour public meeting, where Oakland expressed desire for Alameda County to help with infrastructure costs
July 7, 2021
Oakland City Council held a 6.5-hour public study session with A’s president Dave Kaval, where Project Manager Molly Maybrun and Assistant City Administrator Betsy Lake shared key updates to the negotiation
July 16, 2021
On Friday, the City released a revised version of the term sheet, complete with many of the recommendations presented by city staff in the July 7 study session
July 20, 2021
On Tuesday, the eight-person Oakland City Council will hold a non-binding vote on the term sheet for the Howard Terminal waterfront development
2. Those ‘Ayes’ don’t mean nothin’
Page 4 of the updated term sheet may have led to some initial confusion. In all capital letters, the term sheet states:
“PASSED BY THE FOLLOWING VOTE:
AYES — FIFE, GALLO, KALB, KAPLAN, REID, TAYLOR, THAO and PRESIDENT FORTUNATO BAS”
This is just a standard placeholder for resolutions that are yet to be voted on. This doesn’t mean the eight Councilmembers have made any decision yet.
Here is a list of the Councilmembers, by district:
At-Large – Rebecca Kaplan (Vice Mayor)
District 1 – Dan Kalb
District 2 – Nikki Fortunato Bas (Council President)
District 3 – Carroll Fife
District 4 – Sheng Thao (Council President Pro Tempore)
District 5 – Noel Gallo
District 6 – Loren Taylor
District 7 – Treva Reid
3. No mention of off-site IFD
Infrastructure Financing Districts (IFDs) are key to this whole process.
In short, it’s a financial mechanism that uses future tax revenues to pay back developers/municipalities for up front infrastructure costs. IFDs have fixed geographic boundaries that are locked in for specific periods of time to collect future taxes.
In the A’s initial proposal, they envisioned an on-site IFD (grey in picture above) at the 55-acre lot at Howard Terminal, where taxes from the future residential/hotel/commercial/retail units would eventually flow back to the A’s for 45 years to pay them back for on-site infrastructure like sidewalks, bike lanes, railroad upgrades, etc.
The A’s also proposed a large, off-site Jack London Square IFD (red in picture above) which spanned North-South from 8th street to the water and West-East from West Oakland Bart to Oak Street. The team projected a $1.4 billion revenue stream over 45 years from the off-site IFD, but it has been met with staunch opposition from City Council, which contends it would have captured a lot of that future tax revenue without a new stadium.
“When I saw the plan at the end of April, with this second IFD, it was a head-scratcher,” Councilmember Dan Kalb said on July 7. “That’s just not going to happen.”
In Friday’s updated term sheet, there is no mention of the Jack London Square IFD at all. For now, if you go to Page 14 of the updated term sheet, this is what you’ll see.
So, Oakland and the A’s are definitely in agreement about an IFD and a Community Facilities District (CFD) on top of the 55-acre Howard Terminal site. A CFD, which would share the same boundary as the IFD, is also known as a “Mello Roos District” and imposes a “special tax” for tenants on the property, and would be used to fund on-site infrastructure and future on-site maintenance.
But there is no mention of the off-site IFD, which is a big omission. Oakland reported a 6.4 percent annual growth in the Jack London Square area over the past 20 years, and thought the A’s were asking to capture too many off-site tax increases for an area that has shown historic growth. Not to mention that a majority of the proposed off-site IFD laid within the geographic boundaries of Oakland’s “Downtown Specific Plan Area,” a separate, parallel endeavor the city is undertaking to revitalize part of downtown.
There is a mention of a Business Improvement District (BID), which I believe is a new wrinkle in this ongoing negotiation.
4. What’s a Business Improvement District?
OK, so you know about IFDs and CFDs, but what about BIDs?
The City states that Oakland will help the A’s establish a Business improvement District (BID) if requested.
According to the Oakland Chamber of Commerce website:
“Oakland is home to 11 Business Improvement Districts, which are discreet neighborhoods in which property owners and/or businesses have voted to pay a special assessment to fund projects and services needed within the neighborhood. The City of Oakland annually collects this investment and remits it to the BID to fund services including community beautification, increased security and maintenance, events and marketing, and economic development.”
Sounds like a third way for the A’s to collect future funds to help push this project through.
5. Off-site infrastructure
Exhibit F on page 30 of the updated term sheet states that the City and the A’s project off-site infrastructure costs to total $351.9 million.
The key sentences here are, “The parties are still negotiating how these costs will be allocated. Funding sources must be secured or authorized prior to entering into the Development Agreement.”
This is a big reason why the City wants the County to get involved, to help shoulder the load for the off-site infrastructure costs that this project envisions. Getting people from three different walkable BART stations (West Oakland, 12th street, Lake Merritt) to the ballpark safely will take some work. Plus all the added car traffic, busses, bikes, scooters and drunk people moving near a working rail line.
It’s also worth noting that A’s president Dave Kaval said July 7 that only $22 million in off-site infrastructure is needed by opening day of the stadium, and that the rest could be constructed in phases.
Exhibit F also lays out the responsibility of future maintenance, with the A’s using CFD to fund on-site maintenance, while the City would pay for maintenance of all off-site infrastructure.
6. Affordable housing
Oakland is taking a three-pronged approach to community benefits, with a focus on the following areas: affordable housing, jobs and the establishment of a 66-year community fund.
A key point of contention throughout this process, especially during public comment periods, has been the enforcement of the A’s to provide affordable housing for this project. Oakland is targeting 30 percent of the residential units to be affordable housing.
While the A’s have proposed 15 percent of their 3,000 residential units be affordable housing (450 units), they could also just pay $75 million in impact fees and proceed with 100 percent market-rate housing.
On page 31 of the updated term sheet, Oakland is now writing that the A’s must honor their commitment to actually building the affordable housing units.
“City to require construction of on-site affordable housing, in lieu of payment of fees pursuant to O.M.C. Chapters 15.72.100 and 15.68.080 and consistent with California Redevelopment Law. California Redevelopment Law cannot be waived by the City.”
To get to Oakland’s target 30 percent, there is also another change, as first mentioned by Assistant City Administrator Betsy Lake in the July 7 study session.
“In addition, the City and County will set aside IFD funds (see Other Community Benefits below) over the Project site to support offsite displacement prevention strategies targeting another 450 units (15%), including new construction, preservation, renovation, down payment and senior assistance in the four impacted neighborhoods (West Oakland, Chinatown, Old Oakland, and the Jack London District).”
This is still a bit unclear to me. If the city is targeting that 900 of 3,000 units be affordable housing, but 450 of them be off-site, does that reduce on-site residential units to 2,550? I look forward to some clarification from the City on Tuesday.
7. Job security
During the July 7 study session, City staff said it will look to the Port’s Maritime Aviation Project Labor Agreement (MAPLA) as guidelines for construction jobs. The A’s have publicly committed to using local unions for the construction of the stadium.
The City also referenced the Port’s 2017 Operations Jobs Policy for the Centerpoint Oakland Global Logistics project as a good framework to follow. When a 440,000-foot logistics center was opened in Oakland in 2018, the Centerpoint deal gave local workers priority when it came to filling jobs.
Page 14 of the updated term sheet also outlines some of the other guidelines for the labor policy.
“These include living wages and benefits for workers; priority consideration for unemployed individuals, armed forces veterans, single parents, ex-offenders and foster care adults; and a ban on asking applicants about prior criminal offenses.”
8. Community Fund
While the A’s proposal initially called for $450 million in future IFD captures to be spent on community benefits over a 45-year span, opponents called out that IFD funds can only be funneled back into areas like infrastructure, not social programs or other areas which could benefit the community in different ways.
Oakland has countered by proposing the creation of a 66-year Community Fund, which extends the length of the Port’s lease. The City laid out a plan to capture $411 million over the next 66 years for community benefits on page 32 of the updated term sheet.
Under Oakland’s proposal, an elected Community Advisory Committee and Fund Manager would run the Community Fund like an endowment with 5- to 10-year strategies. The City feels safer with four streams of revenue to bring in money for the fund, as opposed to relying strictly on rising property taxes and IFD payments.
Not to mention the added flexibility of the community fund money, compared to the limited use of IFD funds.
9. Non-relocation agreement
In the initial term sheet published April 23, the A’s made no mention of a non-relocation agreement.
But the City has laid out non-relocation terms for the A’s to follow on page 19 of the updated term sheet.
The A’s must play all of their “home” games (minus exhibitions) in Oakland, maintain its good standing with MLB as a franchise, keep its corporate headquarters in the city, continue to use Oakland as primary geographic team identifier (i.e. never turn in to the Bay A’s or NorCal A’s or East Bay A’s). Any new owner would be subject to the non-relocation terms, while the City said it will lawyer up to enforce the non-relocation agreement if the A’s try to violate the terms.
The A’s — perhaps with pressure from MLB and the player’s association, according to Episode 37 podcast guest Jeff August — are seeking a 20-year non-relocation agreement. The updated term sheet lists a 25-year term for the non-relocation agreement.
This is interesting, seeing as the IFDs and CFDs would be 45-year plans. Also considering what Project Manager Molly Maybrun said on July 7.
“Staff recommends that the commitment agreement or non-relocation agreement expresses a commitment from the A’s to Oakland at a minimum on par with Oakland’s commitment to the A’s,” Maybrun said.
10. What’s it all mean?
Again, this negotiation is in flux and I’m just a sportswriter who is not a policy wonk. In the time I’ve written this article, people like A’s team president Dave Kaval and Oakland Vice Mayor Rebecca Kaplan have made public comments that I’ve yet to hear.
[UPDATE: Just saw this tweet from Bay Area News Group’s Shayna Rubin, but my feelings on all of this are still the same.]
Spoke with Dave Kaval, who said Oakland’s terms are a “step backward,” and exclusion of the JLS tax district is the threshold issue.
“A yes vote on the term sheet that was proposed today, from our perspective, is a no vote on the project.”— Shayna Rubin (@ShaynaRubin) July 16, 2021
But it seems like these are all issues that can be figured out, if not by July 20, by the time the EIR is up for certification in November. I don’t think Tuesday is the end-all, be-all date like Kaval has painted it.
Figuring out the off-site infrastructure costs seems like it will be crucial to this entire negotiation. Since Oakland wants Alameda County to be involved, there could be another cook invited to the kitchen to make this all happen. On June 15, the Alameda County Board of Supervisors said it would need until at least September to consider all of the information before making a decision.
I am optimistic about the new community benefits approach proposed by the city, as the money seems like it would be made available to actually help citizens who need it, rather than be restricted to infrastructure-related things only. I do share some of the same reservations voiced by Councilmember Dan Kalb on July 7, who noted that $411 million over 66 years is “not really a lot of money. It’s just not a lot of money.” That comes out to about $6.24 million a year.
It remains to be seen if the A’s are on board with any plan that excludes an off-site IFD, but I think the general framework is here for a deal to be hammered out.
In short, I’m crossing my fingers that a ‘yes’ vote will be realized for this project, because it would truly change the city for the better. I also think it’s crucial that community benefits are actually realized while preserving and improving the surrounding area, with required effort from the A’s.
The City Council has to see the immense potential here and it’s a non-binding vote.
