Oakland to Athletics: Agree to Stay If You Want a New Ballpark
(Bloomberg) -- The Oakland Athletics should commit to staying in the city for at least four decades in exchange for public financing to help build infrastructure for a new waterfront stadium, officials said.
The city administrator’s office on Friday released an outline of recommended provisions that should be included in any stadium deal. The city’s proposal should steer fewer future tax dollars to the project than the team has proposed and require the A’s to commit to stay as long as taxpayer money is tied to the development, according to the outline. The recommendations will be presented to a city council committee on Wednesday.
The A’s have wanted a new ballpark to replace the aging RingCentral Coliseum, a 1960s-era stadium. Multiple attempts to get a project off the ground have stalled and in May Major League Baseball gave the team the green light to look at relocating out of the city it has called home for 53-years.
The city’s guidelines include the creation around the ballpark of a single infrastructure financing district, which could sell debt that would be paid off by the extra property-tax revenue thrown off by the development. The team has called for two taxing districts. The city’s proposal would tie up fewer future tax dollars than what the A’s had proposed.
“Today’s report shows how we can structure a development deal that protects our taxpayers, ensures our beloved A’s stay rooted in Oakland, and creates a transformative waterfront project that will benefit generations to come,” said Mayor Libby Schaaf in an emailed statement.
“We believe that only the tax revenues generated by the ballpark development itself should be used to invest in the project’s much-needed public infrastructure and community benefits, in a way that never puts the city or county’s general funds at risk.”
Infrastructure financing districts are a way for cities to divert tax revenue generated in a certain area to a specific purpose. In this case, the A’s would likely front the cost of building the ballpark and the surrounding development and the city would reimburse them for the infrastructure with bonds sold by this district. Then future tax dollars the district generates as the property value increases would pay back investors who hold the bonds.
The proposed ballpark site is valued at about $29.5 million. If the project is fully built out, that value could reach $7.6 billion, according to city projections.
The A’s original term sheet released in April proposed the creation of two districts, one that would encompass the area around the ballpark and fund things like environmental remediation, seismic improvements and sea-level-rise mitigation and one that would extend beyond those boundaries and finance items such as bike lanes, rail safety improvements and intersections. In total it would tie up approximately $855 million of future tax dollars for infrastructure, an amount Schaaf said was too much.
“While these are public benefits that we’ve long wanted, it is dedicating a very large amount of our future new taxes and I believe it would be more responsible for us to reduce that commitment,” she said in an interview in May.
The city wants the A’s to promise to not consider relocating out of Oakland while the taxing district is still in place, an approximately 45-year commitment. Since the league allowed the team to peruse other cities, A’s leadership has met with officials in Las Vegas and Portland.
The city is also asking for the A’s to commit to a community benefits agreement that provides affordable housing on- and off-site of the project, provides access to jobs for local residents and provides a flexible long-term source of funds to address community needs.
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