My colleague Matthew Artz of the Bay Area News Group got his hands on the long-awaited financing plan for a new Raiders stadium in Oakland – it was delivered this week by developer Floyd Kephart to Bay Area officials – and based on the reaction of a pair of stadium finance experts the deal is a lousy one for the Raiders.
“This is not just the worst stadium proposal I’ve seen. It’s the worst by far.” said Marc Ganis, president of the consulting firm SportsCorp Ltd. and a veteran of numerous NFL stadium deals, including the one that brought the Raiders back from Los Angeles.
That doesn’t make it a guarantee the Raiders will flee to Los Angeles, where they’ve partnered with the San Diego Chargers to build a stadium in Carson, but they clearly face a dubious future in Oakland.
And with the National Football League contemplating two Los Angeles area stadium proposals – St. Louis Rams owner Stan Kroenke is proposing a stadium project in Inglewood along with the Raiders and Chargers Carson plan – and hoping to decide by early 2016 who will relocate to Los Angeles and where they will play, the Oakland option doesn’t appear very attractive at the moment.
At least based on the assessment of a pair of stadium experts who got a peek at Kephart’s plan.
Before getting into some of the details, if the concerns by experts are accurate, it really should not be a surprise. From the very outset, the NFL has expressed misgivings to Oakland and Alameda County leaders that putting a developer at the center of the deal was risky and made little sense.
From a league perspective, a developer-led deal just added an additional mouth to feed. Or another party trying to make a profit from the team while putting the team at risk.
That’s been the ominous message from the NFL to Bay Area leaders for more than a year, and if the scathing reaction by a pair of financial experts to the plan are accurate, the league’s worst fears are ringing true.
The problem is, Oakland and Alameda County leaders didn’t heed the NFL’s warnings – for reasons only they can explain – and now it looks like they’ve been presented a stadium plan that makes absolutely no sense for the Raiders to accept.
And that makes most of what’s happened over the last year just a big waste of time.
According to BANG:
The plan includes a provision that the Raiders sell 20 percent of the club to Kephart’s New City Development, LLC for $200 million.
That transaction would be a bargain for Kephart’s firm, according to BANG, but it’s hardly the only red flag for the Raiders, said Ganis.
The proposed $900 million, 55,000-seat facility adjacent to the O.co Coliseum would be financed entirely by the Raiders, the NFL and future stadium revenues. The Raiders would have to dip into sponsorship revenue and naming rights fees to help repay $300 million in loans needed to offset an estimated funding gap.
And, other than parking garages, the stadium would get no subsidy from the surrounding “live-work-play” technology campus Kephart plans to build on the rest of the sprawling Coliseum complex. The plan includes 4,000 homes, a shopping center, 400 hotel rooms and several office buildings.
“I can’t think of any sports team owner that would take a proposal like this even remotely seriously,” Ganis said, noting that San Diego has proposed a major public subsidy for a new Chargers football stadium. “It’s so one-sided and so bad, that it’s almost as if local leaders are saying ‘we can’t really do anything, so go ahead and leave.’ “
Meanwhile, we’re anxiously awaiting the Raiders reaction once they get a copy of the plan. But if Ganis is correct, we have an idea of what that reaction might be.
And that’s not good news for Oakland, although it’s clear Bay Area leaders have been given ample warnings over the last year their decision to put a developer at the center of a Raiders stadium plan was a risky approach.