Negative reaction to Raiders stadium “plan” no surprise

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 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.

NFL to Los Angeles – what’s next?

It might seem like a quiet time relative to NFL relocation to Los Angeles, but in this case looks are deceiving.

With the league’s L.A. specific owners meeting just over a month away and St. Louis, San Diego and Oakland furiously trying to put together viable stadium plans intended to keep the Rams, Chargers and Raiders right where they are – and out of the arms of either Inglewood or Carson – rest assured there is a ton of activity going on.

All of which sets up a fascinating scene next month in Chicago when all 32 owners gather to hear the latest on what’s going on in each team’s local market and get updates on the Rams’ Inglewood stadium project and the Raiders’ and Chargers’ Carson proposal.

So what should we be focused on moving forward?

Here are a few things to be keep in mind:.

Does the NFL proceed to negotiate interim facilities leases in Los Angeles?

The league expects to officially reach out to Los Angeles venues this week or next to begin assessing temporary homes while either the Inglewood or Carson stadiums are being built. The Rose Bowl, Coliseum, Dodgers Stadium and StubHub Center are among the sites being considered, and if the NFL moves ahead and leases are signed, then this is a huge signal that activity in L.A. is likely. Last year, for instance, there was no organized effort to find interim facilities.

Do the owners establish a new, more expedited schedule at the August 11th meeting?

Obviously, there are great expectations in Los Angeles leading into the special owners meeting in Chicago. Not just among fans, but the Chargers, Raiders and Rams, one or two of whom might soon be setting up shop in the second-biggest market in the county. By moving up the current January 1st window for relocation – as has been discussed – the league will be signaling an obvious desire to speed up the process and reach a decision on who will be relocating to Los Angeles and where they will play by the end of the year.

If so, that will be consistent with the view that for a team or teams to be successful in L.A. they need to get started before the late March 2016 annual owners meeting vote.

On the other hand, if the NFL keeps the January 1st relocation window intact, and the March 2016 owners vote intact, that signals they are not absolutely decided on a move to L.A. in 2016.

What does St. Louis/State of Missouri do?

If St. Louis comes through with a viable stadium plan, and the Rams hopes to relocate to Los Angeles are stalled as a result, it could change the dynamics moving forward. For instance, what if the NFL then tells the Chargers and Raiders that, with the Rams no longer a threat to move to Los Angeles, we urge you to take another year to try to work things out in your home markets?

Thus putting off relocation until 2017.

That scenario seems highly unlikely, but certainly not inconceivable.

Will San Diego and Oakland deliver stadium plans in time?

Assuming Rams owner Stan Kroenke pulls the trigger on relocation to Los Angeles – regardless of what’s going on in St. Louis – the Chargers and Raiders have little choice but to do the same.

Which means San Diego and Oakland have their work cut out for them over the next few months delivering viable plans in time to keep their teams.

San Diego officials have reached out directly to the NFL about plans to help build the Chargers a new home on the Mission Valley land where their current home sits. The city faces a huge deadline completing an Environmental Impact Report by Aug. 3rd, which is when the document has to be completed and submitted for public comment.

At that point, a 45-day window opens for public comment, and once that window closes the city is proposing to take 13 days to incorporate the public comments into the document.

Technically there is enough time to complete the written report, but expediting the process comes with huge risk.

With time of such an essence, and San Diego getting such a late start on the process, everything is on fast forward. And while the city isn’t skipping any elements, it’s clearly squeezing what is normally a much longer process into a decidedly smaller window. The risk, of course, is it won’t hold up to public and legal scrutiny and the entire process gets stalled in court.

And even if the EIR passes muster – as hoped – a public vote on any agreed upon stadium plan between the Chargers and San Diego won’t happen until late January.

Can the Chargers afford to wait out the uncertainty of a vote – and perhaps lose Los Angeles as a result?

Unless the NFL delays the process, that seems risky.

Similar uncertainty exists for the Raiders.

The good news is, Oakland city officials finally have their hands on a preliminary financing plan for a new Raiders stadium.

The bad news is, a ton of questions remain.

According to the San Jose Mercury News, the financing plan, one of several reports submitted Monday by San Diego-based businessman Floyd Kephart, is bound by a confidentiality agreement and has not yet been released.

As the Mercury News explains, Kephart has until Aug. 21 to provide a final stadium proposal, but top city officials and Raiders owner Mark Davis have described the preliminary financing plan as a potential make-or-break moment in the long-running effort to transform the sprawling 120-acre Coliseum site into a privately-developed urban center with sports facilities, apartment buildings, offices, shops and a hotel.

A number of issues stand in the way as it relates to the Raiders and NFL needing assurances this plan will work. As the Mercury News points out, with the Raiders and the NFL offering $500 million, Kephart must come up with a proposal to fully finance stadium construction without an outright public subsidy. Funding mechanisms used for other stadiums have included hotel tax surcharges, ticket surcharges, and stadium parking surcharges.

Complicating the situation is Oakland A’s owner Lew Wolff has said he doesn’t want to be neighbors with the Raiders in the proposed development. So Oakland officials could be deciding on whether to appease the A’s or the Raiders.

In addition to the stadium financing plan, Kephart told the Mercury News he also submitted required reports Monday on the feasibility of the housing and commercial components of the project, along with proposals on dealing with the nearly $100 million of debt remaining on the Coliseum and public financing of needed infrastructure improvements expected to cost about $150 million.

If public officials don’t like the plan, writes the Mercury News, they can opt not to renew their agreement with Kephart, who has claimed to have hedge fund connections, to finance the project when it expires in August.

With the NFL demanding quick results, stadium experts said Oakland will have to keep working on a Raiders deal even though it could hinder its chances of getting a new baseball stadium built.

The hope is they can pull it off.

But with NFL owners meeting again in August, and chances looking good an expedited Los Angeles process might come out of the meeting, Oakland is running out of time.

It might seem like a quiet time as it relates to L.A. relocation – but looks can be deceiving.

A’s throw cold water on Coliseum City Plan

As detailed financing plans get delivered today on a massive Oakland project that includes potential new homes for the city’s three professional sports teams, it looks like Oakland A’s owner Lew Wolff wants no part of any plan in which the A’s remain neighbors of the Raiders.

According to the San Jose Mercury News, Coliseum City point man Floyd Kephart’s plan suggests the possibility of three sports venues plus housing, retail and office space on the same but expanded site, but the A’s don’t see that.

The club is investigating building a facility on the Coliseum site, but Wolff told the Mercury News his plans means the A’s being the only tenant. Even if Kephart’s report says the plan is doable and the Raiders decide to spurn Southern California to build a stadium at the Coliseum site, Wolff indicated the A’s will be back to square one looking for a new home.

“We have thoroughly investigated things,” Wolff told the Mercury News. “And there is no good way to put two brand-new venues at the Coliseum site. If the Raiders are going to be there, then I don’t know what will happen. We’ll have to sit down with (baseball commissioner) Rob (Manfred) and see what to do.”

According to two league sources, Wolff’s move is not unexpected. The belief for sometime is the A’s want to push the Raiders out to create leverage from which they can negotiate an exclusive deal.

Wolff told the Mercury News he does not believe the Coliseum City plan is good business for his franchise.

“I don’t want this fellow (Kephart) telling the A’s what to do,” Wolff said. “We have no desire to compete with the Raiders for PSLs (personal seat licenses) and sponsors. We just don’t see that. The timetable is for something to be known by June 21. That’s today. I’m very interested in knowing what he’s come up with.”

Meanwhile, according to the San Francisco Business Times, some of the Coliseum City details are beginning to trickle out

The New City proposal would include selling a chunk of land on the Coliseum complex to the Raiders — but ask the city and county to bankroll up to $140 million in infrastructure improvements, according to San Francisco Chronicle columnists Matier & Ross.

The Raiders have $500 million to put to the new stadium, including $200 million from the NFL sponsored G-4 loan program. Figuring out a way to close the $400 million gap has long been the challenge.

Meanwhile, the Raiders have teamed with the San Diego Chargers to build a stadium in Carson as a fall-back plan to stadium efforts in Oakland and San Diego.

The Carson plan is one of two Los Angeles area stadium proposals along with St. Louis Rams owner Stan Kroenke’s Inglewood project.

The NFL hopes to decide by the end of 2005 – or early 2016 – what team or teams will relocate to Los Angeles and where they will play.


Big day for Raiders future in Oakland, but big questions remain

With the clock ticking on the NFL’s decision on who will relocate to Los Angeles and what site they will play, the Oakland Raiders hope to get some clarity soon on the viability of their future in the Bay Area.

Perhaps even today, when Floyd Kephart delivers a draft plan for a potential $900 million stadium for the Raiders to Oakland city and Alameda County leaders.

The stadium would anchor the Coliseum City development, a massive project on and near the city and county owned land where the Raiders, Oakland A’s and Golden State Warriors homes currently sit.

Kephart’s New City Development LLC has an exclusive negotiating agreement with the city and county on the project, and today’s presentation meets a June 21 deadline for providing key information. According to the ENA, the city and county have 15 business days to approve or reject New City’s plans. The ENA is set to expire in two months.

Meanwhile, Los Angeles beckons to the south as a potential landing spot.

The Raiders have partnered with the San Diego Chargers on a stadium project in Carson.

Meanwhile, St. Louis Rams owner Stan Kroenke is proposing a stadium plan in Inglewood.

The NFL hopes to decide which stadium plan they will back on what team – or teams – will relocate to Los Angeles by early 2016.

Kephart is confident he will answer all of the key questions – some of which were posed in this article from the San Francisco Business Times.


“Who will pay for, own and operate the stadium?”

The Raiders will contribute $500 million to the stadium – including the $200 million from the NFL sponsored G-4 loan program.

Obviously, that means a $400 million funding gap must be dealt with.

Meanwhile, there are long-standing issues the city and county must also settle.

Among them, confirmation that:

1. Land will be made available to the Raiders.

2. The new, required infrastructure will be publicly financed.

3. The existing coliseum debt will not be transferred to the new stadium.

In addition, while Bay Area leaders insist they want to save the Raiders, A’s and Warriors, to date there has been no explanation of what economic considerations the city and county will provide to any of the three teams for them to stay.

Kephart is confident he will provide necessary answers on his end, and told the San Francisco Business Times he expects negotiations between the governments, New City and the Raiders to occur “over the next few weeks.”

But the county and city must also step up.

And with the NFL’s clock on Los Angeles relocation ticking loudly, time is of the essence.


Chargers move one step closer to potential Los Angeles relocation

The first of what could be three hammers that help pave the way for the long-awaited NFL return to Los Angeles dropped on Tuesday, and it came in the form of a lightning bolt.

The San Diego Chargers, for decades embroiled in a local stadium fight and now tied together with the Oakland Raiders on a joint Los Angeles area stadium, have informed San Diego leaders they do not believe there is a legally defensible way to place a local stadium ballot measure before voters prior to the end of 2015.

Short of a complete change of course by local leaders or the NFL delaying relocation to Los Angeles by another year – and both of those options seem dubious – the Chargers moved one step closer to looking north for a new home,

“On behalf of our entire organization, the Chargers thank the City of San Diego’s negotiating team for working with us to try to find a way, at this late date, to place a stadium ballot measure before voters in December 2015 while complying fully with the California Environmental Quality Act and election law requirements,” the Chargers said in a statement. “Both groups have spent many hours examining possible options, and we have now discussed these options together at three formal meetings and during numerous informal conversations. Based on all of this work and discussion, the Chargers have concluded that it is not possible to place a ballot measure before voters in December 2015 in a legally defensible manner given the requirements of the State’s election law and the California Environmental Quality Act. The various options that we have explored with the City’s experts all lead to the same result: Significant time-consuming litigation founded on multiple legal challenges, followed by a high risk of eventual defeat in the courts. The Chargers are committed to maintaining an open line of communication with the City’s negotiators as we move through the summer and leading up to the special August meeting of National Football League owners. That meeting may provide important information about what is likely to occur during the remainder of 2015.”

In short, it means the Chargers will focus more attention on their interests in Los Angeles.

The Chargers and local leaders have recently been talking about a stadium proposal pushed by the city of San Diego on the site of the club’s current home in Mission Valley. But with the sides far apart on major points and time running thin on the NFL’s decision on who will relocate to Los Angeles and what site they will play, the Chargers seem to be turning focus away from what appears to be an ill-fated proposal and forward to their potential new home in Carson.

And what is clearly shaping up as a fight between the Chargers and Raiders and St. Louis Rams, who have their eyes set on a return to Los Angeles to play in the Inglewood stadium site being proposed by Rams owner Stan Kroenke.

The Chargers 54-year run in San Diego did not officially end Tuesday, but clearly their future there is uncertain.

San Diego leaders had hoped to persuade the club to stay with a $1.5 billion stadium plan on site of their current home – which was presented last month in response to the Chargers and Raiders Carson stadium proposal that’s been entitled since late April – but financing, environmental and entitlement issues were obvious obstacles standing in the way.

The city hoped to expedite the process by putting the proposal on the ballot at the end of 2015 – and thus avoiding a time sensitive 2016 vote – by declaring the stadium project “categorically exempt” from The California Environmental Quality Act (CEQA) process because the new stadium is replacing the old stadium.

The Chargers have countered from the outset using the “categorically exempt” process for a billion dollar-plus new stadium — one that could also be part of a larger development project — left the proposal vulnerable to lawsuits that wouldn’t just potentially tie the project up in court for years, it might mean the window for relocation to Los Angeles closing entirely on them.

In the process, the Chargers would be left without a new home in San Diego and no safe landing spot in Los Angeles.

That is a risk the Chargers will not take. Their belief is, all of the ways that have been suggested to circumvent CEQA violate either the California Environmental Quality Act, or California Election laws, or both.

The Chargers informed local leaders they would like to maintain open lines of
communication; and they hope the August 11th NFL owners meeting provides additional information on the League’s intentions for next season.

The league is sifting through a complicated Los Angeles relocation situation that includes the Chargers and Raiders Carson site – pending the stadium developments in their home markets – and Kroenke’s Inglewood proposal.

The window for relocation officially opens on January 1, 2016, but the league has informed all three clubs and all cities involved that window may open much sooner.
Should all three clubs file for relocation, a vote among the 32 NFL owners will decide what site wins out and which teams go – with 24 votes needed for approval.

But there is hope a solution can be worked out between the Rams, Chargers, Raiders and NFL in which everyone is satisfied with the outcome.

How the league navigates to that solution remains to be seen, although flexibility, and compromise are musts from everyone involved.

For now, anyway, no one has officially filed for relocation.

But it’s looking more and more like the Chargers are on the brink of doing just that.