Is Fremont move dead? Implications?
by alamedaman on Jan 5, 2008 2:56 AM PST
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PrintThe 2007 debacle with subprime mortages and plummeting housing prices will kill the new ballpark in Fremont. The A's will have to rethink their planned move, and likely remain in Oakland.
Sports writers are of course brain dead, and unable to think a few steps ahead. Or maybe I have missed their articles on this, as I have been out of town. But the dramatic changes in our economy are causing Lou Wolff and his investors to rethink this project. It would not be in their interests to let this out to the news media. But Lou and his investors are pretty savvy investors, and they are not about to invest huge dollars into a project that depends upon new homes and a thriving economy. There is no need for them to announce today that the project is dead. They don't have to put their money down today. But no one would invest in this project today. So you will see this drama play out, Fremot and the other players going through the motions, but this project doesn't make sense now, and when the time comes for everyone to pony up--they will not.
So what will happen with the team, with attendance? Personally, I was surprised at the increase in ticket prices for box seats--I bought them before I saw the Swisher trade. Not sure I would have done so had I known.
I think Lou has a disaster on his hands, and needs to respond quickly. With fans thinking that the team is going to Fremont, the crowd to the North is going to fall away. He had better decide soon, and make a public decision. Right now, I'm sorry I renwed my seat, for something north of $6,000 for two seats with parking.
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Who Blames Dan Johnson now!?!?!?!
Yeah, who can blame Dan Johnson now!
by Athletics fan and runner on Jan 5, 2008 4:09 AM PST reply actions
you could be on to something...
my brother's builds cabinets for developers, and he's says things have been terrible the last few months. I don't think the sky is falling per se... there will always be some part of the economy that works. Even during the depression, there were some cut-throat busunessmen who made money. It would be interestiing to find out what MLB and Negro League teams did as far as ticket prices during the depression. Usually the cities are the focus during hard times. We'll see what happens.
So, you're saying the current billy beane fire sale, could potentially be a franchise sale? As much as I would like that be, I know lew wolff has some fight left in him.
We'll see what happens!
by GrewUpAtTheColiseum on Jan 5, 2008 7:25 AM PST reply actions
Lou will hopefully retrench in Oakland.
I think the most likely scenario is staying in Oakland. But it could be a little rough on the fan base if he waits quite a while before making, and announcing, that decision. And he will want to wait, to see if the real estate market turns around.
A bit shortsighted don't you think?
Even the most pessimistic estimates have the subprime mess clearing out by 2009, a full year before the A's earliest move date. All this stadium move amounts to is a powerful contrarian real estate bet by Wolff and Co.
They're getting contracts and development rights at market bottom prices, when everyone else is starved for business. By the time this deal hits the market, I'll bet that the Bay Area economy will be at the peak of another business cycle.
I don't like the Fremont move for a number of reasons, but economics isn't one of them. If anything, the A's will be a financially stronger team for this move.
Assinine
Ever hear of business cycles?
Using your logic, the Bay Area never pulled out of the tech bust.
My car is running low on gas. I better get rid of it while I still can.
by RandomAverageBastard on Jan 5, 2008 8:29 AM PST up reply actions
I see the real estate market differently.
I have seen a great graph on housing prices over the last 30 years at ,MacroMarkets. I'll have to look around for it, because all I see with a quick look is a 10 year history. But from memory of the chart, the last housing recession started in 1989, bottomed in 1993, and didn't recover until 1997 or later. January 2007 was the first month where housing prices were lower than the same month of the prior year. So if that pattern were to repeat, and of course it may not, housing prices will not bottom until 2011, and not recover until 2015.
If that scenario plays out, Lew (sorry for the Lou) may be alright. Though he may be trying to sell condo's at or near the bottom in 2011. He's a very bright guy so I'm sure he's looking at the same data I am. And if he goes ahead, he'll have a plan to make money in this scenario. But I'm just not sure he'll go ahead.
But I actually think this housing recession is going to be far worse than the 1989-1997 recession. I personally would not invest in the Fremont stadium. I think housing prices could drop back to 2000 levels, which would be a 50% drop from the peak.
So I'm not sure Lew will roll the dice on this one.
a while back we had a good discussion
about this. I believe it was Monkeyball who did the front page post.
Amen.
by The Dogfather on Jan 5, 2008 8:23 AM PST up reply actions
Thanks for this link. some good comments.
I did see the statement that Lew's group had already put $100 million into this project. I have not seen that. Are you, or anyone, aware of a story or link that would support that? I would have thought they would have gotten an option on property--it just would be very surprising to me if they had actually committed-in the sense of spent and the money is gone-$100 million.
The A's arn't selling to low income familys
who will jump on those zero-down loans, and less likely that they will have a lot of people buying in order to flip them. They'll be building luxury townhouses, and thats the part of the housing market that is being less effected by it.
The buyers will likely still be there ...
but the excessive supply of lower priced houses would still, theoretically, drive down the prices overall.
The sub-prime issue was not limited to poor folks. Most segments of the economy have families that are eager to move on up ...
What I mean is
the houses that are still selling on the current market are pretty much the high-end housing, atm.
I understand that ...
like I said, "the buyers will likely still be there".
WolffCo isn't just trying to sell their condos -- they are trying to maximize profits. The amount they sell them for is a pretty important part of that equation.
high-end housing
From my knowledge, high-end townhomes are usually locked away inside of gated communities that are secluded and distant from places; without lots of people.
Cycles...
I hate to disagree, but these things run in cycles. If anything, the timing should be just about perfect. The market goes down for a few years, then shoots right back up for a few years, then plummets again, etc. It's a cycle. Within the next 2-3 years the market will have changed again and be on the up and up. So, by simple math, one can conclude that by about 2010-2011, the market should be rolling again. They cover these basic market principles in most Econ and Business classes. I'm sure most here who work in the Development, Real Estate, or other associated sectors can confirm this. Or, you can do a little digging and see for yourself. The market constantly fluctuates, and if it continues to plummet until 2010-2011, then we are going to have way, way more serious problems then whether or not the A's are moving.
Oops...
Apparently, some of you beat me to the punch!
by PosterNutbag44 on Jan 5, 2008 8:33 AM PST up reply actions
First of all, it's Lew, as in Lewis
Second of all, it's Wolffish. As in Fisher. As in, John "pockets by Gap so deep that I can reach all the way to my...knee" Fisher.
Since Oakland attendance has little to do with the team's current and near-future finances, I doubt they care much about fans not showing up in these last lame duck Oakland years. So why should they "respond quickly" and "decide soon?" Quite the contrary...it's in their interest to play the string out as long as they can.
Note that a month or two ago Lew was asked if he wanted to cut down on housing untis, and increase commerical/retail space, in response to the current economy. He said no way. The inner Bay Area population dynamics practically guarantee a housing audience for the mallpark village; the current economy might push back the date when the note gets paid off. But unless Fremont itself kills the deal--which could happen if the voters get involvoed--this thing is happening, like it or not.
more like Wolffisher
Involvoed as in well-protected by a steel cage against the oncoming crash.
I would disagree that Oakland attendance is not
important. If attendance falls to the point that cash flow is negative, that would be very damaging for Lew and his partners. They have a financial forecast, and if dates start to slip due to Fremont delays or other construction issues, then I think attendance will fall off from the current fan base. Negative cash flow, and running under plan in the beginning of a project, has a very negative impact on investors looking at plowing a ton of money into a 4 or 5 year construction project.
A second negative impact may have already occurred. My guess would be that Lew is looking at higher long term interest rates for his project, because it will be viewed as somewhat risky. Mortgage rates for prime borrowers have actually fallen a bit, I believe, over the past 12 months. But I think this would be viewed as a riskier investment, and he would be facing higher risk premiums. And I don't know when Lew will be able to lock in on his rates--maybe not for a year or more, and they are likely to turn up in that time period. (Long term rates that is--Fed Funds rates and short term rates are of course headed down right now.)
I think a lot of things have gone the wrong way from 12-24 months ago when Lew was putting together his financial model.
They've been tweaking the plan all along
Initially the plan was for 2,800 units to be built in 5-7 years, with no additional commercial development outside of the "Santana Row" portion. Now it's 3,100 units spread over 10 years, with no construction starting until around 2009-10. They've added more mixed density and mixed use development to the plan to provide more flexibility and conserve space.
The plan as it stands adds ~300 units to the new build inventory annually. That's enough to make an impact on Fremont, but the pricing of the housing and the gradual build out probably won't contribute to the considerable glut being seen right now. If this downturn runs for a decade or longer I won't be looking for seats at a new ballpark. I'll be looking for this millenium's version of the New Deal.
The one phenomenon that could truly derail the project financially would be another tech bust. Most of the crappy companies from the last cycle have already passed into the annals of history.
thanks for the detail.
It's going to be an interesting saga. I have a darker economic outlook than most, so that leads me to believe they will not be successful, with the Fremont ballpark that is. I think that would leave them in Oakland for a long time.
Thanks, no problem
A couple more things to note, FYI:
- The consultants writing the Economic Impact Report were approved by Fremont's City Council a month ago right before the winter break, so they probably aren't working in earnest until this week or next week.
- The city is supposed to hold public meetings and forums every 4-6 weeks until the project comes up for approval. The meetings are intended to cover every conceivable bit of planning minutiae from school placement to transportation to building heights.
ah, public committee-derived planning minutiae
I can't wait to hear what Lew thinks of those.
On a less snarky note, let me echo the props to you and your work, v0.
And a question, for you or anyone else more familiar with Lew's oeuvre: has Wolff ever spearheaded a development this ambitious, multifaceted, and involving so many public stakeholders? I know that his RE roots were in brokering Hollywood studio land deals and commercial development, and there are certainly massive egos involved in those negotiations (as there are in luxury resort development, his more recent specialty), but (as we've seen with his out-of-character intemperate and politically incorrect anti-environmental-regs snits) he doesn't seem to me to have much history or facility with developing public coalitions to bolster his plans.
(As an aside, I'm with FSU in believing that the failure to hash out a stadium plan with Oakland was the result of intentional neglect/bad-faith negotiating; however, thinking about it now in the context of my question/jeremiad immediately above, it could simply/also be that Wolff is great at brokering deals in smoke-filled rooms with a small number of invested stakeholders, but lousy at generating broader community consensus with constituents not motivated primarily by profits.)
Master of his domain (or not)
I think the approach Lew is taking is really just to marginalize the opposition. So far there are only two parties, the Sierra Club and an anti-development former mayor. What isn't getting notice is the under-the-radar work with the chamber, school district, city and non-governmental entities. And you haven't heard much negativity coming from them, right? Visions of smoke-filled rooms might sound more interesting and devious, but these deals are done in cardigans with donations and apple pie in hand.
Mainly it comes down to frustration over things he can't control, whether you're referring to the transportation issues, the environmentalists who bring the issues up, or the need to change the project plans thanks to market changes, not the red herring CEQA process.
At the same time he's probably noticed that projects in other typically difficult regions are getting done quickly and with public money, such as the NY ballparks and the Twins' and Nats' new venues. (Cue the California/cancer analogy.)
If you're looking for a parallel, look to Foxboro, MA. That's where Pats owner Bob Kraft spent nearly a decade flirting with both Hartford and Providence while working out a land deal next door.
If anything...
...The "Subprime Crisis" helps Lew Wolff & Fisher, big time. Contractors will be lowballing prices in order to get a piece of the pie. And by 2012 (or so), housing will be a totally different animal than it is at the beginning of 2008.
Maybe of larger concern to the Fishers
are not the A's and an unbuilt stadium but rather their other holdings.
The effects of this economy may have far reaching consequences on those. Devalued properties be they homes or Hiltons and nervous bankers make for the wrong kind of busy.
In finance games it comes down to time is your "enemy" or "friend".
Wolff is a minor player in this matter like Beane. Both are heavily reliant on a profit for their big payday. The well liked Beane, retained for PR purposes as much as his business acumen. Now finds himself in the position of hatchet man, destroying the roster he built.
The (90%?) owners are the Fishers; creators/owners of entities such as "The Gap", many tennant dependent Shopping Malls with and without "Gap Stores", Mutual Funds, Stock Holdings, Property management Corps, and real property.
Their activities are heavily concentrated in harder hit CA.
...in short, the Fishers could very well be reeling from commitments, assets shortages, dwindling resources and confidence amongst their peers. All of which is before even touching upon the A's/Cisco project.
The extent of the market downturn could have caught the Fishers off guard or they may have anticipated it all months or even years ago. IMHO most of the business world and CA in particular fits the "surprised" category.
more later...
by A s Eh on Jan 6, 2008 3:38 PM PST up reply actions
Ownership percentages
I've tried to figure out the ownership shares, but it's hard to piece together from the limited information. Fisher's share is definitely less than 90%, but I'm not sure how much less.
Several news stories have reported that Wolff owns "about 10%" of the group. This story from the Chronicle says that Beane owns "a tad less than 5%" and Mike Crowley (A's team president) owns "a tad less than that".
The same story notes that Lew's son Keith Wolff has a share, and former owner Steve Schott retains a minority share. Keith Wolff is involved in the Fremont plan, and he often appears in news stories labeled "co-owner". I would guess his share is roughly the same as Beane's or Crowley's. That leaves somewhere between 75% and 80% owned by Fisher and Schott.
Schott is the big mystery to me. I wouldn't be surprised if he still holds more than Wolff, maybe 25-30% even. On the other hand he could be down to just a token. I don't think we have any way of knowing. Fisher obviously prefers to remain in the background. It looks like Schott does, too.
Good info! Even though it's vague it sheds a
bit of light on our A's owners.
Personally I'd like to see the alameda county/east bay community end up with A's ownership and we know we have a team in good times and bad.
Today the "Vegas A's" looms as a possibility right alongside Fremont, or Oakland. If Green Bay managed to purchase the Packers, Alameda County and the east bay can own the A's, stadium and all.
Maybe Trader Billy & the A's would trade the A's for Fremont land?
Why not? The land is the real reason the A's owners read like a "Who's Who" of land developers!
by A s Eh on Jan 6, 2008 6:15 PM PST up reply actions
Ownership group is more varied
Around the time of the Beane and Crowley extensions, members of the powerful south bay DiNapoli clan, who have been very cozy with Wolff in the past, were brought into the ownership group. Not sure if they bought a piece of Fisher's share or someone else's. I think we're in danger of oversimplifying if we point to Fisher's situation as an indicator.
No public entity can buy an MLB team according to the ML constitution. Vegas mayor Oscar Goodman is likely going to be out of office by the time another franchise is up for a move. Don't count on the gaming interests or the next mayor taking the baton from him.
you say "buy", & perhaps that answers
my question. The Cubs were owned by Wrigley, which was a public company. Was that grandfathered?
Public/private distinction
Company ownership is fine as long as there is a managing partner designee. Liberty Media bought the Braves a year ago. Can you name the managing partner/president off the top of your head?
MLB will not allow ownership by a city, county, or other municipality. Besides, can you ever envision a period where the owners, who are so frequently on the opposite side of the aisle from government, would allow government into the club? MLB would have to be extremely desperate for that to occur.
One idea I would advocate is public trading of teams as is done with European soccer teams. Unfortunately, that system has proven to be just as greedy and economically unfair as our closed system.
thanks. I like the idea of shareholders
in the sense of the Green Bay Packer model. But unfortunately, that's a unique situation that I don't think we can duplicate here.
Thanks for taking time to clarify
Not to detract but how ironic that MLB won't allow county/city ownership yet gets called on the carpet regularly...
...by the U S Senate.
I guess to seriously acquire them a "Sports Authority" that is a self determined entity should be created.
by A s Eh on Jan 6, 2008 8:36 PM PST up reply actions
It'd be kind of nice if it did...
Because I think Fremont is a terrible move for the franchise, but I bet Wolff's got his bases covered for this too.
by FlynnSox on Jan 5, 2008 10:16 AM PST reply actions
Just wonderin'
Why are you "sorry" you bought your seats?!? This team is building for a very bright future, wherever the games are held.
I can't wait to see this team play ... most excited I've been since the ALCS ... finally, we've got hope for a contending team for years to come. If we had stayed put (with Haren and Swisher) this team would have been mediocre at best, a disaster at worst!
He can put 'em on eBay.
I'm with you Vaca -- I'm jazzed about the season and the future, and about 2008 AN Days in Sac and Stockton when the older adolescents are out-of-town.
119/21/12 & 13 represent!
by The Dogfather on Jan 5, 2008 11:39 AM PST up reply actions
It's certainly true
that the A's current direction is a godsend to fans who enjoy watching baseball played at a minor league level, without having to leave Oakland.
by FreeSeatUpgrade on Jan 5, 2008 11:53 AM PST up reply actions
The question is
if you would rather watch aged mediocrity who will be worse next year or a bad team of young players that will be better next year.
Now the Bay Area baseball fan has a choice.
Ooh, not one but two losing teams to choose from!
Verily, the market hath bestowed choice upon us.
Since I'd choose the A's even if they were the gerentology-and-gold standard option, it's an easy pick, but yes, I prefer youth ascending to age declining. Which is why I called for a rebuild way back when many here claimed the A's were close to contending in '08. I'll still be at the park lots this year...not because it'll be "good" baseball to watch, but because this is my team, even when they suck.
by FreeSeatUpgrade on Jan 5, 2008 12:37 PM PST up reply actions
I think...
I'll change my sig to "This is my team, even when they suck" after the season starts.
"Commitment to suckitude!"
"A's Coliseum & Nursery"
"The boys in Green & Gold" ...literally!
...do you think the A's will have to ban "R" rated games & Shows in the clubhouse?
by A s Eh on Jan 6, 2008 3:57 PM PST up reply actions
Will you give me a dollar per '08 A's win > 60?
Worst MLB record in 2007 was 66, and these guys are minor league-level, after all.
by The Dogfather on Jan 5, 2008 12:16 PM PST up reply actions
Of course not
However, I will offer you sympathy when the crowds of concourse-trotting hotties you so enjoy, um, appreciating from Row 1 of Level 2 have disappeared, because they don't share your fondness for the long view. So to speak.
by FreeSeatUpgrade on Jan 5, 2008 12:41 PM PST up reply actions
I will bring my own concourse-trotting hottie,
see honey, I do love you. That is for my wife if she ever comes to this site and figures out who I am.
by theblackpearl on Jan 5, 2008 12:47 PM PST up reply actions
I'm your wife!!!
Betcha didn't see that coming, didja?
You are blackpearlicus?
by The Dogfather on Jan 5, 2008 2:39 PM PST up reply actions
Nonono -- your nearly flawless memory missed ...
... a "nuance."
1-- the Second-level PromenaDettes have no redeeming social value, as they block the view of the field for at least rows 1-5.
2--the First-Level PromenaDettes, however, are different, esp. from Row 21, below which they can parade to their hearts' desire without blocking the view from the raised rows. For that and economic reasons (cheaper than rows 1-20), I am especially partial to Row 21. Now that the place'll be nearly deserted, others may want to seek seats in that row, bi-focal wearers excluded.
3--Now, what if I give you a dollar for every win < 60, you give me a dollar for every win > 60, and we each give mikeA $5 if the A's end-up at 60 even? I'm just trying to get a handle on how strongly you feel about this "minor league level" thing.
by The Dogfather on Jan 5, 2008 2:37 PM PST up reply actions
I consider row 21+ Level 2
It's always struck me odd that in many of the seat-price ranges the A's cahrge the same for inner bowl seat as they do for 21+. Besides, this way I can imagine that the seats I liberate in the Plaza Level are 3rd deckers. So I know what you meant and meant what you said.
Your proposition is ludicrous, taking a slice of my hyperbole and playing reductio ad absurdum with it, so of course I decline. I don't imagine a whole roster of minor leaguers, but it doesn't take too many Bradens Putnams Komines and Hannahans to put the stench of AAA/AAAA on the whole enterprise. I like young talent on the rise, which I will enjoy watching, probably 25-30 times next year. I'm less enamored with jersey fillers making a short visit to Oakland on their way to their looming HS coaching careers.
by FreeSeatUpgrade on Jan 5, 2008 2:56 PM PST up reply actions
Periclitor a vindicatum est non ridiculum.
Hyperbole est ridiculum. ;-)
by The Dogfather on Jan 5, 2008 3:19 PM PST up reply actions
Well aight check this out dawg,
first of all, you throwin' too many big words at me, and because I don't understand 'em I'm gonna take 'em as disrespect. Watch ya mouth and help me with the sale.
by ChickenStanley on Jan 5, 2008 6:50 PM PST up reply actions
01000101110111001010101001110110101111000
No,
but I'm pretty sure that means I love you. And I don't even know you.
Oh my!
"...I can't deny the fact that you like me, right now, you like me!"
by ChickenStanley on Jan 7, 2008 1:52 PM PST up reply actions
Is that another jeremiad?
Nothing disrespectful, Conn -- just some ...
... bluff-calling. But to FSU's credit, I didn't see anybody else rushing in to take his action.
Hmmm. Maybe things aren't quite as bad as all the recent gnashing hereabouts might otherwise have led us to believe?
by The Dogfather on Jan 6, 2008 5:20 PM PST up reply actions
Actually
I was just making a joke by putting a quote in there from "40 year old virgin" that just seemed to fit in my twisted brain :)
by ChickenStanley on Jan 6, 2008 5:49 PM PST up reply actions
Let me put it this way
It's too early for any of the books to have 2008 season wins odds up. But if someone had the over/under number at 74 wins, I sure wouldn't stake my mortgage payment on the over.
You're psyched about these moves towards building a winner down the road. And you're geared up to enjoy watching youngsters progress during '08. But you're kidding yourself if you don't also expect periods of sustained losing and below big-league caliber play. Those cling to youth movements like stink on a monkey.
by FreeSeatUpgrade on Jan 6, 2008 9:22 PM PST up reply actions
Like 9-18 in July--or maybe 9-17 in September?
Horrors.
And 74 wins is just 2 short of last season. I'd call that a successful year in 2008 (and buy you one of Lew's over-priced beers with most of my winnings).
by The Dogfather on Jan 6, 2008 11:28 PM PST up reply actions
I would caution you against ...
staking your mortgage payment on the under, either ...
Truthfully, you probably shouldn't stake your mortgage payment, no matter how safe the bet ... but I'd say that somewhere in the mid 70s is an appropriate place to draw the line.
Yep. I wunder what the '07 o/u was?
Simon: Gentlemen, I'd like you to meet your captain, Captain Oveur.
Capt. Clarence Oveur: Gentlemen, welcome aboard.
Simon: Captain, your navigator, Mr. Unger, and your first officer, Mr. Dunn.
Capt. Clarence Oveur: Unger.
Mr. Unger: Oveur.
Mr. Dunn: Oveur.
Capt. Clarence Oveur: Dunn. Gentlemen, let's get to work.
Simon: Unger, didn't you serve under Oveur in the Air Force?
Mr. Unger: Not directly. Technically, Dunn was under Oveur, and I was under Dunn.
Mr. Dunn: Yep.
Simon: So, Dunn, you were under Oveur, and over Unger.
Mr. Dunn: Yep.
Capt. Clarence Oveur: Uhh, that's right. Dunn was over Unger, and I was over Dunn.
Mr. Unger: So, you see, both Dunn and I were under Oveur, even though I was under Dunn.
Capt. Clarence Oveur: Dunn was over Unger, and I was over Dunn.
by The Dogfather on Jan 7, 2008 8:00 AM PST up reply actions
I will likely end up more positive on the team,
like you are. Right now I'm still recovering from the Haren and Swisher trades. I've always bought into the "in Bill we trust" way of looking at things. He's been right far more than wrong. I'm very excited about Barton and Buck.
But I just wasn't as negative on the team as it was--and I may have been wrong on that. But the trades have been a bummer for me. But I'll recover and be there opening day--oh wait, they'll be in Japan.
If the economy, and market continue to dwindle to
where Wolff, can't build. The other 95% of us AN people who live in California, have a lot more to worry about than the A's. We will all be living in the Coliseum since noone would be working and California would become a 3rd world country.
You mean the manager's office
aka GM's office South.
by FreeSeatUpgrade on Jan 5, 2008 12:29 PM PST up reply actions
I got the vintage scoreboard!
...I'm lazy.
by A s Eh on Jan 6, 2008 6:25 PM PST up reply actions
it does depend on the economy.
Much of this discussion hinges on where the economy will be in 3-7 years. If the Bay area goes back to a booming real estate market, supported by a strong economy, Lew's project may have bumps in the road, but I would think it would overall be successful. And that would be a good thing for the A's.
On the other hand, I'm not as sanguine about the economy, and particularly the real estate market. I think home prices have to adjust eventually to a point where most people can afford them--though that has not been the case for the past 10+ years in this area. The San Francisco area average home price in October was 6.2% below October of last year, and 2.1% below September of 2008--so the price decrease is accelerating. My guess is the newer construction areas such as San Ramon and condo's are not doing as well as the average, while Palo Alto and Menlo Park are holding up better. And Lew is building new condo's. So if the market is soft in 3-7 years, I think he'll be in trouble. But the world goes on even in soft real estate markets. The early '90's in this area were fine for most--even though real estate was depressing.
But my point in writing the diary was simply to say I think Lew and his investors have got to be reevaluating all of this, and I think it's likely they will end up backing away from it before they have to put down money in the $100 million area. And that would put the A's back where they have been--perhaps staying in the Coliseum. But clearly my forecast of real estate could be way off, as others have said on this thread.
that's basically my hypothesis, too ...
... augmented by an essentially baseless guess that Fisher (though perhaps not Wolff) may be looking to cash in his ROI in the franchise.
Don't we have better regional figures?
The San Francisco Bay Area is a huge region, and it's not uniform. My understanding is that the biggest declines are in Solano and Contra Costa, with the South Bay holding out much better.
Fisher Investments are spread all over CA and
dwarf any imagined priority you have assigned to the A's and Cisco Fields.
...IF they took a hit, and by the types of investments they own they did take a hit, they are not going to tell you or I about it.
I expect Butcher Bill's Fire Sale will continue with speed the mandate over quality of returns.
We will see...
by A s Eh on Jan 6, 2008 6:37 PM PST up reply actions
I think you are on crack
There is no evidence to support that Fremont is no longer an option. In fact, I will shocked if it doesn't happen.
Maybe a little red wine,,,,
I don't think you'll hear this for at least a year. But I just don't think the numbers that they put together 1+ years ago are realistic now. But they will be tempted to let the financial market play out a little--hoping the picture will turn rosier. I just don't think it will, and when significant cash commitments have to be made, they will back off. Obviously this is just my opinion, and not shared by many on this thread.
There were plenty of people ...
1-2+ years ago who completely saw the current situation coming. I'm sure WolfCo was aware of that and factored it into their planning and projections.
bay area real estate
To paraphrase Will Rogers, they're not building any more land in the bay area, so prices are only going higher... A chance to build an entire development with a nice attraction (a ballpark and maybe some citywalk type of storefronts) is a rarity. These condos will sell (not for $4 million each, but they will sell at a decent price).
My only holdback is that I want to know how far the new ballpark is from the dump. Does anyone know if you could smell the dump's wonderful scent from the location of the new ballpark?
by rollierollieOxenfree on Jan 5, 2008 3:43 PM PST reply actions
They're not building any more land
in Detroit, either.
It is at least 5 miles
Maybe more. I live basically between the dump and the new stadium sight. I can only smell the dump on super hot days when I am driving directly past it with my windows open. You will definately NOT smell it at the new stadium. I promise!
by BobbyCrosbysGirl on Jan 6, 2008 5:27 PM PST up reply actions
tsun-tsun, dere-dere
I just find it annoying when people come on to a site, and say how the A's move to Fremont is doomed, and they should see it coming, and everything will go wrong, and the A's are going to lose all their East Bay Fans, and they will go Bankrupt... But... in 5 years when they find they've lost several hundred million on the Fremont project, I guess Oakland will take them back... yeah, we'll take them back! And make THEM pay US! Yeah! And then we can tear down Downtown Oakland and build a stadium there with tax money! Its a much better solution, right? Infact, the Fremont plan has no basis to stand on, and the Oakland Downtown plan is the only one! Yeah! Infact, the Fremont plan is just a trick, a conspiracy to get Oakland to build a Downtown Oakland stadium! Yeah thats it!
I find it annoying...
when a diary title makes an announcement (and invites discussion of the implications of that announcement) as if it's a substantiated fact.
amen
I at least had the good sense in my post to say that it was all speculation and I might have been even more full of crap than usual.
I have no problem with this diary per se -- but the title sure does make it seem as if it's citeable breaking news.
point taken. title modified.
Much more betterer. :)
They're not booing, they're saying
Leeeeewwwwwwwwwwwww!
by FreeSeatUpgrade on Jan 5, 2008 5:47 PM PST up reply actions
I was saying "boo-urns"
Wild speculation here:
- I think the majority of the A's (8?) owners are in it for the short term payoff and would not miss the A's at all if the rest of the Cisco lands could still be acquired, developed, and sold.
- If Alameda County could offer the A's owners the Cisco lands over and beyond the stadium, access, parking, and related, in exchange for the A's franchise & building the new stadium structures first.
IMHO, The ink of the owner's signatures on the contracts would be bone dry right about .....................................................
......now
....and the stadium ready to occupy in about 18 months.
by A s Eh on Jan 6, 2008 7:36 PM PST reply actions
Don't understand what you're getting at
Wolff completed the bulk of the land acquisitions two months ago. He has 225 acres under control. There's no further need for public intervention except for rezoning approval. Alameda County's involvement has been minimal to this point. It's mostly Fremont's deal for now.
Regardless, discussion of a government entity owning a team in whole or in part is moot. I think I can safely say that it will never happen in our lifetimes - not if the current group of team owners can help it.
Do you know how much they paid?
I'm curious how much money they have in this deal to date.
Don't have the final figure
They bought some of the land from Cisco and some from ProLogis, plus additional nearby properties from other landowners. I heard it was well in excess of $100 million.
That should be public information
from the County, right?
Maybe it's different in California, but here in Washington I look up property reports online all the time, and they include sales price for any transaction in the past 10 years or so. When I have to phone the request no one ever asks who I am or why I want the info; it's public information for anyone who requests it.
I just tried the Alameda Co site just now and it doesn't have a map search function, so you can't get at a parcel unless you know the address or the parcel number. (There's a similar page that says "parcel maps" but I can't get it to function at all.) So I tried some other addresses I know, and it looks like they don't show sales figures. They do show assessed value, but in the ones I looked at the assessed value looked low -- ridiculously low in a few cases -- so I'm not sure how assessed value relates to market value.
Still, I think the info has to be out there somewhere. When real estate changes hands they have to report it. Even if they jigger the deal somehow to hide what it truly costs, there should still be an official price.
see my comment below.
I didn't do what you did, but tried something simpler which was just to see what has been publicly announced. As you will see below, it looks like the main body of land, 143 acres, was actually not owned by Cisco, but rather Cisco had/has an option on it. And maybe what the A's now have is an option on that option. If I interpret this right, that means they do have rights to the land, but they have not committed significant money to its purchase.
Old news
The option was for Cisco to pick up pending dev plans and was due to expire in 2009. The deal was constructed in a manner that put total ownership in Wolff's hands. I was surprised that while they got nearly all the land they were looking for, they didn't acquire one or two nearby parcels such as the Scott Gas lot.
Assessor records indicate that the parcel tax paid last month was a significant jump from previous years, which points to a change of ownership. The owner's name is not shown for privacy.
On top of it again, vertig0!
I wondered if this would be old news since all the articles are old. Once again I am very impressed with the depth of your knowledge here. It sounds like you know the site itself--I just know the general location, I think, and what is around it.
If you have any links to the assessor records I would appreciate it.
I'll look forward to your posts on this subject as it comes up in the future.
Thanks, V
You're a great resource on all of this.
I didn't start paying attention to financial records until after I moved up here and started working full-time, so I really only know Washington state. Sounds like the rules are different in California. Up here the County will tell you who owns any property (even if sometimes it's some cryptically named corporation and you still don't know who the partners are).
Also, are you saying Alameda Co only updates the assessed value of a property after a sale? Surely there must be several on AN who can confirm this for me. If you've owned your house since the 1970s, do you still pay property taxes on just the 1970s value?
Prop 13
Someone who knows more about the legal side to public disclosure can speak more about this. AFAIK it's not difficult to go down to the assessor's office to obtain all of the information you're looking for. Online, they limit it.
Assessed value only changes significantly with a sale thanks to Prop 13.
If you're curious, the parcel numbers for some of the acquired land are:
525-1670-13
525-1670-14
525-1326-48
525-1326-49
525-1326-50
525-1326-36
For whatever it's worth
Total assessed value of those six parcels is $116,872,620.
That matches your "well in excess of $100 million".
great work, mdl. thanks.
so as I understand previous posts, the name of the owner of the property was not available to you? But it's pretty certain with the public announcements of the Cisco option, and then the Lew Wolff groups option, that the land is now owned by the A's. So they have "well in excess of $100 million" invested in this property, the intended use of which is the new stadium. I agree that is a very significant finding, and a nice piece of work by by V and you. I wonder if the land would be valuable for other uses should the arrangement with Fremont fall through, or if the investment group is protected in some other way from that possibility. But by posing that question I don't mean to imply this $100+ million is not a significant investment on their part--it clearly is.
A large part of the issue ...
with development is zoning. The parcel is currently zoned for office space -- an idea so appealing that Cisco found it more useful to just leave it sitting there, unused than to build an office park.
The value in the land is in the potential to build an upscale, mixed use housing/retail development.
That, obviously, requires rezoning by the city -- which is inevitably going to be very controversial. The stadium and the team make it a more attractive option. Without that, it'd be a lot harder to get it done.
I don't know Fremont's politics well enough to offer any predictions, but if they can't build the housing, the land loses a ton of value.
You're right, though, that the bulk of what the invested appears to be for capital (land), so that will always have some value.
thanks. that provides excellent understanding
are any of those owned by Jasper Lamar Crabb?
Dang it! I just lost a posted comment.
Following are three references:
Cisco November 2006 press release
A's May 10, 2007 press release
SF Chronicle story on May 10, 2007
My intention was simply to start a file on public announcements regarding cash that has been committed on the part of the A's. I'm hopeful that others would add to this, as my work is simply the result of a Google search.
But the bottom line is that these three articles say that the A's have made arrangements to buy the properties so they can move ahead with negotiations, but they don't seem to say they have committed funds. And in fact, the SF article seems to say that Cisco doesn't actually own their 143 acres, but has an option to buy them. And it would seem that the A's may now have an option on their option.
About 25 acres of the land are controlled by ProLogis directly. The other 143 acres are controlled by Cisco Systems Inc., which has a long-standing option to buy the land.
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