Elephant Rumblings: Howard Terminal funding strategy draws concerns

Happy Friday, Athletics Nation!

J.K. Dineen at the San Francisco Chronicle surveyed experts on the increasingly popular strategy of creating infrastructure financing districts, or IFDs, to fund ballparks without public money. The idea is that building office and residential space in the surrounding area will generate new tax revenues, rather than using existing revenue streams to foot the bill.

The A’s and City of Oakland have adopted this strategy, hoping to generate over $500 million to fund infrastructure improvements at the proposed Howard Terminal ballpark site over the next 45 years. But skeptics point out that similar plans in Atlanta, Lousiville, and Washington D.C. haven’t panned out so well thus far.

One such skeptic is Kennesaw State University economist John Charles Bradbury, who pointed out that the KFC YUM center in Louisville “did not generate anywhere near the revenue forecast.”

Bradbury expressed great doubt about the IFD concept, saying, “I am not aware of one of these stadium districts that has worked.”

There are also concerns that this is a particularly bad time to pin hopes on attracting commercial tenants to Howard Terminal, as office occupancy is historically low—especially in the Bay Area. Further fueling pessimism is the fact that the political and regulatory climate in California will also hinder the real estate development necessary to make it all work.

There are more bullish perspectives to be found, however. Signature Development President Michael Ghielmetti points to his company’s Brooklyn Basin waterfront development, where the completion of 2,000 residential units is underway, units are leasing faster than expected, and retailers are “lining up” to set up shop in the area.

Ghielmetti claims that waterfront developments hold a strong allure, and compares Brooklyn Basin and Howard Terminal development to the successful revival along San Francisco’s Embarcadero in the 1990s.

Regarding the commercial real estate market lull, Oakland Broker John Dolby characterizes it as a “bump in the road.”

“If you’re worried about a bump right now—well, clearly you are not a visionary,” said Dolby. And to be fair, present market conditions won’t necessarily dictate the performance of a strategy that projects across several decades.

I generally trust economists more than developers and real estate brokers. The greatest economist of all, J.M. Keynes, once pointed out that “In the long run, we are all dead.”

That is to say, you only live once. No doubt there are risks involved in moving forward with the proposed ballpark development, but does Oakland really want to be bereft of any major league franchise? I’d think not. This Angeleno implores the denizens of Oakland to take a chance on Howard Terminal!

A’s Coverage:

• Dineen: ‘The devil is in the details’: Why the Oakland A’s plan to fund a new ballpark hasn’t worked in other cities ($)

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• Lin: Padres’ Robert Suarez delivers pivotal performance as San Diego wins dramatic Game 2 ($)
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