Last week it was widely reported that the Oakland Athletics had struck a deal with the Joint Powers Authority on a ten year lease agreement that would keep them in O.co coliseum. It seems in typical Oakland Raiders fashion, there have been behind the doors discussions between the Raiders and Mayor Jean Quan that insinuate they are working on a power play that would put the Joint Powers Authority in a very awkward position.
The San Francisco Chronicle is reporting that the Raiders expect to complete negotiations by the end of the summer on a deal for a “Coliseum City” which would require a tearing down of the current O.co building by 2015 and a new building would be built by 2018. This is surprising news for a fan base that assumed after the Athletics deal, that the Raiders were destined for a new location. Not only would this be a coup for the Raiders to get this deal done, but it would also be massively beneficial for the re-election of Jean Quan.
One of the potential issues with this plan, is the built in two year warning that would be required for the Athletics in the event the coliseum is going to be torn down. With that in mind, it would then be impossible for the Raiders to have O.co demolished by 2015 in order to have the new coliseum built by 2018. This may insinuate there is more to this deal that we currently know and the Athletics may in some way benefit further with this project. Mayor Quan has pushed for a Jack London Square site for the Athletics, but that idea has met opposition from local businesses and the Athletics.
Of course there are skeptics to the deal and said skeptics have mentioned the lack of a developer since the loss of Forest City development and the lack of funds. It has also been made clear the Lew Wolff has little confidence in the current investment group, but businessmen are persuaded by money. To quote a businessman of sorts, maybe they “made him an offer he couldn’t refuse” or at least they plan to. The article mentions that the Raiders and the Mayor plan to have a term sheet ready by the end of the summer. This sheet would outline the money and the basics of the investment plan moving forward. Lastly, there is always the worry about the remaining 180 million from the last renovation, but this has long been viewed as a part of the deal.
This entire deal comes down to two things. First, if the Raiders invest ten million dollars as a down payment for the project the Athletics will take it as their two year notice and move out at the end of those two years. Secondly, Colony Capital is a private real estate investment firm. They have the wherewithal and corporate structure to make this work. If the city of Oakland is willing to allow the group to own the entire area much in the way AEG owns the entire downtown Los Angeles area, then there is the long term investment potential for them. Without it, the Raiders simply do not create enough profit in ten games a season. As for the skeptics, Colony Capital if they a truly looking for a power play, have the money to not only incorporate the 180 million dollar debt from the last renovation into the plan, but they also could buy out the Joint Powers Authority making this process much more efficient.
Tags: Oakland Raiders