Oakland Howard Terminal Ballpark

Howard Terminal Oakland Ballpark Project Clearing Up Errors In Reporting Regarding TIF, SB293 Skinner

In this version of “Howard Terminal Misinformation Wack-A-Mole” I focus on questions by readers about my take on other reports they’ve read. So, without naming names, and focusing on content, here goes my take and based on a newsletter from my friends at the East Oakland Stadium Alliance which reads in part:

In a recent piece published on Patreon entitled “Four Things About Howard Terminal We Learned from the Alameda County Board of Supervisors Meeting”, Name Witheld breaks down the ways in which “it became clear on Tuesday that there currently is no valid term sheet to vote on—and likely never has been.”

So, I decided to look at the post and this is what I found.

The Take From Name Witheld Is Riddled With Errors, So Let’s Start Here

Name Witheld writes:

1. There is no “Financial Plan”, and thus, no “Term Sheet”

For months, John Fisher’s representative Dave Kaval has been touting a “term sheet” for a Howard Terminal ballpark and development project, and publicly issuing demands to Oakland’s City Council to review it for a positive vote as soon as possible. Up to the moment of the Alameda County Board of Supervisors meeting on June 15, Kaval was still referring to the “term sheet”—the document Kaval released to the public and claimed he had also given to the City in April. 

Caving in to pressure, City Council agreed to schedule…something to a July 20 vote, but it wasn’t the April term sheet. The current scheduling is a place-holder, with the expectation of an eventual term sheet document. It became clear on Tuesday that there currently is no valid term sheet to vote on—and likely never has been. 
“We do not agree that the A’s proposed financial plan, which was in fact, first released to the City in writing in April this year…we don’t believe that is fiscally responsible,” Assistant City Administrator Betsy Lake, who is responsible for the City’s side of the deal, told the Board. 

Thus, the $1.4 billion in tax revenues stated in Fisher’s term sheet that would pay for off site infrastructure and “community benefits” are no longer part of the conversation [see 2, below]. 

Correcting The Take Above, Let’s Start With The Last Two Sentences:

“We do not agree that the A’s proposed financial plan, which was in fact, first released to the City in writing in April this year…we don’t believe that is fiscally responsible,” Assistant City Administrator Betsy Lake, who is responsible for the City’s side of the deal, told the Board. 

Thus, the $1.4 billion in tax revenues stated in Fisher’s term sheet that would pay for off site infrastructure and “community benefits” are no longer part of the conversation [see 2, below]. 

It’s not so much that Ms. Lake was right, but why? The real problem is the Dave Kaval-released term sheet was a mashing together of numbers that did not come from a computer model spreadsheet of the Howard Terminal Project. Indeed, the $1.4 billion in tax increment financing was not correct with respect to a 45-year-bond issue, but it was for a 40-year bond issue. How do I know this? Because the $1.4 billion number number could have only came from my initial spreadsheet models sent to Kaval, and broadcasted publicly. The question is, why would Dave and his staff just use my numbers without realizing I would pick up on the activity?

Prior to our April 7th, 2017, 4 PM in the afternoon talk, Kaval was under the impression that no public dollars could be used for the Howard Terminal Project. During our phone talk, I told him about SB 628 Beall (called “The Son of Redevelopment”), and sent him the link to the 2015 legislation that ushered in the era of Infrastructure Financing Districts, or “IFDs.”

I also told Dave Kaval about, and sent him a copy of, the 2010 Oakland A’s at Jack London Square Economic Study. That document contained several estimates of tax increment financing revenue for a series of possible scenarios, including one that has emerged as a desired alternative on the part of the Athletics. But the bottom line is the financing plan, or term sheet, that Kaval advanced has a load of flaws, but to throw the tax increment revenue baby out with the term sheet bath water just shows the author did not understand how TIF is calculated. A problem that persists in this entire Howard Terminal conversation with the public. Let’s continue.

This Jack London Square Infrastructure Financing District Take Is Massively Wrong…
Then, the same person writes this:

3. Without a JLS IFD the Project Can Only Continue with County Participation or as Indisputably Publicly Financed Project

This brings us to the reason the County has been roped into the public spectacle on Howard Terminal. The math no longer pencils. The project isn’t viable using the Howard Terminal on-site IFD as the infrastructure funding generator, unless the County is throwing its share of the tax revenue into the project. 
With the reality that absent County involvement the project no longer works, Kaval is now preparing the rhetorical ground-work to argue that the City should invest its own funds for off-site infrastructure.  Several times during the meeting, Kaval argued that the infrastructure is the City’s responsibility to fund as it is “deferred maintenance”.  
Regardless, only two options are open to pay for the necessary infrastructure: a 100% publicly financed stadium infrastructure, or a Howard Terminal IFD enhanced with the County’s share of property tax increment.
It’s not that tax increment financing revenue can’t work (the author clearly does not know how to calculate TIF revenue) but that it’s better to negotiate with Alameda County, and BART, and AC Transit, and The Oakland Unified School District, and say “If you let us collect what normally would be your share from both Howard Terminal’s base year assessed value and the tax increment, we will finance the construction of your projects X, Y, and Z. Trouble is, the City of Oakland did not do that, should have done it last year, and now because Major League Baseball and Jon Fisher said “hurry up” – they’re just starting, and getting bad consulting advice on top of that.
And This Is Way Wrong Because SB 293 Skinner Does Not Call For An IFD For Jack London Square, But Any IDF. There’s No Language That Locks In Jack London Square.

The same Name Witheld author writes:

4. The Legal Basis for the Howard Terminal IFD Has Changed
Without the JLS IFD, there is no reason to rely on the specific IFD legislation the City and Kaval have based all of their public statements on. That IFD structure, based on SB293 is no longer useful. 
SB293 is a relatively new law created especially for Oakland and Fisher’s project that would have allowed the creation of an IFD and the issuing of bonds with a dramatically lower bar of public input. The state of California already has a an IFD law, SB 628, known as Enhanced IFD. But SB628 requires substantial input from residents and land-owners who may be swept up into the boundaries of the district, something SB293 did away with. In simple terms, SB293 allowed the creation of the IFD in absence of protest from—rather than by requesting permission of—residents. It also allowed the issuing of bonds with a similarly whittled down process. 
In a Jack London Square EIFD, a significant number of residents and businesses would have had a say in whether Fisher got their tax income for his project, creating barriers to put it mildly. And those barriers would only be tested after the plan went ahead, introducing significant insecurity into the mess. 
With a bit of reading between the lines, given the history of SB293, it seems clear that in some past iteration, the Schaaf Administration and Fisher believed they could make the JLS IFD work. That’s why the City sent its lobbyist, Townsend Partners, along with Fisher’s lobbyist, Dave Kaval, to Sacramento to lobby for its creation. 

That dude’s wrong. Again, SB293 does not specifically call for a Jack London Square IFD. Just go to the bill text for SB 293 Skinner and try a search for “Jack London Square” – you can’t even find “Jack”. And that’s a fact – jack. Try it yourself here.

The East Oakland Stadium Alliance Clearly Wants To Blast Out Any Press Negative To Howard Terminal But Why Not Float A Plan?

I get that the East Oakland Stadium Alliance would prefer a baseball stadium at the Oakland Coliseum, but that damn sea-level rise problem needs to be handled for the Oakland Airport, the Airport Business Park Area, and I-880, and not just the Oakland Coliseum. So, why can’t the East Bay Stadium Alliance float a plan for maritime use redevelopment to go with the Howard Terminal Ballpark, and play ball with the A’s?

I am not saying I’m not in favor of sports at the Coliseum, let alone baseball, and it would be cool if the A’s wanted to be down there, and made noise about the sea-level rise problem, but they’ve been in love with first a Downtown Baseball Stadium, then Laney College Ballfields, and now Howard Terminal.

If the City of Oakland really had some negotiating game and wanted the Oakland Athletics at the Coliseum, they’d offer to throw money at them. But the City of Oakland should talk to Major League Baseball about expansion, and let the A’s go – or try and go to Las Vegas. Guess what? I’d bet the A’s would turn around and really make a true effort to stay in Oakland.

Stay tuned.

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