Howard Terminal District At Full Buildout

Oakland Athletics Howard Terminal Ballpark Spreadsheet Shows TIF, Community Revenue Results

I have just completed a new Oakland Athletics Howard Terminal Ballpark Spreadsheet of revenues and expenses and tax increment financing revenues and TIF money available for a bond issue and expected series of bond issues. Here, I attempt to show both the private fiscal side of the stadium and the public fiscal side of the stadium.

Even though this is a first cut, it’s actually the latest version of a spreadsheet I first built in March of 2017, and in anticipation of a private conversation with Oakland Athletics President David Kaval on April 4th 2017. That call was to help the then-new Oakland Athletics President get up to speed on the potential of tax increment financing for the ballpark, and how that could be used to spark the construction of more affordable housing for the Jack London Square area, and a more politically-acceptable project.

OK, So Why Me? Why Am I, Zennie Abraham, Doing This?

As to the “why me?” questions, the very short reason is because I can. I have experience at this going back to my 1987 internship with the City of Oakland’s Redevelopment Agency, fresh out of U.C. Berkeley’s City Planning Masters Degree Program. I created a spreadsheet model for redevelopment that could be used anywhere in the State of California and called “The Area Redevelopment Economic Model”. I was rehired as a consultant to the City of Oakland, and from that point to 1995, had Oakland, San Francisco Emeryville California, and several private business owners as clients. From 1995 to 1999, I was Economic Advisor to Oakland Mayor Elihu Harris. From 1999 to 2001, I moved over to The Oakland Office Of Economic Development as a consultant, where I created and ran the Oakland Alameda County Sports Commission, and the Super Bowl XXXIV Bidding Committee. From 11 cities, in 2000, Oakland was picked as a finalist for the right to host the 2005 Super Bowl, but sadly we and Miami lost to Jacksonville.

From 2001 to 2010, I built two system dynamics models, one called the XFL Simworld, and the other The Oakland Baseball Simworld. And established, with University of San Francisco Professor Dan Rascher, Sports Business Simulations (SBS), February 20th, 2003. Our sims were used in 40 high schools and colleges until I made SBS dormant in 2011.

At that point, I had already made Oakland’s first blog, Oakland Focus, in 2004, became the first YouTuber to cover the NFL Draft in 2005, the first to use livestream in 2007, and became one of the first 128 bloggers to cover the historic 2008 Democratic National Convention. I joined YouTube and Blip.tv in 2005 and 2006, attended the launch parties for a number of tech companies, most notably Twitter, and was named YouTube Partner in 2008. From 2007 to 2011, in addition to consulting and running SBS, I was a CNN I-Reporter, City Brights Blogger at SFGate.com, and then in 2010, established the brand that would become the Zennie62Media Delaware C-Corporation, today.

The Oakland Athletics Howard Terminal Ballpark Spreadsheet

So, to get to, as they say, the main event, here are the basic information outputs from the Google Spreadsheet, which you can see with a click here.

Here are the basic outputs:

Basic Assumption: that the Oakland A’s pay the annual 1 percent property tax on the stadium, which they will own, to the as yet not formed Oakland Redevelopment Agency for the Ballpark. This is major, because the letter to the County Administrator from Oakland City Administrator Ed Reiskin includes a document from the consultant Public Financial Management (PFM), which does not include the ballpark as a taxpayer. PFM does not say that, but the really low payments to the County of Alameda in the letter imply that. There’s no mention of what the A’s will pay as a result of being the property owner in the PFM document.

HT Limit 18 Million Sqft – Land Use Added SqFt – Here, you can add any amount of land use per square foot, with a limit of 18 Million Square Feet assumed (or the total allowed under the plan if one takes the A’s total assessed value of $12 billion and divides that by an SF Bay Area construction-cost-per-square-foot standard of $600.

Mello Roos Rate TEST: I added in The Mello Roos Community Facilities Act Tax Rate based on what the City of Oakland explained they were planning to do during last week’s presentation to Alameda County. Here, the base assumption is the City / A’s will try to gain a revenue stream that “replaces” the lost taxing agency revenue (an action I object to because they could have negotiated with BART, AC Transit, The Oakland School District, and EBMUD Flood Control District last year. Anyway, I plugged in $30 per square foot, first starting with the ballpark, then every time you add a new land use (like an office) via its size in square foot, that’s converted to Mello-Roos Revenue, too.

Base Year Howard Terminal District Assessed Value: $2,081,425,000.00 – That comes from the sum of the anticipated ballpark cost of $1.5 billion, plus the anticipated (first) hotel which I estimate would cost $58.5 million, and land prep and infrastructure, which is to be $445 million and Developer Fees and Administrative Costs which comes to $77,925,000.00. There was no attempt here to add in the “buildout” land uses totally $12 billion. I expect those, if they happen, to occur in phases. Neither the A’s or the City of Oakland have shown the public an expected phasing, and the Public Financial Management example in the document that’s part of the letter to the County of Alameda, was not official and was made for demonstration of possible tax revenue flows. PFM even says so.

Base Year Howard Terminal District Assessed Value Rate of Growth of 4 Percent.  This is much less that the historic Jack London Square Average of 7 percent.  Also, keep in mind the Prop 13-allowed 2 percent increase.
Base Year Tax Revenue From Stadium / Hotel – $20,814,250.00 – That’s based on the basic 1 percent Proposition 13 tax rate, although I can plug in what the actual rate would be in a moment’s notice, if the City or County has that information that’s not immediately visible (or, I could just have been stupid and missed it). This contains what would be the County of Alameda’s share, or about 15 percent, with the rest going to the School District, BART and AC Transit, and the City of Oakland. What’s above that is tax increment revenue, which we will get to.

Base Year Tax Revenue To Alameda County From Stadium / Hotel – $3,122,137.50 – That’s an estimated 15 percent of the total of $20,814,250.00.

Total Tax Increment Revenue – $1,683,260,214.12 – That’s based on the allowed bond issue collection period of 45 years, after which all revenue collection under TIF stops. The basic TIF revenue calculation is the current year assessed value minus the base year assessed value which is $2,081,425,000.00. That result is called the “tax increment”. That “tax increment” is, in turn, multiplied by the property tax rate, which is 1 percent in this spreadsheet run. We do that each year for 45 years until the end.

Total Tax Increment Revenue Added With Base Year Tax Revenues Collected By Oakland Redevelopment Agency – $2,640,715,714.12 – This presents the possible option where the County of Alameda and all other taxing agencies (School District, BART, AC Transit, City of Oakland), elect to allow that base-year money to be collected by the, to this date not formed, Oakland Redevelopment Agency. Collecting it allows a first year revenue use for a bond issue of $20,814,250.00 and a first-year bond capacity of $468,320,625.00 (which is the first-year revenue of $20,814,250 times the bond period of 45 years, divided by 2, which reflects the standard debt-coverage ratio of 2 for a municipal bond issue, and is done to protect against bond debt default.) Without that stream, the first-year of TIF increment revenue is just $832,570.00, and we would have to wait 19 years to reach a mark of $21,351,601.41 in annual TIF revenue, before a bond issue of $468,320,625.00 could be paid for. While we can size the bond issue to make the first payments smaller (which makes the later years payments larger), we’re still waiting a few years. The best way is for the as yet not formed Oakland Redevelopment Agency for The Ballpark to make a deal with Alameda County and the other taxing agencies (School District, BART, AC Transit, City of Oakland). That is the best way to realize the payment of the maximum level of community benefits from the Howard Terminal Ballpark District to Oakland.

Alameda County Share Of Total Tax Increment Revenue – $252,489,032.12 – This reflects the County’s 15 percent share of the Total Tax Increment Revenue Added With Base Year Tax Revenues Collected By Oakland Redevelopment Agency. The way to look at this is it gives the County a chance to have the Howard Terminal Ballpark District fund a predetermined set of structures that serve community needs. For example, it could be earmarked to help fix the East Oakland / Oakland Coliseum / Oakland Airport Sea Level Rise Problem (which helps the African American Sports and Entertainment Group build Coliseum City) and build more affordable housing down there.

TIF Increment Revenue For Community Minus $445 Million For Ballpark Infrastructure – That’s where part of the increment is used to pay for the infrastructure for the ballpark, which is $445 million. There are two ways to look at this: the way where the County keeps its base year share (as do the other taxing agencies) yielding $1,238,260,214.12 for the Oakland Community as per SB 293 Skinner, or the other way where the County and the other taxing agencies let the new Redevelopment Agency use their shares, which produces this $2,195,715,714.12 in total TIF revenue over a 45 year period.

Oakland A’s Private Revenue and Expense Estimates – Here’s a breakdown of basic revenues and expenses in my spreadsheet and that apply to the A’s in the construction and operation of the Howard Terminal Stadium Ballpark. (Note, I did not consult with the Oakland A’s on these, but are based on past estimates for the project and future trends. The Oakland A’s are always welcome to provide corrections or affirmations):

Naming Rights Revenue: $200,000,000.00
Sponsorships Revenue: $1,500,000,000.00
Total Suite Revenue: $911,250,000.00
Total Ticket Revenue: $246,400,000.00
Total Seat PSL Revenue: $140,000,000.00 ($4,000 PSL cost average)
Total Concessions Revenue: $100,800,000.00
Stadium Capacity: 35,000
Number of Suites: 150
Hotel Rooms: 300
Total Stadium Operating Revenue over 45y (not used for stadium construction): $3,097,650,000.00
Total Stadium Operating Cost over 45y: $562,500,000.00
Total Net Profit over 45y: $2,535,150,000.00

Tax Revenue From Project – Athletics Ballpark (Note: From Stadium – Not District Land Sales) – This is a preliminary breakdown which does not include other revenues, like parking ticket monies, etc. This will be updated.
Hotel Transient Occupancy Tax Revenue 45 yr: $35,872,200.00
Sales Tax Revenue 45 yr: $8,568,000.00

Conclusion: A Giant Oakland Stadium Project That Can Be A Win-Win For The Oakland A’s and The Oakland and Alameda County Community.

First, I welcome any questions and feedback regarding the spreadsheet as it’s still a work-in-progress that I want to serve as a kind of community tool. While specific inputs need adjusting, I am 100 percent certain of the dollar flows shown. Moreover, there’s no other organization that’s shown they’ve worked on this other than me and not for a Zennie62Media client, but as a media entrepreneur who loves his city of Oakland and wants it to win.

Second, I want the media and the politicians to fall in love with the fiscal details of this project, because it holds enormous opportunity to help improve Oakland and Alameda County. It’s so large in potential monetary output that it can help East Oakland, so there should be no talk of a choice between the Oakland A’s and the African American Sports and Entertainment Group. That should stop.

Finally, this post will be regularly updated. I look forward to your feedback. Email me at Zennie@Zennie62.com or text 510-517-7565.

Stay tuned.

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