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Oakland Approves a New Stadium in a Hail-Mary Bid to Keep the Raiders - By jkukura - December 21, 2016 - SF Weekly
SF Weekly

Oakland Approves a New Stadium in a Hail-Mary Bid to Keep the Raiders

(Chris Yunker / Flickr)

The Oakland Raiders havemade some magnificent achievements this season. They have donated $50,000 to the families of Ghost Ship warehouse victims, and they have clinched their first NFL playoff berth in 14 years. But it’s the big move they’re planning that has Raiders fans worried and the city of Oakland lining up taxpayer money to placate a franchise with a value of more than $2 billion.

In October, the Raiders announced their plans to move to a $1.9 billion domed stadium in Las Vegas. Las Vegas already has the money lined up for that stadium, having approved a $750 million hotel tax in October to bolster the $650 million offered by a casino magnate (and Donald Trump adviser), plus $500 million from Raiders owner Mark Davis.

But the Raiders’ proposed move to Las Vegas is no sure thing, and NFL owners have the right to reject the move. Oakland is lining up the resources to be the Raiders’ Plan B, and to that end has enlisted a group of investors that includes former Raiders players Ronnie Lott and Marcus Allen. At separate meetings on Dec. 13, officials from both the city of Oakland and Alameda County gave preliminary approval for the city to enter exclusive negotiations with the Ronnie Lott Group and Fortress Investments to provide $350 million in public money to build a new $1.3 billion stadium where the Oakland-Alameda Coliseum currently stands. The council did not approve any actual spending, though, and if the Raiders do decide to move, then the spending wouldn’t be necessary anyway.

About $150 million of the total would be in the form of a parcel of land currently owned by Alameda County. The additional $200 million would come from bond money procured by the city of Oakland, theoretically ensuring that Oakland’s general fund would not be touched. The city proposes to repay this bond money through a combination of sales taxes, parking taxes, and other site-specific taxes created by a new coliseum infrastructure zone. But just like in 1995, taxpayers have no guarantee that this proposed revenue will end up in the city’s coffers.

“I grew up watching football. I grew up a Raider fan,” Marcus Allen said at the Oakland City Council meeting. “There are a lot of terms out there that have a unique relationship. The Steelers with Pittsburgh, Green Bay with the Packers. But none more galvanizing than the city of Oakland, none more passionate, none more meaningful.

“It’s not just games, it brings people and communities together,” Allen said. “The team is so important to this city.”

But the city of Oakland is already badly burdened with myriad other problems, and still owes a huge sum of money on the Raiders’ current stadium.

“I think it is financially irresponsible of this body to take on additional debt when we already have $200 million to pay on the existing stadium,” Maya Dillard Smith, a sixth-generation Oakland native told the council. “When we have an economic downturn and the city coffers are smaller and we’ve earmarked $100 million to this stadium and we don’t have enough funds to cover crucial city services, we will be in a hard place.”

Her math is a little off, but in the ballpark of the remaining stadium and Coliseum debt. Oakland still owes about $95 million on the Coliseum itself, and about $60 million on the adjacent Oracle Arena, making the debt on the overall sports complex more than $150 million.

Splurging on another new Raiders stadium could cause problems other than just debt. “I’m concerned about the displacement of the very community that I hear people talking about, and not all the benefits accrue to that neighborhood,” Dillard Smith said. “The fan base is regional, but the folks that live around there are highly concentrated in poverty and mostly Black. Once we get this stadium going, we will displace those people.”

The city of Oakland, you may recall, took a bath on the 1995 Coliseum renovation deal. That deal wasn’t supposed to cost taxpayers any money, but the city was left holding the bag when the Personal Seat Licenses that were supposed to fund the stadium sold at dismally low rates.

Councilmember Desley Brooks rues that decision to this day. “There are monies that do not go to our general fund to pay for necessary services, because we didn’t do the due diligence that we needed to,” she complained.

But that same due diligence in Las Vegas may be just what keeps the Raiders here in Oakland. For starters, Las Vegas taxpayers do not particularly want the Raiders there. A poll by Las Vegas TV station KNTV in July found that 55 percent of Las Vegas voters opposed funding an NFL stadium, while only 35 percent supported it.

Furthermore, the NFL has traditionally wanted nothing to do with Las Vegas because the market is so associated with gambling and legalized prostitution. NFL Commissioner Roger Goodell sounded like he was softening on this stance at the Winter League Meeting this month.

“There were some real strengths to the Las Vegas market,” Goodell said. “It’s clear the Las Vegas market has become a more diversified market, more broadly involved with entertainment and hosting big events. And there’s a growth to the market.”

But Goodell doesn’t get a vote on this — only the 32 NFL team owners do.

The Raiders have not formally applied to relocate to Las Vegas, and declined to do so at the meeting. But the team has publicly announced their intention to move, and reports indicate they’re angling for a vote in mid-July when the current season is over.

The Raiders are under lease to continue to play at the Oakland Coliseum through the 2018 season, and any move to Las Vegas would come no earlier than 2019.

They would need 24 of the 32 NFL owners to approve their move to Las Vegas. That’s no sure thing, and owners are concerned with more than just the association with gambling. While the Las Vegas strip may be glitzy and glamorous, Las Vegas itself is not a particularly affluent region. It is also a much smaller television market, ranking as just the 42nd-largest market in the U.S., while the Bay Area is the sixth-largest.

Should this deal succeed in keeping the Raiders in Oakland, the city would be giving up $150 million in land for free to Ronnie Lott’s group, plus kicking down $200 million in public infrastructure funding for things like roads, landscaping, and lighting. The general framework of the deal is that the Ronnie Lott Group would pay for the stadium, while Oakland and Alameda County would pay for every infrastructure change necessary outside the stadium.

“We can have a BART walkway that isn’t embarrassing and can have revenue generating things along it,” councilmember Rebecca Kaplan said. “We’ll want to make sure that they include the positive financials for both the team and the community.”

The council did vote unanimously to give preliminary approval, while still expressing serious reservations. “Most of the public feedback that I have received so far from my district, actual emails and calls from residents in my district, are asking me not to support this,” councilmember Annie Campbell Washington said — before voting for it anyway.

“That is based on concerns about public dollars being spent to keep a team, public dollars for what they believe are millionaires, and public dollars being spent when there are so many other deep needs in our city,” Washington said.

The only Oakland city councilmember who didn’t vote to approve the deal was Abel Guillen, who complained that Oakland faces tremendous uncertainty with regard to affordable housing, homelessness, and a potential loss of funding over Oakland’s sanctuary city status. “Right now, there are too many holes in this for me to support this,” Guillen said.

But the council president, Lynette McElhaney, noted that the involvement of Ronnie Lott and Marcus Allen as co-owners of a major stadium would set an exciting new precedent for Black entrepreneurship and wealth. “When we look at the [National Football] League itself, it lacks diversity,” McElhaney said. “I’m excited to see these former players, African-American men, being able to be in a position to do this kind of investment in a city like Oakland.”

Joe Kukura is an SF Weekly news writer. Follow him on Twitter at @ExercisingDrunk.