Back in late December, Alameda County officials unanimously approved a plan to sell their fifty-percent stake in the Oakland Coliseum sports complex to the Oakland Athletics for $85 million (+ $5 million/year in annual operating expenses). The A’s are the last big four team playing at the sports multiplex after the Raiders (Las Vegas) and Warriors (San Francisco) left for greener pastures. The team plans to play at Mount Davis through the 2022 season – while simultaneously redeveloping the Coliseum site to accommodate “a large park, housing and businesses” – before opening a new ballpark at Howard Terminal in 2023 (though, many believe that timeline is optimistic). President Dave Kaval said “[investing in a site the team intends to leave] is something that no other professional sports team has ever done. The money has always come the other way as a public subsidy to these sports teams. We are investing in Oakland, in Alameda County.”
Howie Long-Short: Former team executive Andy Dolich believes that the A’s were wise to invest in the Coliseum property. “There’s more than enough land on the site (155 acres) to build a public park, residential units, commercial space and a new baseball stadium,” so it gives the team “an alternative option [where they could build a new venue and stay in the market] if the proposed Howard Terminal project turns out not to be viable.” Considering ownership’s track record, that must be considered a realistic possibility; “in the fourteen years that John Fisher has owned the team, the A’s have looked at five other locations that have proven to be unrealistic.” Environmental impact concerns (the site sits in an industrial area) and the fact “[the club] has yet to disclose the costs associated with what they have said would be a 100% privately financed project” have Dolich believing Howard Terminal “isn’t going to happen.”
The A’s may have bought the County’s stake in the Coliseum property to “maximize their [stadium] options”, but even if Fisher’s waterfront vision comes to fruition Dolich says the “price paid for the real estate” – considered to be under market value (because the team held all of the leverage with the County desperately wanting out after getting burned by the Raiders and Warriors and the City fearing the possibility of losing another team to relocation) – “and the real estate crunch in the Bay Area” all but ensures a significant return on investment. “The Coliseum sits on quality land, in a geographically desirable location, with fantastic transportation. With just a little bit of vision, [an overhaul of the Coliseum property] could be a massively successful project and provide the franchise with a spectacular revenue generating asset.”
As pro sports teams look to continue to grow the pie, the smartest operators have invested in stadium-related real estate projects (see: Atlanta Braves), but Dolich sees a future where ownership groups are building “condominiums, shopping centers and lifestyle centers – separate from their team’s venue (as the A’s are considering) – to pad bottom line profits.” The former MLB, NFL, NBA and NHL executive asks “if [a team] can develop [residential and commercial assets] and generate revenues 24/7/365 – which even an arena can’t do – then why not [invest in real estate]? There’s only so much money that can be made from ticketing, broadcasting and digital [assets].”
Pro sports teams are particularly well positioned to capitalize on property investments too,“they just need to align with a sophisticated real estate company” to help them execute. Aside from having “incredibly wealthy owners” who can afford to be selective with their acquisitions, Dolich says that having “hours on television [to promote a given project] and a loyal fan base [to market to] are significant advantages for a real estate developer.” The saying if you build it, they will come doesn’t just apply to to the game; “it’s been proven time and again that it applies to anything associated with the franchise.”
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