Sports Stadiums and Government Subsidies
When I first ran for the Fremont City Council in 2008, the subject of ballparks came up as there was a serious attempt to move the Oakland A’s to Fremont in 2008, and again in 2010. I thought it relevant to list this as a campaign issue as Alameda County is part of a joint powers agreement that oversees both the Oracle Arena and the Oakland-Alameda County Coliseum.
The discussion in Fremont led me to do a lot of investigation into sports stadiums and government subsidies. In short, I believe many municipalities give large amounts of money, often hundreds of millions of dollars, and get little in return in terms of increased tax revenue. (These payments can be made directly or by waiving fees such as property taxes.) There are many stories of bad deals that cities have made over the years costing taxpayers dearly.
Alameda County is no stranger to these bad deals. In 1995, in an effort to lure the Raiders back to Oakland from Los Angeles, it was agreed that the Coliseum would be expanded by adding a new tier of seating to the top of the stadium. This became known as “Mount Davis” referring to the Raiders owner Al Davis. It cost the City of Oakland and Alameda County $500 million to build. The Oakland A’s and the Raiders could not fill up these extra seats and both ended up covering the seats with a tarp.
As the Raiders prepared to leave Oakland in 2016, there was still $95 million to be paid off by Alameda County and the City of Oakland. One proposal was that Alameda County would use its reserves to pay off the debt entirely and have the City of Oakland pay them back in time.
Going forward, I would be open to potential deals to lure sports teams to our area. But I would refuse to give away huge amounts of money to lure them here or to keep them here. Any potential deal would have to be done in a fiscally responsible manner, not because someone is excited about getting a professional sports team.
A’s Ballpark – 2010
This is a position paper from my 2010 campaign. The NUMMI location was the second attempt to bring the A’s to Fremont.
Oakland A’s at NUMMI
Position on Latest Proposal to Locate the Oakland Athletics at the NUMMI Site in Fremont
In my opinion, this project is not in Fremont’s best interests and would hurt Fremont’s economy. It is also an example of many systemic problems with our City government.
The Proposal Is Not Fiscally Responsible: Numerous economic studies have consistently shown that sports stadia are NOT good economic generators. A baseball stadium is simply not the way to grow a healthy local economy. This project would most likely cost our economy in the short and long term.
The proposal is that the County would buy the land for the site and the City would spend $62 million on infrastructure improvements! If we are going to give away such a large sum of money, we should put it towards a project that will generate high-paying jobs.
The proposal also suggests using redevelopment money on this project in a way that will hurt our General Fund and our school funding. The proposal is that money from the redevelopment agency will be used to pay for the land and needed infrastructure improvements. In general, for every usable dollar of redevelopment money, the General Fund loses about 25 cents and the school districts lose about 75 cents. Since the ballpark would be in a redevelopment area, money from it would not go to the General Fund. The report says nothing about how this loss to the General Fund would be replaced.
The original project for the A’s would clearly not have generated the sales tax that the A’s predicted it would. The result would have been a net decrease in the City’s General Fund, the fund from which police, fire and other services come from. This project has no retail component proposed and would actually be more detrimental to the City’s General Fund. There is no mention in the project of who would pay the large costs associated with a facility of this size; building maintenance, police, fire and traffic services required for game days, etc.
Public Input Has Not Been Sought: Obviously a decision was made to perform this recent work without telling the public at all. In the interest of transparency, the press should have been notified that this activity was happening.
The City did not do any outreach to the public the last time a ballpark was proposed. The only meetings that were called were regular Council meetings (in which people were given one minute to speak) and small meetings by the A’s themselves which were for the purpose of marketing the idea. The City made no effort to complete an objective survey, nor to put the project on the ballot, to ensure that Fremont residents really wanted this project.
The City Council appeared determined to get a ballpark and clearly did not welcome input from the public who didn’t share their desires. I went to one of the original Council meetings about this and the project was presented as what the City wanted to do. This was before any public outreach was done. One of our Council members was quoted as saying this project was ‘absolutely’ going to happen. Our mayor went so far as to refer to those who didn’t share his views on the ballpark as a ‘mob’.
In retrospect, the Council must have known that the Pacific Commons tenants were not satisfied with the proposed transportation mitigation measures prior to the November 2008 election. These issues weren’t brought to the public’s attention until December which was when the Warm Springs proposal was first unveiled. The heated reaction of the Warm Springs residents was predictable. I believe that the Warm Springs proposal was deliberately kept from the public until after the election. Our Council is supposed to represent us, not keep secrets from us. And they should be using their limited resources to look creatively at several options for the NUMMI site, not focusing efforts on a ballpark that is unlikely to bring any jobs or economic benefit to our city.
A Ballpark Would Reduce Our Employment Opportunities: It is understood that in this economy it will be difficult to attract large employers to replace NUMMI. It may be years before we can generate anywhere close to the 4,700 high-paying jobs that have been lost.
NUMMI indicated publicly that they thought the location of a ballpark right next to their facility would have a significant, negative impact on their operations. Wouldn’t a similar company, or any large employer for that matter, have a similar opinion and not want to locate here? Putting a ballpark at this location would limit our options for the future. Let’s not give up on the opportunity to bring good employers to this site.
I’ve heard people say we need a ‘vision’ for what will happen at the NUMMI site. I think our ‘vision’ needs to be wide open at this point to all sorts of possibilities like bio-tech, green jobs manufacturing, auto manufacturing, and high-tech. I would argue that the Council appears to have ‘tunnel vision’ and somehow is stuck on the idea that a ballpark will be our economic panacea, despite all of the research which clearly indicates that ballparks do NOT contribute in a significant way to an area’s economic development.
A Ballpark Would Generate Significant Traffic Problems: There would be about 15,000 car trips generated for every game at the park. Our city streets simply can’t handle this traffic. This kind of traffic nightmare would be a deterrent to future businesses thinking about locating in Fremont.
The Proposal Is Simply Not Feasible: This is actually the third time that City staff have spent valuable resources on a project that is unlikely to happen. The original proposed site for the ballpark at Pacific Commons had enormous transportation problems that were never properly addressed. Given these problems, the existing businesses on the site (Costco, Lowe’s and Kohl’s) convinced their landlord (Catellus) to oppose the project. With Catellus not on board, this plan was abandoned.
The Warm Springs site was a desperate attempt to find another site after the Pacific Commons site failed. It was doomed from the start. The A’s would have needed to acquire the land for the site. Some of this land was owned by NUMMI, which had publicly stated its opposition to the ballpark. Not surprisingly, many Warm Springs residents were not happy with this plan and organized significant opposition. Only weeks after it was proposed, it was abandoned.
This latest idea faces huge hurdles that have been glossed over in the report recently released to the public. First, it is proposed that the City acquire the land. The City does NOT have the money in their General Fund to do this. Secondly, the land will likely require expensive cleanup. There is no mention of who will pay for this. Finally, the A’s have not shown any interest in this latest proposal. The A’s previous agreement to build the ballpark was dependent on being granted the right to build 3,150 homes. This proposal does not seem to include any homes, so why would the A’s be interested?
Instead of focusing on real economic development that our City desperately needs, our Council has directed enormous staff resources towards a project that is not at all likely to go forward. It’s quite possible that prospective employers are looking at Fremont and deciding to locate elsewhere because the City seems so obsessed with getting a ballpark.
A’s Ballpark – 2008
This is from my 2008 campaign. While the City Council was hyping this as great from Fremont, I found that it was full of unresolved issues and disliked by most of the Fremont residents I talked to. The project ultimately fell apart as the nearby retailers (Lowe’s, Costco, etc.) felt that it would negatively impact their businesses. This led to the attempt to put the project by the Warm Springs BART station which led to it being an issue in the 2010 election as well (see above).
The Oakland A’s Ballpark Village
Should the City of Fremont Take the Risk?
There is a sense of excitement that Fremont could get a major league sports team. I like baseball myself. My son even recently played on a team called the A’s. (Yes, that’s him to the right.) But one should not let this excitement lead us into making a decision that could cost the City in the long run. Ball parks bring crime, litter, and traffic along with the glory of having a professional sports team. And one needs to remember that this is not just about a ball park. It’s about a ball park, 3,150 homes, and over 500,000 square feet of retail . All three of these items will generate significant traffic and demand for city services.
While it’s possible that a Ballpark Village could function well and improve Fremont’s financial situation, the current proposal is fraught with numerous potential problems and uncertainty. Unless a proposal can be developed with clear, funded resolutions to the key issues facing the ballpark, I don’t believe the City should go forward with the proposed project.
The Original Plan for the Proposed Site
Cisco Systems originally purchased this tract years ago with the intention of building a high-tech development facility on it. This development would be consistent with the Fremont General Plan, which puts commercial developments on the outskirts of the city, to the south and west. The project would have brought large numbers of high-paying jobs to Fremont.
After the dot-com implosion in 2000, these plans were abandoned, and the space has remained empty, its future unclear. Cisco has stated that it no longer has any plans to develop this land.
The Ballpark Plan
Around 2004, Fremont’s county supervisor Scott Haggerty made a proposal to Oakland A’s co-owner Lew Wolff: a massive retail/residential complex surrounding a custom-designed, high-tech ballpark, brimming with logos from the likes of Apple, Cisco, eBay, and Intel, which would present an advertising windfall for the taking. The revenue generated could finally make the A’s permanent postseason contenders . Mr. Wolff ran with the idea, and the rest is history.
Below are outlined some of the specific problems I see with the proposal. In looking at these, one might think that I’m definitely against the idea of the ballpark. That’s not the case. I simply believe that it would be irresponsible for the City not to thoroughly analyze and discuss all of the potential problems that a project of this size could bring.
Traffic, parking, and transit options – Stadiums create very intense traffic and parking demands. The solutions that have been mentioned to date are still problematic.
1. On-site parking – The existing stadium proposal calls for 9000 parking spaces at the stadium itself, with another 2000 spaces available within a mile (though the space for these is already allocated for other development projects). The thousands of other attendees will have to figure out some other way to get to the stadium.
2. Trains – There is a set of tracks (Union Pacific / Amtrak / ACE) located 0.8 miles from the proposed site. Both Amtrak and ACE have expressed opposition to building a depot at this location for the purpose of supporting the ballpark. They cite multiple problems, including single-track lines (from Auto Mall in Fremont all the way to San Jose), conflicting schedules (especially for ACE trains, which end the day parked at the end of the ACE route near Stockton), and requirements to negotiate new access schedules with Union Pacific, which owns the tracks. There is currently not enough rolling stock on these lines to accommodate baseball game traffic. In any case, 0.8 miles is farther than most people would be willing to walk.
Another difficulty with train access is that the two train stops to the south of the site do not have significant parking areas. People would have to use another form of transit to get to the train station. Studies show that adding transfers to a transit trip greatly reduce the likelihood of people taking transit.
3. BART – The existing Fremont BART station is five miles from the stadium site , requiring buses or shuttles to carry people to/from the stadium on city streets. Although the planned Warm Springs station is closer (1.5 miles away), it’s not expected to be operational until 2014. Funding for this extension is still uncertain. The current proposed completion date of 2014  could easily be pushed back.
4. Buses/Shuttles – Assuming that a significant number of the 32,000 attendees try to take mass transit to attend games, the city will need a fleet of 30 to 40 buses to move all these people from BART to the game site. AC Transit, which operates the bus lines in Fremont, would be the likely service provider. However, AC Transit has been steadily removing local routes throughout the area over the past couple of years . It is not at all clear that they would be willing to manage this service. If not, what agency will hire the drivers, maintain the buses, etc.? There is also the not so trivial question of where would the bus barn be located.
In view of the various problems, there is a high probability that most people will drive to the stadium and fight for available parking spots. Anyone who has been on I-880 in Oakland near the beginning or end of a ballgame there has seen the gridlock that occurs on the freeway and city streets. Congestion would ultimately hurt attendance as well as sales revenues for the nearby retailers (e.g. the Fremont Auto Mall).
The project proponents have tried to defuse the traffic issue by saying that the currently approved use on the site would generate as much traffic as their proposal. However, more residential development will undoubtedly mean more trips from Fremont to high-tech jobs in the South Bay and on the peninsula. This will aggravate the existing commute patterns. If this area were filled with high-tech jobs, more Fremont residents might not even have to leave town to get to work. A’s fans coming to evening games from the South Bay would undoubtedly use 880, adding to what is already a bad evening commute. Increased traffic problems would make it more difficult to bring in other business into the City. NUMMI, the City’s largest employer, has already indicated concerns about the traffic generated by the project.
Jobs – Unlike the high-tech jobs that Cisco, or other high-tech employers, would have brought to the area, the retail and ballpark jobs that this project would create are virtually all lower-paying, service-sector jobs. They’re not the kind of jobs that typically would allow one to buy a house in Fremont. Thus, these workers would likely be coming from other locales, adding hundreds of additional cars to the local freeways and parking lots.
The A’s have stated that their project will create 13,000 full-time equivalent jobs. However, this is only for the construction period. The economic report prepared by the A’s consultant  doesn’t provide the number of jobs that will be permanently be created.
Distribution of revenues – An analysis of economic and fiscal impacts of this project, prepared for the Oakland Athletics , predicts that the completed Ballpark Village project would bring roughly $19 million per year (in 2007 dollars) into the City of Fremont, assuming that housing, retail, and ballpark resources are all fully utilized. This is a questionable assumption given that many retailers are currently in a major down-sizing mode.
First, it should be noted that economic analyses such as this are simply models that claim to predict the future. If the economic downturn that we’re in continues, this would undoubtedly affect the retail sales which are a large part of the assumption.
Secondly, the study assumes that 75% of all retail sales for the project would be new to Fremont. This might be plausible for a game day. But remember that 3 out of 4 days of the year are not game days. If 75% of retail sales at the Ballpark Village on non-game days come from outside of Fremont, this would create significant additional traffic on 880. In reality, this project would undoubtedly pull retail dollars away from the existing retail centers in the City’s historic districts.
Also, let’s take a closer look at where this projected $19 million dollars in tax revenue will go. Roughly 80%, $15.6 million, will flow directly to the Redevelopment Agency (RDA), not into the Fremont general fund. Redevelopment Agency funds are used solely to pursue further development and to make payments on bond debts from previous RDA projects. They cannot be used for funding city services such as the fire department, the police department, and maintenance of roads and other city facilities. Only $3.6 to $4.7 million/year will actually be paid into the Fremont General Fund, to provide the extensive city services that this complex will require. Again, this assumes that the $19 million projection is not overstated.
An article in the Argus  notes that the Giants have 18 police officers for games at Pac Bell Park, 24 when the Dodgers are in town. Fremont typically has about 14 officers deployed throughout the City at any one time. We’re already having a hard time paying for these officers.
Before approving this proposal, the city needs to take a serious look at how to address the traffic issues, whether this development will generate enough funds to cover its costs, and whether it might not be a better idea to preserve this land for businesses that could provide high paying jobs to Fremont residents.
1. City of Fremont Web Page on the A’s Ballpark Village
2. “The Fremont Athletics: How the deal went down, and why it was inevitable”, 11/29/2006
3. “A’s revised plan for ballpark village gets warmer reception”, 09/18/2007
4. “Teams take on Cisco Field traffic challenges”, 11/11/2006
5. ERA final economic report, 05/08/2007
City of Fremont Web Site
6. “Warm Springs Extension Project”, BART website
7. “Change Happens: June 24″, AC Transit service changes announcement
8. “Fremont may not be able to afford A’s”, Argus, 08/07/2006