The City’s Position on this Proposed Ballpark Deal
Overall, what is the City’s position on this deal?
The City Council is the legislative body that will ultimately review and make a decision on this deal. The City Council has not reached a decision or stated a position on the deal. The City Council's Community & Economic Development Committee held a study session on the project on July 7, 2021. The City Council had its first opportunity to discuss the potential deal terms and financing options (Term Sheet) and approved a non-binding term sheet at the full City Council meeting on July 20, 2021.
Oakland Mayor Libby Schaaf has made her position clear: The Waterfront Ballpark Project at Howard Terminal will keep our beloved A’s rooted in Oakland with a world-class ballpark and mixed-used development that will catalyze community benefits for West Oaklanders and the region. This project is bigger than baseball, with long-needed infrastructure and transportation improvements that will allow people to move safely to and around the waterfront district and create a world-class waterfront neighborhood with beautiful public parks and gorgeous communal spaces for people to live, work and play, all while protecting the economic engine of our seaport. The project will be a good deal for the City and County -- with new net revenues, equitable jobs, housing, and other direct benefits for all residents -- without risk of leaving taxpayers on the hook as happened with bad sports deals of the past. The A’s have committed to privately finance a new world-class ballpark and vibrant mixed-use development, and we commit it will include ongoing community benefits for generations to come.
What action did the Oakland City Council take on July 20, 2021?
The Council approved a non-binding term sheet outlining the key terms to be included in a Development Agreement between the City of Oakland and the Oakland A’s (A’s) related to the Waterfront Ballpark District.
Term Sheet Negotiations
What is a term sheet?
A “term sheet” is a non-binding document that memorializes a general agreement between parties in many different types of complex business negotiations. A term sheet is usually used as a framework or outline for subsequent binding contract documents. Term sheets are often used in negotiations between developers and cities as a way of bringing a conceptual “deal” to the City Council in advance of actual approvals to make sure it is aligned with the Council’s priorities. A term sheet is not an approval, entitlement or binding contract.
How long have the A’s and the City of Oakland been negotiating regarding the Howard Terminal site?
The A’s selected Howard Terminal as the preferred site for their new ballpark in late 2018. The A’s and the City began negotiating a development agreement term sheet for the Howard Terminal site in April 2020, and for approximately one year after that date, negotiations proceeded regarding non-financial aspects of the term sheet. Negotiation of the financial approach began in February 2021, and the A’s first public submittal of a term sheet that detailed their proposed Financial Plan was on April 23, 2021.
What is the status of the negotiations? Is the Term Sheet the City Council approved on July 20th the one that the Oakland A’s released on April 23rd?
City staff has been negotiating a term sheet with the A’s for over a year. Most of the terms contained in the term sheet released by the A’s on April 23, 2021 were mutually negotiated. However, the Financial Plan (Exhibit F to the A’s proposed term sheet) has not yet been agreed to and remains the subject of extensive ongoing negotiations. Staff is continuing to work internally and with the Oakland A’s to evaluate, revise, and arrive at consensus on a new Term Sheet and Financial Plan. This new Term Sheet was released publicly on July 16, 2021 and presented to the City Council on July 20, 2021.
Can the public see the term sheet?
The non-binding term sheet that was approved on July 20, 2021 can be viewed here.
What does it mean to say, "the Howard Terminal Development is 100% privately financed"?
The City and the Oakland A’s are in agreement that the Ballpark and all of the new residential and commercial development in the Waterfront Ballpark District at Howard Terminal will be 100% privately financed by the A’s. The A’s have asked the City and County to seek grants and use project-generated revenues to help fund the infrastructure and safety improvements, public parks, affordable housing, and other community benefits needed to make the Ballpark District successful, resilient, safe and equitable. This sort of public-private partnership is common on projects of this size because the contemplated infrastructure improvements and amenities benefit the City as a whole, and not just the project. Many safety and infrastructure improvements that the project would accelerate and fund are ones that are needed right now, including environmental clean-up and resilience, anti-displacement protections and affordable housing, safer separation and protection of Port-serving rail and truck routes, and better bike, pedestrian, and transit connections between BART and Oakland’s waterfront.
How will the A’s and City raise the funds for the infrastructure upgrades? What is an IFD?
IFD stands for “Infrastructure Financing District” and is one of the financial tools being considered to finance infrastructure for the Waterfront Ballpark District project. It is sometimes also called an EIFD, or “Enhanced Infrastructure Financing District.” Although an IFD and an EIFD have slightly different rules under State law, they are very similar, and the terms IFD and EIFD are often used interchangeably.
When an IFD is established, the district’s existing “base-year” level of property tax revenue is fixed. Then, as property tax revenues grow over the years due to new development, the additional (also known as “incremental” or “but for”) revenues over and above the fixed base year revenues are used for infrastructure supporting the new development project.
For example, if in the base year, the property tax revenues inside an IFD total $1,000, but increase to $1,500 the following year as new development is added to the tax rolls, the extra $500 would be used to pay for infrastructure, while the first $1,000 would continue flowing into the City’s or County’s General Fund. As that incremental property tax revenue grows over the years, the City can use it on a “pay as you go” basis or issue bonds in order to fund or reimburse infrastructure costs. Unlike general obligation bonds, IFD bonds don’t increase property tax rates, either in the District or elsewhere in the City. When the bonds are paid off, usually after 45 years, all of the property tax revenue resumes flowing into the City or County’s General Fund. Other taxes, like sales and parking taxes, flow to the City’s or County’s General Fund throughout the project’s life cycle.
IFDs are generally paired with a CFD, discussed below, and used as a reimbursement mechanism.
Are my taxes going to increase? / Will West Oakland neighbors see an increase in property taxes due to Howard Terminal Development?
No and no. An IFD does not increase anybody’s taxes and does not increase the property tax rate. It also does not impact or put at risk the City or County’s General Funds.
The current assessed value of the Waterfront Ballpark District site is approximately $29.5M. Over the next 16 years, as the proposed project is built out, that value is expected to grow to $7.6B. Property taxes will be assessed on this new development, generating significant new tax revenues every year.
What is a CFD and will one be used on this project?
CFD stands for "Community Facilities District", also sometimes known as a "Mello Roos District." When a CFD is created, the property owners within the district agree to impose a “special tax” on their property, over and above regular property taxes. The county tax collector collects these taxes, which can be used to help pay for construction or maintenance of public facilities. Typically, a CFD is used by a developer to secure inexpensive, upfront financing for infrastructure; because the special taxes are collected by the county, they are considered secure revenue and investors will lend against that revenue at lower interest rates.
The Oakland As are likely to request that a CFD be placed over the Howard Terminal site, effectively taxing themselves and any development partners in order to be able to borrow money inexpensively to build infrastructure for the project. The special taxes would apply only to the Howard Terminal project and no property owner outside of the project site would be subject to them. The IFD would reimburse the developer for qualified infrastructure development costs.
Bottom line: How much will this project cost Oakland taxpayers?
The project will not raise taxes or put the City or County’s General Funds at risk. The City’s goal is for the Waterfront Ballpark District project to create a net fiscal gain for the City of Oakland and its taxpayers. Even with the project’s new incremental property taxes diverted into an IFD to help cover the costs of infrastructure, the City will see increases in other revenue streams, such as sales taxes, real estate transfer taxes and business license taxes. Though more difficult to accurately measure, the City will also see indirect economic benefits from the project as it creates jobs and stimulates business activity from West Oakland to Chinatown. The City is committed to creating a financial structure wherein City and County taxpayers stand only to gain from the project, and are not at risk of being left “holding the bag,” as happened when the Raiders left Oakland without an obligation to repay the debt incurred on their behalf by the City and County to renovate the Coliseum.
So, is this like the Raiders deal?
Not at all. The Raiders 1995 return to Oakland required the City and County, which jointly own the Coliseum, to issue bonds to pay for its renovation. Those bonds are secured by the General Funds of the City and County. The City and County also jointly operate and maintain the Coliseum, and subsidize its annual operating losses.
In contrast, for the current proposed project, the Oakland A’s will privately finance, construct, operate and maintain the ballpark. No public funds will be used to build or operate the facility, nor will the City or County have operational duties or liabilities. Further, unlike the general obligation bonds issued to renovate the Coliseum, IFD bonds don’t put the General Fund at risk, and don’t increase Oaklander’s property tax rates.
Will a waterfront ballpark impact the Port?
No. By including transportation safety, infrastructure, and seaport compatibility measures, the ballpark project will not impact Port seaport operations. The Port has been consulted from the start of the environmental impact analysis and the design of the project so that potential impacts on seaport operations are considered and addressed. Read the Port’s own statements about the project and safeguards to ensure Port compatibility here and here.
Howard Terminal cannot accommodate the modern ultra-large ships and hasn’t been used for container cargo operations since 2014. The 50-acre site is separated from any adjacent Port-owned maritime terminal acreage by Schnitzer Steel, a metal recycling operation. There is still under-utilized capacity for seaport terminal operations to expand along the Port’s deeper water outer harbor, as well as in the more than 300 acres of converted Army Base land.
Also, the Project will include: 1) A land-use plan that ensures that residential development is restricted to the easterly portion of the project site, nearest Jack London Square and as far as possible from the Port and other industrial users; and 2) A transportation plan that minimizes disruption to truck and rail access to the Port.
In fact, in May of 2019, the Board of Port Commissioners voted unanimously in support of the Port’s own term sheet with the Oakland A’s. The Port has stated that it anticipates potential benefits of the project, including diversification of its business, greater nationwide visibility, more visitor traffic at Jack London Square, and a boost for neighboring businesses, and intends to impose its own Seaport Compatibility Measures to ensure that the project doesn’t affect its maritime business.
What exactly is the City of Oakland asking of the County?
The City is asking the County to make a non-binding resolution of intention to “opt in” to a planned Infrastructure Finance District (IFD) over the Howard Terminal site. By “opting in”, the County would join the City in contributing its share of the net new property taxes generated by the new development of the Waterfront Ballpark District at Howard Terminal – revenue that would not exist “but-for” the project - for the purpose of financing affordable housing, parks and other infrastructure of communitywide significance. In doing so, the County would help make the project possible and, even after contributing its net new property taxes, realize millions of dollars each year in net new revenue from sales and transfer taxes to fund critically needed healthcare, early childhood education, and services for those experiencing homelessness.
Why is the County’s participation needed?
Development of the Howard Terminal site requires significant investment in infrastructure, both on- and off-site, as well as community benefits that include affordable housing and new public parks. The cost of those improvements is beyond what can be borne by the City and Developer alone. In order to bring the project to fruition, unlock the potential of the Howard Terminal site, grow the City’s and County’s tax bases, and achieve equitable benefits for our residents, public investment from both the City and County is needed. City staff will be proposing to use an Infrastructure Financing District that is ONLY on the new development site itself, thereby ensuring the project pays for the project. Investing the new project-generated revenues into public infrastructure and benefits, without putting either the county or city’s general funds at risk, is a responsible way to maximize the public benefits of this transformative development.
Does this mean the County will be back in the sports business?
No. We are asking the County to help finance critically needed public infrastructure, public parks and affordable housing. The City and County would have no role in the financing, ownership or management of the proposed Ballpark at Howard Terminal, which, unlike the Coliseum, will be entirely privately funded, maintained and operated.
Why do we need the County approval?
Complex projects such as this were commonly funded without County approval in the past under California’s Redevelopment law, which was repealed in 2011. Redevelopment financing operated very similarly to the Infrastructure Financing District proposed here, except that under Redevelopment, the County’s participation would have been automatic. Under an IFD, the City and County must each independently “opt-in” through a vote of their elected officials and approve the Infrastructure Financing Plan. Because opting into an IFD does NOT raise anyone’s taxes, a vote of the people is not required.
What would the County’s money be used for?
The County’s tax revenues generated by the project would be used to help build public parks and open space, affordable housing and other public infrastructure of communitywide significance, both in and around the Howard Terminal site. Tax revenues from the IFD will NOT be used for the Ballpark, which will be privately financed, constructed and operated.
If the County Board of Supervisors votes against “opting in,” is the Waterfront Ballpark District a dead deal?
Most likely. The new County tax revenue generated by development of the Waterfront Ballpark District creates significant additional bonding capacity within the proposed IFD. Without any contribution from Alameda County to help fund the critical infrastructure and affordable housing required at the site, it’s unlikely any other entity can or will make those sizable investments. And without development of the Waterfront Ballpark District, the County will miss out on $57M in projected one-time tax revenue, $5M in projected recurring annual tax revenue generated by the project that can be used for affordable housing, healthcare and homelessness services throughout the county, and $6M in recurring tax revenues for countywide transportation improvements.
When will the Board of Supervisors vote?
The Board of Supervisors can vote on their intention to “opt in” at any time. At their special meeting of June 15, 2021, they indicated that County staff would undertake an independent financial analysis of the proposed district and its fiscal impacts to the County over the summer, and bring the matter back to the Supervisors for a vote. The City supports the County’s need for due diligence and will cooperate fully with the County as it conducts its analysis. The City’s non-binding term sheet for the Waterfront Ballpark Development will include the qualified assumption that the county will opt in. Final creation and binding approval of the IFD would require future votes of both the Oakland City Council and County Board of Supervisors.
What has the community benefits process entailed so far?
Community members, particularly those who live in the areas closest to the project site (Jack London, West Oakland, Old Oakland, and Chinatown) engaged in an equity-centered process throughout 2020 to identify and prioritize benefits of greatest value to the community. A Steering Committee consisting primarily of community representatives met monthly in 2020 to bring forth the community’s recommendations for deliberation, and in May 2021, the recommendations were presented publicly in a draft Community Benefits Recommendations Summary Report. This report will be used as a tool to help guide how resources are allocated to community benefits. Please visit the Community Benefits webpage for more information.
What’s next in the community benefits process?
Now that the community has identified its priorities, the next step is to determine the sources of funding for affordable housing, jobs and other community benefits, as well as the specific mechanics of delivering community benefits over time, including governance, implementation, and oversight. The City intends to address only the funding sources for community benefits in the term sheet that was presented to the City Council on July 20, 2021; the approval of the benefits themselves will happen in future approval decisions. Again, the City has not agreed with the Financial Plan publicized by the A’s on April 23, 2021 and is developing a better framework for funding Community Benefits.
Where are we in terms of the approval process?
With a non-binding term sheet now approved by the City Council, the City and the A’s are drafting and negotiating the Development Agreement. In addition, this summer, the A’s submitted the final regulatory permit applications. The City is reviewing and working with the A’s to revise and finalize the Planned Development Plan, the Design Guidelines and the Tentative Tract Map. The Development Agreement, together with a final Environmental Impact Report, and these other planning approvals required for the project will be forwarded to the Planning Commission and City Council for consideration, beginning with Design Review that was held in September 2021, and likely concluding in early 2022. Around that time, the Port Board will also consider an Option Agreement and Master Lease with the A’s. Also, in Fall 2021, the Alameda County Board of Supervisors is expected to consider whether to opt in to the Infrastructure Financing District.
Wasn't the project approved in July 2021?
No. The term sheet, which is a non-binding outline of the proposed financial deal between the City and the Oakland A’s, was approved in July 2021.
What does the City of Oakland approval process entail?
Now that a non-binding term sheet was approved by City Council in July, City staff will work with the Oakland A’s to expand the term sheet into a Development Agreement, which will address community benefits (affordable housing, parks, job standards, etc.), environmental mitigations, traffic and circulation plans, and all other aspects of this complex project. Other City actions required to bring the project to City Council for approval will include: certifying the Final Environmental Impact Report, amending the City’s General Plan, rezoning the project area, and other land use approvals such as approving the Preliminary Development Plan and Tentative Tract Map for the project. Once City approvals are done, the project will require Port of Oakland approvals, including Seaport Compatibility Measures, as required by the Port Board of Commissioners.
Was the project approval process accelerated for the July 20, 2021 vote? Did City Council vote to approve the full project?
No. Although the City Council approved a non-binding term sheet on July 20th, the remaining actions described in the approval process will require additional time beyond July 20, 2021.
Has the Port of Oakland already approved the Howard Terminal?
No. In May 2019, the Board of Port Commissioners approved an Exclusive Negotiation Term Sheet, which gave the Oakland A’s four years to achieve:
- A certified environmental impact report for the project;
- Land use approvals from various public agencies; and
- Real estate agreements with the Port and others.
Click here to visit the Port of Oakland’s Proposed Howard Terminal Project webpage.
What are the City’s and Port’s roles in the overall approval process?
In short, the Port controls the real estate, while the City has jurisdiction over its use. In February 2020, the City and Port entered into a Memorandum of Understanding (MOU) documenting their respective roles and commitment to cooperate to their mutual benefit to establish a shared regulatory framework for the proposed project. The MOU can be found on the City’s website here. The City, as the regulatory body with jurisdiction over the General Plan, will first certify the EIR and modify the General Plan before the Port takes any actions. Then, the Port will be able to consider its real estate approvals, including option and lease agreements, as well as its Seaport Compatibility Measures.
What is the timeframe for the City and Port to act on the full project?
After the City Council's action on July 20, there remain significant steps for the City and Port to complete, as described above, before the project can be fully approved. Because the A’s have not yet completed all of the applications required for full approval of the proposed project, the timeframe for final approvals is not fully known. For large, complex projects such as this one, project sponsors typically submit such applications at least six months in advance of their desired hearing dates. Following receipt and staff review of all applications, final approvals, including community benefits, will be presented together to the City Council for concurrent consideration.
How will the Coliseum development proposals being heard by City Council on July 6th affect the negotiations/project development of the Waterfront Ballpark District at Howard Terminal?
The negotiations for the Howard Terminal Project and for the Coliseum site are not related. The negotiations at the Coliseum should not have any effect on the Howard Terminal Project.
Do the A’s need the Coliseum site for the waterfront ballpark project to work?
No. As noted above, the Howard Terminal Project is its own project proposal and is not tied to, or related to, the Coliseum site.
Design Review Committee
What is the Design Review Committee (DRC) of the Planning Commission?
The DRC is a committee consisting of three members of the Planning Commission. Its charge is to review the design aspects of a proposed development project and provide feedback to the applicant and Bureau of Planning staff on the appropriateness of the project’s design. The DRC typically hears a proposed project in a public hearing anywhere from several weeks to several months before that project is scheduled to be in front of the full Planning Commission for final approval, in order to allow time for its suggestions to be incorporated into the project’s final design. The DRC’s decisions are advisory only and not legally binding.
Which aspects of the Waterfront Ballpark District at Howard Terminal did the DRC review on September 8?
The DRC heard a presentation from the A’s and Bureau of Planning staff related to the project’s physical design, including the site plan layout, building heights and design guidelines for proposed buildings and open spaces. The DRC did not address the project’s financial plan, transportation plan or any other aspects of the project.
What happens after the DRC hearing?
The A’s are incorporating DRC feedback, and will resubmit their Preliminary Development Plan and Design Guidelines to the City. At the same time, the City and A’s will continue working on the project’s development agreement, financial plan, final environmental impact report and other aspects of the project’s complex set of approvals, in anticipation of bringing all of these approval documents before the Planning Commission and City Council in the coming months.
Glossary of Terms
Bay Conservation and Development Commission (BCDC): A California state commission dedicated to the protection, enhancement and responsible use of the San Francisco Bay. Generally, BCDC must approve any portion of development projects that come within 100 feet of the bay shoreline.
“But for” Taxes: Tax revenue that would not exist “but for” the project; also known as tax increment.
California Environmental Quality Act (CEQA): The California Environmental Quality Act (CEQA) generally requires state and local government agencies to inform decision makers and the public about the potential environmental impacts of proposed projects, and to reduce those environmental impacts to the extent feasible.
California Public Utilities Commission (CPUC): The state agency that oversees rail safety, which includes freight, inter-city and commuter railroads, rail transit and rail crossings. The CPUC also administers safety oversight and enforcement of passenger carriers (limousines, shuttles, etc.).
Community Facilities District (CFD): Sometimes known as a "Mello Roos District”, a CFD is a district in which property owners within the District agree to impose a “special tax” on their property, over and above regular property taxes, to help pay for construction or maintenance of public facilities.
Coterminous: Something that is coterminous has the same boundaries as something else.
Department of Toxic Substances Control (DTSC): An agency of the state of California whose mission is to protect California’s people, communities, and environment from toxic substances, to enhance economic vitality by restoring contaminated land, and to compel manufacturers to make safer consumer products.
Development Agreement: A legally binding contract between a property owner or developer and a local government, often including terms not otherwise required through existing regulations.
Environmental Impact Report (EIR): Per the California Environmental Quality Act (CEQA) , an Environmental Impact Report (EIR) is a detailed study that a public agency must prepare if a proposed project may cause adverse environmental impacts. An EIR contains in-depth studies of potential impacts to the physical environment, measures to reduce or avoid those impacts, and an analysis of alternatives to the project that could reduce the impacts.
Infrastructure Financing District (IFD) : An Infrastructure Financing District (IFD),sometimes also called an Enhanced Infrastructure Financing District (EIFD), is an area where, as property tax revenues grow due to new development, the additional revenues (also known as “incremental” or “but for” taxes) over and above a fixed base are captured to support public investment in infrastructure or affordable housing. After the District expires, usually after 45 years, all of the property tax revenue resumes flowing into the City’s and County's General Funds.
Infrastructure Financing Plan (IFP): A plan that describes “public capital facilities” or other “projects of communitywide significance” to be financed by an IFD. It includes a fiscal impact analysis, projects maximum annual tax increment and limits total dollars to be collected, and specifies an expiration date. An IFP must be independently adopted by a City, County and any other affected taxing entities.
Nominal Value: The unadjusted rate or price of a product or service without taking inflation or other factors into account. Nominal values are misleading when used to compare values in different periods, because inflation diminishes the real value of something over time.
Property Tax In Lieu of Vehicle License Fee (VLF): In 2004, the Legislature permanently reduced the VLF rate from two percent to 0.65 percent and compensated cities and counties for their revenue loss with a like amount of property taxes, dollar-for-dollar.
Public Financing Authority (PFA): A legislative body that governs an IFD. It is typically comprised of representatives from local government and the public. A PFAs directs the preparation of the Infrastructure Financing Plan (IFP), holds public hearings, authorizes issuance of bonds, and conducts annual reviews / oversees independent audits.
Real Value: The adjusted rate or price of a product or service that has taken inflation or other factors into account.
State Lands Commission (SLC): A unit of state government that manages 4 million acres of waterfront lands in the State of California that are “held in trust for the people of California” by law and tradition.
Tax Increment Financing (TIF): A financing structure that allows local governments to invest in public infrastructure and other improvements up-front by capturing the future anticipated increase in tax revenues generated by the project. An IFD is an example of TIF.
Term Sheet: A non-binding document that memorializes a general agreement between parties in many different types of complex business negotiations. It is a framework or outline to guide the negotiation of subsequent binding contract documents such as a Development Agreement.
Transient Occupancy Tax (TOT): A hotel tax or lodging tax that is imposed by many cities to travelers when they rent accommodations in a hotel, inn, tourist home or house, motel, or other lodging, generally unless the stay is for a period of 30 days or more.