Oakland’s efforts to keep the A’s in town took a major blow after the city was denied a federal grant that could have provided somewhere around one-third of the money needed to hold up its end of the proposed Howard Terminal stadium project.
It’s largely unknown where exactly the negotiations stand between the city and its last major professional sports franchise, but the U.S. Transportation Department’s decision not to include Oakland in its list of grant recipients makes a difficult project even harder. The city is anxious to craft a deal that does not rely on substantial subsidies from taxpayers.
“They’re looking under all the sofa cushions – federal money, state, county and city money, taxpayer money at all of those different levels,” said Nola Agha, a University of San Francisco professor and expert on sports economics who has followed the project closely.
City officials had sought the $182 million grant – a request to the federal MEGA program intended to help fund infrastructure projects around the country – to pay for street and transit improvements that would ultimately ease access to the team’s proposed waterfront ballpark and massive housing development.
But, according to a DOT document released Tuesday, the project details did not meet “statutory requirements” to be a cost-effective choice for investment.
“What’s unique about this is the MEGA grant, of course, was designed to be for infrastructure,” Agha said. “And the city very much perceives this to be an infrastructure project.”
Agha authored a financial study last year of the Howard Terminal project – a report funded by local shipping industry businesses opposed to the A’s development.
While the city already has secured about $321.5 million in funding for the improvements, its most recent cost estimate – provided in response to Agha’s findings – suggests the costs may total around $600 million.
The MEGA grant would have put a sizable dent in that cost burden, and former Mayor Libby Schaaf was quick to cite it as fuel for optimism that the city could get a deal done with the A’s, who have often taken a hardball approach to negotiations.
Schaaf, who officially left office last week, was among the Howard Terminal project’s most vocal and influential advocates. When MLB Commissioner Rob Manfred said last fall he didn’t expect the A’s to stay in Oakland, she was quick to jump into damage control.
The A’s have promised to pay for the roughly $1 billion ballpark, which would seat 35,000 fans. But the stadium project is contingent on the city funding the off-site infrastructure projects and eventually creating a tax district to cover the costs of building 3,000 housing units, hundreds of hotel rooms and commercial and retail space on the available port land.
Major League Baseball, meanwhile, has encouraged the A’s to look into relocating, and the franchise has long flirted with a move to Las Vegas. Team president Dave Kaval and other executives are scouting potential ballpark sites in Nevada, where their Triple-A team currently plays in Henderson, a suburb of Las Vegas.
Normally, teams must pay a sizable fee to MLB when they relocate, but Manfred said last year that he did not expect to charge the A’s if they moved to Las Vegas, citing the cost of building a stadium there.
The Las Vegas Review-Journal reported Tuesday that the A’s appear to be focused on land near the Tropicana as a likely ballpark site in the city. Negotiations about the Las Vegas Festival Grounds had stalled, according to a spokesperson for casino magnate Phil Ruffin, who owns the festival site.
The A’s did not immediately respond to a request for comment.
Schaaf’s successor, Mayor Sheng Thao, promised at her inauguration Monday that she could reach a deal with the A’s without compromising benefits to local residents and businesses.
“I’m hopeful we can reach an agreement that safeguards the financial interest of taxpayers – creating good jobs, housing, retail and recreation opportunities,” Thao said. “And I know we can do this together, but only under our Oakland values.”
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