Matt Holliday had better love Mount Davis: The San Jose Mercury News reports this morning that the ongoing economic cataclysm could put the kibosh on the Oakland A’s plans for a new stadium in Fremont, at least for now.
As I reported for BP last year, A’s owner Lew Wolff’s plan for a 30,000-seat stadium in the East Bay city of Fremont relied on a complicated land-for-stadium swap: Essentially, Wolff would get the right to develop land around the ballpark as condos, and use the proceeds to pay off his $400-million-or-so stadium bill. Unfortunately, right now in California you can get condos free with your Happy Meal, so Wolff has had to revamp his plan: Now, he says, he’ll use naming-rights, concessions, and parking revenues to fund the stadium, while waiting for the housing market to pick up.
Not to disparage the word of a trusted real-estate magnate, but: fat chance. Cisco has already announced plans to buy the naming rights to a Fremont stadium, for $4 million a year - that’s enough to pay off at most $60 million in stadium costs, and probably less given today’s extortionate interest rates. That would leave something on the order of $25 million a year to come out of concessions and parking money - new concessions and parking money, if the A’s don’t want to take a loss on what they’re currently bringing in at the newly de-corporatized Oakland Coliseum. Given that stadiums almost never pay their own way with increased revenues, Wolff would almost certainly have to take losses for a few years in hopes that the real-estate bubble could eventually be reinflated, which seems like a risky gambit.
Wolff, as you might expect, kept a happy face on all this, telling the Merc News that he doesn’t expect to have to delay plans for a Fremont stadium, which at last word he was still hoping to open by 2011. “The best building I’ve done has been in times when I shouldn’t be building,” said Wolff. “We could easily put our plans on hold for two years, but that is the furthest thing from our minds.” Paraleipsis, anyone?
(For fans of football and the other football, the economic mess is also expected to throw a wrench into the planned San Francisco 49ers and San Jose Earthquakes stadiums; I have a bit more on this at fieldofschemes.com.)