Why The Oakland Arena Land Sale To AASEG/ OAC and Oak View Group Yielded A Bonus For Oakland Coliseum JPA

Why The Oakland Arena Land Sale To AASEG/ OAC and Oak View Group Was So Complicated And Messy I wrote this account as an answer to a question an Oaklander had over at Nextdoor. My answer: Sandy Let them waste taxpayer dollars and find. NOTHING. Try and understand that Sheng’s crew came up with this cocamame idea to use a land sale as a way to finance the general fund. They believed the deal could circumvent the normal checks and approvals that make such a deal take a long time. They did not succeed. As part of the process, Sheng’s people set up a series of deadlines that had no tie to any consequence.

So, when the deadlines were not met – in part because of the City’s own process delays in money transfer , people who wanted to be against AASEG for other reasons jumped on to that. The real reason this matter has been so messy is the City of Oakland under Sheng Thao had NO group of people who were focused project managers – no task force. It was Larry Gallegos but he resigned from the whole Duong mess. But even then, he was split between projects.

Because Oakland does not use tax increment financing to pay administrative costs (unlike before 2011) , in other words people, project administration takes much longer. Then, the way the project is done is such that one lawyer who’s just getting a look at the project, sees it from the perspective of their own experience and legislative knowledge, and finds a NEW problem. A task force approach would eliminate these problems but that’s not how Oakland works right now. It should.

Then, there’s the public’s total ignorance regarding PUBLIC land sales. Oakland can;t just sell to the highest bidder – it has to sell to affordable housing builders or a team with such involved. And then there’s the condition of the land – its normal for a government to take over distressed propeties, or cause them to become that, then sell them for cheap. Generally, the government is not in the business to become rich from selling land at more than its market value. People do not understand the political implications of such a request.

The Look At The Oakland Arena From An Internal Rate Of Return Perspective

This presentation includes Internal Rate of Return calculation of -36 percent (negative 36 percent) for the buyer OAC / OVG, of the Oakland Arena and a giant return for the City of Oakland . A revised look shows average annual revenue from the Oakland Arena has been an embarrassing average of $2.5 million from reports. Frankly, the Coliseum JPA reports combine City / County subsidies with revenue and do not report the two as separate items consistently.

For example,the 2023 year was said to be a record one for the Oakland Arena, but that number of revenue was not shared with the general public in documents. That year, the City of Oakland and the County of Alameda took shares of money as a “payback” which this blogger objected to. That reduced the actual value of The Oakland Arena.

So we’re left with an average of $2.5 million annually from reports. That gives an IRR (Internal Rate of Return) of -33.528% on a $50 million investment. Arguably, The Oakland Arena should have been sold for $10 million, and not $50 million.

The reason for the stadium sale in “chunks” reflects the even lower revenue from the near-empty stadium.

Overall, the loss of all three major Oakland sports teams in less than ten years was an accident of bad timing in political disinterest and industrial change. Oakland never spent real money to improve its sports industry and that fact was fine in the 20th Century, but bit Oakland in the bottom in the 21st Century, starting with the stadium facilities race in 1992 (with Camden Yards), and The Georgia Dome in 1992. Both sports facilities started a sports venue arms race, as new places opened at a record pace through the first part of the 21st Century.