August 1, 2014

Now that the various roadblocks appear to have been removed from passage of the proposed ten-year Coliseum lease extension agreement for the Oakland A’s, an appropriate question is now in order: how did the citizens of Oakland and Alameda County make out in the deal? I’m not at all certain, and I don’t think I’m by myself in that bit of puzzlement.

A little background explanation. The Oakland A’s (I guess we can use the Oakland again, since they’re going to be around for at least a little while longer) play baseball at the Oakland/Alameda County Coliseum under a long-term license agreement. That lease ran out some time ago, but has been renewed by a series of short-term extensions. The last extension—in November of last year—took the lease agreement through December of 2015. The newly-negotiated extension allows the A’s the use of the Coliseum ballpark through 2024.

Why are we doing short-term lease extensions instead of full, long-term lease agreements? In part it’s because the Coliseum is an aging structure trying unsuccessfully to accommodate teams in two different professional sports—football and baseball—and Oakland would like to demolish it after working out deals to build new separate stadiums in the for the A’s and the Raiders to play in the city. The second reason we’re not doing a long-term agreement with the A’s is that the current ownership of the A’s would rather the team play someplace other than in Oakland—for reasons you’ll have to ask them about—and so have been busy over the past several years trying to find another place to locate.

While the A’s don’t want to tie themselves to Oakland with a long-term deal at the present time, they also needed this particular lease extension as much as Oakland and Alameda County did. Maybe more. That’s because the team has been unable to find a new city to play in that was acceptable both to Major League Baseball and to the their own financial aspirations. So as much as they tried to pretend otherwise in the media, the A’s were under the gun to get a deal with Oakland and Alameda County done. Moving elsewhere in time to start the 2016 major league baseball season would have been a financial ruin for them.

Anyways, it took a full 14 months of negotiations between the A’s and the Joint Powers Authority—the eight-member public body which oversees the management of the Coliseum complex on behalf of the city and the county—to come up with a tentative agreement. But the part where the Oakland public and the full Oakland City Council got involved all came and went considerably quicker, about a month in all, between the middle of June and the middle of July. Like most people in Oakland, I got my first look at the proposed lease extension when the issue was taken up at the special City Council meeting a couple of weeks ago and the document was published online as part of the agenda packet.

Reading the lease proposal itself wasn’t much help in understanding its provisions, at least to me, since I’m neither a contract or a sports finance expert. The Council debate was little better. Except for some illuminating questioning by Councilmember Desley Brooks concerning the history of the current lease and what the City was actually giving up financially to get the A’s to stay, the discussion centered almost entirely on whether the Council should accept the deal as written, or whether some minor clean-up language should be added, with no change to the basic terms. The impression the public was given—by some of the Councilmembers, by some in the media, and by and a vocal core of A’s supporters—was that the City Council was duty bound to approve the exact language—and only the exact language—of the proposed lease agreement because anything else would be certain to immediately drive the A’s out of town.

Some, in fact, seemed to wonder aloud why the City Council was involved at all.

No-one was more adamant that the City Council was “meddling” in the A’s/Coliseum JPA lease deal than our good friend Chip Johnson, the columnist who covers the East Bay for the San Francisco Chronicle.

In a July 4 column entitled “Oakland Leaders’ Bungling With A’s A Predictable Disgrace,” Mr. Johnson wrote that “Oakland's city leaders apparently aren't well versed in the art of the business deal. Once an agreement is reached between two sides, it can't be grabbed by a third party for a do-over.” Mr Johnson continued, “In an e-mail sent late Wednesday, team owner Lew Wolff laid it out to Oakland leaders in plain and simple language that any idiot could understand. It said, in essence, if Oakland City Hall balks on the lease deal that the A's had worked out with the board that runs O.co Coliseum, the A's had [Major League Baseball’s] authorization to catch the next plane out of town. Now that's hardball.” Mr. Johnson concluded that “Oakland's elected leaders are sticking their nose in another government agency's negotiations and turning the table upside down.”

I have no idea what Mr. Johnson knows about “the art of the business deal,” but he displays little understanding of the legal relationship between the City of Oakland, the Oakland-Alameda Coliseum Complex, and the Joint Powers Authority. I’ll help him out, if he wants to know.

The JPA is not “another government agency,” as Mr. Johnson asserts. It is a board set up jointly by the City of Oakland and Alameda County to manage the Coliseum Complex, which is owned jointly and paid for by the citizens of the city and the county. While the eight-member JPA has the authority to negotiate contracts, the contracts themselves can only go into effect when ratified by both the City Council and the County Board of Supervisors. It’s the City Council—and the County Board of Supervisors—who are legally and politically responsible for the lease terms. In fact, it’s my contention that the City Council should have followed Councilmember Brooks’ lead and looked closer and more critically into the proposed lease terms, rather than doing as Mr. Johnson suggested, and not look into them at all.

Of course, it was Mr. Johnson’s own newspaper which helped to spread confusion about Oakland city government’s role once the preliminary lease negotiations had ended. After Oakland City Attorney Barbara Parker made a series of minor adjustments to the lease language following the Council vote, the Chronicle  editors characterized those actions in a headline as “over-editing,” as if Ms. Parker was an irritable schoolteacher being over-picky about mistakes in a student’s homework. (“Latest Twist In Oakland A's Lease Saga: Over-Editing” July 19, 2014). Ignored in the Chronicle headline was the explanation by Ms. Parker that in making the adjustments, the City Attorney was attempting to ensure that ambiguities in the lease language did not lead to costly litigation somewhere down the road. But, of course, Oakland would go both broke and crazy trying to follow the Chronicle’s “suggestions” as to how we should handle our business.

Unfortunately, some people on the Oakland City Council were thinking the same way as our friends at the Chronicle. In the same “Latest Twist” article in which the Chronicle headline writers scolded the Oakland City attorney for trying to clear up lease language ambiguities, Chronicle reporter Will Kane wrote that “Councilman Larry Reid, who voted against the changes [during the Council deliberations] and said the city should have approved the original lease, said he didn't understand why the council was trying to second guess the Coliseum Authority, where Reid represents the city. ‘The city of Oakland is not responsible for negotiating for the lease agreement,’ Reid said. ‘It is just mad confusion that is going on in this institution that I am a part of.’”

The real question that is being obscured by whether City Council’s role in reviewing the lease is whether the A’s/JPA lease proposal—either in its original form or in the slightly amended form as passed by the Council last week and then further amended by the City Attorney—is in the best interests of Oakland residents and taxpayers.

There are two ways of evaluating the 10 year lease extension. First, we can ask how the extension affects the signing of a long-term lease to keep the A’s in Oakland. And second, we can ask what the financial implications are to the City.

It’s obvious that if no lease extension at all had been approved and signed by all the parties, the team would have been forced to leave Oakland at the end of next year, since they’d have no contract to play at the Coliseum after December of 2015. But since the terms to move to a new city under forced and frenetic conditions would have been far worse than anything they could have gotten out of Oakland and Alameda County—even if the city and county had actually done hardball negotiations—it’s hard to see how some deal for a short-term extension to continue to play at the Coliseum would not have been struck.

However, that doesn’t mean that signing the 10 year extension gets us any closer to a long-term A’s/Oakland deal. Although Alameda County Supervisor and Joint Powers Authority chairperson Nate Miley said he believes that this interim lease extension deal is a step in the direction of a long-term lease, it’s not at all certain if A’s owner Lewis Wolff is thinking the same way. Although the lease extension requires the A’s to bargain “in good faith” for a long-term extension, that’s standard contract language that allows a broad latitude of interpretation. The current A’s ownership could decide that Oakland is, after all, the best place for the team to play in the long-term. Or they could sell to another ownership group that’s committed to Oakland. Or, in the alternative, Mr. Wolff and the other current A’s owners could use the time afforded by the extension to forge a long-term deal with another city. The truth is, that’s their decision to make, and we won’t know the answer to that question unless and until either a long-term deal is signed or the A’s pack up and go.

Meanwhile, it’s still uncertain whether the proposed extension is a good one or a bad one for the citizens of Oakland and Alameda County. That’s because “success” is based upon whether or not one has reached their goals and, in this case, we don’t know what the financial goals of the JPA were and the City of Oakland are in this lease extension.

I know in principle what the A’s goals are. They want to make as much money as they can, with as little risk as they can, and with the maximum flexibility to either keep the team in Oakland long-term or move as the occasion warrants

But besides keeping the A’s in Oakland for the next few years, what were the strategic goals of the JPA, the mayor’s office, and the City Council in the negotiations with A’s? Do you know? I sure don’t.

But if we don’t know what the financial goals of the public entities are in negotiating with the various professional teams in our city, we can certainly talk about what we think they ought to be. That’s an interesting question, and one we’ll be sure to go into at another time.