Post by TheShadow on Nov 5, 2005 18:10:21 GMT -5
www.sfgate.com
City, county still owe $180 million on Coliseum complex
Jim Herron Zamora, Chronicle Staff Writer
The decision by East Bay officials and the Oakland Raiders to scrap the failed scheme to sell personal seat licenses and let the Raiders take over marketing and ticket sales will not help Alameda County and Oakland pay off the $180 million they owe on the Coliseum complex anytime soon.
At best, the deal announced Thursday keeps the debt from getting any bigger, officials said, and taxpayers still will have to subsidize the complex where the Raiders play to the tune of about $20 million a year for the next 20 years. That figure could come down sooner if the Raiders start filling the stadium with sell-out crowds that park their cars in the coliseum parking lot and buy lots of food and beer during the games.
In other words, there are a lot of "ifs" that must happen before the city and county start saving any money on what has, so far, been the losing proposition that brought the Raiders back from Los Angeles 10 years ago. But the political leaders who backed the latest deal with team owner Al Davis said it was the only thing that would prevent the losses from getting worse.
"Our backs were against the wall," said Supervisor Gail Steele. "Before we can make it better for taxpayers, we had to stop it from becoming worse."
Steele and Oakland City Council President Ignacio De La Fuente, both of whom helped broker the deal that brought the Raiders back to Oakland and worked on the deal announced Thursday, said taxpayers would have been socked with an even bigger bill next year if officials did not scuttle the personal seat licensing plan. Renewing the PSL plan, which was widely reviled both by fans and by Davis, would have cost taxpayers an extra $3 million next year and $1 million a year thereafter under the terms of the 1995 deal that brought the Raiders back.
"What we did for 10 years was a flawed business plan," De La Fuente said. "We've known for a long time that it didn't work. But it's time to quit fighting, move past it, and try to do the best we can to climb out of this."
In 1995, to help lure the Raiders back, the Alameda County Coliseum Authority agreed to sell bonds to finance the $200 million expansion and renovation of the stadium now known as McAfee Coliseum. Authority officials thought they would repay the bonds by selling personal seat licenses that would cost between $250 and $4,000 and give fans the right to buy season tickets for a decade. Under the terms of the deal, the ticketing and marketing would be handled by the Oakland Football Marketing Association, an entity separate from the team and Coliseum Authority.
But too few fans were willing to buy the licenses, and with the Raiders failing to sell out home games, they found themselves paying thousands of dollars for season tickets when others were buying game-day tickets for less than $100.
With the PSLs failing to sell, the city and county had to dip into their general funds to pay the interest and principal on the bonds, which have been refinanced several times, costing taxpayers from $11 million to $20 million or so a year. Most of that money went to pay off the interest, so most of the debt remains.
It wasn't long before the city and county were losing money, Davis felt he'd been duped, and the lawsuits started. Since 1995, taxpayers have spent between $1 million and $2 million a year on attorney fees related to the Raiders lawsuits. The deal announced Thursday settles all of those lawsuits, potentially freeing up millions of dollars that would have been spent on legal fees.
"Just the attorney fees were killing us," said De La Fuente.
He notes that Oakland residents voted last year to increase taxes to raise $10 million a year to hire 65 more police officers, taxes that wouldn't have to have been raised if the city weren't paying for the Coliseum.
"I certainly think of how many cops I could hire with all this money we are paying out," said De La Fuente. "It's painful."
With everyone losing money, De La Fuente said he had called Raiders Chief Executive Amy Trask two years ago to see if there was a way to clean up the mess. Trask said the team was willing to talk about everything but the $34 million that a Sacramento jury had ordered the Coliseum Authority to pay the Raiders in 2003.
"The talks started very informally -- not much happened for the first year," Trask said. "But over time we started making progress."
Eventually, they settled on the deal announced Thursday. Steele hopes that everyone can reach a settlement on that $34 million judgment, which the authority appealed and is now up to $41 million with the interest.
Supporters of the new deal said that taxpayer subsidy to the Coliseum complex, which includes the stadium used by the Raiders and the Athletics and the nearby arena where the Golden State Warriors play, had dropped from $38 million in 1998-99 fiscal year to $19.3 million in 2004-05.
But De La Fuente and Steele said it was unlikely that those payments would drop much below $15 million even if the Raiders managed to sell out their games during the next decade.
What's more, there's no guarantee the Raiders will stay in Oakland after their lease on the Coliseum expires in 2011, and the public subsidy of the facility could rise higher if the team leaves town. The city and county would recoup some of their losses through the sale of the Raiders' practice facility in Alameda -- which the city and county will own if the team departs, under the terms of the new deal.
"There are a whole lot of ifs," Steele said. "But things were going so bad that we just had to take a risk and try a new approach."