🏟️ Why is Oakland selling the Coliseum?
Newsom strikes again, new Oakland polling data, and Olympic Gold
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Story of the week
Oakland announced terms to sell its 50% stake in the Coliseum to AASEG, an Oakland-based private investment group, for $105M.
How we got here: Earlier this year, Oakland faced a $177M budget deficit. With an important election coming up, the Mayor and City Council undoubtedly felt pressure to pass a budget that would avoid major spending cuts.
In a surprise move, Mayor Thao proposed a budget contingent on the sale of the 112-acre Coliseum Complex, which includes the stadium, arena, and parking areas.
The one-time revenue from the sale would help her avoid serious cuts to public services, including more police and firefighters. City Council passed the plan 5-3.
Deal terms: Both sides are expected to sign the agreement by August 23, but the deal won’t close until mid-2026.
Notably, the terms stipulate that only $15M will be paid by the budget deadline in September, and nearly half of the proceeds ($42M) won’t be paid until 2026.
A lot still needs to happen. AASEG likely needs to raise funds to close the deal, and important details need to be fleshed out.
Is selling the Coliseum a smart move? With the A’s leaving, a long-term redevelopment plan in East Oakland makes a lot of sense. What’s unusual is how it’s happening.
First, you don’t typically sell a revenue-generating capital asset to cover operating expenses. That’d be like mortgaging your house to pay your credit card bill.
Second, when cities sell public property, they typically require the buyer to have a full development plan. The developer can buy the property, but only after they meet substantial milestones, such as securing financing, building a certain amount of housing and retail spaces, and creating jobs.
Instead, we’ve sold the land to AASEG without any such plan or measurable progress. If the deal closes in 2026, AASEG will own the land and what happens after is largely out of Oakland’s control.
The real problem is the budget. The sale buys the city another year, but it doesn’t address the $100M+ deficit looming in 2025 and beyond.
“The short answer is that the City did not solve the structural deficit. In fact, it didn’t even attempt to solve it.” – Oakland Report
City officials have been silent on the budget problem. We desperately need leadership to step up and make some tough (and likely unpopular) decisions.
In an ideal world, we would rebuild the budget from the ground up – also known as zero-based budgeting – where you assess and justify every expense.
This would require addressing major structural challenges such as the dramatic rise in city employee compensation, which exceeded inflation by 2.5x and far outpaces Oakland’s ongoing revenue growth.
Clock is ticking: We don’t have another Coliseum to sell next year. If leaders are willing to take the unpopular medicine now, Oakland could be in a much better position for a faster, stronger rebound.
In other news…
Gov. Newsom finalized a plan to have state attorneys prosecute drug and violent crimes in Alameda County. This comes after five months of trying to negotiate a similar agreement with DA Pam Price. It adds to the growing list of actions Newsom has taken affecting Oaklanders, including quadrupling CHP deployment, urging Oakland to reconsider its police chase policy, and cracking down on encampments (ABC)
A new poll of 400 likely Oakland voters is out. Results showed that 73% believe Oakland is on the wrong track; 69% described Mayor Thao as unfavorable; and 65% disapprove of City Council’s job performance. In terms of issues, 90% said they are concerned about crime, with 56% noting crime as the reason businesses are closing in Oakland (East Bay Insiders)
The Washington Post published a feature on the paradox of today’s Oakland, with the political and safety woes on one hand, and the cultural vibrancy and natural beauty on the other (WaPo)
Several Oakland restaurants closed this month, including Wise Sons near Lake Merritt, Duende in downtown, and Souvenir Coffee in Old Oakland. Many cited crime and a challenging environment to do business (SF Chronicle)
On College Ave, a three-alarm fire destroyed a beloved local bookstore. The cause of the fire is under investigation. A donation page was launched to rebuild the store (KTVU)
🥇 Oakland Proud
At the Olympics, a team of Oakland-based rowers took gold in the Men’s Four, the first time Team USA has won this event in 64 years. The team trains at Cal’s boathouse in Fruitvale (NBC)
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I'm concerned about whether this group that wants to buy half of the Coliseum actually has the money to buy and develop it. They don't sound like wealthy people and I don't think the site is appropriate for housing. It's a good place to drive to and park or take BART for an athletic event where the lot and the station are patrolled. People can come and watch a game and then get back on the freeway or BART and go home. Also, the A's own the other half of the site so nothing can be done with it until Fisher agrees to sell or participate in a project.