A $1 billion stadium for the Oakland Raiders — paid for by a mixture of bonds, a special tax district and more — could be ready in time for the 2020 season, according to a plan from the potential developer.
The strategy, handed off Friday to Oakland and Alameda County officials by developer Floyd Kephart’s New City Development LLC, is subject to negotiations with the Raiders. The city and county also could reject it, invite other developers to take over or come up with their own plan to keep the revered National Football League franchise in Oakland.
Regardless, time is running out for negotiating, financing and constructing a Raiders stadium at the center of the $4 billion Coliseum City sports, retail, hospitality, office and residential development. The Raiders are pursuing another stadium project with the San Diego Chargers in the Los Angeles suburb of Carson, and the NFL is pressing Oakland officials to deliver a plan months ahead of an expected January league decision on where the Raiders play next season and beyond.
Oakland officials, led by assistant city administrator Claudia Cappio, could bring New City's plan to the City Council as soon as Sept. 8. At that point, accelerated negotiations would have to take place with the Raiders to give other NFL owners time to choose between Oakland and Southern California in January.
"The NFL needs to come to the table with the Raiders and lay out all revenue sources and obligations — and the city needs to do the same thing — and they need to play Scrabble and come up with a word," Kephart told the San Francisco Business Times on Tuesday. "It's doable, I believe."
New City’s proposal would pay for the construction of a $900 million to $1 billion stadium by using:
• A $300 million, city-sponsored, 25-year conduit bond that wouldn't leave the city on the hook in the case of bond default. The bonds would be repaid by various stadium revenue, including naming rights, non-game day revenue and ticket or parking assessments.
The debt service for the bonds would be more than $21 million a year.
The bonds could be upped to $400 million and/or extended to 30 years, Kephart said, to cover construction interest or other costs.
Conduit bonds differ from general obligation bonds used by the city and Alameda County in that the government agencies wouldn't be on the hook for repayment if the bonds defaulted, Kephart said.
The city and county used general obligation bonds in 1995 to woo the Raiders back to Oakland from Los Angeles, and Kephart said the city and county have paid some $400 million over the past 20 years on those bonds. That has led to some politicians and taxpayers to require that no government subsidize a new Raiders stadium.
• A $200 million loan from the NFL.
• As much as $200 million from the sale of seat licenses, though that figure could be much lower.
• $100 million from the sale of Coliseum site land to New City, which would develop the property. The city could decide to use the land-sale cash for other projects.
• $100 million from the Raiders. An earlier proposal from New City raised the idea of the Raiders selling a new 20 percent equity stake and using the proceeds to finance part of the stadium construction. That now appears off the table, at least as a stadium-funding mechanism.
An enhanced infrastructure financing district, which would divert property tax increment revenue to fund public capital facilities, ultimately could raise $20 million in new taxes per year, New City told city and county officials in its proposal. But only a portion of that money is earmarked in New City's plan to pay down construction.
The district wouldn't require a public vote because the only land owners in the district are the city, county and, potentially, New City.
Raiders Managing Partner Mark Davis has said he prefers to keep the Raiders in the East Bay, but the franchise has said little publicly about what it is willing to commit to make that so. Meanwhile, the team and the Chargers have underwritten a petition initiative for a Carson stadium and put money into design work for the proposed Southern California stadium.
Earlier Tuesday, Kephart said at a forum sponsored by the group Save Oakland Sports that a Raiders stadium deal in Oakland stands a 50-50 chance of success. But if the city is successful in buying out the county's interest in the current Coliseum site — the home of the Raiders, baseball's Oakland Athletics and basketball's Golden State Warriors — he said the likelihood of a deal would jump to 80 percent.
Oakland City Council member Larry Reid said Tuesday that the city and county are "having those discussions."
The other question is whether New City will be able to see the development forward. The firm's exclusive negotiating agreement, or ENA, with the city and county expires Sept. 24, and Reid said the city could extend it, let it expire, put out another request for proposals or "go back to other individuals who have expressed interest in Coliseum City."
Reid didn't specify those other parties, but Irvine-based megadeveloper SunCal has expressed interest about Coliseum City in the past, has served as an adviser to the Raiders ( see our story from March) and is cozy with some city officials.
"We don't know if we will ask for (an extended) ENA," Kephart said. "We might just take the loss and go home."
That decision by New City conceivably hinges on progress that Cappio is able to make in discussions with the Raiders — she has been loathe to use the word "negotiations"— before and after making a presentation to the City Council about the Kephart team's plan.
An outline of New City’s plan initially was delivered to city and county officials in late June. It had been subject to back-and-forth discussions before the firm tweaked it and added more specifics this month to hit the Friday deadline, including a 97-page economic feasibility report.
Previous passes at Coliseum City and new stadiums for the Raiders and A's have fallen short on putting together a viable development plan, financing plan or investors.
In the 10 months since New City received its initial ENA, Kephart's team has now delivered a plan for a nine-phase, 132-acre development — with construction starting in January 2017 — with 750,000 square feet of tech-commercial office space, 300,000 square feet of retail, 3,500 multi-family and condominium units, 550 hotel rooms and more than 12,500 parking spaces in structures and as surface parking.
Kephart has said that Coliseum City represents more than a chance to keep at least two of Oakland's major-league sports franchises in the East Bay; it would be a transit-centered development that would span generations and renew East Oakland neighborhoods.
"That's still why we're here," Kephart said. "The anchor is BART and the transit hub."
But Coliseum City still faces many questions. For one, it is unclear whether city and county officials have the political will and resources to carry it forward. But Cappio, who rejoined the city in May, is "in a crash course of negotiations with the teams," Kephart said.
Mayor Libby Schaaf waited to assemble her economic development team, Kephart said, before pursuing talks with the Raiders. "Mayor Schaaf made a good decision," he said, "though it caused great frustration for me."
