The City of Oakland has struck out in obtaining a key federal grant to finance development of the Howard Terminal with a new ballpark for the A’s team.
The U.S. Department of Transportation declined to award Oakland the $182.9 million it sought to help pay for infrastructure for the $12 billion Howard Terminal stadium project, the San Jose Mercury News reported.
The city had sought the grant from the department’s MEGA program to pay for street and transit improvements to pave the way for the team’s proposed waterfront ballpark and 3,000-unit mixed-use development. The federal program helps fund infrastructure around the country.
The project didn’t meet the “statutory requirements” for a cost-effective investment, according to a DOT document.
The failure to obtain the federal grant – a third of the money Oakland needed to hold up its end of the Howard Terminal stadium project – could doom the city’s effort to keep its last big professional sports franchise.
The city is eager to craft a deal that doesn’t rely on large subsidies from taxpayers.
“They’re looking under all the sofa cushions – federal money, state, county and city money, taxpayer money at all of those different levels,” Nola Agha, a University of San Francisco professor and expert on sports economics, told the Mercury News.
Agha authored a financial study last year of the Howard Terminal project, funded by local shipping industry businesses opposed to the A’s development.
While the city already has secured $321.5 million in funding for the infrastructure improvements, its most recent cost estimate – provided in response to Agha’s findings – suggests the total cost may sum to $600 million.
The MEGA grant would have put a huge dent in that cost burden, and former mayor Libby Schaaf cited it as a home run in closing a deal with the A’s, who have played hardball in their negotiations.
Schaaf, who left office last week, was among Howard Terminal’s most strident advocates. When MLB Commissioner Rob Manfred said last fall he didn’t expect the A’s to stay in Oakland, she was quick to defend the Howard Terminal project.
The A’s have promised to pay for the $1 billion, 35,000-seat ballpark.
But the 56-acre stadium project is contingent on more than the city funding the off-site infrastructure projects.
Oakland also would create a tax district to cover the costs of building 3,000 housing units, 1.5 million square feet of offices, 270,000 square feet of shops, restaurants and community space, a 3,500-seat theater, a 400-room hotel and 18 acres of parks.
Missing the Mega grant money is a critical blow to the A’s Howard Terminal plans, since the alternative to seeking hundreds of millions of dollars in federal funds would be for the A’s and owner John Fisher to pitch in more money — something Fisher, despite his $2.4 billion net worth, has shown no willingness to do, according to SFGate.
A’s president Dave Kaval has long postured that Howard Terminal is the franchise’s only option for staying in Oakland. Otherwise, the team will pack up its bats and leave town.
Major League Baseball, meanwhile, has encouraged the A’s to look into relocating, and the franchise has long flirted with a move to Las Vegas.
Team president Dave Kaval and other executives are scouting potential ballpark sites in Nevada, where their Triple-A team currently plays in Henderson, a suburb of Las Vegas. The Las Vegas Review-Journal reported the A’s now appear to target land near the Tropicana as a likely site.
Schaaf’s successor, Mayor Sheng Thao, promised she could reach a deal with the A’s without compromising benefits to local residents and businesses, according to the Mercury News.
“I’m hopeful we can reach an agreement that safeguards the financial interest of taxpayers – creating good jobs, housing, retail and recreation opportunities,” Thao said. “And I know we can do this together, but only under our Oakland values.”
— Dana Bartholomew
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