City Needs to Explain Ballpark Benefits

Steve Kline—a lawyer, former political consultant and current city activist—recently sent a letter to the San Jose City Council asking for a full hearing on the land option agreement with Lew Wolff that gives the A’s owner a sweet deal for a future ballpark.

It was a shot over the bow, not a lethal attempt to kill the stadium.  But the city should be circumspect moving forward to insure transparency and make sure the community benefits from any deal made to bring baseball to San Jose are enumerated up front—beyond the traditional promises of jobs and increased business.

A couple of caveats: first, I am 100 percent behind a baseball stadium in the South Bay; second, Steve Kline is my former business partner.

That said, stadiums provide tangible benefits to communities over the long term. The 49ers recently ran a campaign in Santa Clara to insure their stadium was built and it was a great deal for the city, the schools, businesses and the community, even beyond Santa Clara.

The San Jose stadium deal points should be no less beneficial or transparent. The key to the entire process is to insure the residents of San Jose are getting their fair share of benefits from the new venture. That’s what Kline is asking for up front. He wants to make sure residents benefit from a deal if land is given to Wolff, which is clearly what the option agreement does. Clearly, such a benefits package will be necessary for voter approval.

Wolff and the city should bring Kline and those he represents in early. If the city simply gives away the store with no benefit to the residents, Kline will help kill the project. It is something, from my experience, he knows how to do.

Money can’t always overcome political expertise—just ask Meg Whitman. In a political fight, Kline is a champion. But a contest need not take place. All the city and Wolff have to do is prove to Kline that the residents and neighborhoods will benefit more from this project than it will cost them.

It should be easy, because if that is not the case, the deal should not be made in the first place. It is called a win-win. Both Kline and Wolff understand the concept—and it would be silly to jeopardize this project because of a lack of communication.

Make the deal.

Rich Robinson is an attorney and political consultant in Silicon Valley. Opinions are the author’s own and do not necessarily reflect those of San Jose Inside.

40 Comments

  1. Wendell, I ‘ll take it a step further…

    If the deal puts some money in Kline’s pocket (which might result in a smaller cut for Reed) then Kline will endorse it.

  2. Wendell – you make an interesting point, but your suggestion that Kline is in the back pocket of the mayor is ludicrous, unfounded and totally without merit. Before you suggest that Steve Kline is a shill for Reed perhaps you’d be more secure in his motives by meeting with Kline and getting to know him. I am assured of his integrity, convictions and motivation. Kline has positioned himself as a citizen leader in D6 which is more than I can say about our current Councilmember. Do yourself a favor – talk to the guy.

  3. The city should put out bonds to finance the stadium.  We all know which bonds are good.  Those that pay off political contributors are good. It doesn’t matter if the project makes financial sense.  Bonds that pay off pension obligations are bad. It doesn’t matter if the unions have the law behind their argument.  Go Mayor! Go Council!  Get this stadium built, like the airport and city hall projects, we can let the city employees take the fall if there is a problem.

  4. This raises a great issue, which has become (not) “best practices” in local economic development activities over the last 30 to 40 years –

    Preferred vendor relationships.  We will have an open bidding process for something like garbage service, cable tv franchise, developing a downtown mixed use residential tower with grocery store, etc, but that’s just so we can say it was an open process.

    In reality, its a “proprietary bid system” where we will work with our preferred development partner, that guy we did the hotel project with before or someone we’ve had a relationship over time and we feel will do a decent job and understands our markets.  (and who by the way is visible at the Chamber of Commerce, all the right non-profit fundraisers, the campaigns of all the incumbent council members, etc.)

    I’m troubled by this because like the power of incumbent politicians, incumbent business interests, those most invested already in the community tend to be overwhelmingly favored which means that the general public sometimes doesn’t get the best value for its investment.  Public Goods is a shared resource that we should all share in the maximum potential benefit.  Sometimes its a crap shoot, with a local restraunteur being the prefered tenant for an airport concession for example, but lacking the unique skills for running an outlet in this kind of venue are set up to loose a lot of money before failing and leaving a vacancy.  A guy who’s already run a ball team might know more about running it profitably than a rookie, but does the investment of public resources, the land and political capital it takes to fast track permits and assemble parcels while providing special zoning and approval make sense when its all done for the private profit of this one guy?

    Or do we all gain with a trickle down effect and carryover such as we’ve seen with the Pavilion master tenant (Sharks.)  Are we hoping to reap the same kind of return on investment and how do you value the non-monetary investment types being used by elected and non-elected city leadership to push this?

  5. The sale of land below value is another shining example of the transfer of public funds to a private developer.  Believe me, Mr. Wolff will make money hand over fist by this ball park, he can at least pay market value for the land.

  6. Santa Clara had guiding principles with relation to the stadium, NO SALE OF CITY LAND, FULL TRANSPERANCY.

    Reed the Reformer??

    No, Reed the Developers Bootlicker.

    I want the A’s to come to San Jose.

    SUCCESSFULLY.

    REED CERTAINLY IS NOT WORKING FOR THAT.

  7. Show me the debt service numbers for this land and the rest of the former RDA’s project.  Show me the revenue stream(s) that will support that debt service.

  8. Good deal for Santa Clara , Are you high??  Monies made from the stadium belong to the NFL , monies made from the private box’s belong to Ned York(team owner) the City of Santa Clara will receive something in the neighborhood 200,000 – 800,000 from a year from the deal. Plus new studies show it is going to cost the City of Santa Clara Millions more than originally projected. Gee imagine that! ………Im sure that couldnt happen here in San Jose( the armpit of silicon valley)

    I too am all for a ballpark , as long as there is a complete and unbiased study done of total costs involved ( and who will be responsible for overage). I simply do not trust that this City Administration. The Mayor , The City Manager and The City Council , have shown nothing but contempt for the residents of San Jose . all in the name of fiscal emergency.  it has been proven that the mayor lied about measure V & W , he stated that it would allow him to hire even more Public Safety, NOT TRUE! since then Many Police and Fire officers have been laid off and even more have left by choice. to date the city has not been able to rehire or attract those laid off or new qualified candidates to replace those officers or firefighters. Every other city or jurisdiction offers either more pay , better benefits , or both along with employee appreciation

    This city has put its residents at risk. There are no where near enough jobs for residents , even more low income housing in the works ,  no Audit of incubator system , Illegal movement of monies and debt (RDA) , conflict of interest as Council Members are also RDA board members.the list goes on and on. this city admin is so far beyond corrupt , if this was private industry , they would all be in jail. lets not even talk about the illegal ballot measure that the mayor is pushing, this illegal ballot measure will cost the residents of San Jose Millions /millions of dollars fighting hundreds of lawsuits that are being filed . when is enough ,enough?? time for this Mayor , City Manager , and council to go

    • DC/DC recently announced to the troops that the PD might have a lateral officer academy early in 2012. PD is down to fewer than 15 of the laid off officers availible to be rehired in anticipation of upcoming retirements AND current officers leaving for other departments (yes others are hiring!).

      There is also talk of sending New Hires to the old South Bay Academy Program (SJPD lost its Academy accreditation due to being mothballed). New Hires being necessary because current staffing levels,  being unsafe,  are about to drop throught the floor.

      Not sure how the PD will accomplish either of these things since City Manager Figone, Alex Gurza Mayor Reed and the rest of the council have made it clear that they WILL NOT HIRE ANYONE until a second tier pension is in place. There will be no second tier because the City will not negotiate with any unions on pensions and is ready to proceed with a ballot measure which will pass and then be tied up in court for years. 

      Even if teh City relented on its hireing freeze WHO IN THEIR RIGHT MIND would think of coming to work in San Jose knowing that the City is already planning to lay more police and fire fighters off???

      Nero Fiddled while Rome Burned…,  band played on while the Titanic Sank…  Mayor Reed is giving away the farm to Lew Wolfe and his former clients in the real estate speculator community!

      Wake Up San Jose!!!

      • There will be no new hires as the city has already speculated laying off another 100 officers next year, and who in their right mind would want to lateral here??

      • More layoffs are coming, do you want to buy into this BS.  Where is the Chief do we still have one.  He/she never answered our questions.  Whatever DC is selling this crap, the real officers don’t buy in to it. Moral is at a all time low.

        Who in the heck would want to come here unless they were fired from their previous employer.  If they are that desperate we don’t need them.

        NEED TO VOTE DOWN BALLOT MEASURE IN MARCH, IT IS COMING.  THIS MAYOR HATES UNIONS AND PUBLIC SAFETY.  DO NOT DRINK THE COOL-AID!

    • “New studies show it will cost Santa Clara millions”

      Name and source of study, please?

      Retired is for a ballpark where the land is being sold at less than market value, but against a stadium where city keeps the land.  Boy, when Bailey passes out mushrooms everyone gets high.  Santa Clara is part of the stadium authority which receives the revenue.  It also OWNS the stadium.  The 49ers are paying for the operating costs, so the city does not pay for that.  Even Roger Noll, the archangel of stadium haters admitted THREE TIMES OVER THE PHONE that the plan Santa Clara put together is a good one.

  9. It’s sweet, really, that you advocate communication with the mayor and council. But I have to believe that you already know Mayor Reed doesn’t listen and pretty much takes stonewalling to the level of an art form.  He makes his mind up in advance and then goes through the motions of pretending to care about governance before doing what he wants. It would be amusing if there wasn’t so much at stake.

  10. Shouldn’t the City already have provided this information to the public before putting it on an agenda. Why should it take someone threatening to “kill” the deal for the most basic of information to be shared by the City and their plan properly explained.  So much for sunshine.

  11. The unspoken part of this is that you are essentially telling, “if Kline says its a good idea then trust him.” Glaring problem with that is there is no proof he and the Emporer err, Mayor, aren’t in on this together.
    Too many times someone has pretended to be the people’s watchdog only to later be found the politician’s bed buddy.

  12. “But the city should be circumspect moving forward to insure transparency”

    This mayor and most of the council does not care about “sunshine” and “transparency” and all the other political hogwash.

    It is his way or the highway,  if he cannot get his way he puts it on a ballot measure under “fiscal emergency”.  The city has billions tucked away.  Hope everyone read the Mucky News today how the Gov. was told standing pensions are legal and to attacked them (ballot) is illegal.  Yes, we need to change the process but you cannot do it to current employees or retirees who have paid into the process for years.  Yes, take away payouts if possible. March ballot will cost us millions in legal fees.

    To say a ball park which MLB will not approve a move, nor will voters approve, will put money in the city bank is a joke. But then they could build parking lots and charge us $20+ bucks to park.  Don’t they already do that if we dare come downtown to eat?

    Mayor, be reasonable, we have much greater issues.  Lets create a city where people want to feel safe and come to work here.  We need an environment where companies what to come here and create jobs, we do not need more low income housing or city owned golf courses that are losing money.

    • To There is a problem, while you make some good points I totally agree with, you loose me when you say outragious things like “the city has billions tucked away”, I just do not beleive that in all the budget information available.  I parked downtown after 6pm for free to eat and then it cost me $25 to park at the arena for a Sharks game last week. it costs more to park at events outside San Jose. I hope they can find legal solutions to the pension issues and I hope they can bring the ballpark to San JOse.

  13. After some checking, at least two former legal associates of Chuck Reed’s former law firm have done a lot business representing Lew Wolff.

    It has been sent to the Bar Association.

  14. Pac Bell, HP pavilion, the new 49er stadium were all opposed by myopic nimbles,  You can’t find past opponents to the arena or the SF ballpark and look at the before and after pictures of the area.  It seems to me that the citizens against virtually everything (cave) people would simply get tired of being wrong.

    • In debating how best to deliver city services and enhance stuff in the name of economic development, there should be room for a little reasonable debate on both where and how we spend public time and dollars.

      What feels wrong is that the deals are worked out behind the scenes with concessions, trade offs, profits and incentives for development partners and all the rest and if the public is consulted at all its usually late in the process as sort of an up or down vote on the whole package.

      I like economic development projects and have seen many great examples where there was a tremendous multiplier in terms of additional jobs and business generated around a small public investment.  I’m hoping that’s what this is on track to be also, but for every example of a great project, there’s probably a dozen more that folks don’t like to talk about where we gave away way too much and got way too little in return. 

      Its not just the squarandered public dollars that cost us, but also the opportunity cost where had we done it right we’d be enjoying great benefits as a community but instead lost that opportunity when the eventual package included to generous of a reward for development partner and too little of a cost recovery mechanism for the public partners.  Or is trickle down income from sales tax at restaurants supposed to be our only vehicle for cost recovery?  How about we retain the naming right, and ownership of the land and have a long term lease with profit sharing built in since we are sharing the risk?

      But I can be honest and recognize that big money capital is risk adverse in this economy (and they probably are even in good times) so they are less likely to invest in our city unless given reasonable profit incentives.  I’m just thinking we need to also think about our community’s future in terms of tax revenue generation and build in some public profit mechanisms in these mega-projects like we saw come out of redevelopment over the years.  I also like the idea of direct benefits to community members such as ticket discounts for SJ residents like Shoreline offers for Mt. View resident or something.

    • You’re right Rich. These cave people just don’t get it. They don’t realize the benefits that powerful and profitable sports institutions bring to a community. They don’t understand that sometimes it’s necessary for the power elite to cover up certain facts in order that the greater good be served.
      I wish they’d just go away and leave the running of things to enlightened progressives like us.

  15. More lay-offs coming , More low income housing , much more corruption on the way followed by endless lawsuits that will cost into the millions…………………….and Oh yeah , the residents of San Jose will be on the hook for cost of lawsuits . you can thank Mr Burns (Chuck Reed) Doug Figone and the rest of the the Council(Cartel)

  16. Mr. Robinson is concerned that the City be ‘transparent’ in explaining the benefits of a ballpark. That hasn’t really been a problem. The City is bending over backward to be transparent about the BENEFITS. 
    If Mr. Robinson was truly objective, wouldn’t he be just as concerned that the City be transparent in describing the COSTS of the ballpark?

    I guess when you’re in the PR business you get used to emphasizing the upside of whatever it is you’re being paid to promote, and pretending that there isn’t any downside.

  17. As a citizen and taxpayer in this city, I DO NOT want to see this land deal go through as long as the city is contemplating “fiscal emergency”. How can they even think about selling this land, at a loss, when we are in a fiscal emergency? That does not make sense and certainly does not sound right. I hope Mr. Kline DOES follow through and either gets the information, via hearing, we residents deserve…or he moves forward to kill the project. If the land deal goes through, then I am not going to believe a fiscal emergency exists and will vote NO.

  18. The corruption is endless! Everybody has forgotten about the FMC land deal with Lou Wolff. The city of San Jose said that they bought the land for a 100 million dollars and that they were going to sell it to the billionaire for 69 million, or market price at the time, so he could build his soccer stadium and retail area.

    When did the city of San Jose become real estate brokers for the rich. Ever since the real estate lawyer became mayor. I wonder if his firm is handling all of these transactions, you know he’s getting his kick backs!

    If both deals go through, that means the city will lose close to 44 million dollars, the tax payer has lost. How long would it take to make up 44 million dollars in loses. It’s sad!

    He’s driving the car off the cliff!

  19. The City Council’s statements in favor of the ballpark are misleading at best. 

    1) There are greater costs than simply building it—the additional infrastructure building and maintenance, the additional need for public safety during events etc.  These costs were not identified or provided by the City to give a NET BENEFIT.

    2) The city says that this makes sense because the land is restricted to being developed as a ballpark.  That is the most artifical reason ever—the city put that restriction on the land and are now using it as a justification.

    3) The money goes back to the RDA and cannot help the general fund. BS—the RDA owes the general fund millions of dollars; the general fund just paid off a multi-million RDA debt because the RDA allegedly did not have the funds.  The RDA could repay the general fund and then it would help with general fund expenses.

    Finally, no one has answered or analyzed as far as I can tell—what happens if Wolff exercises the option and voters vote no.  Do we owe Wolff because we cannot fulfill the deal of delivering the land to build a ballpark? How much will that cost the city?

  20. Rich Robinson may have some feet of clay, but he has turned out to be one of the most insightful writers on San Jose Inside.  I believe Robinson has really helped SJI.  Transperancy.  Hmm.  Do you know that the leader of the anti stadium movement in Santa Clara has exchanged over 40 emails with a planning commissioner in San Francisco, Michael Antonini, and Antonini is refusing to release them, even though they were sent to his official email address.  Transperancy should be a universal concept.  Robinson has made some bad calls, but overall, he is batting well over .653 concerning his views on the ballpark and the stadium.

      • Just for the record I don’t believe in anonymous comments.  I always take full responsibility for my views.  And while the original comment showed tremendous insight and intelligence, my batting average is muc higher.  wink

      • The only one greater is The Great Steve Kline. Don’t get me wrong, Rich is pretty fantastic but even he concedes that S.K. is the Bee’s Knees!

    • I couldn’t agree more Rich Robinson might just be one of the Greatest of All Time!  Second to none! Cream of the Crop! Top of the Heap! Best of the Best! Numero Uno! Of course I am not biased.

  21. Lets see…The next ballot will ask voters to approve a new BallPark AND cut public pensions??? Boy that is good timing! How about a ballot measure to recall Mr. Burns!

  22. $1 billion for City Hall, $2 billion for Convention Center, Theaters, Museums and free events, $250 million for HP Arena, Ice Center and sports parking lots that Council gave away

    So $120 million for Baseball Stadium, streets and other city paid stadium improvements is not so much when all costs, interest, yearly general fund puyments are totaled

    Ops, forgot this is City Hall funny accounting with

    – double and triple benefits counting

    – millions understated and hidden city tax costs

    – non existent: new high paid jobs, sales taxes, and property taxes minus millions taxes to be given away to sport team owners, yearly additional city paid free general fund services, sports team promotions, staff time and cheap parking lot leases worth $ 3-12 million per year unless stadium costs go up. fans don’t buy enough tickets, BART doesn’t come to downtown etc or any lame excuse to give sports team owners more city taxes or free services

    City Council will give a few more millions but no tell public about free services, give team stadium naming rights, pay for stadium maintenance, advertising signs, reduce stadium and parking rents and provide free shuttles to Berressa BART so owners are happy and make their expected many millions profits like San Jose Sharks owners got

    History Repeats – repeats ” sweetheart sports deal of decade ” with Council hiding millions given to Wollf and his local partners

    “AT THE TIME THE CITY originally signed the management deal with Sharks owners George and Gordon Gund in 1991, it was widely regarded as the “sweetheart sports deal” of the decade.

    For one thing, the city paid for the bulk of the development costs for the Arena—at least $147 million. But that wasn’t all. City leaders, led by then-Mayor Tom McEnery, gave the Sharks and its alter-business ego, the Arena Management Corp., total control over building operations and revenues. That meant the Sharks got money from all Arena events, including non-sporting events like Disney on Ice and the recent Dixie Chicks concert.

    The 15-year lease didn’t actually go into effect until the Arena opened in 1993. The team has three five-year options to renew after the first 15 years.”

    ” THE ONE-INCH-THICK, 106-page management agreement between the city of San Jose and the San Jose Sharks is a monument to athletic franchise worship. Among its contents: section after section ceding the hockey team almost absolute control over operations and revenues at the city-funded San Jose Arena, which cost local taxpayers nearly $150 million to build.

    The agreement was created in 1991, in the city’s flush of excitement about gaining its first-ever major professional sports team, and officials willingly gave away future bargaining chips with their future tenant like they were tossing chum into the ocean.

    http://www.metroactive.com/papers/metro/06.22.00/sharks-0025.html

  23. http://www.bizjournals.com/sanjose/stories/2008/04/14/daily20.html 132 million dollar deal (just gotta work it out) Count 1 – Representation of Clients with Conflicting Interests (Rule 3-310(C)(2))
    In count 1, the State Bar charges that respondent wilfully violated rule 3-310(C)(2) of the
    State Bar Rules of Professional Conduct,
    10
    which provides:  “A member shall not, without the
    informed written consent of each client:  (2)  Accept or continue representation of
    more than one client in a matter in which the interests of the clients actually conflict.

    Count 2 – Failure to Disclose Prior Relationships (Rule 3-310(B)(3))
    In count 2, the State Bar charges that respondent wilfully violated rule
    3-310(B)(3), which provides that “A member shall not accept or continue representation
    of a client without providing written disclosure to the client where:  (3) The
    member has or had a legal, business, financial, professional, or personal relationship with
    another person or entity the member knows or reasonably should know would be affected
    substantially by resolution of the matter.

  24. I doubt that any member of the San Jose City Council has issues concerning conflict of interests and the San Jose ballpark proposal.  However, from what we have been reading, Jamie McLeod in Santa Clara has very serious ethical problems concerning the 49ers. 

    A) McLeod contributed over 500 dollars to the effort to defeat the Santa Clara stadium, yet refused to recuse herself from issues concerning spending limits for both sides of the measure.

    B)  McLeod has received funds from Fannie Mae in the form of stipends, and Lennar Urban, the San Francisco developer who is putting forth the rival project.

    C)  McLeod has met with Rebecca Kaplan several times since 2009.  Kaplan was a major donor against the stadium, and wants the A’s, 49ers, and Raiders all in Oakland.  When asked for emails about these meetings, McLeod lied and said they do not exist.  After a two year long battle to get the emails from Kaplan, an email that McLeod said does not exist, was found, from McLeod requesting a strategy meeting with Kaplan.

    I doubt Oliverio would do such things, but McLeod has cherry picked ethics laws many times, even accusing in an open meeting, one of her colleagues of taking a bribe.

  25. While I disagree with Jamie on the Niner stadium, I do not question her ethics.  She just disagrees.  If she did things for money, she would have chosen the other side.  The supporters of the Niners are far greater in number and wealthier than their opponents.

    That said, now that the voters have spoken, we should all work together to make the project the best possible for the entire community.  The campaign is over.

  26. Well, I appreciate Robinson’s desire to be a good guy.  However, if McLeod’s motives were pure, then why did she lie about not meeting with Kaplan, who wants the Niner project in Oakland?  Again, a San Francisco Planning Commissioner not only sent emails using his title against the project, but he is the major cheerleader of the SF project.  As for McLeod not making any personal money, again, Rich, you just do not know the facts.  McLeod invests in two British venture funds that are connected with Lennar.  While Fannie Mae caused the mortgage meltdown, McLeod is collected a stipend fron Fannie Mae.