City to Decide on Selling Land to A’s

The City Council will hold a public hearing Tuesday to decide whether or not it should sell land to owners of the Oakland A’s.

Councilmembers and the San Jose Diridon Development Authority will discuss an option agreement with the A’s, which would allow the baseball organization to put a deposit down to buy land if given permission to relocate by Major League Baseball. The land would be sold on the condition that it is used to build a ballpark.

The city would sell the property for $6.975,227, which is 36.5 percent of the total ballpark site’s current value. The theory, according to ballpark advocates, is the economic benefit of a ballpark would outweigh some combination of corporate, retail offices and housing on the property, which is located next to HP Pavilion. There are three remaining parcels of land privately owned that would need to be bought to complete the ballpark site.

The option agreement is for two years, and the A’s would pay $50,000 as a deposit. The agreement could be extended for another year for $25,000 if both the A’s and the Diridon Development Authority agree. None of this money would be included in the property purchase price, according to the city.

In a memo written by City Manager Debra Figone, here is a rundown of how much the property is worth, what the city is asking for and what would be expected of the A’s to acquire the rest of the land needed to build a ballpark:

“The Redevelopment Agency paid approximately $25,160,000 for acquisition and relocation costs for the entire ballpark site. Colliers International conducted an appraisal for the entire ballpark site in September, 2010. Colliers concluded that the entire ballpark site, vacant, assembled and available for development at its highest and best use would be valued at Thirty Eight Million Two Hundred Fifty Thousand Dollars ($38,250,000). Using the estimated value for the highest and best use of $65.75 per sq.ft, the highest and best use value for the Property is approximately $13,970,000. Colliers also concluded that the market value of the entire site, vacant assembled and restricted for development of a ballpark, would be valued at $19,100,000. The Property to be optioned to AIG, on a square foot basis, represents approximately 36.5% of the appraised value of the entire ballpark site. The Purchase Price of Six Million Nine Hundred Seventy Five Thousand and Two Hundred Twenty Seven Dollars ($6.975,227) represents approximately 36.5% of the appraised value of the entire ballpark site restricted for ballpark use. The Purchase Price does not include acquisition of the adjacent City streets. Staff is verifying the ownership of the streets. It is intended that the adjacent streets would be purchased by the developer for site development at a later time.”

While A’s owner Lew Wolff has said he believes MLB Commissioner Bud Selig is going to make a decision’s on the club’s fate “very soon,” a report on the proposed property sale suggests otherwise. According to the Chronicle, baseball owners are expected to talk about the A’s at their winter meetings in January rather than this month, because of the messy Los Angeles Dodgers ownership situation.

Another item expected to be under council consideration Tuesday is an amendment to the city’s revolving door policy for employees who were laid off due to continuing budget shortfalls.

Two items that have been deferred to later meetings include janitor services and commission appointments. Apparently, city-wide janitor costs run more than $6.3 million a year. A decision on approving a new agreement with GCA Services Inc. has been deferred to the Nov. 29 meeting. Appointments to the Civil Service Commission have also been deferred to Nov. 15. The candidates are Roy Truitt, Holden Green, Melinda George, Joan Smith and Randy Martinez.

Click Here to Read the City Council Agenda for November 8, 2011.

Correction: An earlier version of this article stated that the property the city is considering selling to Oakland A’s ownership is being sold for $6.975,227, or 36.5 percent of its current value. The land is actually being sold for 36.5% of the appraised value for the entire ballpark site. San Jose Inside regrets the error.

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

48 Comments

  1. This sale, if it goes through, is another example of a transfer of public money to private developers.  If the A’s really want a stadium in San Jose, at least make them pay market value for the land.  San Jose, who’s mayor wants to claim a ‘fiscal emergency’ shouldn’t be giving land away right now.

  2. 25 mil that is one third of the alleged deficit, please layoff more city workers so chuck can have his ballpark legacy……please sell for one fourth what you paid and make city employees take a 10% pay cut then ravage their retirement so chuck might get his field of dreams…..just because you build it doesnt mean they will come, look at the new city hall, look at the airport….. you built it and they did NOT come….wake up

    • This is the final step in establishing Chuck Reed as the most corrupt, deprived, hypocrite ever to set foot in San Jose Mayor-ship. This is truly an evil minded City governing body in over its head, and a Mayor drunk from media adulation. The fiscal emergency is real, and a direct product of a Council that has prostituted itself to housing development for two decades under the horse manure guise of “Smart Growth”. A fiscally responsible municipality with this kind of budget shortfall would declare a housing moratorium, due to the obvious inability to service the residents it has. But no, instead it has approved a plan for 120,000 new units, guaranteed to further bury the City’s finances! Last week it approved Final maps for 500+ units.

      Even though Pandori was not attractive to labor, I am now trying to imagine what it would be like if he had been elected, one who understands the need to have competent workers who are appreciated for their experience, as he does as a County Attorney. Instead, Charlie proposed layoffs to those very people instead, keeping “new blood” meaning of course amateur chumps. Or Janet Gray Hayes, who surely would not allow San Jose to be one of poisoned reasoning, damaging the lives of so many, in a similar manner Joe McCarthy did, scapegoating the wrong people. But there is no hope, the voters of San Jose are too stupid and indifferent to truth, but rely on the Reed cheerleader propaganda machines, the Merc and KLIV.

      Otherwise they would demand a complete Ballpark analysis of exactly what kind of jobs we are talking about relative to the jobs lost by commercial development, total outlay of City resources to give Wolff all the needed entitlements, and to identify just what real economic benefit there is outside the park, besides a handful of restaurants. AT&T, the Coliseum, or Candlestick, none having significant residual surrounding economic stimulus. Fans predominantly go to the game, and then go home.

      Don’t get me wrong, a City like Santa Clara who is fiscally more sound, and does not trash its workforce, deserves a venue like this, even with a net economic loss. S.J. is no where near that status.

      Occupy City Hall and Recall Reed. After all nobody represents the 1% better than he.

  3. If the city council gives away this parcel for 36% of its value, we will begin to see many recall efforts in the city of San Jose.

    • Are you sure? These are the same voters who voted 3 of the Council most responsible for the fiscal imbalance to County Supervisor. And the most corrupt of all to School Board prior. No, I am afraid, based on the media sources the electorate relies on, there is no hope, just a downward spiral. We need an articulate knight in shining armor who’s soul is not for sale. For now, the armor mill is closed due to lack of buyers.

    • Azephan:

      You will see nothing of the kind.  The electorate in San Jose is too lazy, as it is in most parts of the country.  Plus, there are enough sports fans who are mesmerized by the Bread-and-Circus Act that has become professional sports.  These fanatics will be more than happy to pay ungodly sums of money to watch the pampered take to the diamond.

      I am, however, Azephan often wrong, but never in doubt.  That being said, maybe you are far more sagacious than I.  For all I know, it will be you who launches the “many recall efforts.”  If so, good luck, because the odds of your being successful with a recall are not in your favor or anybody’s favor.

  4. Why not just give him the land for free.  This is why our city is going down the toilet.  They do not care about anything, most of all public safety.  Chuckie just wants a ball park named in his honor.

    First of all, MLB is not going to give rights over the SF Giants!  (without a huge pay back) Second, we are not going to vote to allow this to happen. Chuck claims this park will be privately funded.  Right, we just gave away millions that the city could have made selling the land to other developers.  Third, here we go again, the council has to allow for public comment but their vote is already done.  They will approve the sale.  This is how the council works.  Watch as they nod off then wake up and vote yes.  Done deal on their part.  Chuck would not even bring this to a vote if he did not have the votes.  This is all the mayor wants, screw city services, he wants a ball park.

    Same as they did when the unions proposed a 500 million dollar savings in pensions.  They tried to look interested then never even looked at the proposal.  Instead looking at a March 2011 Ballot Measure so he can say it is the will of the people.  But he will not tell you it will cost (us) millions in court costs because it is illegal.

  5. How many times have we heard that no public funds would be spent on the ball park? Isn’t this giving them millions of public money. And they claim we are in a fiscal crisis. I hope they do declare an emergency, then we can see their books and see how much they have really given Wolff as a gift of public funds. The City needs to be audited.

  6. This land should be sold to the A’s at the fair market value, not a $20 million discount. It is amazing this has received so little attention from the media, neighborhood associations, and city council members who oppose this.

  7. Its a done deal.  The public hearings mean absolutely nothing.  Its a political parade to appease the public that actually is paying attention.  The $500 million pension reform from the employees is not enough for the mayor/city manager….they are looking for close to $1 billion so they can payoff MLB ownership and the San Francisco Giants.  More layoffs will occur for this to happen….Fiscal Emergency = Baseball Stadium…..Citizens of San Jose WAKE UP!!!!

  8. Our mayor and council members suffer greatly from a diminished sense of self-concept, being associated with this piss-ant City of San Jose.  Having MLB downtown would go a long way in giving them a renewed sense of importance.

    BTW, where is Tony D., the “Rainman,” who has consistently maintained that not a dollar of public funding will go towards funding yet another costly and underutilized behemoth in downtown SJ?

  9. This equates to a Gift of Public Funds – but sadly, is already a Done-Deal.
    There is so much collusion, backroom peddling, and conflicts-of-interest here, it is unbelievable.  (oops, sorry…believable for the City of San Jose, where everything is done for the benefit of a chosen few.)

  10. I know lets do 1 more round of layoffs and cuts this July 1st, then we will be ready for the new stadium! What do you think?

  11. I truely hope everyone realizes that this council has already made up its mind( in closed door sessions) that it is going to move forward with this illegal sale.Get used to it, the council could truely care less what the citizens want.they are all out for themselves.this has to be the most Corrupt Mayor,City Manager,Council i n San Jose history

  12. Has anyone tried to contact the mayor and council.  I have twice recently and barely even got a response.  Some were staff with a form letter a couple were just BS. 

    This council does not care about the will of the people or employees just their own agenda.

    They just want another ballot measure to bring this city to it’s knees.  Seek the facts don’t just vote blindly.

    WAKE UP SAN JOSE

  13. This is the worst Mayor , City Manager , and City Council to ever run San Jose. Please , EVERYBODY PLEASE WAKE UP , AND START EDUCATING YOURSELVES!!! THIS ADMIN WANTS EVERYBODY TO STAY IN THE DARK. RISE UP SAN JOSE

  14. City hall has been flooded with emails and letters from residents against this miss use of power. Reed only has letters from those who stand to make profit from this.  A’s how the lowest attendance.  Oakland spends millions keeping their ball park operating. LA dodgers are going up for auction.  Once chuck gets approval he will lay off and cut more services he plans to shut every library, close every park and cut every city service to its bare minimum. Ask him he will tell you. The city will lay off another 500 workers as chuck tries to under fund the pensions to the point he can declare bankruptcy. Once that Is done San Jose will emerge flush with cash and throw money at project like the sports village.

    Think this is good yep its great for the people at the top everyone else it will suck unless you enjoy hawking beer and peanuts at game time.

  15. I think we should all march on city hall and demand a real government. Demand an investigation into the misd use of power. Demand the lobbyist leave and pass a law making it illegal for the council to speak to a lobbyist outside of a public meeting.

    Reeds attack on the middle class workers is what OWS is about.  He will transfer millions of dollars into the MLB corporations hands. Tax dollars for the rich.

    • Get it scheduled and I will be there, enough of this crap it is not employee pensions, it is one sided bad decisions then lets punish others for councils upon councils bad money management.

      But this mayor is the absolute worst.

  16. Mayor and City Council Members           Agenda June 21, 2011
                          Item#  3.11)b)

    RE: Pension Reform

    Dear Mayor Reed and Councilmember’s:

    I am representing only myself in this matter.  As a retired San Jose City Attorney familiar with this issue, I am bewildered as to what the city would undertake an action, which is so clearly violates the contract clause of the California and the Federal Constitutions.

    A long line of California Supreme Court cases establishes that retirees’ pension rights are an integral portion of contemplated compensation, which cannot be changed once they have vested (1).  Similarly, vested rights are protected under the contract clause Art. 1 S 10 of the United States Constitution.

    The California Supreme Court has held that with respect to active employees, some limited modification of vested pension rights has been allowed but the resulting disadvantage to employees, must be accompanied by comparable new advantages. 2 As a to retired employees, the scope of continuing governmental power appears to be ever more restricted.  The retiree is entitled to the fulfillment of the contract, which already has been preformed without detrimental modification.  The impairment provision does not prevent restricting retirees to the gain reasonably to be expected from the contract (3).

    It appears that you are being told that the Emergency Declaration, which you are contemplating, gives you the power to supersede the long established vested rights principles.  In fact, a post Proposition 13 case (4) that deals with a charter amendment, which places a 3% cap on police and fire pension benefit cost of living adjustments is so directly on the point that I have attached it so you can read it yourselves.

    Have your lawyers given you any authority that says you can enact a change in retiree COLA’s?  Have they provided some case authority that emergency modifications can continue beyond the period of the actual inability to appropriate the funds to pay the retirees as requested?  If so, please let me know what legal authority is being relied on.

    It seems to me that placing restraints on the COLA’s in the charter only diminishes any argument that the change is justified by a state of emergency.  It underlines the fact that the goal is to create permanent restructuring which is not a justification for diminishing vested rights.  For both policy and legal reasons, I urge you not to put the proposed reduction of retirees’ COLA into the charter.

    I hope that you have fully considered the potential costs to the City of the litigation that would result if there is a successful ballot measure reducing the retiree COLA benefits.  Since the City Attorney Office has a conflict, you will have outside attorneys and need to pay their fees regardless of the outcome.  You could face some unknown number of different lawsuits from the various bargaining units and individual retirees as well as the Retirement Association If the enforcement of the ballot measure were not immediately enjoined and you lose the litigation (which seems to me to be inevitable to regard o current retirees), there will be interest owed to all of the individual retirees.  Also, since the retirees’ claimed will be constitutional bases, you may have to pay the attorney fees of the retiree plaintiffs.  Inviting this litigation seems vet short sighted to me.

    Thank you for the serious attention to this matter.  I know the process of structuring needed to reform is difficult but I urge you to consider the tenuousness of your legal position as well as the detriment to loyal long term staff who retired in reliance on the benefits they have earned.

    (1)  Kern v. City of Long Beach (1947) 29 /cal 2d 848, 853
    (2)  Allen v. Long Beach (1955) 45 Cal 2d 128. 131
    (3)  Abbott v. City of Los Angeles (1958) 50 Cal 2d. 438
    (4)  United Firefighters of Los Angeles. (1958) 50 Cal 2d 438

    Written by Retied City Attorney Joan R. Gallo

    • Joan – How is this important news relevant to San Jose’s giveaway to the multi billionaire owners of the Oakland A’s?

      • because our council has its priorities all screwed up.  They are stripping employees of all their benefits and yet they want to give away millions for a ball park that will not come.

  17. Anyone who attends, please ask the Council the basic questions like 1) what economist have they retained to determine the future revenue from the ballpark? 2) what are those revenues projected to be and when will they kick in; 3) how many years will it take to recoup the money the city is now losing by selling so far under fmv, including interest on those dollars that could be working for our city now? 4)how many jobs will be created by this plan; and 5) how do they explain why San Jose will be different from all of the other cities who have not seen revenue from ball parks. See, http://www.cato.org/pub_display.php?pub_id=2479

    “Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.”

    Have they even analyzed this report?

    • I don’t have the multiple sources at the ready to back this number but I do recall that it appears in previous articles on this blog regarding the Land/A’s….

      The City says that (assuming the A’s come to SJ and play in a new stadium) estimated revenue to the City coffers are $3million/year.

      A paltry sum (imo) which probably wouldn’t come close to covering the annual expenses for City services needed to service the site.

      • You are absolutely correct in saying “a paltry amount”. monies made by the ballpark belong to the League NOT The City! This is a deal with the devil and this City is going straight to hell!

  18. http://www.cato.org/pub_display.php?pub_id=5336

    How does the Council justify giving away millions of dollars during this “fiscal emergency”?

    Even if there is long term revenue, that does not comport with the problem that they have valuable land that could be sold to assist in this “fiscal emergency”

    For those who want the Mayor’s ballot initiative for pension reform to be successful, you must urge the Council to vote no. Otherwise his entire pension reform agenda is discredited.

  19. the updated version of this with the correction stating that the sale of the land for $6,975,227 or 36.5% of the appraised value for the entire ballpark site is meaningless and only serves to muddy the water. UNLESS the land is 36.5% of the entire ballpark site.

    What is the current appraised value of ONLY the parcel(s) of land to be sold and what percentage of that value is $6,975,227??? 

    This is pretty basic stuff.

  20. while the city is going broke laying off everyone..

    1. City excutives are able to get 250,000 dollar loans at a rate of 2.8%

    2. There is an exutive bonus that will net for some more than 30 on top of their base pay. the Mayors secretary qualifies.

    3. The City restarted its time off buy back for excutives. did you know certain excutives are able to receive a bonus of time off which they can sell to the city.

    4. Land is planned to be sold at less than 1/4 its value to a man who has more money then he can spend and for a team and a sport that cannot pay its own way.

    5. millions are being spent on planning and preperations for the A’s. layers, full time staff, plans being drawn, mettings, ect .. all of these have a dollar amount paid with tax dollars.

    6. keep in mind the mayor is giving away land that i would bet he does not own meaning he will give away the land and still owe a note on it!

    Every wonder what the mayor credit card bill looks like or how about the city councils. Oh wait they do not get a stateement they just pay it. there is no way to know what expenses were charged really !

  21. Don’t say I told you so.  these votes are predetermined way ahead of time because this mayor and council does not care about employees and citizens just their own goals and ambitions.

    Doesn’t matter if unions want to give back 500 million they will put it on a ballot and hope you drink the cool-aid.

    God bless us all because this city is being flushed down the toilet.  Feel sorry for those but appreciate the effort to show up and speak.  Was chuck keeping his eyes open before announcing the council vote?

    • If what you say is true and the outcome of these “public votes” by the council are predetermined from the results of private “serial meetings” where say the city manager (who sets Council’s agenda)calls the mayor or councilperson, who calls another who calls another… to “vote count” before putting an item on the agenda——then the entire process is illegal and the outcome of the vote is null and void under the Brown Act. Is it not?

      Where is the Mercury News and self-appointed local gov’t watchdog and managing editor Bert Robinson when you need him?

  22. This will be a 100% private investment to build the park.  Gee did the city not just give the land away?

    “Council members and the San Jose Diridon Development Authority”, will discuss an option agreement with the A’s.  Don’t you get it, one in the same all in the same room, was there ever in doubt or discussion on this?

    • please post more info on where you plan to gather signatures (dates, times, public places) I will send all my friends, neighbors, church and community members and generally everyone we know,including coworkers, school friends, etc. there to sign the petition.

  23. Everyone talks about a recall.  i will start some research but if some one knows the process let me know!

    We have suffered enough.  We need to save the few that still work and those that have served before us.  Crazy spending needs to end.

    • Why waste the time and money necessary to recall Reed? The most efficient solution to the problem that is “Chuck” is to (1)GET OUT THE VOTE to oppose any ballot measures that Reed proposes or supports, (2) Elect council members who oppose Reed,  (3) make your council member and the mayor’s office aware through email/phonecalls/fax/attendance & comment at councilmeetings of your opposition to everything the Mayor and his followers on the Council propose/support.

    • open your eyes and your mind and you might see that everything is not good in San Jose. try to look at the big picture and more than anything please try and educate yourself on the issues facing San Jose start by reading ANYTHING other than the Merc.(they are in bed with Reed, and Never print anything with Bias)
      1) look into what low income housing is doing to this city
      2) look into shifting of funds/debt from RDA to General fund
      3)look into council members who are also RDA board members
      4) look into Council members Disability Fraud
      5) look into the truth of san Jose’s financial status. with over 2.5 billion in reserve, how can you claim fiscal emergency
      6)look into staffing levels for PD andFD , & you will find lowest staffing levels in the nation
      7)pension reform is needed but ,not the reason for San Jose’s problems
      8) look into stadium deal.why are we giving millions of dollars in real estate to a billionaire?
      9) look into lawsuits that this city loses every year and total cost
      10) look into(proven) illegal ballot measure regarding pension reform. that has been tested in court most recently in Orange County.

    • He’s lied about everything , since being in Office! Remember measure V & W , he swore if passed it would allow him to hire even more public safety . Instead Police Officers and Firefighter both laid off and even more retiring. all of this equals the lowest staffed public safety in the country! no public funds for Ballpark , just wait and see. He also said “No give aways”. the list goes on and on

  24. Who would like to bet that upon term limiting out as SJ Mayor, Chuck Reed takes a job overseeing the construction of the stadium and upon its completion he joins the A’s as a part owner or at a minimum joins Lew’s executive staff?