Howard Terminal Update: Why Oakland A's Don't Need To Sign A Non-Relocation Agreement

Howard Terminal Update: Why Oakland A's Don't Need To Sign A Non-Relocation Agreement
Howard Terminal Update: Why The Oakland A's Don't Need To Sign A Non-Relocation Agreement In this Howard Terminal Update, I'll explain why the Oakland A's don't need a non-relocation agreement with the City of Oakland. The constant song has been that such an agreement that the Oakland Athletics would commit to stay in Oakland for the life of the Howard Terminal Project was needed in order for the mechanics of Howard Terminal Ballpark Financing to work. That idea was based for the most part not on true financing process but an inaccurate comparison of one deal, the Raiders Las Vegas Agreement, with the Howard Terminal Ballpark Financing Process. Why inaccurate? Because, when one starts to think about it, what works for the Raiders Las Vegas Agreement doesn't apply to Howard Terminal Ballpark Financing, and for a host of reasons. First, the reason the Raiders Las Vegas Agreement needed a non-relocation contract was tied to the hotel-tax-based bond issue: if the Raiders moved in 15 years, gone with the team would be its traveling fan base that stays at Las Vegas hotels, thus fueling the hotel tax revenue that pays the Stadium Hotel Tax. By contrast, the Howard Terminal Ballpark Financing Process does not call for a hotel stadium tax. Instead, the Howard Terminal Ballpark Financing Process includes the use of Tax Increment Financing. In Tax Increment Financing, the property tax on the assessed value of the structure is collected by a (in the California EIFD law language) Public Financing Authority, which then uses that to pay off the yearly debt service on a bond issue the same Public Financing Authority issues. Thus, the only consideration that the Public Financing Authority should have is will the annual property tax be paid by the ballpark owner? There should be no consideration whether that's the Oakland A's or another group – as long as the property tax payments can be assured for the 45-year life of the bond issue, the A's can sell the ballpark and go away, if that's the team's wish. Indeed, a non-relocation agreement really helps just the Oakland A's and that's with stadium sponsorship financing. The A's should want to project an image of location stability, and so should welcome such an arrangement. But it's not a deal breaker nor should it be. Indeed, the Howard Terminal Public Financing Authority that's ran by the City of Oakland should be concerned that the full buildout of $12 billion in construction be done, or at least $7 billion, and because that would help make the matter of the A's relocation and property tax revenue from the ballpark owner even less of a consideration because the ballpark is not the only privately owned structure – the other buildings are, too. In closing, the matter of the Howard Terminal Ballpark Financing Process is not rocket science and the basics should be communicated to the public, including what tax increment revenue is. But a combination of the City of Oakland admitantly not knowing what it was doing in considering the use of tax increment revenue and media and political operatives taking advantage of the misinformation that came from the City of Oakland's three-year-long delay in working on and explaining tax increment financing, has made it seem like the Howard Terminal Ballpark Financing Process is only for the rocket scientist. Stay tuned.
via YouTube https://www.youtube.com/watch?v=UNSqJ8UfH6E