Fresno City Hall Series
Wednesday February 4, 1998 Oakland-Alameda Coliseum Authority
Unworkable $200 Million Stadium Deal
Howard Hobbs, Daily Republican Contributing Editor
Recent stadium related reports:
PALO ALTO DESK - The Oakland-Alameda County Coliseum Authority has been soliciting proposals from Wall Street investment banks with the aim of finding a feasible means of restructure its bonding obligations that were used to finance improvements to the municipal sports stadium.
At issue is how to dig out the municipality from a pile of debt associated with bringing the Raiders back to the East Bay from Los Angeles three years ago.
Reorganizing the municipal debt won't be painless. The Coliseum Authority gave away too much to the Raiders and hurt the taxpayers of Oakland and Alameda County, analysts and bankers agree. In all, the city and county spent about $200 million to entice Raiders owner Al Davis to return here. The bulk of that money was raised by a 1995 bond offering to the public.
The taxpayers were told that the financing technique would easily pay-off the bonds. However, the bond repayment plan has already failed, and now the taxpayers are facing a municipal deficit for 1998 of over $15 million.
Making matters worse, in order to pay its stadium bond obligations, the municipality will be using general-services funds.
Under the current debt-service schedule, the municipality could owe as much as $147 million on long-term notes at the end of the Raiders' 16-year contract, officials told reporters.
Under the original agreement, the municipality handed the Raiders nearly $63 million in cash and lent them $22 million for relocation expenses and new practice facilities.
In the meanwhile, an additional $130 million was spent on renovation of the stadium to meet Raider demands.
County taxpayers now owe an additional amount equivalent to the gap between the bond debt and insufficient stadium revenue resulting from unsold personal seat licenses that expire after 10 years, making them depreciating assets. Since a sufficient number of seats weren't purchased in the first year, they aren't likely to sell, at all.
Making matters worse, Al Davis is now talking up moving the Raiders out of Oakland again and back to Los Angeles.
Worse still, the municipality has a pending lawsuit against the Raiders in Sacramento alleging the Raiders prevented the collection of about $9 million for stadium-naming rights, which would have helped offset the municipal operating deficit.
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