Coliseum Sale Would Guarantee 25% Affordable Housing, Community Benefits–but Proceeds Unavailable Until 24-25 According to Legislative Document
Legislation to be deliberated this Wednesday that would greenlight the final negotiation to sell the City’s 50% Coliseum interest reveals a worrisome fact—sale proceeds the City and Council were counting on to close the FY 23-24 General Purpose Fund [GPF] budget deficit don’t appear to be available this fiscal year. That will be an awkward bit of news to wrestle with at the Special City Council meeting on June 12, where the Coliseum sale legislation is considered, and at a future June 18 meeting where the Fy 23-24 budget patching actions will be discussed again.
The City’s plans to close this fiscal year’s deficit were initially reviewed late last month by Council, shortly after the news of the Coliseum sale became public. The FY 23-24 deficit closure report stated that the City Administrator would rely on a portion of the proceeds from the sale during this fiscal year to help close a $62 MM gap. About $41.9 MM of the sale proceeds combined with savings from several budget-tightening measures [around $20 MM] would have balanced this year's budget with sale funds to spare for next fiscal year. But the Coliseum sale enabling legislation clearly states that the first $60 MM of the funds won’t be available until the FY 24-25 fiscal year. That leaves around a $41.9 MM hole in this fiscal year's budget which ends June 30.
The Coliseum sale legislative report, written by the Office of CM Rebecca Kaplan in conjunction with several City departments, was released too late in the week for OO to follow up with city staff or spokespersons. But the remaining GPF deficit gap will likely come up in the discussion at a Special Council meeting on Wednesday when the sale item will be taken up. With three weeks left of the budget year, it’s unclear what the City or Council can do to close the gap before June 30.
And it still isn’t clear whether the entire $105 MM would be available in FY 24-25. The report accompanying the sale approval legislation also notes that the City has bond debt obligations that won’t end completely until mid-2026. A clause in the legislation*, also prepared and sponsored by Kaplan’s office, notes that close of escrow won’t occur until the bond debt is fully settled. The report notes that the final “defeasement” of the bonds on the property occurs on June 30, 2026.
Pledges on 25% Affordable Housing and Community Benefits Would be Guaranteed by Deed Restriction
Regardless of the budgeting issues, the sale agreement makes good on a number of pledges from Mayor Sheng Thao's administration to secure public goods from any proposed development by the African American Sports and Entertainment Group [AASEG] at the Coliseum Complex. The legislation directs the City Administrator to secure a deed restriction on the property requiring at least 25% of future Coliseum Complex residential units be affordable to those making 60% of area median income [AMI]. The restriction would guarantee 10% be affordable to households earning up to 30% of AMI. The deed restriction would also require AASEG to “negotiate in good faith a bundle of community benefits within 5 years after the closing.” The benefits would touch on labor agreements, workforce training and local employment, public open space, sustainable development, transit and anti-displacement and housing preservation, as well as city profit-sharing.
Non-Public Character of Property Necessitates Sale not Lease, per Report
The legislative report also addresses the basis of some of the criticisms of the deal—the decision by the Thao administration to sell, rather than lease, public land. Entering into multi-decade leases has become city policy and is considered best practice in many jurisdictions, after decades, especially in Oakland, of sales of a City's public properties that have often been opposed by advocacy groups. The report notes that the City owns only half the Coliseum Complex, and that the property, due to the previous County sale to the A’s, “is already not quite public land as commonly understood.” The report notes that plans to develop the Coliseum go back to the 2015 Environmental Impact Report and prospectus, which outlined scenarios for the development of the entire property and that AASEG has been in negotiations on the land for at least three years.
The meeting is occurring during a compacted scheduling of Council deliberations, that has special meetings of the full council sandwiched in between regular committee meetings, and expanded Rules committee meetings with substantive ballot measure legislation discussions. Other notable items at Wednesday’s Special Meeting:
First Council Mid-Cycle Budget Amendments Submitted
The meeting will also feature discussions of the first Council budget amendment proposals for the mid-cycle budget adjustment. In recent years, the Council President has led a Council budget team—confined to 4 CMs to avoid Brown Act violations—on the creation of a comprehensive set of amendments to the Mayor’s proposed budget. Usually, the President’s amendments are either published before other Council members' proposals or simultaneously with them. But Bas notes her group consisting of herself and CMs Kevin Jenkins, Carroll Fife, and Dan Kalb won’t have their amendments ready until the June 18 Council meeting. Bas has included a memo explaining the delay and highlighting the values her group is confronting the budget with.
Bas’ memo notes the Council President’s amendments will focus on
—Improved delivery of critical, core city services
—Improved community safety
—Improved revenue collection/generation
In the meantime, CMs Janani Ramachandran, Treva Reid and Noel Gallo have submitted their own collective amendment, centered around restoring community ambassador roles to East Oakland business corridors. The modifications rely on reshuffling around $900K in GPF dollars. It’s not clear how the revelation that the current fiscal year closure methods are no longer viable will affect the proposals, which were prepared before the Coliseum sale legislation was published.
CM Kaplan has also proposed using Measure BB funds, the City’s share of a county transportation tax revenue fund, for street safety measures that include ongoing abandoned vehicle towing and new parking enforcement. Kaplan’s amendments also include funding for infrastructure, including a program to place bollards and/or k-rails in front of businesses to prevent vehicular ramming smash and grabs. Kaplan previously tapped FY 23-24 unused Measure BB funds to increase and focus abandoned vehicle removal services earlier this year.
Kalb Amendments to PEC Ballot Measure Proposal
Also on the agenda is a Public Ethics Commission ballot measure that would add some powers and staffing to the PEC. The legislative proposal was originally submitted to the City Council by the PEC’s director, Nicolas Heidorn, on behalf of the department. Dan Kalb has submitted a version under his own stewardship. In his memo to Council, Kalb notes that he was the original author of the 2014 PEC strengthening legislation that created the current version of the body. In introducing his amendments to the PEC proposal Kalb noted that he’d discussed the changes with the PEC and received positive responses.
Kalb’s markups appear as amendments to the original charter language, however, and not the PEC ballot measure proposal–it will be difficult for Council and public to know what Kalb has changed in the original proposal. Kalb did go through his own redline alterations and explain differences in his version over the PEC one, however, at Rules. Kalb also noted that he had discussed all the changes with the PEC Director and City Attorney staff.
Kalb’s significant changes to the PEC version:
—Limits the charter-mandated minimum staffing to one additional enforcement staffer and removes some of the strict language in the original PEC version that would limit how the CAO or Council could freeze positions under extreme fiscal necessity. But Kalb included language that would match PEC freezes proportionately to other department freezes—ensuring that the PEC does not become a sole focus of staffing limits.
— Removes the PEC's proposal for right to independent counsel, with caveat that if City Attorney has a conflict of interest, the PEC would have the right to seek conflict counsel
—Includes allocation of responsibility for setting the Oakland Mayor’s salary. Kalb apparently envisions the Mayoral salary and PEC ballot measures being joined, but it's not clear if the other ballot measure legislation is being withdrawn or simply consolidated into the PEC ballot measure.
—Requirement that if the PEC forwards legislation in the subject focus of the PEC to Council, Council or a Council Committee must at least consider it within 180 days.
Cultural Facilities Infrastructure Bond Measure
The cultural infrastructure bond measure is also coming to Council for placement on the ballot–with the addition of the Malonga Casquelord Center, an amendment brought by Carroll Fife. The ballot measure was originally proposed without Malonga.
The dollar amounts that would accrue for the infrastructure needs of each organization have been reduced slightly to add Malonga, which now would receive as much as the Peralta Hacienda, $7.5 MM. CM Jenkins originally proposed adding an East Oakland facility, but that doesn't appear to have made it into the final language.
*the legislation directs the City Administrator to negotiate the purchase and sale agreement, within the minimum terms dictated in the legislation, but does not, itself, constitute a sale of the CIty’s 50% interest in the Coliseum property
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