The City and Council are fast-tracking authorization of a second amendment to the Coliseum sale to Oakland Acquisition Company [OAC], the collective corporation of financing behemoth Loop Capital and local developer AASEG at a special meeting Monday morning. The new amendment would bring the deal in line with the County’s timeline for the sale of its 50% interest, as well as OAC and the County's agreement with third party Oak View Group to purchase the arena.
The new amendment was reviewed by Council in closed session on July 7 and was forwarded directly to Rules for scheduling on July 9—at the meeting, City staff argued the need for an expedited scheduling in order to close the deal with OAC by the end of the year, given Council break and the need to hear the amendment at two council meetings because its an ordinance. At the July 9 Rules committee meeting, Rules Chair Kevin Jenkins called for the 7/13 Special Meeting to hear the amendment to the sale on first reading.
The legislative report produced by the Economic and Workforce Development Dept and the Finance Dept posits the amendment as a win for Oakland, with "improved financial terms" and more risk mitigation.
In the new city-side deal, OAC would buy the entire site outright [and then on its own sell its city-portion of the Arena to Oak View]. The Arena cost would be $100 MM split between the City and County—OAC would purchase the city’s share of the Arena outright for $50 MM, then pay the remaining $55 MM for the Coliseum site in installments over a 7 year period. The new parameters for the remaining Coliseum portion of the site is similar to the structure that the A’s-run group, Coliseum Way Partners [CWP] had with the County when it purchased the Coliseum in a plan that involved incremental payments over several years. OAC plans to assume a similar deal with ALCO as well. The City calls the staggered payments “financing” in its title of the deal, but there is no loan from the City involved, just the three payments over a period of 7 years at 5% interest. OAC would pay an additional $15 MM once it has secured building permits. The total sale price OAC is expected to pay to the City would eventually be $125 MM with additional interest.
New Payment Guarantees
The City would also have several guarantees of payment for the remaining $55 MM [the $60 MM total minus the non-refundable $5 MM OAC has already paid to the City] on the city’s portion of the site. OAC would be obligated to obtain a guarantor for the outstanding payment and if it failed to do so, the sale price would increase by $100K for each month the guarantee requirement is outstanding. OAC would also be required to maintain a reserve covering the outstanding payment amount throughout the sale term. During the sale term, if any of the terms aren’t honored, the City would have the right to foreclose on the property and reclaim it.
If Deal Proceeds as Planned, City Would be Free of Costly Coliseum Site Payments
The City also anticipates savings and revenue from the sale of the Arena. Currently, the City pays about $6 MM per year to the Coliseum Joint Powers Authority, its share of a $12 MM total to run the site. Though the Arena is lucrative, it costs the city more to run than it earns in payments. Once the sale is transacted, Oakland would transfer the remaining payment to OAC to run the site for the remainder of the year until the sale closes. Thereafter OAC would be required to cover the upkeep of the site.
The City says it would then be free of the $6 MM yearly with a sale closing anticipated by the end of 2026. As part of the deal, the City would receive 6% of Arena ticket sales going forward, an estimated $3 MM per year.
The arena, a much smaller 8 acre within the total is mostly consumed by the Arena building itself, and would be carved out of the affordable housing requirements in the OAC deed. The site has no room for residential development aside from the Arena. The Arena would also be carved out of environmental liability. OAC was trying to secure a similar agreement from the County on the Arena environmental liability, but it's not clear if it was ultimately successful.
After the first amendment in 2024, the City envisioned the sale closing the sale after bond defeasement on the site by July 2026, but that term was never a stated requirement.
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