Oakland Coliseum sells new financing plan

Image: Oakland Coliseum, Quintin Soloviev, CC BY 4.0

As uncertainty continues to surround Oakland’s budget and how it will impact it Oakland Coliseum (U.S.) sale warns the city’s finance department that its financial condition is “significantly at risk.”

‘KQED’ stated that Oakland is in a “difficult financial position” as it seeks to implement an emergency budget as part of a new financing plan for the city, according to its most recent financial report to the city manager Oakland Coliseum The sale adds to concerns about the city’s operating deficit of nearly $80 million at the end of the 2023-2024 fiscal year.

The 63,000 capacity Oakland-Alameda County Coliseum is a multi-purpose stadium in Oakland, California, USA. It is part of the Oakland-Alameda County Coliseum Complex with an adjacent capacity of 19,200 people Oakland Arena near Interstate 880.

‘KQED’ further stated that earlier this month the council members and critics of the Oakland Mayor Sheng Thao raised alarm when it emerged that a payment was expected in the city’s highly anticipated deal to sell its stake Colosseum didn’t arrive on time. As it turns out, the terms of the land deal were changed and the deadline was extended to November for the developers, African American Sports & Entertainment Group (AASEG), to make a second payment of $10 million, according to details the city has been paid into an escrow account.

The company based in Oakland (USA). African American Sports and Entertainment Group (AASEG) is a Black-led development group dedicated to improving economic justice for the Black community through sports and entertainment.

Thao, that AASEG and the council members, including the Oakland City Council President Nikki Fortunato Bashave called the revised deal a success because it increases overall revenue, reduces the city’s outstanding bond debt on the Coliseum by $12.8 million and closes the deal sooner. However, council members Treva Reid, Janani Ramachandran and Noel Gallo have called for more transparency about how they believe the revised payment plan will impact the city’s budget.

About $63 million from the sale proceeds would be used to close gaps in a massive deficit in Oakland’s 2024-2025 budget. Since the funds were still outstanding in July when the council passed the budget, a contingency was also foreseen: if these payments were not received on time, it would result in a much tighter budget, leading to cuts that amounted to a kick in funding -Emergency brake would be equivalent.

Ramachandran noted, “Now there is a lot of uncertainty [contingency] Budget has been triggered. My focus is on understanding what will be cut first because there is absolutely no doubt and no lack of clarity that things need to be cut.”

Ramachandran said Oakland’s Finance and Management Committee was scheduled to meet on Oct. 15 to report on the status of the emergency budget activation. However, the meeting was canceled at the last minute following the government’s request for more time.

The original Colosseum The deal — tied to the budget the City Council passed in July — called for an initial payment of $5 million at signing, followed by $10 million in September, $15 million in November , $33 million in January and the most recent $42 million through June 20^Th2026.

The amended purchase agreement between the AASEG and the city is changing the payment schedule, postponing the $10 million expected in September to November and the remaining $95 million to the end of May next year.

While the $10 million payment is already in escrow and will be available in November, according to Casey Pratt, mayoral spokesman Ramachandran and Reid said in a recent statement that these changes mean the emergency budget has been triggered and “Oakland must cut $48 million from its budget.”

The mayor’s office had no comment for this story, but Thao posted on social media that city officials had informed Ramachandran and Reid of the amended deal.

Mayor Thao wrote in a post

Thao’s chief of staff, Leigh Hanson, said she does not believe the revised payment plan – particularly the elimination of a $15 million installment that was expected in November under the original contract – materially affects Oakland’s management decisions regarding fire stations or police academies will change.

Hanson explained, “We don’t have a cash flow problem.”

However, the city’s budget FAQ page states that “cost saving measures were identified in the emergency budget and are currently being implemented in accordance with the budget resolution.”

The emergency budget includes brownouts, or rotating closures, of five fire companies, reducing the number of sworn police officers from 709 to about 600 through attrition and freezing or eliminating violence prevention positions.

It would also trigger a citywide hiring, contracting and travel freeze and could result in a multi-year delay or cancellation of $200 million in planned bond-financed infrastructure, affordable housing and other projects scheduled for the coming fiscal year.

There was no clarity from either Thao or the city manager’s office about what emergency budget policies will be implemented. The financial report states that “steps will be taken to minimize the impact of implementation on public safety.”

Ramachandran concluded by noting that regardless of whether the amended Coliseum purchase agreement is implemented on time or not, the city will still not receive more than $40 million allocated in the budget by January – “I find that great.” If this deal goes through on time, we’ll get a purchase price of $5 million more – with future development plans potentially costing up to $15 million more. But all the future money and promises of future money are irrelevant to this budget. Nothing Council passed replaced this emergency budget.”

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