Last week, the Mercury News reported that San Jose city officials and a team of developers had come to an agreement on a $132 million deal that “sets the stage for a major league soccer stadium near the airport as early as 2010.” The Mercury News article failed to address a number of important questions surrounding the project.
QUESTION: Is it true that the City of San Jose will ultimately own the stadium at the end of the process?
ANSWER: Yes, according to a previous report accepted by the council.
QUESTION: What financial guarantees will the city receive concerning the long-term viability of the Major League Soccer (MLS)?
ANSWER: None that I know of.
QUESTION: The “San Jose” Earthquakes are playing all of their games this season in Oakland and in Santa Clara. And, their business office address is listed as being on the El Camino in Santa Clara. Will the City of San Jose receive ANY revenues (tax or otherwise) from the Earthquakes this year (or next)?
ANSWER: Unknown
I invite San Jose Inside readers to share any information that they might have that would shed light on these questions/concerns.
Pete—
A lot of questions about the soccer stadium proposal are answered on this blog post from today on Centerline Soccer (and in the city staff report linked from there):
http://www.centerlinesoccer.com/http:/www.centerlinesoccer.com/monday-ive-got-game-day-on-my-mind/
In a nutshell, the soccer stadium proposal is great deal for the City of San Jose, though you wouldn’t know it from reading the Mercury News.
Don,
I read through Mr. Krutko’s summary and found the whole business of transfering industrial job capacity to Edenvale a bit suspect. If Edenvale can handle an increase in job capacity, why do we include this “benefit” as part of the calculation for the soccer deal? Let’s increase the job density in Edenvale on its own without requiring the increase to be part of this convoluted soccer deal.
I swear to high heaven if there’s one public cent spent on this soccer stadium I will start recall proceedings against Mayor Reed and every single councilmember.
NO PUBLIC MONEY FOR STADIUMS!
That land, while in San Jose, is just across the tracks from Santa Clara.
If it encouraged people to take the train to the stadium, this would help a lot with traffic—assuming there is a way for pedestrians to cross the tracks without being threatened with prosecution (as now happens to commuting Costco employees).
But which side will benefit the most from bringing all those people into the area?—San Jose or Santa Clara?
As it stands, there’s not much around there on either side—except for the Royal Oak, whose owners must have their fingers crossed right now.
Will San Jose fight against a pedestrian bridge to discourage people taking the train to games in order to protect sales tax from the many new businesses that are expected to spring into life along Coleman ?
More excitement to come…
RIPavilion,
NO PUBLIC MONEY WILL BE SPENT ON THE PROPOSED SOCCER STADIUM! So no need for recall proceedings. I just hope the Edenvale rezoning and exclusive development rights (FMC) for Mr. Wolff/Quakes stadium will lead to something even greater for San Jose. Mr. Wolff once said something to the likes that if San Jose could come up with a viable plan for soccer, it would show their interest/commitment to professional sports…stay tuned!
GO SHARKS?!
#4
I swear to high heaven if there’s one public cent spent on this soccer stadium I will start recall proceedings against Mayor Reed and every single councilmember.
But if public money is spent I am sure we will hear how, by the use of Voo Doo economics, “tens of millions of dollars will be generated by [file in the blank]”
I can provide some answers to your last two questions.
While it would be impossible for any one team owner to guarantee the continued existence of any league, be it the NFL, NBA, NHL, MLB, or MLS, it was reported last November that Lew Wolff has agreed to pay for the maintenance and operations of the proposed stadium for the next 55 years, regardless of whether MLS exists or not.
To answer your final question, the Mercury News reported just last week that the tentative agreement for the purchase of the Airport West site includes a provision whereby Wolff & co. “agreed to pay interest that San Jose will accrue on the bonds it sold to buy the property – as much as $12 million over the next two years.” As I understand it, those payments have been made directly from the General Fund since the property was purchased, so you can count those revenues as a direct economic benefit to San Jose.
Here’s a link to the Merc story:
http://www.mercurynews.com/localnewsheadlines/ci_8929164
in my opinion, when it all comes down to it, all those with concerns about this deal AFTER reading all the facts, are just plain xenophobic. if this was any other sport…crickets
progress, don’t regress, Cons
Pete, RIP, Steve, where were your questions and outrage when the Berryessa Flea market was rezoned from industrial/commercial to residential over the last couple of year? What benefit did the city gain from that rezoning?
Yet, you hear the words “sport stadium” and you are drawn like moths to a flame. So, I guess it is ok for developers to pocket all the money in one case, yet one that wants to provide an asset that will be enjoyed by many in our ethnically diverse community gets put under the microscope. I find this both illogical and hypocritical.
We have the 10th largest city in the country, some of the best weather in the world, but, have not built an outdoor sports venue since Spartan Stadium was constructed in 1933.
We now have a chance for a modern, outdoor facilty that will virtually cost the taxpayers of this city ZERO dollars, and is part of a project that will be pumping millions of dollars into the city’s general. fund. Sounds like a great deal to me.
One last comment. Those bemoaning the potential loss of industrial land in this deal should reaize that the land in question was zoned agricultural up until a few years back. It is still an orchard full of trees. The land has never provided the city any income from industrial or commercial use. Unlike the Berryessa Flea Market.
To answer Mr. Campbell’s questions
Yes the city will own the stadium according to the current plan. But that ownership is coming with a contract for the Earthquakes ownership group to provide for the maintenance and upkeep of the stadium for the next 55 years as mentioned above. Regardless if MLS stays in business or not. Which of course plays into your question about MLS viability. While they’ll likely receive no guarantee about MLS existing long term, the stadium will be provided for regardless of the league’s status. Though there is no reason at this point to assume MLS is going anywhere but up based on their revenue and attendance numbers.
With regard to the team providing tax money to the city it may interest you to know that their original offices were not in Santa Clara, but in downtown San Jose at the Fairmont. The same Fairmont hotel owned by Lewis Wolff. So it’s fair to say that the ownership group is providing a large amount of tax revenue to the city. Which is to say nothing of the relief of 7 million in tax service the city currently pays on the FMC site. That 7 million annual tax burden is gone after the city sells the blighted and unused FMC site for 132 million dollars (a profit for the city of 51 million dollars over the purchase price in 2005). That’s not a bad return on investment for only 3 years of land ownership.
And to answer your final question you posted in the Mercury News today regarding social responsibility when Spartan Stadium sits unused. Pete, Spartan Stadium was built in 1933 and is ill suited to host any major event. I don’t know if you’ve been down there lately, but the place is falling apart. Bathrooms backup, there are not enough concession stands, walkways are cracked and decaying, and the eastern bleachers are still made of splintering wood. Add to that SJSU’s plan to replace their already too narrow field with fake grass and the stadium becomes even less suitable to host professional events especially soccer. It’s not the kind of venue we should be using to showcase our great city.
Hope that puts to rest some of your concerns.
I was disappointed the Mercury News editorial board decided to run your letter this morning, Pete. Not that you do not have the right to express your opinion. But that they chose not to identify you as a “talking head” here on San Jose Inside, and that they chose not to run many of the letters supporting the stadium. 95% of people in their own poll support the stadium – and the Merc itself seems to support it, if ever so hesitantly- and yet they only print your letter.
No San Jose soccer fan wants a negative impact to the city’s general fund. But the existing study – sanctioned by the City of San Jose and its fiscally conservative mayor – shows there is a net positive impact on the general fund of $1-2M a year if the stadium is built. What is befuddling is the venom with which some people oppose the stadium, even in light of these facts. The city gets a great asset and money in the bank.
Mr McCarthy:
The MERC’s “poll” is not a scientific sample. Second, why should I (or the MERC) be required to identify me as a “talking head” on San Jose Inside? I’m not on San Jose Inside’s payroll.
Let’s assume that your numbers are correct, and that a $1-2 million stream for San Jose’s General Fund will be created by the deal. My question is, can the city do even better…are there alternative deals that generate more revenues for the city long-term. With regard to Spartan Stadium, there are older venues still in use today, and if it’s so bad, why does the NCAA sanction Division 1 play there?
Finally, as I understand it, the MSL is owned collectively by the owners of the teams. If the building of the stadium will be such a great and profitable thing, why doesn’t the league itself underwrite the entire project? (One could ask the same thing of the NFL re: the 49ers stadium).
Pete Campbell
Pete Campbell, you proved today (April 23) with your letter to the Mercury News editor that you do not have honest questions emanating from an open mind.
You’ve obviously made up your mind that you are opposed to a soccer stadium and you won’t be dissuaded by facts, regardless what they are.
Here are the facts for anyone reading who still has an open mind:
NO PUBLIC MONEY WILL BE USED TO BUILD THE SOCCER STADIUM. NONE.
THE SOCCER STADIUM DEAL WILL ELIMINATE THE CITY’S NEARLY $7 MILLION IN ANNUAL MORTGAGE PAYMENTS ON THE FORMER FMC SITE WHICH THE CITY MUST CURRENTLY PAY OUT OF ITS GENERAL FUND (Talk about relief from a mortgage crisis.)
THE SOCCER STADIUM WILL PROVIDE A NET POSITIVE ANNUAL BENEFIT TO THE CITY’S GENERAL FUND FROM $1.8 MILLION TO $2.8 MILLION (even after accounting for additional city services to new residents in Edenvale).
Obviously, once you know the facts, you don’t have to like soccer to love this deal.
And you don’t have to believe me—a soccer fan. Read the City staff report prepared by expert consultants hired by the City, which is a public document and which was publicly presented at a city council meeting in March of this year, and which was unanimously accepted by the city council. No one—and I mean no one—has brought forth evidence undercutting the veracity of anything in that document.
The San Jose Mercury News, as usual, is doing a tremendous disservice to its readers and all the citizenry of San Jose by NOT reporting these FACTS and by pretending that its editorial board has “questions” (just like Pete Campbell pretends on this blog that he does) that have already been answered in the public record.
Our civilization is not advanced by pretending that there are unanswered questions about whether the world is flat (notwithstanding Columbus), whether species evolve (notwithstanding the Scopes Monkey Trial), and whether the proposed soccer stadium for San Jose is a good deal (notwithstanding the unimpeached city staff report).
Earthshaker,
You have set a very high bar for San Jose residents to ask questions about the soccer deal without being considered illogical and hypocritical: unless a resident has protested every previous rezoning, they should remain silent on the soccer deal.
San Jose residents should scrutinize the soccer deal as we have seen what happened with the Grand Prix when our enthusiasm clouded our judgement.
I asked a very simple question that you did not answer. Why is Mr. Krutko including the industrial job transfer in Edenvale as part of the “benefit” of the soccer deal? If Edenvale is currently able to handle this increase in job capacity, we should not wait or depend on a soccer deal to bring more jobs to the area.
Krutco? isn’t that the guy that screwed up the San Jose Grand Prix deal by his miscalculations? And cost us 4 million dollars!!! Hmmm! I would double check on his work, his arrogance does get in the way sometimes!
Clearly, you are Anti-Soccer at any cost. You want the city of San Jose to receive revenues for the Earthquakes playing in Oakland? Yes, because such theft is standard fare in San Jose politics and culture, eh?
You obviously have little understanding of this topic. I would suggest moving on to something more your speed…perhaps there’s something to be said about that new Taco Bell in your neighborhood, eh?
“With regard to Spartan Stadium, there are older venues still in use today, and if it’s so bad, why does the NCAA sanction Division 1 play there?”
They continue to sanction it for that very reason. There are venues that are that old and in that state of decay all over Division 1 football. Memorial Stadium in Berkeley is case and point of that. However Division 1 football is not a professional sport. There are few venues that old in professional sports, and none that are in that state of inadequacy and decay. Professional stadiums that are that old (think Fenway Park), have all undergone extensive renovation and updating to stay current and continue to do so on a fairly regular basis. Spartan Stadium has had no such face lift beyond the expansion in the 80’s. It is still a passable venue for college football but is in no way a suitable permanent professional venue for the city, nor a source of income for the city like a new marquee stadium would be. Particularly a marquee outdoor facility that the city doesn’t have to pay to build or upkeep, such as being offered here.
I dont see as to how this guy doesn’t understand the good a stadium will do on the economy. Doubt he ever attended a game at Spartan, and see all of the things that needed improvement but hey why not continue to use an old facility that is not suited for soccer? You expect the city to get game revenues from oakland as well? What have you done to deserve that? Listen before you write letters, understand that the owners purchased the land to build the stadium and then are paying to build it. Dont shoot blanks when your are not on point, because you make little sense in your argument.
Steve,
Earthshaker’s bar is hardly high.
Wolff wants to re-zone 75 acres of unused industrially zoned land thats really just a fallow field.
The flea market re-zonning was 120 acres of one of the most vibrant outdoor markets in the state if not country. It was a San Jose landmark for generations. And the rezonning generated a heck of a lot of press.
‘Shaker’s got a point. If you didn’t oppose the rezonning of the flea market you’re hypocritical to oppose the re-zonning of Edenvale.
Where were you then?
#9:
What are you implying? And, why don’t you provide your full name?
Pete Campbell
Brian,
Why the obsession with the Flea Market? We are talking about a soccer stadium deal and you (and Earthshaker) have no clue if people here on SJI were for or against the conversion. Let’s stick to the topic at hand.
I know many people living in South San Jose who do much of their shopping on previously fallow fields in Morgan Hill (Target, Home Depot, etc…), giving Morgan Hill a great tax benefit.
I raised a very simple question about the Edenvale job transfers that are included as a “benefit” for the soccer deal. For some unknown reason this simple question is generating quite a hostile response. Do you suggest San Jose residents should just blindly accept this deal without scrutiny?
(yawn) enjoy being a brick wall
I’m really getting sick and tired of these petty endless rants and arguments from not only the media, but from supposed people who “care” about the reprucussions which will follow this soccer stadium! I mean are you sure you aren’t a plant of Barry Witt or what?
In all my years of living in San Jose, I’ve never herd or read any type of deal that would benfit the city of San Jose’s citizens as much as this one!
NO PUBLIC FUNDS WILL BE USED!
Exactly what consequences will the city’s citizen’s face if this thing gets done? I’m sure if it isn’t Lew Wolff someone else sooner or later will get the rezoning thing approved in Edenvale and at that point we will still have an empty ugly space next to the train tracks at FMC ……. I mean come on just shut up already!
Steve (#15) That’s a good question you ask. If there is a demand for more industrial capacity elsewhere in Edenvale, then why does it need to be tied to to the soccer deal. But, you are asking me to give an opinion on why the city has written the rezoning policy as they have. That is a question you need to write your city council.
Personally, I think it is silly that the “industrial capacity” of a piece of property that has never in its history created a dime of revenue for the city from industrial use should have to be transfered anywhere. But, that’s just me.
But again, maybe you and others who are critical of the rezoning aspect of the soccer stadium deal can explain why a similar fuss was not made over the rezoning of the Berryessa Flea Market? Let me explain this again. Lew Wolff wants to take every cent of profit from the Edenvale rezoning and a build a stadium which will generate revenue for the city’s general fund. And what again did the owners of the flea market say they will do with all of the profits they will be making?
I hate!!! Soccer, it’s like a cheep drug tailor made and mass produced for especially morons.
Steve (#15) said…
“I asked a very simple question that you did not answer. Why is Mr. Krutko including the industrial job transfer in Edenvale as part of the ‘benefit’ of the soccer deal? If Edenvale is currently able to handle this increase in job capacity, we should not wait or depend on a soccer deal to bring more jobs to the area.”
Steve, the fact that there’s no net loss of industrial job capacity isn’t a benefit—it’s a requirement. That’s why it’s included in the discussion on rezoning.
Of course the city government could double the industrial job density across the entire city even without a stadium deal proposal. But why they don’t do that has nothing to do with the stadium. It has to do with the demand for industrial job capacity. So your argument’s really a non sequitur.
#22:
Figured you’d stay hidden.
Pete campbell
“Do you suggest San Jose residents should just blindly accept this deal without scrutiny?”
What were all these staff reports and council meetings about !?!?!
Steve, the Sun’s a shinning! You just gotta open your eyes.
BTW – How did that work with the Flea Market rezoning?
This is one of the better developer proposed ideas to come along. San Jose has long endured the endless string of developers who have pocketed taxpayer money for any number of projects. Clearly, the city needs a change in the way they do business, but in the rush to change the rules, San Jose runs the risk of halting all development, good or bad.
It is fair to talk about the Berryessa Flea Market deal in conjunction with this proposal. What exactly did the city gain? Was there any real benefit to the city, or did the Bumb family reap most of the benefits? The flea market itself was one of the most popular attractions in the state. That doesn’t mean the owners did not have the right to do what they did, but I would be interested to know who supported that, and how the same people feel about Wolff’s overall proposal (the soccer stadium is a relatively small part of the whole deal).
Lew Wolff was very clear from day one that no matter what he proposed, there would be opposition. I think he said that if he proposed a cure for cancer, it was inevitable that there would be people who were against it. It’s the nature of the business.
What hasn’t been mentioned is the approximately $7 Million the city spends each year to service the debt for the old FMC property (which also had to have the toxic waste cleaned up). I am not sure exactly how long the city has owned it, but it is about a decade…..$70 Million. Maybe I would see it differently if there had been ANY serious proposals for the site during that time, but it’s not a situation where developers have lined up for a shot at it. In this case, the city gets what it wanted in the first place…hotel and commercial. Yes, there is a trade off, but it’s not all that difficult to conservatively see that the elimination of the $7 Million annual debt service, plus the increase in the city revenue will more than offset the city’s cost at Edenvale. Plus, the city gets a stadium without spending it’s money (including any potential construction overruns), plus a long term tenant for the stadium. No, it’s not a cure for cancer, but it is a pretty good deal for the city.
I thought the inital city council vote was 12-0 last June in favor of the SSS? Where exactly is there opposition within the city’s governors?
I know people close to Pierluigi Oliverio of the SJ city council and he stated that no one is really opposed to this thing.
I still fail to see where there should be any opposition!
#31 (Gabriele Falvo): The Shark Tank build was before my time, but as I understand it there was indeed concerted opposition to it and it only barely passed a public vote. (Tom McEnery can expound on this, I’m sure.)
The opponents of building HP Pavilion look pretty foolish now, as I predict the opponents of the proposed soccer stadium will look in a few years (as they do already). The soccer stadium development, which includes hotels and offices and retail, will also be transformative of an underdeveloped area and will, like HP Pavilion does, bring tremendous economic benefits to the city and to downtown (which is not so far away from the former FMC site.)
As I’ve said, you don’t have to like soccer to love this deal.
#30
Was there any real benefit to the city, or did the Bumb family reap most of the benefits?
This is purely from memory of what I read in the Mercury News, so it might be wrong.
The way I remember this is, for whatever reason, the Bumbs wanted to sell the flea market for ‘x’ million dollars. The only part the city had in it was that the land needed to be rezoned to make it worthwhile for the buyer. I believe one of the things that made the land attractive for sale was the possibility of a BART station being built nearby. The city did not get any money from the sale, unless there is some type of a sales tax on this type of transaction.
At this point the Bumbs want to take their profit from the sale and keep it, which is fine. However, they are trying to get Santa Clara taxpayers to provide land for another flea market at the county fairgrounds, which is not fine.
This is exactly my point Don! No one remembers or cares if there was any opposition to the HP Pavilion. The only thing I remember was the gripes from the Iatlian-American community who wanted to keep the old houeses down there intact for some type of hisorical society thing but obviously those voices were never herd from again.
Ever since the SJ Arena was completed in 1993/94 anyway, I’ve herd nothing but positives from everyone in the community including non sports fans. We finally have something that San Jose can boast about.
I’m trying to think back to 1991-92 when the the San Jose Arena was built. That whole area down there was desolate and depressing at best. It looked like a complete junkyard. From what I recall in the pre Internet days of Silicon Valley, I can’t remember much opposition at all for the Sharks or the Arena being built.
As I remember it, the Arena was built with Public Funds and required voters approval. I have never herd anymore complaints after that area and Arena was built. I’m sure the people of San Jose are proud of the Sharks and the Arena.
Therefore, why is there any opposition tothe soccer stadium now?
It makes no sense!