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Stadium FAQs
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What is this project, anyway?

The proposal is to build a baseball stadium on about 14 acres of land immediately next to Diridon station. Specifically, the stadium would be constructed in the area generally bounded by Autumn St., Bird Ave. and Los Gatos Creek to the east and south, railroad tracks to the west, and Julian St. to the north. The stadium would become the home field for the (now) Oakland A's. Currently still undetermined are the size of the stadium (options are 32,000 or 36,000 seat capacity) and whether and where any parking lots would be constructed for the stadium. Here's a map showing the location of the stadium, and two potential parking lot locations.

The city of San Jose has lots of information about the project available online:

Note that there are 2 major parts of the Environmental Impact Report (EIR). The original EIR was done in 2007. More recently, a supplemental EIR (SEIR) was done to adjust the original EIR for some changes in the project proposal and to correct traffic study errors. The SEIR is not a complete replacement for the original EIR, but it does cover traffic, parking, and noise.

Assuming the stadium is approved by San Jose in 2010, construction would start in 2011 and would be complete in 2014.

Why do the A’s want/need a new stadium?

In a word: money. Professional baseball is a business, and a very lucrative one for the people involved.

A new stadium is designed and built to capture as much of the spending by fans as possible, increasing the revenue to the team owners:

  • more expensive corporate suites (sky boxes);
  • more high priced club seats;
  • fewer seats overall to create scarcity, and demand;
  • many more built-in concessions (beer, food);
  • many more built-in merchandise outlets;
  • team owners get parking revenue (if they can get away with this)

In addition, the team owners get a significant boost in the value of the team franchise. When it comes time to sell the team, they get to keep the money, and the host city gets a new ownership team which often demands more stadium improvements to help pay for the team they just bought.

New stadiums are often not particularly fan friendly, or public friendly:

  • there are a lot fewer cheaper seats, and they're in worse locations
  • ticket prices go up, making a game less affordable for the average family
  • more space given to concessions, etc. means seats are often further from the field (especially the lower priced ones)
  • money spent inside the stadium is not spent outside, hurting near-by businesses (businesses near Yankee Stadium saw sharp declines in business when the new Yankee Stadium opened)

In a sense, team owners are engaged in a stadium 'arms race', at our expense. They need more and more revenue to compete with each other, and they need public money to help finance their revenue streams.


What will the stadium cost? Who will pay for it?

These are key questions; the answers are not as clear as they should be.

So far we’ve been told that the estimated stadium construction cost is $461M (in 2009 dollars) and that San Jose will insist that the team pay the construction costs and the maintenance costs. It has also become apparent that San Jose will essentially pay for the land and infrastructure changes around the stadium.

So what will the stadium cost San Jose? There is no official answer, but we can make some estimates, to get a total of $95M to $145M, plus lost tax of $1M per year.

  • land cost (present value: $60M to $100M
  • land cleanup: $10M to $15M
  • infrastructure costs: $20M to $30M
  • foregone property tax on land: $1M per year

See here for a more complete estimate of the San Jose costs.

Are there other costs that we're not aware of?

Another important question with no official answer.

A baseball stadium would have a very high opportunity cost for San Jose. The proposed site is immediately next to Diridon Station, which is slated to become one of the most important transportation hubs in the western US, and a prime location for office space in a 21st Century, new green economy. Commercial development at this site would bring four times more economic benefit to San Jose compared to a stadium. This would be a loss of billions of dollars and thousands of jobs for San Jose. See here for a fuller analysis.

There are lots of other potential costs that we don't know now, and probably won't know until it's too late. The city and the team would have to negotiate a lease for the stadium. Team owners are very good at these negotiations - it's their own money, and they can and do threaten to go somewhere else if they don't get their deal. Cities are very bad at these negotiations - the politicians will be gone by the time anybody figures things out, and its our money, not theirs. One common example: the city agrees that the stadium will remain 'competitive' or the team can break the lease and move; for many cities, this has meant that when other stadiums get new multi-million dollar scoreboards, the city has to do the same.

Finance is another murky area. Often the city floats the bonds to pay for the stadium and the team agrees in one form or another to pay the interest on the bonds. But if the team gets in trouble, or gets sold and the owner finds a way to break the lease, the city is stuck.

Last Updated on Friday, 07 May 2010 22:56
 


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Better Sense San Jose is a community based all volunteer organization founded to promote open and transparent government, and sensible, prioritized spending in the City of San Jose.

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"Past research clearly shows there are extremely limited or nonexistent economic benefits from a team's presence . . . that is not part of a comprehensive redevelopment effort"
Major League Winners (Mark Rosentraub)

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