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Mercury News: Many residents cry foul over San Jose's plan to give A's owner Lew Wolff option to buy land at greatly reduced price


By Carol Rosen, Correspondent


The San Jose City Council voted 10-1 on Nov. 8 to option 5.5 acres of downtown land to A's baseball team owner Lew Wolff for three years. The measure, which was amended to include a residents' vote, offers Wolff a three-year option to purchase the land for $6.9 million, less than a third of the $25.1 million the Redevelopment Agency paid for the land.


The option itself is $50,000 per year for the first two years and $25,000 for the third year, in hopes that baseball commissioner Bud Selig will grant the A's permission to move to San Jose.


Prior to the vote, District 6 residents from the Shasta Hanchett and Willow Glen neighborhoods were burning up the electronic wires with letters to Mayor Chuck Reed and council members, letting them know they were against selling the land to at such a reduction.


Only a very few favored the transaction. Most suggested city officials look to the RDA's list of debits and the consequences to the city's general fund and the routine, but necessary services the city currently is finding it hard to meet financially, such as libraries and police officers.


One resident called the option "The Field of Schemes" and others noted that the HP Pavilion has been successful, but not as much to the city's coffers as to the Sharks. Another said the real estate market has dropped, but certainly not by $16 million. Others said they were tired of providing their tax money for athletic events, when other areas need the money more.


"We can't afford to give that land away. In these difficult times, it just doesn't make sense," said Carol Myers of Willow Glen. "I want my libraries, community centers and parks to be open on a regular basis. There's no way the city will be able to cover the costs it will inevitably need to make [for the stadium]. The A's aren't doing that well, and what happens to the stadium when it's not baseball season and it's too cold or too rainy to offer events?"


"Why is the city giving land away to a billionaire?" asked Mark Sweiger, also from Willow Glen. "At least sell it for a price that kind of makes sense."


Sweiger also questioned why the city doesn't lease the land. Nearby cities of Santa Clara and Mountain View lease all the land north of Highway 101 and bring in a lot of money. "The city would be better leasing that land, which it shouldn't have bought in the first place. In that case, there would be more money. There are a lot of potential alternatives."


Sherman Oaks resident Steve Kline sent a letter to Mayor Chuck Reed and council members reminding them that city manager Debra Figone recently sent them a memo with a projected 2012-13 budget deficit of $80 and rising.


"The citizens you surveyed in July are weary of the cuts that you have imposed. People are reeling from the increase in crime, both violent and property. The city staff's morale... is the lowest it has ever been. In the midst of this frustration, the city proposes to sell to Mr. Lew Wolff and his wealthy interests, an option for up to three years to buy properties for which the city paid $25 million. The citizenry are rightfully outraged," Kline said in the letter he provided to the Resident.


He and several others interviewed question who will pay the interest on the $25 million bond during the option years, and how will the city pay the remaining balance on the bond principal.


Kline, Sweiger, Marc Morris and several others also asked how the city plans to pay off the RDA debt. The RDA already owes the city's general fund $52.7 million for the housing trust, $11 million to the parks fund and $6.8 million to the parking fund. Morris, who works on communications for a volunteer community group called Better Sense San Jose, calls the entire stadium idea "a vanity project we can't afford."


Morris thinks the tax revenues from the stadium won't begin to cover any increased expenses. He believes that "a lot of the defensive claims of supports are overblown."


Pierluigi Oliverio was the only council member voted against the land option. He told The Resident he voted against it because, "I believe the voters should decide, and that a ballot measure giving the city direction should be at the start of the process."


But the mayor says he's looking to raise money to provide for the libraries, community centers and parks. "The land isn't giving us any income at all right now," Mayor Chuck Reed said. "We're taking a piece of dirt and generating revenue for the city. We are trying to turn underperforming areas into money; I'd love to sell the Hayes Mansion. We've already sold the Fountain Alley parking lot, the parking lot between the Rep and Tower 88, and we're working on the lot across from city hall."


As for the claim that a completed stadium would only provide low-paying jobs, Reed said, "We have 60,000 unemployed in the city right now. People want to work, and there will be jobs for them."

He's hopeful that building a ballpark will encourage other new private building in the same area to help fill city coffers to pay for city services and help reduce or pay off the RDA's debt.


Matthew Mahood, CEO and president of the San Jose Silicon Valley Chamber of Commerce told city council members Nov. 8 that he expects Wolff's private investment in the ballpark to spur other private investment of nearly $500 million including new restaurants, mixed use buildings and possibly a hotel.


"This is a great return on investment. Other cities like San Francisco, San Diego, Phoenix, Baltimore and Washington, D.C, saw huge amounts of private investment created with new baseball stadiums," he said.

Mahood also suggested that by adding baseball to the mix of the Earthquakes and Sharks along with the 49ers in Santa Clara, "will help us build our brand as a large, vibrant metropolitan city and region. This in turn helps us market and promote ourselves for economic development purposes."


Willow Glen resident Mike Jennett agreed with Mahood that a "major league ball park will give us worldwide exposure for television and bring in tourists and their money. I watched the Sharks turn San Jose into a community. By doing this we're investing in the future of the city," he said.


Most city council members accepted that the vote would go to citizens before the options are exercised and favored the option. "I think the investment on our side pales against the investment from the private side," said Don Rocha, District 9 council member. "The risk we're taking is minimal, and the reward we're getting is a new privately financed ball park.


"Keep in mind that a vote from the public would come before any approval is given," Rocha added.


District 10 Councilwoman Nancy Pyle also voted in favor of the option, saying that she initially didn't really like the idea. She said after going over the measure thoroughly, she decided it ultimately will be good for the city. "I was in real estate for 10 years. You sell what you can and hope for a profit. No one else is lining up to buy the property," Pyle said.


Prior to the council meeting, Reed and council members Sam Liccardo and Rose Herrera issued a memo recommending the council take positive action for the option issue.


According to that memo, the city would gain a $50,000 nonrefundable option, providing payment for land, which currently is lying fallow. In addition, once a ball park is built, it would generate $1.5 million per year in general fund revenues; $1.5 million annually for other fund revenues; $6.9 million in one-time funds to the RDA; 1,000 permanent jobs; and a baseball team that would produce "hundreds of millions of dollars in economic activity."

In addition, the memo estimates the county and public schools would receive $1.5 million in tax revenues annually, along with encouraging future private investment in the area to "enhance public infrastructure, increase ridership of public transit systems and strengthen downtown as Silicon Valley's urban center."


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