Response to real A_s proposal _2_ by BayAreaNewsGroup


									                             1111 Broadway, 24th Floor      T: 510-834-6600
                             Oakland, CA 94607-4036         F: 510-808-4721

                                               July 2, 2014


Mayor Jean Quan                                          Henry Gardner
Council Members                                          City Administrator
City of Oakland                                          City of Oakland
1 Frank Ogawa Plaza                                      1 Frank Ogawa Plaza
Oakland, CA 94602                                        Oakland, CA 94602

         Re:       A’s Lease Extension Negotiations and Coliseum City ENA

Dear Mayor Quan, Council Members and Mr. Gardner:

        We have had a chance to briefly review the proposed new lease with the A’s released by
the JPA this week. The “out clause” as it is written in Section 7.2.2 will make it impossible to
complete the obligations of the development under the Exclusive Negotiating Agreement
(“ENA”) with the City. The ENA requires our team to produce a deal with at least one of the
teams. As you know, the only team that has been willing to engage in active negotiations with us
is the Raiders.

        The City has spent three years and $4 Million to adopt a plan and an EIR that would
allow a major new development at the Coliseum site creating a new environment that can keep
both the A’s and the Raiders in Oakland. The City entered into the amended ENA with our
client Bay Investment Group and JRDV and HKS. Our clients relied on the City’s good faith for
almost six months in continuing to fulfill their obligations before the ENA was executed. We do
now have a fully executed ENA and the proposed A’s lease will make it impossible to fulfill the
ENA development team’s responsibilities under that agreement.

        The A’s have until the last few weeks expressed no interest in talking about the Coliseum
Project. The Raiders who have clearly said they want to stay in Oakland in a new facility have
been meeting regularly with representatives of the ENA team. We believe that we will have an
agreed upon term sheet with the Raiders making the Raiders the anchor of a new multi-use
football stadium on the Coliseum Site by the end of the summer. This will allow the ENA team
to meet its obligations to have an agreement with the City in October.

         As you know, it is the Raiders desire and plan to play in a new facility in Oakland for the
2018 football season. They are making arrangements to play elsewhere for the intervening time.
It will be critical to demolish the existing stadium in 2015 not only to construct the new multi-

                                                                     WENDEL, ROSEN, BLACK & DEAN LLP

July 2, 2014
Page 2

use Raider’s facility but also to simultaneously construct the associated developments including
a hotel, retail and office buildings. These ancillary developments are critical to support both the
developer’s ability to fill the gap on the cost of the multi-use Raider’s facility and to create the
necessary tax benefits for the City and the County and create a new major economic engine for

        The approval of the new lease as proposed, allowing the A’s to remain on the site would
frustrate these negotiations with the Raiders, frustrate the purpose and language of the ENA and
prevent the effective development of the Coliseum City Project. It is not necessary to choose
between the teams. The goal of the ENA and the goal of our team is to provide the necessary
support for both teams – and much more. The ENA, which is valid through October 2014,
provides the City and ENA team a period of time for preliminary study and exclusive
negotiations over a proposed project at the Coliseum site (which includes and encompasses the
area subject to lease negotiations with the A’s). Terms requiring a two year “Out” notice in the
A’s lease will violate the ENA agreement between our clients and the City of Oakland. All we
are asking is for the time to perform that is provided in the agreement you have approved..

        The “out clause” in the proposed A’s lease would be triggered by the presentation of a
“Raider’s Construction Plan” – this term is not defined. If it means a detailed engineering plan,
then this would allow the A’s to remain in place for two years beyond when the developer and
the Raiders would be ready to start construction – which clearly does not make sense. In
addition, the A’s would not be required to leave until 60 days after the conclusion of the second
baseball season following the notice – so if notice were given in September of this year, based on
the current design plans, the A’s would not have to vacate until late summer of 2016, which
means that the new facility and the ancillary development could not be completed until fall of
2019. But if there were any serious thought of giving notice this year, the new lease – including
the economic terms - makes no sense at all.

        The City has spent over $4 million dollars in a far sighted and thoughtful effort to create
a new, amazing, and absolutely possible development that will create a major new tax base for
the City and County, produce thousands of jobs and make it possible to retain at least two teams
in Oakland. Permitting the A’s to remain in the existing facility beyond 2015 under the terms
of this proposed lease would make the City’s expenditures and efforts a waste of public funds.
The current proposal also simply allows the A’s to buy more time to find a site outside of
Oakland. frustrate Bay IG’s efforts to develop the site and disrupt the ability to deliver a stadium
for the Raiders and the ancillary developments adjacent to that stadium.

        We ask you to honor the terms of the ENA and allow the development team the time to
meet its obligations in October. Approving the A’s lease as proposed now will make that
impossible. Any decision on this proposed lease should not take place until the ENA team and
the Raiders have been allowed the agreed upon time to perform and to create the opportunity that
will benefit the A’s as well as the Raiders, their fans and the entire City and County.

       Along with the City, the ENA team wants the A’s to remain in the City of Oakland and at
the Coliseum site. We welcome the opportunity to discuss this with you and any representatives

                                                                    WENDEL, ROSEN, BLACK & DEAN LLP

July 2, 2014
Page 3

of the JPA and we are certainly open to discussions with the A’s about how we can work

                                                Very truly yours,

                                                WENDEL, ROSEN, BLACK & DEAN LLP

                                                R. Zachary Wasserman


cc:      Gregory Hunter
         Barbara Parker
         Dan Rossi
         Fred Blackwell
         Ed McFarlan
         Richard Holliday
         Mark Gilman


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