OAKLAND — The city’s sale of its share of the enormous Coliseum property to a local development group has sparked widespread confusion over when the city will receive the money it needs from the deal to combat a historic budget crisis.
Now there’s a new twist: The two sides have tentatively agreed to fresh terms that will see the African American Sports and Entertainment Group drop almost all the cash it needs to acquire the city’s ownership share in one sweeping payment.
Under a previously unreported agreement reviewed by this news organization on Wednesday, the Oakland-based developers would send the city $10 million by Oct. 7 and an additional $95 million by May 30, 2025, on top of $5 million in revenue the city has already received.
The Oakland City Council would still need to approve the revised deal. At a meeting Tuesday, two of its members worried aloud that $10 million promised earlier by AASEG had not yet arrived.
The timing is crucial. Mayor Sheng Thao has staked revenue from the deal against the city’s crippling financial crisis, with plans to use the revenue to pay city worker salaries and general operating costs.
In July, the City Council even approved a worst-case-scenario contingency budget that would impose severe cuts to city police staffing and fire station availability if AASEG’s payments didn’t arrive in time.
Technically, the contingency budget has already been triggered, a person with direct knowledge of the city’s financial woes told this news organization Wednesday, but the drastic cuts haven’t yet taken place because so far there’s enough cash on hand to keep everyone paid as normal.
The city official, who declined to be named out of concern for job safety, expressed concern that the current “holding pattern” on spending may lead the city to tap other funds or even emergency reserves before next summer.
In a statement, a spokesperson for Mayor Thao said the sale is “on track.”
African American Sports and Entertainment Group founder Ray Bobbitt, front left, Oakland Mayor Sheng Thao and city administrator Jestin Johnson hold up signed copies of a term sheet between Bobbitt’s group and the city to acquire the entire Coliseum complex — a deal formally announced at Oakland City Hall on July 30, 2024. (Shomik Mukherjee/Bay Area News Group)
Ray Bobbitt, the founder of AASEG, said in an interview the new agreement allows his group to more smoothly acquire the city’s entire half ownership share of the 155-acre Coliseum site, which includes the stadium, arena and surrounding parking lots.
The new terms raise AASEG’s purchasing price by $5 million for a total of $110 paid to the city.
AASEG is separately acquiring the site’s other half ownership share from the A’s for $120 million. The higher amount, Bobbitt said, compensates the departing baseball franchise for due diligence it completed upon its acquisition of a property stake in 2019 from Alameda County.
Under a previously agreed-upon timeline, AASEG would have submitted payments to the city of Oakland on an incremental basis over the coming months.
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Source:: The Mercury News – Entertainment
