What the Oakland A’s Howard Terminal ballpark proposal means for taxpayers

The Oakland A’s released a term sheet April 23 that details their financial plans to develop a new ballpark and mixed-use development along the city’s waterfront. But City Hall officials were surprised by the long-awaited details.

Dave Kaval, the president of the A’s, said his team of attorneys and consultants met with the city three times a week for close to eight months to develop their proposal and he added that city officials “were fully aware of all the terms and conditions in the agreement.”

Now, he wants City Council feedback and is pushing for a council vote by July.

“We had gotten to the point where we had really felt strongly that this document needed to be something where we got the perspective and input from the City Council,” he said. “We thought the best way to do that was make it public.”

Mayor Libby Schaaf, who has supported the project, told The Chronicle she is committed to getting the term sheet ready for a City Council vote by July. But, she said, in the weeks ahead, the city will be in “continual dialogue” with the A’s to make sure this is a good deal for city residents.

“This is a very expensive and complicated project,” she said. “Not only is there the ballpark ... but there are a lot of improvements to our transportation system and community benefits that Oaklanders deserve as part of this project. That is the part we are looking at now.”

Opponents say the fine print makes clear the project isn’t a good deal for the city’s taxpayers.

How much do the new ballpark and the adjacent development cost, and why is it so expensive?

The A’s total budget of $12 billion for the project would make it one of the most expensive developments in the entire country. The entire project’s cost would be more than triple the assessed value of the Bay Area’s single most valuable building, Apple’s headquarters in Cupertino. A challenge for the A’s project is the Bay Area’s construction costs, which are among the highest in the world. One new apartment unit in the Bay Area can cost upwards of $500,000 to build.

The $12 billion will fund a ballpark with a capacity for 35,000 attendees, 3,000 residential units, up to 1.5 million square feet of commercial uses, up to 270,000 square feet for retail, an indoor performance center for up to 3,500 people, 400 hotel rooms and up to 18 acres of publicly accessible open space.

The development will span 55 acres of land in and around Howard Terminal in Jack London Square. The land closest to the waterfront and the ballpark will be leased while the land used to build condos and commercial real estate will be purchased, Kaval said.

Who will pay for it?

The ballpark is expected to cost more than $1 billion. On-site project costs will be paid for through private financing and project-generated revenues.

The term sheet lays out a plan for the city to develop two infrastructure financing districts: the Howard Terminal Infrastructure Financing District and Jack London Infrastructure Financing District.

The tax revenue generated from those districts will go toward paying the A’s back for all infrastructure costs.

The term sheet estimates that $855 million in tax revenue will be used to fund on-site and off-site infrastructure upgrades.

Schaaf said the project requires certain improvements, but there are other improvements — pedestrian safety, traffic flow — that would be beneficial to the Jack London neighborhood regardless of whether there is a ballpark or not.

The city is “critically examining” claims that the growth in tax revenues is enough to fully fund those investments, said Justin Berton, a spokesman for the mayor.

“The commitments requested by the A’s would predetermine the use of a substantial portion of tax revenue from this part of the city for years to come,” he said. “We will also explore whether there are other financing tools that could preserve the project’s viability while reducing the level of commitment” of future taxes that would be promised as part of the infrastructure districts.

What’s an infrastructure financing district?

Infrastructure financing districts are created to finance public infrastructure projects and are commonly used for big development projects. The special district diverts some property tax revenue to pay for infrastructure upgrades and other costs. San Francisco, for example, has nine big infrastructure financing districts to fund upgrades in areas of the city including Transbay and Mission Rock.

How much will Oakland get in community benefits and affordable housing?

Oakland will get $450 million in community benefits from tax-generated revenue from the two infrastructure financing districts. The maximum amount of time that the infrastructure financing districts will last is 45 years. Kaval said the $450 million in community benefits could come to the city within 15 to 20 years.

The A’s estimate that the city will get $1.4 billion from the Jack London Financing District. Their term sheet specifies that $360 million of that should be used to fund offsite infrastructure, $280 million should go to community benefits like affordable housing and offsite infrastructure and $760 million should go to the city’s coffers.

The A’s estimate that the Howard Terminal Financing District will generate $860 million — with $495 million of that used to fund all on-site infrastructure costs, including environmental remediation, seismic improvements and sea level-rise improvements. The term sheet states that $170 million of that revenue should be used for community benefits like affordable housing and $195 million to be given to the city’s coffers.

How long will it take to build?

The first phase of the project includes the ballpark, 540 residential units, 250,000 square feet of commercial office, 30,000 square feet of retail and restaurant space, 400 rooms for hotels, about 12.3 acres of open space, and 4,818 parking spaces. The first phase is expected to take two years to build once construction starts, according to the draft environmental impact report, but it’s not clear when building will begin.

The A’s say nothing else can be built until the ballpark is completed. The overall project could take at least eight years to be built and likely much longer.

What are the environmental concerns?

In 2019, The Chronicle reviewed regulatory documents that showed the soil and groundwater on the site contain hazardous and cancer-causing chemicals that would need to be remediated before the ballpark can be built at the Howard Terminal site.

Environmental groups submitted letters to the city that say the draft environmental impact report fails to disclose and mitigate environmental concerns around air quality, greenhouse gas emissions, transportation, hazardous materials, water quality and other issues.

“Simply put, the Project is proposed for a dangerous toxic site, imperiled by sea level rise, with an inadequate remediation plan,” a letter written by the San Francisco Baykeeper states.

San Francisco Baykeeper criticized the project’s plan to raise the site and its plans to manage storm-water runoff by redirecting it away from the site.

What infrastructure upgrades need to be made?

The draft environmental impact report states that the ballpark would be surrounded by pedestrian streets with limited vehicle access. Transit options include BART, AC Transit, ferry service and bus shuttles, and a transportation hub that would have a raised pedestrian and bicycle crossings to the ballpark.

Infrastructure upgrades include pedestrian grade separation, new bike lanes, sidewalk improvements and more.

Melvin Mackay, the president of Local 10 ILWU, which represents 1,400 workers in the longshore division, said the ballpark and overall development would create “total gridlock” at the port. He worries that port workers will lose their jobs if the development is built.

“We are the third largest port in the country,” he said. “Where will we get our goods from when the waterfront boards up?”

San Francisco Chronicle staff writer Roland Li contributed to this report.

Sarah Ravani is a San Francisco Chronicle staff writer. Email: sravani@sfchronicle.com Twitter: @SarRavani