Facing a steep budget shortfall with few easy solutions, Oakland officials said Wednesday the city will begin selling its share of the Coliseum — perhaps the most notable piece of real estate in the East Bay.
The city will speed up existing plans to eventually transfer its 50% ownership share of the 155-acre property — including the soon-to-be-former A’s stadium, nearby arena and lots of parking space in between — to a local Black-led group of developers.
Few details of the African-American Sports and Entertainment Group (AASEG)’s grand redevelopment plans at the East Oakland site have been finalized, but the organization this year will begin paying the city installments of what’s expected to be at least $105 million over the next two years.
Leigh Hanson, the chief of staff for Mayor Sheng Thao, said the final terms are still being negotiated between the city and Loop Capital, a Black-owned investment firm in AASEG’s coalition that manages funds worth billions of dollars.
In turn, Oakland will take the rare step of putting revenue from the sale of a major capital asset toward its general purpose fund, which mainly pays the salaries of thousands of city employees.
It is a bold move by city officials that reflects just how concerning Oakland’s ongoing budget crisis has become.
The city faces a projected $177 million shortfall by the end of the current fiscal year in June, and a structural deficit that will persist next year without significant changes.
OAKLAND, CALIFORNIA – FEBRUARY 2: Oakland Mayor Sheng Thao, center, takes part in a press conference at the Oakland-Alameda County Arena and Coliseum Complex on Thursday, Feb. 2, 2023, in Oakland, Calif. The African American Sports and Entertainment Group is negotiating with Oakland for the city’s 50% interest in the Coliseum complex. (Aric Crabb/Bay Area News Group)
Thao is expected to release later this week a proposal of adjustments to the budget in the middle year of a cycle that ends in 2025.
For now, city officials hope the sale is a worthy bet on AASEG’s success in eventually transforming the neglected Coliseum property into a new hub of live sports, retail, nightlife and some affordable housing — an ambitious redevelopment that may take years to fully realize.
By purchasing the city’s half of the Coliseum, AASEG would no longer be required to buy the other half-share of the property before moving forward.
That other half-share will soon be owned by the A’s, which agreed in 2019 to buy it from Alameda County for $85 million — a much lower price than what AASEG will pay.
The group, led by Oakland native Ray Bobbitt, is in talks with the A’s about buying the team’s half-share of the Coliseum. In an interview last month, A’s President Dave Kaval spoke positively about AASEG, saying the group “has a really interesting vision” for the Coliseum complex.
“The arena has actually done very, very well,” Kaval said at the time.
Neither the A’s nor AASEG’s respective purchases of the public property shares can be finalized until January of 2026, when the city and county finish paying longstanding bonds they took out to make improvements to the Coliseum site back in the 1990s.
