After years of gobbling up land for a downtown ballpark, the city of San Jose is ready to sell about five acres of prime downtown real estate to the Oakland A's for $6.9 million -- almost a quarter of what the city originally paid for the land and $7 million less than it's worth on the open market.
The major league discount is detailed in new documents released Wednesday that give the A's exclusive rights to the land if they build a new stadium near HP Pavilion and Diridon Station.
"I think the price is a fair price when you consider that we want a ballpark, and the A's will have to pay for the ballpark with their money," San Jose Mayor Chuck Reed said. "And let's not forget that if we get a ballpark on the land, we get money and 1,000 jobs or so."
But critics of the stadium idea call the proposed land sale a "public relations gimmick" to benefit the team and Lew Wolff, the 75-year-old co-owner of the A's and a prominent developer with deep ties to downtown San Jose.
"If the city opened up the land to all comers, let's see what they could get," said Marc Morris, a spokesman for Better Sense San Jose.
But city leaders say they're determined to make sure that Wolff can purchase the land as soon as Major League Baseball finally clears the way for the A's to move to San Jose, the City Council puts it on the ballot and voters approve the land sale.
Over the past decade, the city's redevelopment agency paid $25.1 million for the six parcels of land, including the costs of relocating businesses that once operated there.
But according to a 2010 appraisal by Colliers International, it's worth far less today: $13.9 million if developed into shops and offices.
Wolff has said the A's will not purchase the land unless Major League Baseball allows the A's to relocate to San Jose. So the city is offering Wolff a two-year option for $50,000 that could be extended for a third year for $25,000.
The San Jose City Council is expected to vote on the proposed option agreement and other details related to the proposed land sale at its Nov. 8 meeting.
A 2009 economic analysis, paid for by the city, described the economic benefits of a baseball park. It said the development of a 32,000-seat stadium where 81 home games would be played would pump $130 million a year into the local economy. The analysis also said the stadium would create 2,100 full-time, part-time and seasonal jobs in San Jose -- 980 of which would be new jobs.
Two other parcels -- about 5.5 acres owned by AT&T and a Los Gatos family -- are needed to complete the proposed 13.4-acre site. (The final three acres are streets.)
The biggest question mark, however, is whether baseball commissioner Bud Selig will allow the A's to move to San Jose -- a decision that has been two-and-a-half years in the making. At the heart of the issue is whether Selig will agree to break the territorial rights to the South Bay now owned by the San Francisco Giants. Even if Selig agreed to let that happen, three-quarters of the league's team owners would have to ratify his decision.
And even then, because the city's land would be sold for less than its market value, San Jose voters will have to approve both the ballpark and the sale of the land to the A's, City Attorney Rick Doyle said.
Doyle said the city could use its powers of eminent domain to acquire the last two privately owned pieces of property to complete the ballpark site. But Reed -- who said the city had talked with one of the owners, AT&T, about a month ago -- doesn't think the city will have to take that route.
AT&T spokesman John Britton on Wednesday reiterated that the AT&T land is not for sale. But, he said, "the company is always re-evaluating its real estate portfolio. ... And if Mr. Wolff calls, we're willing to listen."
Contact Tracy Seipel at 408 275-0140.
BY THE NUMBERS
$25.1 million: Price the city redevelopment agency paid to acquire nearly five acres.
$13.9 million: Estimated market value of that land if used for retail and office space.
$6.9 million: Sale price of the acreage
to the A's for a ballpark.
Source: City of San Jose