OAKLAND -- The struggle for Oakland to keep its sports teams suffered a twin blow this week when the Golden State Warriors made clear they are leaving for San Francisco and the Oakland Raiders appeared to backtrack on their desire to stay.
To the surprise of city officials, the Raiders missed a 5 p.m. Monday deadline to submit a Letter of Interest in working on a project to transform the 132-acre Coliseum complex into a sports and entertainment hub with new sports stadiums.
Team spokesman Mike Taylor declined to comment as to why owner Mark Davis, who has expressed interest in Coliseum City publicly, so far has declined to issue the letter.
While the Raiders' hesitation isn't a deathblow to the multibillion dollar project -- the letter could still be issued and could just as easily be rescinded at a future date -- the Raiders' failure to meet the deadline raises fresh doubts about the project's viability.
"I'm very concerned about it," said Councilman Larry Reid, who sits on the board that manages the Coliseum complex. "The question is where do we go from here."
With the Warriors now committed to building an arena in San Francisco's Mission Bay district, sports economists say Oakland finds itself trying to accommodate two teams -- the Oakland A's and Raiders -- who are likely at cross purposes when it comes to building stadiums in Oakland.
Coliseum City's original vision was for all three teams to pay for new stadiums and offset construction costs by getting a cut of proceeds from the development of a hotel, homes and restaurants on adjacent public land.
But that model has slammed up against the reality of 21st century stadium construction, Stanford University Economics Professor Emeritus Roger Noll said.
Without public subsidies to build stadiums, Noll said that major league franchises are demanding development rights to nearby land to make their projects pencil out -- and they typically want it all to themselves.
"The probability of Coliseum City working financially and some team committing to it would be greater if there was only one team involved," Noll said. "A Coliseum City development with both the Raiders and the A's is not going to happen without a public subsidy."
Warriors' co-owner Joe Lacob on Monday also questioned whether all three teams could have feasibly built new facilities at the Coliseum complex. The Warriors' departure, he said, provided "a better chance for the A's and the Raiders, for one of them or maybe two of them, to succeed in the East Bay."
If given the choice between the A's and Raiders, Oakland should go with the baseball team, economists said. The A's play 81 home games to the Raiders' 10, meaning the team would provide a much bigger economic boost for nearby shops and restaurants.
"Giving 15 to 20 acres of land around the Coliseum for a football stadium is a bad investment because it undercuts the ability of the Oakland A's ownership to develop land adjacent to the stadium in a productive way," said Andrew Zimbalist, a sports economics professor at Smith University.
Unfortunately for Oakland, it doesn't have the luxury of making a choice. By failing to issue the Letter of Interest, the Raiders appear to be hedging on building at the Coliseum complex, where a proposed football stadium already faces at least a $500 million shortfall. The A's only want a long-term lease at their current home field while still holding out hope that the team can move to San Jose.
Further complicating matters is that the two clubs appear to view each other as rivals rather than partners. The Raiders have stated a preference for a new football stadium to be built on the footprint of the existing O.co Coliseum, potentially leaving the A's without a home.
The A's, meanwhile, continue to control concession and signage rights at the facility, making money during Raiders home games.
"The biggest stumbling block you have there is that the two teams don't want to be partners," said Robert Boland, academic chair of the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management.
Oakland officials refused to comment about the stadium situation Tuesday as they pored over studies provided late Monday by their development team. The team, which includes real estate titan Colony Capital, proposed bringing on additional investor, Helix Global Partners, sources said.
Councilman Reid said he was worried that Oakland was paying the price for waiting too long to secure deals with its teams. "Our backs are up against the wall," he said. "We're trying to play catch-up."
Contact Matthew Artz at 510-208-6435