By Kitty Kelly Epstein

Once in a generation — if we’re lucky — we see huge federal investment in infrastructure.

Thanks to the U.S. Department of Transportation’s Mega Grant program, communities across the country have been asked to identify their highest-priority projects in the first round of long-needed transportation investment funding to help make U.S. transit safer, more efficient and resilient to future challenges.

But not all projects hit that mark.

Here in the Bay Area, several major transformative projects have applied for Mega Grant funding and are worthy of this kind of investment. Contra Costa County’s 680 Forward project, for example, would improve mobility along Interstate 680, the backbone corridor for the region’s supply chain and commuters, linking airports, business centers and seaports.

Then, there’s Oakland: Mayor Libby Schaaf’s administration applied for a $182 million Mega Grant to help fund what it describes as a “waterfront mobility hub” at Howard Terminal in Jack London Square. In reality, though, the grant would help billionaire Oakland A’s owner John Fisher develop his $12 billion proposal for luxury condos and a stadium far more than it would the public.

The Mega Grant program, which is currently reviewing initial proposals, should reject the proposal.

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The problems with such an application are obvious and numerous. First, even if the city got a Mega Grant, Oakland’s City Council would need to approve its use. The mayor has no role in that process and so far, the City Council has yet to see a development agreement or receive the independent financial analysis it requested early this year.

The Council has, however, received an update from City staff that there is nowhere near enough money to finance the project. According to a September informational memo from Assistant City Administrator Elizabeth Lake, the cost to the public would, “significantly exceed the A’s previous estimate.” How much that cost will increase and how the city plans to pay for it is unclear.

Moreover, if a proposal with actual terms is ever presented, it will be after Schaaf and several current Council members are out of office. It is possible — perhaps even likely — given the financial uncertainties, that the new City Council will not approve the project, and if it does, there are multiple lawsuits pending and additional regulatory hurdles to cross.

The Mega Grant criteria appear to require that proposed projects clear the likely hurdles they might encounter along the way. The Howard Terminal proposal does not meet that criterion.

Of course, it is also possible that Fisher, for whom this taxpayer largesse is intended, will still end up moving his team to Las Vegas.

According to a poll last December, 46% of Oakland residents do not support using public money for this project, compared to 37% who do. The poll also found that even among A’s fans, who comprise a 53% majority of the electorate, support is tepid at best.

Oakland residents already have real transportation concerns that the city needs to address: traffic congestion, along with its impact on climate and public health; deferred maintenance of roadways; gaps in the availability of reliable public transportation; the efficient movement of goods through the supply chain, including at the Port of Oakland.

But residents, stakeholders and experts were never asked how they might want to spend a Mega Grant. No hearings; no webinars; no surveys — not even consideration for existing projects in Oakland’s Capital Improvement Plan.

And, ironically, this proposal is chasing transportation dollars for a project that nearly all the transportation stakeholders at the port, including those running container trucks and trains through our city, agree will make congestion and safety situations worse.

In the absence of the independent financial analysis promised earlier this year, port stakeholders commissioned an independent report from Nola Agha, a professor of sports management at the University of San Francisco and expert on stadium projects. Agha’s report concluded that revenue projections for the development are overestimated, project costs are underestimated, and indirect costs are not accounted for.

There are numerous examples of sports deals failing to deliver the fiscal returns promised by local governments: the Atlanta Braves stadium, where office buildings penciled in to pay for the stadium were never built; the University of Louisville’s KFC Yum! Center left the city $28 million in debt and the Washington Nationals’ failure to build 46,000 square feet of promised commercial and retail space alongside the baseball stadium.

Here in Oakland, much of the pro forma for the Howard Terminal development relies on revenues from office, retail and high-end condos — all of which have a risky outlook in the post-pandemic economy. These critical elements of the project financing may never get built.

Significant opportunities to improve and build up our region with the help of the federal government are few and far between. Using them to support a private development for which there is no approved development agreement is a bad idea. The City of Oakland’s Mega Grant application sacrifices critical funding for the Bay Area’s real infrastructure needs.

Kitty Kelly Epstein is a scholar, an Oakland resident, host of a radio show and the author of three books on Oakland and urban affairs.

Kitty Kelly Epstein

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