In surprise move, Oakland to sell off Coliseum stake to fix budget crisis
The city hopes revenue from the sale will help patch up a looming $177 million shortfall.
Facing a steep budget shortfall with few easy solutions, Oakland officials said Wednesday the city will sell 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, a 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, 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 will likely face a deficit next year as well without significant changes.
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.
In interviews, financial analysts were critical of the city’s last-ditch effort to shore up the budget crisis with a one-time revenue boost.
“Good elected officials of all stripes know that you should not sell off capital assets,” said David Crane, a lecturer of public policy at Stanford University. “When you sell capital assets, you should use the money for something that produces a benefit for many years.”
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.
Bobbitt first became involved in the Coliseum’s future as an Oakland Raiders fan lobbying for the Las Vegas-bound football team to stick around. Now he is at the helm of one of the most ambitious real-estate developments in the region’s history.
“Every time one door closes, four open up,” he said at a Wednesday news conference formally announcing the sale. “At the end of the day, there’s a new beginning, a new chapter, new sports teams, new housing, new developments. That’s what this is all about.”
AASEG has stressed community involvement, pledging to build 25% affordable housing in any upcoming residential developments and build with local labor.
They can’t get started until the A’s sell them the franchise’s share. Bobbitt signaled Wednesday that the talks are progressing; 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.