Oakland Councilmembers Sound Alarm Over Coliseum Payments

OAKLAND,CA — A trio of Oakland City Council members are sounding alarm bells over a payment installment in the city's sale of the Coliseum to local development company, the African American Sports and Entertainment Group.

AASEG founder Ray Bobbitt, however, says the deal is moving forward smoothly despite some final negotiations over technicalities involving the company's payment schedule.

Councilmember Janani Ramachandran said in a pair of news releases this week that she, Noel Gallo and Treva Reid have been asking city staff about the status of the first $15 million payment she says was due to Oakland back on Sept. 1.

Ramachandran says because that deadline was missed, the city's "contingency budget" should now be in effect -- a budget that cuts the police force to 600 officers, temporarily closes five fire stations and pauses all city contracts.

"The people of Oakland deserve full transparency from City leadership on this situation and the impact on our City's finances and public safety," Ramachandran said Thursday. "I continue to call upon the Mayor and City Administrator to provide clear and immediate answers to the City Council and our residents regarding our fiscal future."

Bobbitt said Thursday, however, that the sale is on track and that the company made its initial payment of $5 million at the beginning of September upon the execution of the purchase and sale agreement.

The city and AASEG have come up with a slightly different payment schedule, which will also see the final price rise from $105 million to $110 million, Bobbitt said.

On or about Oct. 7, AASEG will cut the city a $10 million check, and then another for $95 million on May 30, 2025, according to Bobbitt.

In addition to the extra $5 million, the city liked the new schedule because it means it will receive all the money in the same fiscal year, which could benefit its budget process, Bobbitt said.

"The health of the deal is excellent and we're really excited to move forward through the process and we're excited to move to the site planning phase of the project," he said, noting that the company's purchase of the other half of the property from the A's is also moving forward.

A portion of the initial $105 million Coliseum sales price was used as a one-time stop gap measure to help bridge a $177 million shortfall in Mayor Sheng Thao's budget, which the council approved with a 5-3 vote in July, with Reid, Gallo and Ramachandran opposed.

The vote was supposed to stave off painful service and program cuts for at least another year but if the Sept. 1 deadline was missed, the contingency budget, featuring $63 million in cuts to city services, was supposed to kick in.

Ramachandran and Reid raised the issue at Tuesday's council meeting, during which City Administrator Jestin Johnson said the city has enacted some cost-reduction measures and mentioned a hiring freeze and travel expenses as examples.

Because the sale and budget implications weren't on the agenda, however, that was essentially the end of the discussion.

Johnson said those issues could come before the council's Finance and Management Committee, which next meets on Oct. 8.

While the deal to sell the Coliseum to AASEG may be healthy, it's still unclear if the city is operating on the contingency budget or not or if additional cuts are in the works.

Thao and Johnson didn't immediately respond to requests for comment.

One of Thao's loudest critics, the union representing the city's rank-and-file police officers, on Wednesday demanded the city release documentation regarding the sale and AASEG's payments.

"The Mayor, and Assistant City Attorney Ryan Richardson, who both publicly proclaimed that this was a done deal and money was in the bank may be misleading the public," said Oakland Police Officers Association President Sgt. Huy Nguyen.

"It's time for Thao and Richardson to resolve the uncertainty and make the details that they have been hiding public and show us that the money is in the bank," Nguyen said.

Story by Kiley Russell, Bay City News.

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