The city of Oakland has revealed contingency plans in case a critical $105 million deal to sell its share of the Coliseum to private developers falls through.
The plan includes cutting an additional $63 million — the amount the city is banking on from the Coliseum sale to help it close the deficit for the next fiscal year — through reductions to city programs and staff, in order to cover expenditures.
This includes closing two police academies, saving about $3.5 million; freezing some 78 police officer positions, saving about $23 million; and freezing five fire companies and a handful of fire-fighting jobs, for about $20 million.
The proposal would amount to a worst-case scenario for the city if the deal, which it is relying on to help close a $292 million deficit, were to fall through. Along with the contingency document, the city administrator has also proposed a separate budget that the council may pass that excludes proceeds from the Coliseum entirely, and makes similar cuts.
The contingency resolution stipulates that the plan would go into effect if the first $15 million from the Coliseum deal is not received by Sept. 1, the next $15 million by Nov. 1, or if the final $33 million is not received by Jan. 15, 2025.
The contingency plan has been in the works since before last week, a city spokesperson said Tuesday.
The plan was linked on an agenda for a City Council meeting on Friday, when members are expected to work to finalize the budget. That work could spill into early next week, due to the complexity of the budget and growing turmoil at City Hall.
The city and its political establishment have been thrown in disarray after the FBI raided Mayor Sheng Thao's house last week, as well as by the announcement the day prior that opponents had successfully certified a recall election of her for the November ballot.
Thao has vowed to keep the city's business on track. She says she is innocent of any wrongdoing implied by the FBI action, and she has gone on the offensive against her opponents.
Ray Bobbitt, the founder of African American Sports & Entertainment Group, the private development group that has agreed to purchase the city's 50% ownership of the Coliseum parcel, told the Chronicle Tuesday that the deal remained on track and would not be affected by the current tumult at city hall.
"We feel like we're one of the positive things happening, and we're trying to make sure that gets celebrated," he said by phone. "[We're] 100%in — our group is committed to this because we're from Oakland."
AASEG is still negotiating with the Oakland Athletics organization to purchase the other 50% share of the site. The baseball team is leaving the city for Sacramento next year, with plans to move permanently to Las Vegas.
The Mayor's office brokered and has championed the agreement to sell the city's half of the Coliseum to the private developers AASEG. The agreement was later approved by the council. But the two parties are still finalizing the technicalities of the deal, most significantly the payment schedule.
The proceeds from that sale are slated to be used, both this year and next, to help the city close its deficit without major cuts to public safety departments like the police or layoffs among city staff. But the contingency planning shows that those outcomes remain a possibility, should the deal fall through.
"Work to finalize a landmark agreement selling the City's ownership of the Oakland Coliseum property to the African American Sports and Entertainment Group (AASEG) is making swift progress," Sean Maher, the communications manager for the city, said in a statement. "At the request of Councilmembers, the administration has provided the City Council with scenario options to balance the budget that will correspond to wherever that progress stands at the June 30 deadline to pass a budget for the upcoming fiscal year."
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