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Re: “Oakland to Vote on $350 Million Public Subsidy for New $1.3 Billion Raiders Stadium This Tuesday

Neither of the financing structures would expose the general fund. The district is set up so that it can issue the bonds to finance infrastructure (i disagree with your take that the stadium isn't considered a public works project here, but that is immaterial). If the project fails, the district declares the bankruptcy not the city. The city and county would fund the district staff and admin costs and then the district would become a self-financing entity. Private issue bonds are also issued by other than the city and county so that party would be responsible for them if the project financials don't support repayment of the principal and interest. The interest rates for these debt issues will be higher than for the city and county, but this project must be a money-maker for the private investment group to want any part of it. The city and county would be stupid not to take it for the development alone. The costs to secure the site should the Raiders and A's move would be as much as the investment they're being asked to make here. The difference is they get some political points and a stadium which produces additional city revenue and creates additional jobs in the area. The math on stadia is traditionally based on a much more hefty investment by the city and county.

As for why folks still discuss Mt. Davis, I can only assume a lack of formal economics training and education as those are considered sunk costs. The city and county will be on he hook for them whether the Raiders are using the stadium/land or not. So is it disingenuous to add those costs to this project. Those costs are due either way. The difference here is that they can be due and the city receiving revenue from use of the stadium or they can be due with absolutely zero offsetting revenue.

The only real question is whether or not the group is trying to get Mark Davis to sell them part of the team as a condition.

Posted by coachglove on 12/10/2016 at 9:29 PM

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