Taxpayers in Oakland, California, are getting hit with a squeeze play as the city purges good-paying port and trucking jobs while paying hundreds of millions for a baseball stadium.
Having seen the Golden State Warriors and now Las Vegas Raiders leave for greener pastures, Oakland Mayor Libby Schaaf appears willing to tank container port growth to keep the Oakland A’s. The inherent problem is that good-paying trucking jobs, dock work, and tax revenue the port generates will be gone — again, to greener pastures. The question stakeholders in Oakland, California, are asking is: who’s footing the bill for the $12 billion baseball stadium to be erected at the Port of Oakland?
Mayor Schaaf’s office has gone on the record indicating a condominium complex and state-of-the Major League Baseball stadium would not impact taxpayers. When the Raiders moved to Las Vegas, Nevada lawmakers added a nominal dollar or two to the hotel tax to pay for part of the construction. The team and private investors paid the remainder.
The pricey baseball park that would supplant parts of the Port of Oakland’s Howard Terminal is expected to run upwards of $12 billion. And there’s a boots-on-the-ground concern it will come out of residents’ pockets.
“So, even though the City (of Oakland) is trying to find additional grant money from federal and state sources for funding, they have been very explicit in stating that they don’t want to be the backstop,” Mike Jacob, Vice President & General Counsel of the Pacific Merchant Shipping Association, reportedly said. “They don’t want the City general fund to bear the brunt of the cost of the project if something goes wrong, or an estimate is off, or a cost increases, or the timelines get delayed, or the project isn’t as robust as was estimated. At that point, the question is: ‘Who’s going to backstop the deal? The A’s have never said that they want to backstop the deal.”
The city has quietly diverted approximately $603 million in tax revenue to finance the build. Reports also indicate taxpayers would be on the hook to subsidize at least $850 million in additional infrastructure for Howard Terminal Project. This comes as the Port of Oakland will relinquish valuable commercial property that could have been used to expand its import-export capacity, creating more jobs in the freight transportation sector.
Meanwhile, the Port of Oakland continues to see container traffic decline. U.S. growers and ranchers complained their exports were being unnecessarily delayed as empty containers were fast-tracked back to Asia in 2021. After the West Coast bottlenecks last year, cargo ships have rethought trade lanes and Oakland has not exactly won the Pennant.
Loaded container traffic slipped from 169,602 TEU in August 2021 to 155,682 during the same period in 2022. Imports dropped by 10.2 percent and exports declined by 5.5 percent.
One would expect Oakland’s leaders would be trying to hit a home run with a working waterfront. It appears they are striking out.
Sources: ajot.com, porttechnology.com
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