Oakland councilmember raises concerns over changes to city's sale of Coliseum
It is an understatement to say that the stakes are high when it comes to the city of Oakland's sale of the Coliseum site to a group of investors.
The city is selling its half of the property and relying on that money to balance Oakland's budget, avoiding $63 million dollars in painful cuts impacting the police and fire departments.
Wednesday night, KPIX confirmed that there is a new timeline for the buyer, the African American Sports and Entertainment Group, to deliver that money.
Oakland City Councilmember Janani Ramachandran says she wants the deal with AASEG to go through, but right now she's more worried about how to balance the city's budget since the group hasn't made the first $10-million payment.
It's something she says the mayor refuses to talk about.
"Why are you leaving council members in the dark? What's going on with the contingency effect? Are we going to see fire stations browned out tomorrow? Are we going to see a drop in officers? And those are my questions too," Ramachandran said.
Ray Bobbitt is the founder and managing partner of AASEG. He says the deal is still on track, and their group is in the final stages of negotiating an amendment to the original sales deal – and plan to pay the city the $10 million in the next 5 days.
The original purchase sale agreement was signed at the end of July. It called for four payments totaling $63 million between Sept. 1 and January 15.
The amendment AASEG is proposing would provide the city with one $10 million payment on October 7, then pay the full balance of $95 million no later than June 30, 2025. That's also an increase in the sales price from $105 million to $110 million.
"We increased the price slightly just because it was important for us to move quicker through the process," Bobbit said.
According to Bobbit, AASEG's main concern with the payment plan arrangement in the original contract was that if something catastrophic happened and the city filed for bankruptcy, the group would basically lose all their money.
The amended agreement would allow the group to take ownership of the property immediately after that lump sum payment is made.
Bobbit told CBS News Bay Area he's not sure why the city council members weren't told about the proposed changes.
"It sounds like there was some miscommunication between the city divisions," he said.
But Ramachandra says the deal with AASEG is a different contract than the city budget, which requires the city to cut spending if the AASEG payments aren't made on time. But she says the city administrator and the mayor's office aren't disclosing which cuts they're making first.
"Contingencies have begun to kick in, in that they're starting to make cuts," Ramachandra said. "We of course want to know what are those cuts. Are they going to be the big dramatic cuts to public safety? Is it going to be something softer? And we don't know that."
Oakland Mayor Sheng Thao declined a request for an interview Wednesday. However, she released a statement Tuesday saying "The AASEG deal is on track" and that "no contingencies have been triggered that weren't already in place."
Bobbit also said he's questioning whether some of this controversy is politically motivated, as Mayor Thao is facing a recall on the November ballot.
