This week, Oakland Mayor Libby Schaaf doubled down on her stance regarding (lack of) any public subsidy towards an Oakland Raiders stadium.
“I am willing to lose this team if public money is the issue,”
The position is understandable, but it’s not a common one. If a “how to lose an NFL team” handbook existed, the above sentence would be in bold extra-large font.
So I’m thinking, was this the plan all along?
Some won’t take this idea seriously, they believe politicians tell the truth and a fairy visits when we lose a tooth.
An NFL legend, why wouldn’t Ronnie Lott be the perfect investor?
Well, maybe he would be the ideal partner if the plan was to sink the pirate ship docked in the East Bay.
Surprisingly, very little has been reported of Lott’s post NFL life in asset management. I’d have no clue without the extensive sleuthing that is a 10 second google search.
Skeletons in the closet?
In 2011, Lott’s investment firm, HRJ Capital, filed for Bankruptcy, signaling dramatic failure for Lott’s first large-scale business venture. The firm was a co-partnership between Lott and former 49ers teammates, Harris Barton and Joe Montana – hence the name HRJ (initials of their first names). While I can’t vouch for the accuracy of the story, if it’s true, it presents damning evidence of investors getting swindled with debt – in an attempt to ensure the group could walk away clean.
I also say “if true” because we’ve only heard one side of the story. Neither Lott, Montana nor Barton would comment on the story.
A village is no match for a fortress
The money backing Lott is from a partnership with Fortress Investment Group. Just last week, Japanese based SoftBank agreed to acquire FIG, likely putting on hold any current transactions (although representatives insist they still plan to proceed with the proposed Oakland stadium funding).
Around the same time Lott’s group at HRJ was floundering, the city of Vancouver was learning first hand that dealing with Fortress was the financial equivalent to swimming with sharks. Vancouver had teamed with Fortress to fund their upcoming Olympic Village.
Fortress stopped payment on its $633 million construction loan in the fall.
The city said Fortress backed out due to cost overruns, and a crashing real estate market meant Millennium Development might not be able to pay them back.
The city stepped in with $84.3 million interim financing to keep construction going, but that funding runs out next month.
Robertson said Fortress was bought out on terms that will save the city $71.7 million compared to the Fortress deal.
The city had to pay Fortress a $3.2 million early payment penalty, city councilor Geoff Meggs said.
By partnering with Fortress, the city of Oakland has gone directly against the behest of league wishes – including a third party developer. The fact that Fortress is that third party, pretty much shoots down the theory that the league could force Mark Davis into this deal. While Fortress doesn’t carry the gambling concerns that Sheldon Adelson possesses, they’re every bit as toxic to the idea of maximizing profit and long term security.
The more likely scenario
Stadiums are not big money makers for investors outside of the NFL teams capitalizing from the hundreds of millions luxury suites provide. Libby was probably flooded with offers of “no thanks”, and went with the best option, aka only option.
I wish Lott luck in this business venture, but have very little faith he’s the right man for the job.
Lott’s greatness on the field is undeniable.
Off the field, the ground has been shaky.
If Lott’s billion dollar dream ends up crashing, there’s plenty other ways he can make a difference. As of today, the Raiders still do not have a defensive backs coach. If Ronnie really wants to help the Raiders, that might be his best opportunity.