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AABAColiseumCaseStudyin partnership with
University of California Berkeley, Haas School of BusinessDr. Robert Edelstein, Co-Chairman Fisher Center for Real Estate and Urban Economics
hat happens when you gather eleven MBAstudents, a renowned economics professor, andgraduate intern together with several
seasoned businesspeople to facilitate dialogue?Add in a dynamic business district as the focalpoint of discussion and youve got yourself areal-world case worth studying. An AABAColiseum Case Study, that is.
And so it happened on the eve of May 2, 2012in Cheit Hall, Room C325, that this gatheringoccurred as part of Course 284 taught byDr. Robert Edelstein to his MBA class at Haas School of
Business.
The Coliseum Case Study project, several months in themaking, began in 2011 with a meeting between Dr. Edelsteinand AABA. MBA intern Thu Banh was brought on boardto write a case study with the guidance of Dr. Edelstein,AABA Economic Development GroupChair Randall Whitney, and JRDVArchitects Managing DirectorEd McFarlan. The study would focus onthe Airport Area, more specifically theColiseum complex, in solving a
hypothetical (but very real life) problemof retaining an NFL football team at thesite. Dr. Edelsteins students would readthe case study and come up with solutionsin overcoming a $400 million funding gapto get a new NFL stadium constructed and generatingrevenue. Students were provided with the AABA case studydocument and three guiding questions two weeks in advanceof class to aid in preparing solutions to the problem.
Guiding Questions
ou are a private developer crafting aPublic-Private Partnership (PPP) tofinance the construction of a new
venue that will incentivize the hometownprofessional sports team to remain in Oakland.You are presenting your proposal to the teamand the Oakland-Alameda County
Authority. From a macro development perspective, howwould you create a PPP that:
Significantly increases revenues and closesthe anticipated $400 million funding gapthrough various public-private finance andmarketing strategies that employ innovativeand best business practice, taking into accountstadium indebtedness?
Attracts private-public sector financialentities (e.g., sports teams, investors, hotel
operators, developers, public assessment districts, etc.) and
devises a schema for risk-reward sharing related to partici-pation in the overall performance of the Coliseum area?
Has a positive fiscal impact on both the local and regionaleconomy, with the goal of maximizing social and economicbenefits?
Closing the Gap
uch of class time centered arounddiscussion of generating a
revenue stream to fund thestadium. As Ed McFarlan noted, a gapwould exist in any city where a billion-dollar NFL stadium is built whether inSanta Clara, Los Angeles, or right here in
Oakland. Closing the loop on funding is obviously not aneasy assignment and requires some big thinking. Studentsand facilitators were up to task, citing both typical andcreative sources of revenue in delivering solutions to get thestadium built and operating in the black. Case in point:
Maximization of non-game day events Renegotiation of existing debt Taxation of concessions and merchandise Negotiation of a better naming rights deal Sale of public land to private investors Restructured parking fees Use of New Markets Tax Credits Creation of a REIT to attract investment Use of technology in advertising and media Innovative seating and suite programs
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PHOTOS, top to bottom:
Haas School of Business, where Course 284 is taught AABA Executive Director Debbie Hauser, board member Randall Whitney, Dr. Robert Edelstein, and Thu Banh meet at the Faculty Club before class Ed McFarlan (skyped in larger than life from Malaysia) , Dr. Edelstein, and Mr. Whitney are ready to engage with students for a three-hour class session
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Case Study Participants
eveloping and presenting a case study has manymoving parts, and thus many people to thank.AABA acknowledges the following
individuals for their time and effort inparticipating in the Coliseum Case Study onbehalf of the organization:
The recipient of high academic honorsthroughout his distinguished career,Dr. Robert Edelsteinis the author ofnumerous books and papers on economics andreal estate investment. A past lecturer atHarvard University and Wharton School, Dr. Edelstein hastaught at Haas School of Business since 1985. His fields ofexpertise include urban economics, money and banking,public finance, urban land economics, energy economics,economic forecasting and real estate financing.
The Managing Director of JRDV Architects,Ed McFarlanis also an alumnus of Haas School of Business.Ed and a team of multi-disciplinedprofessionals his firm assembled were recentlyawarded an Exclusive Negotiating Agreementby the City of Oakland toward thedevelopment of Coliseum City on theColiseum site, as well as an agreement for thecreation of a Specific Plan and EIR in masterplanning the 750 acres surrounding theColiseum. JRDVs success in attracting world-class stadium developers, Forest City and HKS,bodes well for the Coliseum City project.
Randall Whitneyis President of Pacific Thomas Capital.The companys real estate activities and holdings span theHawaiian Islands as well as West Coast locations. Randallheads a team involved in real estate acquisition, investmentanalysis, project management, lease-to-fee conversion, tenantmanagement, and entitlementprocessing. Pacific ThomasCapital is the developer of theproposed Gateway Community,a ten-acre Transit OrientedDevelopment (TOD) nearbyBART in the heart of Oaklandsthriving Fruitvale district.
Jay Musante, AABA Boardmember, joined in the casestudy discussion. Jay was theSenior Project Manager for theCity of Oakland Communityand Economic Development
Agency assigned to the Coliseum Redevelopment Area. Jayviews the Coliseum and Airport Area as unique drivers withclear market potential to anchor the Bay Area sportsmarketplace, and notes the Coliseum is already a cham-pionship venue with three professional sports teams, a rare
commodity in the world sports marketplace.
Aliza Gallo, who joined discussion, is theBusiness Development Services Coordinator
for the City of Oakland, focusing on majorprojects, business retention and attraction,health care and life sciences expansion and thedevelopment of strategic partnerships withkey private and governmental entities.
Thu Banhis an AABA intern. Thu has a BA inEconomics from Yale University and is currently an MBAcandidate at Haas School of Business. Thu has over twelveyears of experience in designing and facilitating meetings,trainings, and community planning processes forfoundations, community-based organizations, and govern-ment agencies. Post-MBA, she will make a career transitioninto real estate, focusing on urban infill development that
enriches the socioeconomic fabric of our cities
About the Course
eal Estate Investment Strategy 284, is acapstone course for students who havecompleted prerequisite real estate
courses and-or have obtained significantprevious real estate-related experience. The
course utilizes the case method, with a focus on
developing strategic real estate management decision-makingskills. Class time is spent presenting and critiquingmanagement strategies that students develop for each case.Cases are chosen to examine either recent or classicmanagement problems in real estate development andacquisition, real estate financing and capital markets,
corporate real estate, real estatetransaction restructuring,repositioning and marketing,the entitlement process andproject management. In mostclass session presentations,senior decision-makers involvedin the case lead the discussion.
More on the Study
Visit http://coliseumscribbles.blogspot.com to read theColiseum Case Study.
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MBA students react to a question posed by Ed McFarlan in a back and forth exchange of ideas MBA student Thu Banh, author of the Coliseum Case Study, will take Dr. Edelsteins Course 284 next year as part of her studies at Haas School of Business
Case Study participants after class: students, professor, and business leaders, including City of Oakland manager Aliza Gallo (bottom left)
