On June 26, 2024, the City Council approved Ordinance No. 13801 authorizing the City Administrator to negotiate and enter into a Purchase and Sale Agreement (PSA) with the African American Sports and Entertainment Group (AASEG) for the sale of the City of Oakland’s (City) 50% interest in the Oakland Alameda County Coliseum Complex property (Coliseum Complex). On August 31, 2024, and as amended effective September 23, 2024, the City of Oakland (City) entered into the PSA, also known as the Real Property Sale Agreement, with Oakland Acquisition Company (OAC), an affiliate of AASEG.
FAQ's specific to the Coliseum sale itself are available here.
Below are FAQ's regarding the City's budget that relate to the sale.
How is the sale of the Coliseum linked to the City’s budget?
The ordinance authorizing the sale of the Coliseum, unanimously approved by City Council, directed that the sale proceeds be deposited into the General Purpose Fund. It otherwise does not link the sale of the Coliseum to the City budget.
What happens to the City’s budget if the Coliseum sale is completed?
The Purchase and Sale Agreement between the City and AASEG provides for $110 million to be paid during the City’s fiscal year ending June 30, 2025. The budget passed by City Council includes $63 million in revenue from the sale.
If the transaction completes on May 30, 2025 as required by the PSA, the City will receive $47 million more revenue than was initially budgeted.
In the short term, this would provide much needed revenue for the City’s 2024-2025 budget to maintain fiscal stability. In the long term, the redevelopment of the Coliseum site will provide significant new tax revenue to sustainably contribute to resolving the City’s longstanding structural deficit.
How does the Coliseum sale impact the City’s budget?
The budget resolution (separate and apart from the purchase and sale ordinance) adopted by the City Council provides direction for what city services are funded under two scenarios: the approved budget and the contingency budget. Conditions for implementing the contingency budget have been met. In March 2024 the City Administrator put cost savings measures into effect and these measures remain in place. They include slowing of hiring, as well as freezing travel for non-essential public safety training. Further cost saving measures were articulated in the contingency budget and per the budget resolution are in the process of being implemented.
If the sale happens this fiscal year, what will the City do with the extra funds?
City Council will determine where the additional $47 million in unbudgeted revenue will be appropriated. The administration has expressed its intention to advocate for allocating surplus funding from the sale of the Coliseum to replenish the Vital Services Stabilization Fund, in line with fiscal best practices.
When will we know if public safety cuts are necessary this fiscal year?
As is standard practice during a challenging budget year, staff have been closely monitoring revenue and expenses since the passage of the budget three months ago. The Administration had already anticipated the need to propose budget amendments to City Council in the fall, following the close of the previous fiscal year and release of Quarter 1 revenue reports. Given the decades long structural deficit and unpredictable impact of inflation on tax revenues, budget amendments were always a likely necessity regardless of whether the parties amended the Coliseum sale contract or not.
The City Council President has reconvened her Council Budget Team to evaluate the magnitude of public safety overtime spending against higher than anticipated revenues to determine if further public safety cost containment measures are necessary. The Finance and Management Committee will hear the most recent fiscal analysis at their regularly scheduled October 22 meeting.
What are the next steps?
We are thoughtfully pursuing the implementation of the contingency budget plan Council adopted in June, prioritizing an approach to minimize impacts to public safety.
It is the intent of the administration in partnership with the City Council President and Finance and Management Committee Chair to revisit the current-year budget to account for overspending this year and last year in order to maintain the stability of the city’s finances.