New Oakland Coliseum Sale Deal Raises Questions About Delayed Payment and City’s Budget

The city of Oakland and the developers’ group that is buying the Coliseum both said the deal is still on track after council members raised questions about the sale this week, but the timing of payments to the city — used to balance this year’s budget — could be changing.

Under the original deal signed at the end of July, an initial $5 million payment from the African American Sports and Entertainment Group to Oakland was meant to have been followed by $10 million last month. The city’s budget plan, also passed in July, relies on one-time funds from the Coliseum sale and includes a contingency plan with drastic cuts triggered on Oct. 1 if the city hadn’t received the first $15 million from AASEG.

That second $10 million payment did not come in before the budget’s contingency cutoff date. The new sale agreement would push it back, but the effect on Oakland’s budget is still not clear, frustrating some City Council members.

Ray Bobbitt, AASEG’s founder and managing member, said Thursday that AASEG and the city had talked about amending the initial deal before it was signed and entered into talks quickly after to add security against the property to their payments.

On Sept. 30, AASEG received an amended deal that increases the total price from $105 million to $110 million and requires all of the funds to be transferred before the fiscal year ends in July, Bobbitt said. Under the initial deal, the last installment would have been made by June 2026.

The $10 million payment that was initially slated for Sept. 1 was pushed back to Oct. 7, which Bobbitt said AASEG expects to meet.

“Nothing’s really changed other than the fact that we may pay all of the money off within the fiscal year, which would be a mechanism to give us the security we need,” Bobbitt told KQED.

Some council members aren’t pleased that they were left out of the conversation.

Councilmember Janani Ramachandran said she and Councilmember Treva Reid had inquired repeatedly since August for updates on the sale. They were both skeptical of the city’s budget plan this summer.

“We said, ‘Look, we want to protect our city’s money. If it seems as though this money isn’t going to come in on time, we want to help problem solve and see what we can do to soften the blow of the contingency budget,’” Ramachandran told KQED. “We were denied an opportunity to engage with that.”

At Tuesday’s council meeting, she asked about the status of the $10 million payment that was expected Sept. 1, with an apparent grace period of about three weeks. City administrator Jestin Johnson said the city had enacted “several cost-reduction measures,” seemingly necessary only without those funds, but officials said they could not provide information about the status of the payments since no discussion of the sale was on the meeting’s agenda.

Ramachandran said that even if the payment plan being negotiated by AASEG and the city is enacted, it could affect the budget.

“That means the two other installment payments that were supposed to happen in November — another $15 million, and then $33 million by Jan. 15 — what’s going to happen to aspects of our budget that relied on that money coming in on time?” she said. “Even if this proposed deal does come to council, I have deep concerns about this impacting our budget.”

Mayor Sheng Thao did not respond to a request for comment, but her office said in a statement on Tuesday, the Oct. 1 budget cutoff date, that “no contingencies have been triggered that weren’t already in place.” It did not specify what, if any, contingencies were in place at the time.

“All relevant information will be presented to the City Council in closed session and at the Finance and Management Committee meetings, in accordance with appropriate and legal noticing requirements,” the statement continued.

If the deal is amended, the City Council will have to approve it before it can take effect.

Ramachandran said the Coliseum deal is not currently scheduled for closed-session discussion. — aside from an emergency informational item that she, Reid, and Councilmember Noel Gallo requested be added to next Monday’s agenda, which was awaiting approval.