Oakland Coliseum sale payment dispute triggers concern of public safety cuts

OAKLAND, Calif. - An historic agreement between the City of Oakland and the African American Sports & Entertainment Group (AASEG) is a done deal, but there are concerns about critical payments.

Three Oakland councilmembers contend that because the city has not received an installment it believes is due, a contingency budget will kick in starting Tuesday, October 1. That means drastic public safety cuts could be made.

Councilmembers Noel Gallo, Janani Ramachandran and Treva Reid raised the alarm Tuesday over a lack of transparency, since they say the city has received no proof of payment that the initial $15 million from AASEG has been made. 

Although the Purchase and Sale Agreement was signed by September 1, the city has not confirmed receipt. They say the payment should have been made by the built-in grace period deadline of September 23. If it is not, the contingency budget goes into effect October 1. 

"The mayor's proposed budget included $63 million that we did not have in the bank, and there were terms that were agreed upon…those terms have not been made clear as to where that money is now," said Reid. "So we have been spending money, and budgeting for money that we don't have in the bank."

"The fact that we are here on October 1st, without having received the entirety of this initial $15 million payment, is unsettling to me, because we don't know what this contingency budget is now going to look like," said Ramachandran. 

The councilmembers said the contingency budget would reduce Oakland's budgeted police force to 600 officers, and temporarily close five fire stations and pause all city contracts.

The city administrator confirmed at Tuesday's council meeting that the contingency budget has indeed been triggered, and cost-reduction measures have begun, though its unclear exactly what kind.

Mayor Sheng Thao's office issued a statement disputing this claim. Her statement reads: "The AASEG deal is on track. No contingencies have been triggered that weren’t already in place. 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."

"Unfortunately, it's a political season. I'm not sure if these political issues that are occurring between the councilmembers and the mayor's office, but really for us, it's really unfortunate because it's such a historical project," said AASEG co-founder Ray Bobbitt. "These are the kind of things that when they happen, it makes the city look a little bit bad."

Bobbitt said the group has made all required payments, according to the Purchase and Sell Agreement with the city. AASEG stated that it wired $5 million to the city on September 3rd, and plans to pay the required additional $10 million by October 7th, as it continues to negotiate with the city to pay the full $105 million by the end of this fiscal year.

"If that is the case, they need to bring that back to council. There's been a lack of accountability, there's been a lack of transparency, and there has been a question of integrity in this entire process," said Reid. "Where is the money, when did it come in, how much do we have and what are the steps that we're taking?"

Reid said multiple emails to the mayor's office from all three councilmembers asking for updates on this deal have all gone unanswered.  

"I would hope that moving forward in this process, the different branches of city government would communicate in such a way, where it wouldn't put our organization in a position where we have to sort of explain things that are much more complex to the average person," added Bobbitt. "As African Americans, we're not necessarily part of the financial economic fiber of this country, and so it's easy target to question our financial capacity."