Foul Ball: Commission report overturns earlier rejection of Oakland A’S Howard Terminal application

On May 2^nd, the Bay Conservation Development Commission (BCDC) staff recommended overturning an earlier Seaport committee vote that rejected the Oakland A’s application for redesignating the Howard Terminal site for real estate use.

In its Mission Statement, the San Francisco Bay Conservation and Development Commission (BCDC) says it “protects and enhances San Francisco Bay and encourages the Bay’s responsible and productive use for this and future generations.”

The Oakland A’s ballpark and condominium complex cannot move forward until BCDC removes the current Public Priority Use (PPU) designation from the Port of Oakland’s Howard Terminal site.

“I believe the Port of Oakland is acting in good faith. But I don’t believe the Oakland A’s are.”
- Mike Jacob, Vice President and General Counsel, Pacific Merchant Shipping Association (PMSA)

The issue will be decided on June 30^th when BCDC votes on the Oakland A’s application.

The new BCDC endorsement recommends that the Howard Terminal site be removed from the PPU designation, paving the way for the ballpark/condominium project to surmount a crucial regulatory hurdle.

Oakland A’S Hail BCDC Report

The Oakland Athletics sponsored site, athleticsnation.com, hailed the BCDC staff decision:

“Back in March, hopes for a new ballpark at Howard Terminal took a hit when the Seaport Planning Advisory Committee (SPAC) recommended that the San Francisco Bay Conservation and Development Commission (BCDC) reject removing Howard Terminal’s designation for port activities. Were the BCDC to follow this recommendation in a binding vote to be held in June, the ballpark project would be dead.

Thankfully, BCDC staff rejected the SPAC recommendation in a report released earlier this week that recommends “Removing the Port Priority Use designation from 56 acres at Howard Terminal at the Port of Oakland.” This means the authors of the report believe that Port of Oakland operations would not be adversely affected if the new ballpark and surrounding developments go forward.

If the commission’s June 30 vote follows this recommendation it will effectively remove a big hurdle that has threatened to block the A’s new stadium plan.”

BCDC Rationale

The May 2nd BCDC staff report conceded that it overturned a March Seaport Planning Advisory Committee decision to reject Howard Terminal’s PPU removal.

This report was entitled “Staff Report and Preliminary Recommendation for Proposed Bay Plan Amendment No. 2-19 Concerning Removing Howard Terminal from Port Priority Use (For Commission consideration on June 2, 2022).”

The circumstances of the rejection were:

“At the March 16, 2022, meeting, the SPAC (Seaport Planning Advisory Committee) voted 5-4-1 to recommend that the (BCDC) Commission deny the Bay Plan Amendment to remove the Port PUA designation for Howard Terminal, primarily because the SPAC lacked information from the Applicant and the Port of Oakland it felt was necessary to support the application.”

However, the May 2^nd BCDC report conceded that the committee’s rejection was based on cargo forecast data that had been developed after several hearings, over several years and after substantial research:

“The Cargo Forecast was developed under the guidance of the Seaport Planning Advisory Committee (SPAC) over the course of three public meetings. Representatives of each of the five individual ports located in BCDC’s jurisdiction provided direct feedback about their operations to inform and verify the forecast’s data and findings, and the forecast was independently peer reviewed. The final Cargo Forecast was approved by the SPAC at its third meeting in May 2020, and each port representative voted in favor of its adoption. The Cargo Forecast includes slow, moderate, and strong growth scenarios, a range of productivity estimates, and an inventory of available Port PUA lands that could be utilized to meet forecasted needs to the year 2050.”

After the March 16^th SPAC rejection, the BCDC staff reported that the Oakland A’s, the City of Oakland, and the Port of Oakland came up with new information to countermand the earlier finding:

“After the SPAC meeting on March 16, 2022, the Applicant, in coordination with the Port of Oakland and the City of Oakland, provided a great deal of information in support of its application that was unavailable prior to the SPAC meeting.”

The new information was found at the Port of Benicia:

“In those materials, the Applicant and Port questioned the Ro/Ro cargo capacity at the Port of Benicia (described in detail in Section V of this report). Though the Port of Benicia is operating at full capacity, the Applicant identified additional existing acreage that contributes to Ro/Ro operations at the Port of Benicia that was mistakenly not considered when the Cargo Forecast was developed.”

This new information was sufficiently compelling to cast doubt on the Cargo Forecast conclusions presented on March 16^th resulting in the rejection of the Oakland A’s application:

“This new information, described in detail below, would have changed the Cargo Forecast’s conclusion about the region’s Ro/Ro capacity had it been incorporated in the Cargo Forecast during its development. After the SPAC meeting, staff and the Tioga Group undertook a review of this issue and consulted the Port of Benicia. Staff preliminarily concludes that the Port of Benicia has 122 acres of existing Ro/Ro capacity rather than the 75 acres originally identified in the Cargo Forecast. As a result, the region will need fewer additional acres of Port PUA to meet projected cargo growth.”

PMSA Dissent

The Port of Oakland Turning Basin expansion, crucial to allowing mega containerships to expeditiously dock at the Port of Oakland, could be in jeopardy if the Bay Conservation and Development Commission approves the Oakland Athletics application to exclude the Howard Terminal site from its current seaport designation, according to Mike Jacob, Vice President and General Counsel, Pacific Merchant Shipping Association (PMSA).

In an interview with AJOT, Jacob explained his concerns:

“If the (Turning Basin) 10 acres is removed from the PPU designation it is a sign. Either the land remains part of the PPU (Public Priority Use) designation, or it does not. I believe the Port of Oakland is acting in good faith. But I don’t believe the Oakland A’s are. If the Port and the A’s are acting in good faith, they should put their money where their mouth is and keep the 10 acres in the PPU and not remove it with the rest of the land that is slated for condominiums and the ballpark.”

Also, Jacob is suspicious about the rationale for the BCDC decision to overturn the SPAC report. He believes the March 16^th SPAC vote was based on a cargo forecast that “was rigorously researched” and he questions BCDC’s rationale for introducing the new data.

Mercator: Howard Terminal Can Handle Container Ships Up To 5,000 TEU

A suggestion that Howard Terminal could still be useful as a container terminal comes from a Mercator International consultant who had been hired by the Oakland A. In a May 13th, 2020, email sent to AJOT, the Mercator representative identified as “S. Rothberg” wrote that Mercator was contracted to analyze Port of Oakland and Howard Terminal container terminal possibilities by the Oakland A’s. In part, Mercator found that Howard Terminal could handle container ships of up to 5,000 twenty-foot unit containers (TEU).

This container ship size could currently be deployed in trades that operate at California ports with vessels smaller than 5000 TEU:
The May 13, 2020, Mercator email to AJOT noted:

• As per Matson in the California to China trade.
  
• As per Pasha and Matson in the California to Hawaii trade
  
• Mercator cites trades to Central America and the South Pacific
  

“With respect to Mercator’s engagement by the Oakland Athletics … In evaluating the utility of Howard Terminal for serving container traffic, we took into account that the Howard Terminal’s water depth, wharf structure, and other infrastructure prevent that facility from being able to efficiently handle container ships with capacities greater than 5000 TEU, and recognized that well before 2050, the container ships expected to be used in the major lanes between California and Asia, as well as between California and Europe, will all be larger than 5000 TEU. We established that the terminal’s future utility in the container sector would therefore be limited to handling a few niche services for small markets (such as the California trade to and from the South Pacific Islands or to/from Central America), noting that the terminal has not stevedored containerships on a regular basis for more than the past five years.”