TO: The Honorable Members of the Board of Supervisors

FROM: Adam Van de Water, Legislative Analyst

DATE: August 20, 2002

ISSUE: Women"s Professional Sports Franchises (File No. 020365)

Summary of Request

President Ammiano, through the Board, asked the Office of the Legislative Analyst to research the steps required for the City and County of San Francisco to attract a professional women"s sports franchise, including required financial backing and sporting venues and capacity. The report should document, to the extent possible, bids offered in other jurisdictions to obtain teams, ticket sales in other local sporting venues, such as Candlestick Park to be used for soccer and the status of plans to develop a basketball arena and new football stadium in San Francisco.

Executive Summary

There are currently three women"s professional sports leagues in existence: the Women"s National Basketball Association (WNBA), the Women"s United Soccer Association (WUSA), and the Women"s American Football League (WAFL)¹. Appendix 1 details information on the three national leagues, their teams, venues, capacities, costs of construction, and single ticket prices.

San Francisco currently has four stadia capable of hosting a major league sporting event: 3Com Park at Candlestick Point, Pacific Bell Park, the Cow Palace and Kezar Stadium. Appendix 2 describes their opening dates, costs of construction, seating capacities, and primary tenants. San Francisco has a newly formed women"s professional football team (the San Francisco Tsunami), currently has the capacity to attract a WUSA women"s soccer team, and would need to negotiate with the WNBA and build a stadium in order to attract a professional women"s basketball team.

After exploring the history of new stadia construction in San Francisco and the preliminary conditions necessary to attract a WNBA or WUSA franchise to San Francisco, the Office of the Legislative Analyst finds that the WUSA is the most attractive women"s professional sports team should the Board wish to pursue a new team in San Francisco. Preliminary conversations suggest that the San Jose CyberRays could be lured to play in Kezar Stadium if the City:

Constructing New Sports Stadia: A Brief Overview

Simply put, most publicly funded sports stadia do not generate new revenues to the City. In fact, in the words of the Federal Reserve Bank of Kansas City, "studies overwhelmingly find that the [job creation and tax revenue] benefits are much smaller than the outlay of public funds." The value of building a new sports stadium, therefore, depends upon its ability to meet latent demand for meeting space (additional concerts, conventions or sporting events not otherwise able to reserve space in San Francisco) and the immeasurable degree to which it generates short-term construction work, national television and advertising exposure, and/or regional civic pride.

Roger Knoll and Andrew Zimbalist, co-authors of Sports, Jobs, and Taxes, state flatly, "few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development." According to the literature, most of the additional revenues resulting from the construction of new stadia represent shifts in discretionary spending within the region away from other leisure activities and toward the new stadium. In addition, because 65 percent of team revenues go to players under union contracts who often do not live locally, much of this spending shift is transferred out of the region.

According to the June 14, 2002 San Francisco Business Times, between 1987 and 1999, 55 sports complexes were built at a cost of $8.7 billion. Taxpayers covered 57 percent of those costs, in some cases - such as the reconstruction of the Oakland Coliseum and the Oakland Arena - paying the entire cost of the new stadium. On average, a new basketball or hockey arena costs approximately $200 million (with the public"s share averaging approximately $100 million), while a new baseball or football stadium costs approximately $300 million (with the public"s share averaging approximately $200 million). See Appendix 3 for a listing of the total cost and public share of recent national and California major league stadium financings.

Plans to Build a New Stadium in SF

Mayor Brown proposed to build two professional sports stadia over the past six years, neither of which ever reached the construction phase. The first, a $100 million bond issuance authority to build the NFL 49ers" a new $450 million stadium at Candlestick Point alongside a new $200 million 1.7 million square foot retail shopping center, was narrowly approved by the voters as Proposition D in June 1997. However, in a memo to the Finance Committee in early 1997 (File 60-97-3), the Budget Analyst estimated that the net result of increasing sales taxes, gross receipts, and other tax revenues while decreasing park revenues and increasing debt service would have resulted in an annual General Fund reduction to the City of $4,648,912. These escalating costs, together with instability within the 49er ownership, prevented the City from ever exercising this specific authority and the bond was never issued.²

Currently, the City and the 49ers are seeking new naming rights for the stadium at Candlestick Point as the agreement with 3Com Corporation expired in January 2002. According to Jaci Fong at the Department of Recreation and Parks, how long the 49ers will continue to play in the existing stadium is an open question. Given planning and construction time, Ms. Fong estimates that it would be at least five to six years before a replacement stadium could become operational.

The second stadium proposition came in 1994 and again in 2000 when the Mayor"s Office explored building a 20,000-seat stadium above the Transbay Bus Terminal. The large-scale development project incorporated the existing transit hub as well as retail and office space, convention facilities and a possible future home of a NBA and/or NHL team. According to Maria Ayerdi in the Mayor"s Office of Economic Development, it was never determined how long it would take or how much it would cost to build this arena. Rather, given the inadequate structure at the Terminal to support the stadium and the need to build over the streets and acquire new property, the project was abandoned as prohibitively expensive. Building an arena could potentially work, Ms. Ayerdi advises, near the terminus of I-280 between 6^th and 7^th Avenues and Townsend and the Channel, with parking above the Caltrain tracks at 4^th and King. However, this is not currently an active project of the Mayor"s office.

Port Director Douglas Wong believes that the only thing currently preventing a developer from privately financing and constructing a 20,000-seat stadium near Pacific Bell Park is a demonstrated commitment of support from the Board of Supervisors. If the Board passed a motion urging the Port to explore the possibility of privately financing and building a new stadium, he believes a developer would respond with a 100 percent privately financed proposal that involves no public commitment of funds. Mr. Wong believes that significant demand exists to fully recover this private expenditure of funds from sources such as Bill Graham Presents concert promoters, the University of San Francisco basketball team, and other agents that have approached the Port looking for space to hold their conventions.

Attracting a Team to SF

WAFL Football

San Francisco already has a women"s professional football team in the San Francisco Tsunamis. The Tsunamis began their inaugural season last fall in Kezar Stadium in front of an average crowd of up to 400-600 spectators³. According to General Manager Tynya Beverly, efforts to increase visibility of the new league have been slow and team representatives have met with the city to discuss promotional opportunities as well as possible changes to its contract with the Recreation and Parks Department (DRP) which operates Kezar Stadium.

WNBA Basketball

Attracting a WNBA team to San Francisco faces two significant, if not outright prohibitive, hurdles. First, San Francisco would have to negotiate to host the first WNBA team outside of a NBA city in the league"s history. As most WNBA expansions are negotiated with the support of NBA team executives⁴ and San Francisco does not currently have a NBA team⁵, it is unlikely that San Francisco could successfully bid to host an expansion team. The owners of the NBA Golden State Warriors in Oakland have expressed a desire to host a new WNBA team as early as 2004. According to Chief Operating Officer of the WNBA Paula Hansen, NBA team owners get first rights to operating agreements in new markets and would therefore have first priority should the Bay Area be considered for an expansion team.

Secondly, and perhaps equally prohibitive, San Francisco would need to construct a new 10,000 - 20,000-seat stadium to host a team⁶, the current average total cost of which is approximately $200 million (see Appendix 3). Even if, as Port Director Wong asserts, private financing currently exists to construct a new stadium without public money (see above), the City of San Francisco is still likely to be liable for non-construction costs (such as police services and transportation management) and could not benefit from a new team"s presence until at least 2008 when the stadium could first be completed. Also, the fact that two recent efforts to build new stadia in San Francisco have failed to reach the construction phase despite public support suggests that other obstacles may exist other than the availability of public vs. private funds.

As a result, barring a future and expensive move of the Golden State Warriors to San Francisco after 2009 or the collapse of any arrangements between the WNBA and the Warriors coupled with the construction of a new $200 million stadium, San Francisco is unlikely to gain a women"s professional basketball team anytime in the near future.

WUSA Soccer

Of the existing eight WUSA teams, only two are from the West Coast: the San Diego Spirit and the San Jose CyberRays. According to Charles Parker, WUSA Chief Financial Officer, the Atlanta-based WUSA is currently looking to expand its West Coast league and would be interested in establishing an expansion team out West. As the WUSA is a single entity corporation, attracting a new team would require the formation of a private investor group willing to invest in the league and purchase the rights to an operating agreement for the team. The WUSA Board of Governors approves this several million-dollar commitment which is pooled and shared equally among teams on the basis of the team"s ticket sales, sponsorships, and television rights. The team could play at an existing city-owned stadium - most promisingly Kezar Stadium, which, according to Parks and Recreation, has available dates and appropriate seating capacity⁷.

However, San Jose CyberRays General Manager Marlene Bjornsrud believes with 99 percent certainty that the Board of Governors would not approve another team in the Bay Area within such a short radius of San Jose, especially this early in the league"s development. Instead, should San Francisco be interested, Ms. Bjornsrud indicated that the CyberRays would consider moving from their current home at San Jose State"s Spartan Stadium to a venue in San Francisco if certain essential conditions could be met. These conditions include:

The San Francisco stadium that most closely meets these criteria is Kezar Stadium in the southeast corner of Golden Gate Park⁸. Kezar has a capacity of 10,000 in 18 rows of bleacher seating on the north and south sides, has field lights for night play, has hosted televised high school events, and has booking availability during the WUSA season mid-April to mid-August. According to Stadium Manager Jim Jackson, this could cause conflicts with high school track tournaments during the WUSA"s opening weeks in late April. However, the remainder of the WUSA season falls outside of high peak permitted times, which occur during the school year.

The primary hurdle to luring the CyberRays to San Francisco is parking. In order to win approval from the Kezar Stadium Advisory Committee⁹ and the Recreation and Park Commission, team or city officials would have to demonstrate a strong Transportation Management Plan that could handle the expected 7,000 to 9,000 fans for each of the team"s ten or eleven home games. A recent proposal to host a professional soccer game at Kezar was denied due primarily, according to Ms. Huntington, to lack of an effective transportation management plan¹⁰.

Per Section 12 of the Kezar Operation and Permit Policy, this plan (1) "must coincide with the times when available parking is at a maximum" (shown in the table below as weekday nights), (2) "must be coordinated with other facilities in the area so that adverse impact from concurrent use will be avoided", (3) must "direct stadium patrons to available off-site parking lots in the area" including posting maps and informational flyers, (4) must have "police regulation for vehicles exiting from the stadium lot...and pedestrians crossing Stanyan and Frederick Streets", (5) and must provide "evidence of coordination with Muni Transit and consideration for use of chartered buses with either Muni or private companies."

The Transportation Management Plan could include the use of the estimated 904 weekend and 2,375 weekday parking spaces within a 15 minute walk¹¹, MUNI"s N Judah light rail line, bus lines 7 and 71, and possibly a shuttle service from a satellite parking location elsewhere in the city. According to President Dorrie Huntington, the Kezar Advisory Committee plans to begin work on elements of what constitutes a successful transportation plan at one of their upcoming quarterly meetings.

Other considerations contained in the Stadium Operation and Permit Policy include:

Any associated cleanup, maintenance, police services, or transportation costs incurred by the City could be at least partially recovered by stadium rental rates, currently set at the greater of a low set fee or 25 percent of gross ticket and concession receipts plus 20 percent of gross merchandise receipts. Depending on ticket prices and total attendance, the amount generated for the City would likely range between $12,000 and upwards of $55,000 per game¹². The Director of the Parks and Recreation Department has the authority to adjust or waive rental rates charged for the rental of Kezar Stadium.

According to Ms. Bjornsrud, the CyberRays" agreement with Spartan stadium ends at the conclusion of the 2002 season and the team will begin to negotiate their field contract for the 2003 season in mid-September. Under the existing contract with Spartan stadium, the CyberRays pay the greatest of $10,000 per game or eight percent of gross receipts (capped at $25,000) plus field operations costs for groundskeeping, custodial work, and concessions. According to Ms. Bjornsrud, depending on attendance and the time and length of the game, the sum of these costs can total up to $50,000 per game.

Conclusion

The most promising opportunity to bring women"s professional sports to San Francisco is to lure the WUSA San Jose CyberRays to play at Kezar Stadium in Golden Gate Park. To do so, the Board of Supervisors would need to:

The WAFL (formed 2001)

The inaugural 2001-2002 WAFL season consisted of fourteen teams. Five additional expansion teams are planned for the upcoming 2002-2003 season. San Francisco"s home team, the SF Tsunamis, played ten games last fall/winter including four on their home field in Kezar Stadium. Attendance averaged 400-600 per game with single adult ticket prices of $15.

WAFL Atlantic Conference

13. Alabama Slammers

14. Jacksonville Dixie Blues

15. New Orleans Voodoo Dolls

16. Birmingham Bandits*

17. South Florida Sun Devils*

18. Indianapolis Vipers

19. Virginia Destroyer*

* Expansion Teams 2002-2003.

Appendix 2: San Francisco"s Major League Venues

Pacific Bell Park - SF Giants

Opened March 31, 2000 for $306 million, Pacific Bell Park is the first ballpark built for Major League Baseball without general fund or special tax subsidization since Dodger Stadium opened in 1962. Pacific Bell Park can seat 41,059 and sold out a record 90 consecutive games through April of last year, although attendance has decreased somewhat since that time. According to the San Francisco Business Times, attendance at Pac Bell is on pace this year to top 3.3 million, enough to place the Giants in second or third place among Major League Baseball"s 30 teams. The value of corporate sponsorships will top $20 million for the third consecutive year (more than double the Giants" final season at Candlestick - due largely to increased signage space) and annual revenues are among the top five in the majors at $160 million. Single ticket prices range from $9 for standing room up to $37 for Club level seats.

Park at Candlestick Point - SF 49ers

Opened April 12, 1960 for $24.6 million, the currently unnamed stadium at Candlestick Point was built entirely with public funds. The current home of the San Francisco 49ers, Candlestick Park can seat up to 70,000 and in 2001/2002, according to information provided by the Department of Recreation and Parks (DRP), the 49ers averaged 67,145 tickets per game and $47.5 million in total revenue for the 10 game home season. Jaci Fong of the DRP Property Management Unit says that DRP "would love to have soccer" and could easily schedule the ten or eleven home games required to host a WUSA team in San Francisco.

The Cow Palace - No Major League Team

The Cow Palace was publicly funded and built in 1941 as a post-Depression Works Progress Administration construction project to be used primarily for livestock shows. Since its completion it has been used for everything from rodeos to concerts, World War II troop deployment, and as a home for the NBA Golden State Warriors (1962-4, 1966-71) and National Hockey League San Jose Sharks (1991-1993). The Cow Palace has a seating capacity of 12,953.

Kezar Stadium - SF Tsunamis

Opened in 1922 and then demolished and reconstructed in 1989 after the Loma Prieta earthquake, Kezar Stadium can hold a capacity crowd of approximately 10,000. Kezar is the current home of the Women"s American Football League"s San Francisco Tsunamis and the former home of the 49ers (1946-1970) and the Oakland Raiders (1970).

Appendix 4: WUSA Minimum Stadium Standards

Capacity 7000

Lights Top quality for night play and for television standards

Playing Field Natural grass; 106" x 68"; 10 yards between touchline/endline and stands/fence; barrier between stands and field/bench area

Enclosure All enclosed by fence or wall; no entry

Team Locker Rooms Two separate locker rooms 400 sq. ft. each equipped with two toilets, two sinks, four shower heads, twenty lockers, four electrical outlets, air conditioning and heat, doors with working locks; segregated space for 1-4 male coaches

Referee Locker Room One room 100 sq. ft. equipped with two sinks, one individual shower, four lockers, and doors with working locks, air conditioning and heat

Press Box Capacity of 20, four phone lines, four electrical outlets, two broadcast booths with broadcast lines, two television monitors, internal PA, one unisex toilet with sink

PA System Quality sound system with ability to plays CDs

Scoreboard Clock that can count up or down 0-45; home/visitors score

Luxury Suites Space for tents for pre/post game hospitality

Camera Positions Six positions: two at 18 yard each end, one midfield field level, one midfield high level, one handheld field level, one behind goal

Concession Stands One line per 200 people

Public Restrooms One woman"s toilet per 100; two urinals per 125

Novelty Stands Space for two temporary stands

Gates One turnstile per 1000

Ticket Windows One seller per 500 walk-up; 1 spectator will call

ADA Seating 2% distributed among all price levels

Parking Space needs determined by ratio of 3.5 people per car

TV Truck Parking and power near press box for semi, 1000 amps/200 volts

Interview Room Tent located near field for post-game

First Aid Stations Space for one 10 x 10 tent

Pre-game Fan Fest 5000 sq. ft. open space near stadium

Storage Room 200 sq. ft. on site

Flag Poles Two of equal height

Sponsorships No restrictions regarding on-site rights for sponsors; no facility sponsors at field level

SOURCE: Marlene Bjornsrud, General Manager, San Jose CyberRays

¹ This does not include semi-professional teams or tournament sports such as the Women"s Tennis Association or the Ladies Professional Golf Association that do not have franchise teams.

² The authority while never exercised was tied closely to the specific conditions of the proposed deal as the authorizing text of Proposition D stated that "the City shall not issue the bonds until [eleven specific] conditions have been negotiated and concluded with the Mayor"s Office."

³ The Department of Recreation and Parks and the Tsunami management disagree on average attendance figures.

⁴ The bid to attract a WNBA team to San Antonio for the 2003 season, for example, included among others the support of San Antonio Spurs Chairman Peter Holt and Spurs Executive Vice President Russ Bookbinde.

⁵ While the Golden State Warriors played in the Cow Palace in San Francisco during the 1960s and could potentially be lured back to play in San Francisco in the future, the Warriors are currently under contract with the Oakland Alameda County Coliseum Authority to play in the Oakland Coliseum through 2027. The team could break that contract in 2009 if it agreed to pay 100 percent of the cost of the remaining debt service within 30 days of the contract"s termination.

⁶ WNBA attendance has averaged just over 9,000 fans per game and typically use the lower tier of NBA stadia for their games. The WNBA requires its owners to curtain off upper tier seats and sell all lower tier seats (lower tiers of current stadia hold approximately 8,500 to 13,000 seats) before they can sell tickets in the upper tier.

⁷ According to CyberRays General Manager Marlene Bjornsrud, the best suited WUSA venues range in capacity from 7,000 to 15,000 seats. The CyberRays evaluated 3Com Park as a potential site in 2001 and determined that it was far too big for the average attendance of approximately 8,500 fans. Similarly, in the words of Ms. Bjornsrud, with a capacity of 30,578 Spartan Stadium "costs a lot of money just to open."

⁸ Candlestick Park was deemed too large and too expensive by the WUSA when they initially explored venues in 2000/2001 and the newly renovated Cox Stadium at San Francisco State University has a capacity of only 5,000.

⁹ According to the Interim Kezar Stadium Operation and Permit Policy Section 18, "the General Manager will appoint a Kezar Stadium Advisory Committee to be composed of up to eleven members. This committee will consist of neighbors and residents of the Kezar and Haight area, representatives of the San Francisco Unified School District, inner Sunset community groups, private schools, San Francisco Recreation and Park Department, soccer organizations, and other user groups."

¹⁰ Event organizers intended to hire several buses and shuttle fans in from Chrissy Field during rush hour on a weekday.

¹¹ Interim Kezar Stadium Operation and Permit Policy Table A-1.

¹² Rental rates at Kezar are determined by the higher of either a low base rate (currently between $400 and $2000) or 25 percent of gross ticket and concession receipts. As the WUSA would almost certainly attract over 8,000 fans to its games, the City would generate a minimum of $12,000 per game for 8,000 tickets sold at the minimum price of $6 per ticket and a maximum of $55,000 for 10,000 tickets sold at the maximum price of $22 per ticket plus 25percent of all concession and 20 percent of all merchandise sales.

¹³ The Total Cost and Public Share estimates by NSLI include all known costs of construction and all public costs directly attributable to the construction.

¹⁴ Phase I of a seven-field complex financed by local tax revenues.

¹⁵ Former home of NFL Redskins and MLB Senators.