Payment dispute over Oakland Coliseum sale sparks concerns about public safety cuts

OAKLAND, Calif. – A historic agreement between the city of Oakland and the African American Sports & Entertainment Group (AASEG) is a done deal, but concerns remain over critical payments.

Three Oakland council members claim an emergency budget will go into effect starting Tuesday, Oct. 1 because the city hasn't received what they say is a payment it is due. This means drastic cuts to public safety could be made.

Council members Noel Gallo, Janani Ramachandran and Treva Reid sounded the alarm Tuesday about a lack of transparency, saying the city had not received proof of payment that the first $15 million from AASEG had been made.

Although the purchase and sale agreement was signed on September 1, the city has not acknowledged receipt. They say the payment should have been made within the built-in grace period of September 23rd. If this is not the case, the emergency budget will come into force on October 1st.

“The mayor's proposed budget included $63 million that we didn't have in the bank, and terms were agreed upon…those terms were not made clear as to where that money is now,” Reid said. “So we spent money and budgeted for money that we don’t have in the bank.”

“The fact that we are here on October 1 without having received the entire initial payment of $15 million concerns me because we don't know what this emergency budget will look like now,” Ramachandran said.

Council members said the emergency budget would reduce Oakland's projected police force to 600 officers, temporarily close five fire stations and suspend all city contracts.

The city manager confirmed at Tuesday's council meeting that the emergency budget has indeed been triggered and cost-cutting measures have begun, although it's unclear exactly what kind.

Mayor Sheng Thao's office issued a statement denying this claim. Their statement said: “The AASEG deal is on track. No contingent liabilities were triggered that did not already exist. All relevant information will be presented to the City Council in closed session and at meetings of the Finance and Administration Committee in accordance with appropriate and statutory notification requirements.”

“Unfortunately it is a political season. “I’m not sure if these political issues arise between the council members and the mayor’s office, but it’s really unfortunate for us because it’s such a historic project,” said AASEG co-founder Ray Bobbitt. “These are things that, when they happen, make the city look a little bad.”

Bobbitt said the group has made all required payments under the purchase and sale agreement with the city. AASEG said it transferred $5 million to the city on September 3 and plans to pay the required additional $10 million by October 7, while continuing to negotiate with the city on payment of the entire $105 million US dollar will be negotiated by the end of this fiscal year.

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

Reid said multiple emails from all three council members to the mayor's office requesting updates on the deal all went unanswered.

“I would like to see the various branches of city government communicate as we move forward in this process so that our organization is not put in the position of having to explain things that are much more complex to them.” “An average person,” Bobbitt added added. “As African Americans, we are not necessarily part of the financial and economic structure of this country, and therefore it is an easy target to question our financial performance.”