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How Much Is Memorial Stadium Worth?

Honestly, I don't have any idea how much the stadium is worth.  I don't even have a ballpark (ha!) figure.  But in the wake of yesterday's ruling, pretty much everything rests on answering that question.

After reading yesterday's ruling, I came away with the feeling that UC won on pretty much every point of contention, and while that is the case, it's not enough.  We're not keeping score here -- UC has to do more than just win the most arguments.  In a conversation overheard at the grove yesterday, a PHA representative described the voluminous CEQA objections raised by the petitions as nothing more than 'gnats in front of UC's face', side issues used as 'distractions' and as 'delay tactics'.  There wasn't much merit to many of these issues, as Judge Miller attests in writing page after page of her ruling, striking down each argument with ease (and what I read as overtones of annoyance).

No, the really important issue, as the PHA representative pointed out, the one issue that could potentially kill the whole project, was the valuation of the stadium, and it was on this issue that UC lost a couple of key points.  First of all, UC contended that the Alquist-Priolo Earthquake Fault Zoning Act (A-P) didn't apply to them.  Personally, I felt that this was the weakest point of UC's argument, and Judge Miller evidently agreed, ruling that, in fact, A-P did apply to UC.  (I think UC also knew that this was a weak argument, but if they had won this point, the rest of the case would have been basically moot.  Hey, if you're stuck in court anyway, you might as well swing for the fences!)

Star-divide

OK, so for those of you who have been following the case (and the excellent analysis of OaktownMario, danzig, Ken Crawford and others), this is old news, but I'll recap just in case.  Basically, because of A-P, the University is limited in any alterations and additions they do to Memorial Stadium to 50% of the value of the Stadium.  Fortunately, Judge Miller also ruled that the Student Athlete High Performance Center (SAHPC) is not an addition to the stadium -- it merely sits next to it.  However, here's where UC lost on a second, seemingly minor, issue:  while the SAHPC is a separate structure, certain parts of it are considered alterations to Memorial Stadium:  a grade beam, some staircase alterations, and a some floor penetrations.  Pretty minor stuff, but it's enough for the plaintiffs to get their foot in the door.

See, one thing that UC left out of its project proposal was the value of the stadium and the value of the alterations to it.  Understandable, because UC assumed that it didn't have to comply with A-P, and even if it did, phase I of the project (the SAHPC) is a separate structure that wouldn't trigger A-P.  Well, now that the judge has ruled that A-P applies and the SAHPC triggers it, UC has to go back and fill in the blanks before it can proceed.  No big deal, right?  I mean, it's pretty obvious by any reasonable measure (not that the plaintiffs won't argue otherwise) that the Stadium is worth more than twice the value of a grade beam and some floor penetrations.  The project can proceed!  Hooray!

Well, yes and no.  Before UC can proceed, they first must say exactly what the stadium is worth.  While these minor alterations certainly won't go over the 50% limit, if the value is set low enough, they won't have nearly enough cap room to for phases II and III of the stadium renovation.  This is important.  Very important.  I mean, the SAHPC is nice and all, but the overarching goal of all of this is to renovate the stadium, and UC doesn't want to be stuck with a decaying bowl that they can't legally renovate.

So, now the stage is set for a court battle over how much the decaying California Memorial Stadium is worth.  UC will try and value it as highly as possible, while the plaintiffs will try and lowball it to the point where it's basically worthless, forcing UC to tear it down and build a new stadium in next to Great America in Santa Clara (or some other ridiculous alternative).  I expect Judge Miller will rule on a reasonable value, but I don't expect her to do UC any favors.  Hanging in the balance is UC's ability to renovate the stadium and retain Head Coach Jeff Tedford.

So how much is the stadium actually worth?  As the cliché goes, that's debatable.  There are actually many different correct answers to this question, but the real answer is:  it all depends on your method of valuation.

One could argue that the stadium, being that it is a World War I Memorial and it is on the National Register of Historic Places, is irreplaceable (true!  UC would be legally barred from build a replacement on the same spot, due to the Hayward Fault) and therefore priceless.  Man, that would be nice.  One could also argue that, since the stadium cost only $1.4M to build and it has now been through roughly 90 years of depreciation, it is essentially valueless, especially in light of the fact that it's on an active fault and can't be renovated except under the restrictions of A-P.  I've no doubt the plaintiff's lawyers will try to make this argument.  However, I've also no doubt that Judge Miller will not buy either of these extreme arguments.

What we'll probably see is that UC will choose one of a number of accepted methods for valuing commercial property; basically whichever one gives them the highest dollar amount.  The plaintiffs will then argue that UC's valuation method is unrealistic and that the stadium is actually worth much less than UC says, based on some other, much less favorable valuation method.  Expert testimony from licensed property appraisers will no doubt be given, and Judge Miller will then get to sort through another mountain of evidence.  Lucky her!

So how does a property get valued?  Well, three common methods are (thanks, Wikipedia !) the cost approach, the sales comparison approach, and the income capitalization approach.

- The Cost Approach - This method basically says that a property is worth what it would cost to replace it.  It is not the original construction cost in today's dollars; modern construction costs, methods, and restrictions should be taken into account.  However, as Judge Miller cautioned in her ruling, it is also not what it would cost to simply build a new stadium.  Since the old stadium has undergone serious decay and depreciation, such depreciations must be taken into account.  Basically, this method determines what it would cost to build a new replacement, and then subtracts the value of such depreciations as would bring the new building down to the same condition as the current stadium.  This could be significant, and not in UC's favor.

- The Sales Comparison Approach - Basically, what is the stadium worth on the open market?  What are similar buildings in similar locations selling for?  This method is pretty worthless in this case, as there is essentially no market for used stadia.  And even if there were, trying to compare Memorial Stadium to, say, Candlestick Park would be incredibly difficult; although their functions are roughly the same, their capacity, construction, location, amenities, age, historical significance, etc., are all so different as to render a comparison essentially worthless.

- The Income Capitalization Approach - Here, now, is an interesting approach.  Instead of considering the stadium a pile of wood and concrete, consider it an investment.  You can then use the stadium's revenue stream and an expected rate of return on commercial investments to calculate a value.  For example, say you bought an apartment building for $1M, and that building in turn brought you $75K in income every year; essentially, you'd be getting a 7.5% rate of return on that investment.  Now, we can turn that equation around; if, for example (caution: numbers are entirely made up! for demonstration purposes only!), Memorial Stadium brings in $10M every year, and the investment market expects a 6% rate of return on an average investment, then Memorial Stadium would essentially by worth $10M/0.06 ~= $167M.  Now, of course, there's a lot more complicated math involved, but that's the basic idea.

Without seeing some actual numbers (and being a lot more familiar with the formulae involved), I couldn't say whether the cost approach or the income capitalization approach would produce a higher valuation.  I also know that there are potentially lots of other factors that could be involved in determining the value of the stadium, and that both sides have a whole host of data and expert witnesses already on hand to advocate their views.

Overall, there is absolutely nothing in Judge Miller's ruling that says UC can't build the SAHPC just as soon as a few procedural hurdles get cleared up.  However, one of those hurdles is the stadium valuation, a potentially major roadblock for UC's future stadium plans, and I expect to see quite a legal battle on this front in the months to come.  Unfortunately, the SAHPC, and the students and staff it would potentially serve, are caught in the crossfire.  By no means is this project dead; Stephan Volker's assertion to the contrary is at best a gross mischaracterization and at worse a barefaced lie.  Still, there is a long road yet to hoe.  A long, long road.

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Time to revise A-P

I’m a geographer, and I take preparation for environmental hazards very seriously. And while I find the A-P act to be rather old fashioned in its emphasis on surface ruptures along a fault, when general ground shaking far removed from the fault itself causes the vast majority of damage and destruction during an earthquake, I nonetheless appreciate its intent to make California just a little bit safer place.

But like many laws, A-P is flawed, and it has indeed been revised as needed in the 35 years since its original passage. Most notably, the current law specifically exempts the properties damaged/destroyed by the 1991 fire in the Oakland/Berkeley hills. Panoramic Hill, if I’m not mistaken, was spared by that fire, but no doubt its residents sympathize with the loophole added to A-P in 1992 to allow their hillside neighbors to rebuild their homes, even though such new construction was otherwise forbidden by A-P.

Clearly, Memorial Stadium was not the sort of project that the authors of A-P had in mind when they included the 50%-of-value provision, because unique, historic landmarks like our beloved CMS truly are priceless. This is revealed by how difficult/impossible it is to apply any of the three valuation methods that Rags has summarized above for us so well. Only method #1 seems to hold any relevance, as far as I can see, to CMS. But even it is problematic. Sure, the physical condition of CMS has deteriorated over the decades, but in this case, that is emphatically not the same thing as value depreciation. Any method that de-valued CMS because its concrete is crumbling would have to also take into account its appreciation as the site of, among other things, The Play. And it’s not like this stadium has stood there untouched over the last 85 years; why hasn’t A-P been invoked when new scoreboards, press boxes, and the like have been added.

I remain optimistic that this project will ultimately get done. But like Ragnarok, I’m worried by just how long it’s going to be dragged out. What a phenomenal waste of the public’s patience and the taxpayers’ monies—all in the name of deluded anarchists, incompetent City politicians, and ultra-NIMBY rich people on a hill.

Go Bears!

by California Pete on Jun 19, 2008 6:48 PM PDT   0 recs

yeah, we’re of course only dealing in this (or any) trial with how the law is, and not how is should be. this is definitely one of those special cases where law was written broadly, but had unintended consequences for special cases like this.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 9:07 AM PDT to parent up   0 recs

Curious

Several of you have demonstrated a legal knowledge far greater than mine. Is there precedent for applying A-P to historic structures? For the sake of Cal-not to mention our collective sanity!-I’d like this case to be wrapped up as quickly as possible. That said, I wonder if this could become a landmark case concerning historic preservation, one that ends up in the state Supreme Court (assuming it has jurisdiction here).

And for what it’s worth, I don’t know the law, but I do know Earth Science. Unless it was moved to the campus of, say, UC-Merced, there are no locations that would be significantly safer in an earthquake than the present one at Strawberry Canyon. Indeed, the Berkeley Marina (as I’ve read Mayor Bates proposing) would be the absolute worst location for a new facility, given all the unconsolidated fill. Think Loma Prieta and Cypress Structure. This is what I mean above about A-P being old-fashioned; proximity to the fault trace is certainly not irrelevant, but it is far overrated when it comes to assessing earthquake hazards.

Go Bears!

by California Pete on Jun 20, 2008 10:23 AM PDT to parent up   0 recs

BREAKING NEWS!?!

Just got word that our brave officers were attempting to remove the tree sitters as I type this. PLEASE, is anyone there that can verify this?

by CaliSeth on Jun 19, 2008 6:49 PM PDT   0 recs

THANKS

by CaliSeth on Jun 19, 2008 7:07 PM PDT   0 recs

bummer

Hmm, that doesn’t sound as promising as I first thought. Hopefully I’m wrong… )-;

by CaliSeth on Jun 19, 2008 7:08 PM PDT   0 recs

hey, it's a start

these people are so resilient, in part, because they have a good support network. the more we isolate them, the more likely we can whittle their numbers down without significant confrontation.

So, basically, you gotta Go Bears!

by ragnarok on Jun 19, 2008 7:23 PM PDT to parent up   0 recs

Good and bad news from Scout

from Greybear (the guy who basically has covered this case better than, well, anyone):

“Another confirmation from [head attorney for UC] Olson: he again said (as I have reported earlier) that if the plaintiffs appeal, the appeals court MUST take the case (apparently a California rule), and that appeals typically take 12-18 months to adjudicate.

On the other hand, he also confirmed if the present injunction is dissolved now, UC would begin construction immediately. This could happen as early as within the next few weeks.

As we have earlier reported, the fact that the appeals court only rarely imposes new injunctions (especially after a thorough win by UC) means that no new impediment to the project will be created.

A caveat on all this that I know will dismay many readers here: Judge Miller will have 60 days to compose her final Writ after the parties submit their proposed language.”

So:

-appeals court would take 12-18 more months, but they rarely uphold injunctions.
-judge has 60 damn days to issue her final Writ, which, knowing judge Miller, she will take all of.
-assuming 60 days are taken from the June 27th deadline, that puts us at oh, right about opening fucking day. Just in time for MSU.

by Spazzy Mcgee on Jun 19, 2008 9:10 PM PDT   0 recs

60 days, huh?

Agreed. GreyBear’s coverage of this case, in both its breadth and its depth, has been unparalleled.

You’re right, 60 days puts us right at about the end of August, and while I think the University always intended for construction to go on during football season, it’ll sure be difficult to fell trees during a crowded football Saturday.

Also, I think this additional delay pretty much assures that the SAHPC won’t be occupied in 2009, even with a very aggressive construction schedule.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 9:10 AM PDT to parent up   0 recs

Inflation...

Hey ragnarok, for the cost approach, do you know if they would take into account inflation? That would put the original construction cost at $17.7m in 2008 dollars – which, considering the stadium depreciation, would still probably not be enough for the UC.

by GrandeBear on Jun 20, 2008 7:21 AM PDT   0 recs

see below comment from SierraBear

the original construction cost is irrelevant here…building methods and practices have changed so much as to render such information nothing more than an historical curiosity.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 8:09 AM PDT to parent up   0 recs

Appraisal Methods

I’m a commercial appraiser by trade (although the people who will be hired to value Memorial will be slightly above my pay grade). The cost approach requires an analysis of what it would cost to build the stadium today (including the value of the underlying land) minus depreciation of the “improvements” (i.e. anything constructed on the land). I’m not familiar with land prices in the Berkeley hills, but that value alone could be significant. Because Memorial is what is referred to as a “special purpose property”, typically the sales comparison and income approaches usually don’t apply. However, I think a case could be made that the annual rental value (usually identified on a per unit basis) of the stadium multiplied by a suitable capitalization rate (for unusual properties the capitalization rate is typically much higher than 6% – potentially in the 10% to 12% range). The theory is that the higher the risk associated with a property, the higher the required capitalization rate. The downside of attempting to apply the income approach is that the value is typically reported with 2 components; a real estate component and a business value component. Because a structure like Memorial requires skilled management to be profitable, the “business enterprise value” component is likely to be high. In the final analysis it all depends on which appraiser provides the most convincing argument for his/her value when it (inevitably) is challenged in court. Unfortunately, this will also require time.

by SierraBear on Jun 20, 2008 7:50 AM PDT   0 recs

Under A-P, land value irrelevant

Typically, yes, the cost approach to valuation will take into account the value of the land, which in this case could be significant (although plaintiffs could certainly argue that, since you couldn’t build anything on it due to the Hayward Fault, it too is valueless). However, the subdivision of Alquist-Priolo that we’re concerned with here specifically says that the value of any alterations must be less than “50 percent of the value of the [existing] structure,” meaning that for these purposes, the value of the land is irrelevant.

Interesting stuff about the income approach, though; didn’t realize you would get such a high capitalization rate for a property such as this, but it is pretty unique (and potentially risky). Really, whatever approach is used, so much about this property is unique that pretty much any assumption used by an appraiser will be challenged by the opposing counsel. Could be quite a court battle.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 8:20 AM PDT to parent up   0 recs

Rag, for the sake of argument I'll give the optimist's view on this

I think your skepticism/cautious pessimism are understandable given what we’re talking about here and what hangs in the balance: the success or failure of Cal football. I know, I know, the Integrated Projects mean a lot more to a lot more people including women not having to change in cars. But to most of us here, this project has come to equate football success or failure. Having said that, I think Holmoe and Mack Brown have done a number on our collective psyches and have conditioned us to expect the worst. I’m just not one of those that expects the worst and I know that from your comments you aren’t expecting the worst either, but it almost seems that way.

After thinking about the ruling more than 24 hours later, it’s obvious that the Order(s) submitted by the parties and signed by the Judge is/are going to be critical in determining what the Judge actually meant in 129 pages of her decision. [A bit of background: Judges routinely ask the moving party to prepare an order consistent with their ruling. The moving party is simply the party that asked for the particular remedy/order/ruling, not necessarily the party that won on the issue. As in this case, the opposing party gets to make objections to the language of the order. And when I say “objections” I mean any comments that reflect disagreement with the proposed order, including suggested different language. The Judge then considers the comments of both parties and adopts the appropriate order. This is a very odd proces and you may ask “Why doesn’t the Judge draft the order?” Well, Judges have tons of cases and don’t want to miss any key element of an order so they count on the parties to let them know what needs to be included]. Given this, I can already see the Plaintiffs drafting an order that continues with the injunction and prohibits any construction at all (“The Project’s Dead” Order). UC will obviously object and suggest an order permitting it to move forward with Phase 1 of the projects and to comply in other respects with the Judge’s Order on the EIR (“unavoidable” increase in events and traffic, noise, etc.) and valuation. I think each party would do well to craft the order carefully and consistent with the Judge’s ruling, or else she might get pissed and completely reject “your” proposed order and go with the other side’s. I think ultimately this will happen with the Plaintiffs. They’‘l give an exceedingly broad order that does not truly reflect the Judge’s ruling and the Judge will probably adopt something close to what UC submits. In any case, this Order will be critical to anything UC wants to do and ultimately is as important as what the Judge issued on Wednesday. So in a sense we have to wait and see what the Judge’s signed Order states.

You’ve also discussed how you feel the Judge’s ruling reflected “key losses” on a couple of key points, and cite as one of these losses the application of the AP to the UC. I don’t agree that this was a key loss for a few reasons. Remember that back in December 2007 the Judge issued an order on this issue already. There was much media distortion of the order when the press was claiming that “UC lost,” blah, blah, blah. I looked at the ruling and wrote the following back then: “The ruling should not be seen as a victory for either side in this sense: the Judge does rule that the Alquist-Priolo Act ("AP") does apply to the University as a "state agency with the responsibility to prohibit the location and development of structures for human occupancy across the trace of active faults." Apparently, UC was initially contending that the Act "might not" apply to the University (why I do not know) "despite numerous statements in the administrative record that UC not only would comply with Alquist-Priolo but that it was required to comply." UC’s contention on this issues seems to be one of those trial strategies where UC raises something they know they will lose on, but do it anyway so that the Judge can rule against it on that issue, while ruling for it on the more important issue (separate structure vs. same structure). This gives the Judge something to show that she is not partial to UC if it ultimately prevails. The fact is, UC lawyers had to know that AP applies to it because it has applied in the past. Example: In Better Alternatives for Neighborhoods v The Regents (1989) 212 Cal App. 3d 663, a 1989 decision, a neighborhood group sued the University to prevent it from building the Foothill Student Housing Project and other buildings. That decision discussed the efforts made by the University to comply with AP and how it ultimately did comply. Therefore, more than 15 years ago the University took it as a given that AP applied to it and complied with its requirements in winning that suit. For these reasons, I don’t think UC attorneys realistically believed that AP did not apply to it because of this and other prior decisions and because of the UC’s actual attempt to comply with AP in this case, as noted by Judge Miller. So this part of the ruling should not be considered a victory for anyone.” I still think that the application of the AP was expected and a no brainer for the UC. It reasonably could not have been ordered otherwise.

Now to the valuation issue.

You’ve created a bit of a doomsday scenario in that you expect a long protracted court battle regarding the value of CMS and the possibility of losing on valuation. That may happen, but I don’t think it will. Here’s what I mean. When the UC values the CMS, UC has the authority to determine a reasonable valuation method. As long as UC can reasonably support this valuation method, the Judge cannot disagree with it to the extent of saying it was wrong and some other method is right. I’ll explain. In proposing, planning, and building a poroject, UC is acting as an “administrative body” with a wide range of discretion. In order to effectively challenge and strike down what the UC is doing, Plaintiffs would need to show there is an “abuse of discretion”: that there is no substantial evidence in the record that supports UC’s valuation method. What this means is that even though Plaintiffs can argue that another method should have been used, as long as there is reasonable evidentiary support for using that method, UC will win. In other words, the Court cannot say “UC chose method A, but methods B, C and D are better.” It’s not an issue of what method is “better,” it’s an issue of “can UC reasonably support the method they chose?” The Judge cannot weigh the methods used and make herself into the administrative body by “choosing” which one is better. That’s why I think that UC is in the driver’s seat as to the valuation issue. I do agree with you however that this has the potential to get protracted. That’s why I think it’s key as to what the Order actually says. If she allows SAHPC to proceed now, that’s great because by the time you get to the other phases of the project in “construction time,” the valuation issue should be resolved.

Just my 2 cents.

by oaktownmario on Jun 20, 2008 9:11 AM PDT   0 recs

Thanks for that extensive analysis, OakTownMario. I appreciate it, because it is more positive than Ragnarok’s. I didn’t want to say anything, but his more pessimistic (some might say realistic) analysis was really harshing my buzz.

And I hate it when my buzz gets harshed.

"Save The Oaks: Overthrow Capitalism" said Dumpster Muffin sanguinely

www.CaliforniaGoldenBlogs.com

by TwistNHook on Jun 20, 2008 9:22 AM PDT to parent up   0 recs

Good analysis! I have been hearing a lot about how the valuation that is determined now for the SAHPC will be the valuation that is set in stone for the rest of the project. This seems to not make a whole lot of sense, given that perhaps phase 3 wont take place for another say 20 years (theoretically). Inflation over that time will render the “value” determined in 2008 meaningless. Does A-P in effect set a “value” for all eternity? That sort of decision would run contrary to the intent of the law. If the “value” of the stadium is such that it cannot be retrofitted, then the stadium must be red-tagged, demolished (for the sake of liability), and then nothing else can be built on that site. This, of course, is what the panoramic hills people are salivating for, but it can’t be.

In effect, if a home (that was not damaged in the Oakland fires) that is on P-hill on or within 50 feet of a fault line (plausible), and said homeowner wants to build a 3rd bathroom (addition/alteration), they would be able to do so as long as the bathroom is less than 50% of the value of the home. Easy enough – let’s say home is 1.5M, bathroom is $30k (I have no clue); easily within the 50% threshold. But, does that 1.5M “value” stay static? Say in 20-30 years, a new homeowner wants to retrofit the home – does that mean this new homeowner is stuck with the $1.5M value determined back in 2008?? It can’t be – this new homeowner should be able to use the current value in 2038 (or whatever) dollars. Likewise, in 5-10 years when we actually start construction on phase 2, we should be able to use the “value” of the stadium as determined then.

by Vandalus on Jun 20, 2008 9:45 AM PDT to parent up   0 recs

well, i am sure that, under A-P, the valuation of a property will never be ‘set in stone’. you’re right, such a rigid valuation would lead to some ridiculous consequences, such as the scenario you posed, which is clearly not the intent of the law.

however, all three phases of this project are considered as one project (they were approved by the regents that way), and so the total sum of the alterations and additions to CMS in all three phases have to be less than 50% of the value of CMS, and that valuation has to be some concrete number; otherwise the law is essentially meaningless. could the number be adjusted higher for later phases down the road to account for inflation and such? i can see that being a reasonable interpretation, but i will gladly defer to someone with more expertise in this area.

of course, i don’t see any of this as being a problem if, in 30 years, UC wants to start a new project to retrofit CMS. in that case, i’m pretty sure UC would get a new valuation, and any prior improvements from many years’ past wouldn’t count towards to the total sum of all new improvements that could be done. otherwise, you’d get to a state where a property had ‘used up’ it’s 50% A-P improvement budget, and was now legally barred from being further improved, a state that i’m pretty sure was not the intent of A-P.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 10:13 AM PDT to parent up   0 recs

that’s a lot more than 2 cents, if you ask me… (j/k. the thoughtful reply is much appreciated)

first off, my pessimism (not what i would call it, but i could see it being a fair characterization) stems not from years of football futility and holmoe and mack brown and such, but from years of observing and dealing with the city of berkeley. things never go as smoothly in this town as one would like. just now, i’m working on a deal to purchase a piece of property in berkeley, and it is a pain in the ass…

secondly, i was a little confused about the whole ‘writ of mandate’ issue, even after some internet research, but i think you’ve cleared it up for me. i suppose i am a little pessimistic on this issue, but i can certainly see a situation where the judge would say, “well, this project is essentially legal, so once we get a few minor issues cleared up, you’re good to go,” and the injuction is lifted. i hope you’re right.

thirdly, i did label A-P’s application to UC as a ‘key loss’, which i now see was a bit misleading. it was ‘key’ only in the sense that if it had gone the other way, much of the rest of the trial would have been basically moot. i did not expect, nor did UC, that the judge would rule in UC’s favor on this issue, but you’re right in saying that the result was entirely expected and should not be seen as a setback for the university.

finally, as for valuation, you’re right in that UC, as the administrative body, gets to choose the valuation method, and the petitioners only get to challenge such methods as being ‘unreasonable’. this was a point i meant to make, and certainly an important one at that, but somehow, in my writeup, i forgot. good that you’re around to call me on that.

i suppose that i’m a bit uneasy about the valuation for a couple reasons:
1) CMS is such a unique property that valuation will be difficult, and i forsee that it will be easy to challenge UC’s valuation methods (whatever they are) on a number of fronts. not that such challenges will necessarily be successful, just that it has the potential to be quite the battle.
2) my reading of the judge’s ruling was that the valuation issue had to be settled before the Regents’ approval of the project would be considered valid and the project could proceed, which meant that it could be a long summer before ground could eventually be broken. perhaps my reading was incorrect, or perhaps UC only has to show that any reasonable valuation of CMS will allow the SAHPC to comply under AP, which should be relatively easy. personally, i hope that you (a lawyer) are right, and me (not a lawyer) am wrong.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 9:59 AM PDT to parent up   0 recs

After this back and forth, my buzz has been successfully un-harshed!

Further, I hope, at some point, to bring something of value to this blog.

"Save The Oaks: Overthrow Capitalism" said Dumpster Muffin sanguinely

www.CaliforniaGoldenBlogs.com

by TwistNHook on Jun 20, 2008 10:02 AM PDT to parent up   0 recs

I read the Judge's decision differently

While ruling that the SAHPC “as a whole” is not an addition or alteration under the AP, she says that certain parts of it are alterations subject to AP: (a) a grade beam to be installed along the CMS west wall; (2) alterations to staircases; (3) "floor slab penetrations" for purpose of installing SAHPC telecommunication system. 34. She then rules that UC is “Not Required to Determine the Cost of All Three Phases of the Stadium Project at This Time.” 35. This is really important IMO. Then she says “Although the University must determine the cost of the SAHPC project’s alterations to CMS and compare those costs to CMS’s existing value stadium before construction of the Stadium can begin, it need not calculate the cost to construct later phases which have not been approved.” To me this means that the SAHPC can move forward now, and that construction on the Stadium cannot move forward until the valuation is done. I think ground breaking can commence on SAHPC before valuation (and that’s what I would include in UC’s proposed order), but again this depends on the order adopted by the Judge.

I also hope that I am right and you are wrong, regardless of who the lawyer is, cuz ultimately it’s just our opinion and our opinion don’t mean squat.

by oaktownmario on Jun 20, 2008 12:06 PM PDT to parent up   0 recs

“I think ground breaking can commence on SAHPC before valuation”

I don’t follow your logic. If we could start SAHPC construction before valuing CMS, what is the point of her asking for this info and not lifting the injunction already??

by OskiMonsta on Jun 20, 2008 12:29 PM PDT to parent up   0 recs

As I stated above

she found that 3 related parts of the SAHPC project are subject to the AP: (1) a grade beam to be installed along the CMS west wall; (2) alterations to staircases; (3) "floor slab penetrations" for purpose of installing SAHPC telecommunication system. 34. She did not find the SAHPC as a whole was subject to AP b/c it was not an alteration or addition to the CMS. If you read the decision at the relevant parts, you’‘ll note that these 3 things relate to construction on the stadium and not the SAHPC proper. That is my interpretation of her decision.

As to why she asked for this, it is so the UC can comply with AP as it relates to those 3 “alterations” to CMS. As to why she has not lfitd the injunction, I can’t explain that but in my opinion, that has to be addressed in the order she approves based on the parties submissions. If I were handling the case for UC, I would include language in the order permitting groundbreaking on the SAHPC because that is not related to the stadium as discussed by her. So in a sense her decision as of now is incomplete.

Does that help?

by oaktownmario on Jun 20, 2008 12:43 PM PDT to parent up   0 recs

i'm definitely reading this more narrowly than you are

Given that the title of the section you quoted was ‘The University is Not Required to Determine the Cost of All Three Phases of the Stadium Project at this Time”, I’m merely reading this as saying that the University doesn’t have to know the full cost of all potential alterations right now in order for Phase I (the SAHPC) to comply with AP. I tend to think that the judge wasn’t intending for ‘all things not explicitly forbidden are permitted’ to be the case, and that this section fails to state one way or the other whether construction can being on the SAHPC before the valuations are done.

Moreover, on p. 34, the first paragraph of section 5 states: “In order to comply with Alquist-Priolo with respect to these limited alterations, the University must determine their value, and the value of the existing Stadium structure.” Then, on p. 128, Judge Miller writes: “The Court has chosen to receive “extra record” evidence from the parties to aid in the determination of whether the University’s December 5, 2006 decision to approve construction of the SAHPC complied with Alquist-Priolo.” This is in the section wherein the petitioners objections are sustained in part. To me, this tells me that before an injuction can be lifted, the Judge needs to be able to decide whether the SAHPC complies with AP, and before she can decide that, she has to know the value of both the stadium and the alterations.

Admittedly, I think this is a narrow and (from our point of view) a rather pessimistic interpretation, but that’s my opinion. Which, as you astutely pointed out, isn’t worth jack squat regarding the outcome of this case.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 1:30 PM PDT to parent up   0 recs

The force of pessimism is strong in you young jedi knight . . .

But seriously with respect to page 34, I interpret the Judge to be referring to the 3 alterations I have identified when she states “with respect to these limited alterations, the University must determine their value and the value of the existing Stadium structure.” Because remember, she did say the SAHPC was not “as a whole” an alteration or addition to the CMS.

The stuff on page 128 refers to the Judge taking “evidence” after the trial. Remember that in December 2007 she asked for additional evidence to evaluate whether SAHPC was an addition or alteration. She asked for expert declarations to be submitted from both sides, and I believe both sides asked for extensions of time on this. Declarations submitted after a trial would normally be considered “extra record evidence,” which is permissible, notwithstanding Plaintiff’s objections that she could not do this and had to rely only on the record at the time. Without having the “extra record evidence” before me, and putting her statements at 128 in context, UC expert declarations most likely included information related to changes in the design of the SAHPC after December 5, 2006 – December 5 being the date that UC approved the EIR (I believe) and plans for construction of SAHPC. The Judge rightly notes that evidence of design changes after that date of approval are not relevant and should not be considered. Which is a long way of saying I don’t think her discussion on evidentiary objections relates to this issue.

To be clear, it is very frustrating that she left out an important part of her ruling. Namely, can UC start chopping down and building? But again that’s what the Order needs to clarify. And perhaps I’m being more of an advocate than an objective analyst, but I thought I’d try to give the other side of the argument, otherwise we might have some people jumping off trees!

by oaktownmario on Jun 20, 2008 2:00 PM PDT to parent up   0 recs

agreed

we don’t want people jumping off of trees…well, we don’t want any of our people jumping off trees. i can think of a few whom i wouldn’t mind taking that leap…

in any case, we’ll hopefully get an Order issued soon, and then we can all know exactly what it is we need to spend our days needlessly worrying over.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 2:04 PM PDT to parent up   0 recs

Valuation

This issue is going evolve into what now comprises 90% of the cases in California courts—especially CEQA cases: a situation where one side should prevail under the law but the other side can successfully throw up enough procedural challeges/arguments to delay resolution significantly. UC will retain qualified appraisers/historical places experts etc. who will be able to place substantial evidence in the record to support a valuation determination. Even though the substantial evidence test greatly favors the project proponents (UC), the petitioners will cry that the evidence is insufficient, that a finding that it is substantial evidence is an abuse of discretion, bla bla bla. I think the dissolution of the injunction is at least a few months away.

by bearlaw on Jun 20, 2008 10:37 AM PDT   0 recs

This is why I didn’t want to get into law.

In other words, Go Bears!

by royrules22 on Jun 20, 2008 10:51 AM PDT   0 recs

Great analyses

So best case scenario—groundbreaking in a few weeks?

by sec119 on Jun 20, 2008 4:12 PM PDT   0 recs

that would be a best case, yes

assuming the final writ of mandate that the judge issues does not uphold the injuction. until we see that writ, however, pretty much everything else is pure speculation.

So, basically, you gotta Go Bears!

by ragnarok on Jun 20, 2008 4:41 PM PDT to parent up   0 recs

Memorial worth $539 million?

I’m not sure if anyone saw this but:

University officials late Wednesday said the value of the stadium is approximately $593 million.

from Inside Bay Area

In other words, Go Bears!

by royrules22 on Jun 23, 2008 10:54 PM PDT   0 recs

yeah, i saw that figure in another story

I believe UC officials quoted that figure as the cost to replace Memorial Stadium, which Judge Miller specifically said in her ruling that such a figure wouldn’t be a realistic valuation (too high, doesn’t account for depreciated condition of the current stadium). It’s a ceiling figure, and UC will argue it, but they’ll lose that argument. Hopefully, the figure they eventually get knocked down to will still be plenty high enough to retrofit the stadium.

So, basically, you gotta Go Bears!

by ragnarok on Jun 23, 2008 11:30 PM PDT to parent up   0 recs

recycled value?

an 80 year old, crumbling stadium is worth little more than the value of the concrete, steel, and benches if recycled. an easy way to compute the value is to compare the cost of starting with an empty plot of land and building a modern stadium, to the cost of upgrading memorial to modern (AND SAFE) condition. upgrading the stadium would probably cost as much or more than building afresh—giving CMS a negative value. $500 million is laughable.

by dumpstermuffin on Jun 26, 2008 8:15 PM PDT   0 recs

don't forget the copper pipes

with the soaring costs of copper, you can bet that all those pipes will fetch a pretty penny at the recycle yard.

you can also imagine how the stadium, if scrapped completely, could fetch quite a bit more than traditional recycling values if auctioned off piece by piece as souvenirs and memorabilia to thousands of Cal football fans who want to cling to their memories of this crumbling old stadium.

regardless, it seems unlikely that UC would choose such a valuation method, and since the law says that UC gets to choose the valuation method (and must only defend such a method as ‘reasonable’), this is nothing more than an interesting exercise.

So, basically, you gotta Go Bears!

by ragnarok on Jun 27, 2008 9:59 AM PDT to parent up   0 recs

dumpymuff!

Is that really you??

I'm still wondering why the Nets didn't draft Leon Powe.

by yellow fever on Jun 27, 2008 10:29 AM PDT to parent up   0 recs

She really is dumpy…

In other words, Go Bears!

by royrules22 on Jun 27, 2008 8:27 PM PDT to parent up   0 recs

if it really is her...

we have a true celebrity among us.

by HydroTech on Jun 27, 2008 10:34 AM PDT to parent up   0 recs

Well, I don’t know about the rest of you, but she convinced me!

"Save The Oaks: Overthrow Capitalism" said Dumpster Muffin sanguinely

www.CaliforniaGoldenBlogs.com

by TwistNHook on Jun 27, 2008 11:01 AM PDT to parent up   0 recs

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