Bears execs reveal how many luxury boxes and crafts fairs Chicagoans can have for only $2B in public money

access_time personNeil deMause

We got Chicago Bears lakefront stadium vaportecture!

So that really is directly south of the existing stadium, on top of the two-level Waldron Parking Deck. I have no idea whether it could support a stadium on top of it, or whether it would need to be moved to the north or south (which would certainly help explain the reported $1 billion infrastructure price tag), or whether Bears execs just figure they can do without those 1500 parking spaces. But it looks like a stadium might just fit there, barely.

New baseball and football (or maybe soccer?) fields on the old stadium site! This is no doubt designed to win the approval of parks advocates who won’t want to lose green space, though the whole area is still likely to be a mess during construction.

Yes, that indeed looks like a football stadium. even if you didn’t notice the people playing football and the giant letters “STADIUM.” That is an absolute crapton of luxury suites along the far sideline, and unlike in the earlier Soldier Field renovation renderings they’d be inserted under the upper deck seats, making those much worse, but such is stadium design in the Plutocracene.

Also, there’s a clear plastic roof, because all the kids gotta have one.

That’s some kind of skating rink? And maybe a crafts fair? In the spring, because the trees are flowering? Or is that snow that only sticks to small branches and not large ones? Anyway, more stuff, if Bears president Kevin Warren is calling it “a recreational and cultural campus,” there’s got to be lots of stuff.

All in all, not super-enthralling, without any major lens flare or typos or fans flinging their hands in the air for no reason. But it does look like a stadium, on the waterfront, which is what we were promised. What do elected officials have to say about it?

“This project will result in no new taxes on the residents of Chicago.” — Chicago Mayor Brandon Johnson

And where would the reported $1.5 billion to $2 billion in public stadium and infrastructure spending come from, if not new taxes?

“…” — Chicago Mayor Brandon Johnson

Okay! Gov. J.B. Pritzker, you have anything to add?

During a press conference earlier Wednesday on an unrelated topic, Pritzker — while stressing he’s a Bears fan — said he “remains skeptical about this proposal.”

 

“I wonder if it’s a good deal for the taxpayers,” Pritzker said. “It’s early on. I have not even heard the announcement (Wednesday), but obviously read (media) reporting.

“… It’s very important to me that with all the state has to accomplish, that we think about what the priorities are of the state. … There are a lot of priorities the state has, and I’m not sure this is among the highest priorities for taxpayers.”

This is a developing story, so tune back in for further updates. (Though honestly I’ll probably just wait to see what tomorrow morning brings, we can all wait, you got somewhere to be? Feel free to kibitz and add followups in comments, though.)

Share this post:

Was defeat of Royals/Chiefs stadium tax hike Frank White’s fault, or to Frank White’s credit?

access_time personNeil deMause

While we await Chicago Bears stadium plan details, let’s kill some time reading Monday’s Kansas City Star article on “what went wrong in Jackson County” that led to the overwhelming April 2 vote against a 0.375% sales-tax hike to funnel money to Royals and Chiefs stadium projects.

(And yes, “what went wrong” is very much a leading framing, since it implies that Jackson County residents expressing their opinion that they didn’t want to kick back $500 million in sales taxes en route to well over a billion dollars in public stadium is a bad outcome. But let’s not hold the article responsible for the headline’s crimes, and just see where it goes.)

Kansas City Manager Brian Platt offered reassurance last week as the teams consider next steps. The city will take a lead role from here on in trying to keep the teams happy, by learning from others’ mistakes…

“We were largely on the sidelines, on the city side, for a lot of this,” Platt said. “And we are going to take a much more active and proactive role in making sure that whatever comes next, we are a big part of it. And that we’re listening to all the voices that need to be heard.”

Not a great start: “Reassurance” implies that KC residents want a different jurisdiction to take over that isn’t as skeptical of the teams’ demands, which doesn’t appear to be what the voting results show at all.

Emails obtained by the Star between the county and the team reveal what was said behind the scenes, and ultimately how the talks broke down.

Internal emails! Now we’re talking.

Let’s see, blah blah, Platt “re-enforced the narrative” that Jackson County executive and former Royals second baseman Frank White “bargained in bad faith” — no, that’s you re-enforcing the narrative, and also it’s actually “reinforcing” — and “the teams cast White as a villain.” Where are these emails already? “The blame game will go on.” This article sure does!

Okay, now we’re talking:

The Star has obtained correspondence between the Royals and White’s administration that shows the arc of the negotiations…

[In May 2023,] two Clay County commissioners and the mayor of North Kansas City posted an open letter on X, formerly Twitter, saying that not only were they willing to make an offer for the team, but that the Royals were interested.

White saw that as an insult to Jackson County taxpayers and fired off a letter to Sherman that day. … “Given today’s unfortunate developments, I urge the Royals to publicly reaffirm their commitment to Jackson County until at least 2031 and voice their intention to continue calling Jackson County home for decades beyond.”

Ignoring White’s ultimatum, the Royals issued a public statement saying that the team had not yet decided where it was headed but “continue(d) to be actively engaged” in talks with Jackson County, as well as others.

Not really news that this is how it went down, but it’s at least new documents. Tell us more!

Brooks Sherman, the [Royals] president of business operations, said the team envisioned that the cost of building a new ballpark would be shared by county taxpayers, the team, Kansas City and the state of Missouri, but left out a crucial detail. What it didn’t say was exactly how much the $1 billion-plus ballpark was expected to cost, or how much each party would be expected to contribute to the project.

Again, this isn’t news, as it had been clear for months before that that Royals owner John Sherman didn’t want to specify how his stadium was going to be paid for, except that the first $250 million or so would come from the sales tax hike. But sure, here’s an email showing that team execs were saying the same thing privately as publicly.

[Jackson County counselor Bryan] Covinsky said the county needed more information before face-to-face talks began, such as how much money the team expected to receive from the city and state, as well as any tax incentives the Royals might pursue on the commercial ballpark village development the team proposed building around a new ballpark.

Okay, let’s skip ahead: Is there anything in these emails that we didn’t already know from public statements? And what does it all have to do with the role of Frank White, as promised by the lede? We have White requesting only a 20-year sales tax hike instead of 40 years, which we also knew already, and Royals execs saying nope nope, and more talks, and Sherman agreeing to at least cover property and casualty insurance on their new stadium, and finally both teams saying they’re going ahead with the April 2 vote regardless of what White wanted. And then got their heads handed to them at the ballot box.

The only thing new here, then, is the framing: Both White and the team owners are presented as having screwed up by failing to get a deal agreed on before sending it to a public vote, which then led to referendum being defeated.

But there is another way of looking at this, which is that White stood his ground in refusing to give in to the teams’ demands (though he did offer up as much as $300 million in public money for each stadium, and didn’t rule out city and state money being used as well so long as it wasn’t coming out of his jurisdiction’s pocket), and the teams tried to get what they wanted by going around him directly to county voters, who likewise told them to kick rocks. That’s not a failure so much as tough negotiating — and if the teams now come back with reduced subsidy demands, it’s a success.

Of course, stories like this one in the Star that cast responsible governance as “getting things done” when the things are making it a spending priority to meet the wish lists of local sports billionaires only make it harder to negotiate toughly, since it throws shade on elected officials who do so. The Star has generally done pretty good reporting on the whole Kansas City stadium saga so far; if Platt is indeed taking the lead in talks, let’s see how the newspaper portrays his role, and if they chide him if he gives in too far to the owners, or only if he doesn’t give in enough.

Share this post:

Bears, White Sox announce plans to make announcements about stadium announcements

access_time personNeil deMause

Things are not going smoothly at all for the Chicago White Sox and Bears stadium plans, with White Sox owner Jerry Reinsdorf facing criticism not just for his record-shattering $2 billion public subsidy demand but for his ties to a guy who did jail time in Iraq for trying to assassinate the prime minister, while pretty much everyone hates on Bears owner Virginia Halas McCaskey’s lakefront domed stadium plan. Time for the billionaires to seize control of the narrative! Which means splashy stadium announcements — but first, to prime the pump and maximize air time, announcements of those announcements:

  • Bears officials issued a statement yesterday that they plan to issue a statement on Wednesday presenting a “state-of-the-art, publicly owned enclosed stadium” near Soldier Field on the Lake Michigan lakefront. The Chicago Tribune reports that “the team has pledged to spend $2 billion in private money” while “the cost of the stadium is estimated at $2.5 billion to $3 billion, plus $1 billion for associated roads and other infrastructure.” For the math-challenged, that leaves $1.5 billion to $2 billion to be covered by taxpayers — not including the presumed exemption from property taxes that would come with a publicly owned stadium, and assuming the team’s $2 billion is really $2 billion.
  • Reinsdorf had “a source close to” him, which could easily be Reinsdorf himself, tell Crain’s Chicago Business that he is totally willing to put in some of his own money toward a $1.25 billion stadium, which would be part of a massive South Loop redevelopment project on land owned by Nadhmi Shakir Auchi, the aforementioned ex-con Iraqi real estate baron. Reinsdorf’s avatar didn’t specify how much money, mind you, but different sock puppets “close to negotiations” told Crain’s that “Reinsdorf has mentioned a figure of $200 million or more.” This earned the ur–savvy negotiator the Crain’s headline “Reinsdorf offers to open wallet for new Sox stadium.”

Let’s take the Bears first. While we’ll have to wait till tomorrow to see whatever renderings and other distractions the team throws at the public, the intended framing here is clear: McCaskey, or whoever actually controls the 101-year-old owner’s bank account, plans on spending two billion dollars on a new stadium not in the suburbs, and all that’s left is for someone to figure out how to raise maybe another $2 billion, no problemo. While unlikely to immediately sway skeptical state officials, it’s the necessary first step to change the narrative from “you and Reinsdorf need to get together and figure out something that doesn’t cost taxpayers billions of dollars” to “oh, well, if you’re offering to pay for at least half of your insanely expensive stadium project, then maybe we can talk.”

As for the comparatively youthful Reinsdorf (he’s 88), offering $200 million while demanding $2 billion in public funds might seem like chump change. But his reality distortion field is strong, and he’s effectively managed to anchor people’s expectations to where him putting up any money at all might just feel like a win. (To Crain’s headline writers, anyway.) As with his Chicago NFL frenemies, Reinsdorf doesn’t need a winning argument just yet, he just needs to get the conversation off of his ten-digit subsidy demands and partner’s shooty past and onto what he’s willing to do for you, which is to generously pay for maybe 20% of his own stadium’s construction cost, something he should easily get back in property tax exemptions alone.

Tl;dr: The Bears and White Sox owners are still asking for close to $2 billion in tax money each to help pay for new stadiums so they can make more money, but they want it to seem like a bargain. There’s a ways to go to get there, but the payoff would be lucrative enough that it’s worth throwing rhetoric against the wall to see what sticks.

Share this post:

Coyotes arena could cost Salt Lake City $670m or more, plus Meruelo keeps on Merueloing in Arizona

access_time personNeil deMause

This may just be the inevitable fallout of a franchise relocation that came pretty much out of nowhere two weeks ago, but there was a lot going on this weekend with the Arizona Coyotes‘ transformation into the Utah Something-Somethings. Let’s take the news items one at a time:

New team owner Ryan Smith doesn’t want a new arena, he wants to renovate his current one. This makes sense, if only because Smith is already plunking down $1.2-1.3 billion on the franchise, so he’ll want to keep construction costs down so that he doesn’t have to cover too much of them. It could be a tricky rebuild, though, as, like the arenas in Phoenix and Brooklyn, the Delta Center was built with the NBA in mind, so it’s going to require significant reworking to accompany a hockey rink, which is a good bit longer than the Jazz basketball court.

Also, Smith claims that if he had his druthers, he’d be building a new arena south of downtown, but elected officials instructed him otherwise:

“Our elected officials,” Smith said, turning to address those in attendance Friday. “I know you guys get dragged every way possible, you guys literally stopped us in the middle of the process and said ‘These both have to be downtown, so go figure out what you have to do.’” The Delta Center remodel plans were the result.

There’s still no reported price tag for a renovated Jazz arena to accommodate hockey, but the Salt Lake Tribune does have a new estimated total for the 0.5% Salt Lake City sales tax hike that would help fund it, reporting that it “would, in the estimation of the Legislature, raise $54 million per year that would go towards repaying bond on the project; over 20 years, it’s a total that sums to over $1 billion.” The better total would be to use the present value of those dollars over time — in other words, figure out how much in 2024 spending it could pay off, like calculating how much house you could buy with a certain amount of future mortgage payments — and that comes to $673 million, which is a lot more than the $500 million that was reported last month when the legislation was passed by the state legislature. Plus, that doesn’t include the kickback of all sales taxes from a possible sales tax increment financing district around the arena, so the public price tag could still go higher.

The sales tax hike still needs to get passed by the city council, but Bettman says if it fails, there’s a Plan B for raising the funds:

If that tax hike doesn’t pass, Bettman told ESPN700 on Friday that he’s seen a second set of arena plans. “There are a couple of sets of plans which I’ve seen. One is obviously a renovation and a resizing and configuring of this building. And the other is … a new building,” he said.

Uh, that’s not actually a Plan B for raising money, it’s a Plan B for spending it. Either Bettman, or ESPN700, or the Tribune (which reported the above) got confused somewhere along the way, your guess is as good as mine as to which.

Salt Lake City downtown businesses are in for an unpleasant surprise. “Utah NHL rising tide expected to lift all downtown businesses” read the headline on last night’s KUTV story, which quickly makes it clear that the ones doing the expecting are those self-same downtown business owners:

[STK Steakhouse manager Markus] Ericksen knows the introduction of a hockey league could be great for a growing downtown.

“We are excited; we saw a lot of great walk-in business because of the games with the Jazz,” said Ericksen.

Unfortunately, the economic literature doesn’t support the idea that more arena business drives a significant amount of new spending at local dining establishments — here’s one paper from last year that concludes that “basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses” — and neither do anecdotal reports from local restaurateurs, who say it’s hard to seat enough fans in the brief time before and after games to get much benefit.

Ericksen has the opportunity to get his steakhouse’s name in the news, so it makes sense for him to use it to promote his business to future hockey fans. Why KUTV chose to investigate the economic impact on local businesses solely by talking to one local business owner and the head of the downtown chamber of commerce — I mean, it’s an easier lift than spending the 60 seconds it took me to find that economic paper, I guess, and then going through having to contact the authors and wait for them to get back to you and set up a Zoom, but it’d be nice to see TV journalists doing at least minimal journalism.

Outgoing Coyotes owner Alex Meruelo can’t make up his mind about pretty much anything. Meruelo had quite the week, saying all kinds of things that he then had to immediately walk back:

  • On Thursday, Meruelo said he’d retained ownership of the minor-league Tuscon Roadrunners, and announced that “we’re gonna move them up to Mullett Arena” in Tempe, where the Coyotes have played the past two seasons. Later that same day, Meruelo said “we haven’t made a decision yet,” and the next day he said, “We’ve talked about maybe playing half the season in Tucson and half the season at Mullett.” He also, according to Tucson TV station KVOA, revealed that “the hasn’t discussed the matter with the Roadrunners, the City of Tucson, or Arizona State University, which owns Mullett Arena in Tempe,” all of which would be slightly important before moving the team.
  • In Friday’s press conference, Meruelo declared that he hadn’t done many press interviews of late because he “didn’t like the media” — leading NHL commissioner Gary Bettman, who was sitting next to him, to interrupt: “Let me translate that a little bit. I don’t think anybody should take that personally. I think he doesn’t like being a public person.”
  • After calling his planned Phoenix arena “the first ever privately funded sports arena and entertainment district in the history of Arizona,” Meruelo declared that he actually plans to ask the city to create a “theme park district” that could levy a 9% sales tax surcharge within the district, which would be kicked back to pay for arena construction. (How much of this would come out of taxpayers’ pockets, and how much would act like a ticket tax where he would have to lower prices on things like concessions and souvenirs to avoid driving away customers, remains the subject of debate among economists, depending on a bunch of factors.) A theme park district would also be exempt from property taxes and “monies derived by the district” exempt from income taxes, which could be a much more significant chunk of change.

Like I said, it’s a lot. It’s entirely possible, though, that the move of the Coyotes from Arizona to Utah could end up triggering a billion dollars or more in public costs across two states, so that two NHL team owners can get new arenas without dipping too far into their own pockets. Or Salt Lake and Phoenix elected officials could vote down all the tax kickbacks, sure, that’s a thing that could happen. But accepting defeat and paying for things yourself doesn’t seem to be in Bettman’s, or Meruelo’s, vocabulary.

Share this post:

Friday roundup: Nevada legislator says she voted for A’s stadium because she didn’t understand it, and other great moments in U.S. politics

access_time personNeil deMause

Before we get to the week’s news roundup, a couple of programming notes. First off, my apologies for the ads that have kept appearing in the middle of posts on this site — I keep telling Google Ads not to put them there, and it keeps ignoring me. I think I may have finally succeeded in turning those off, but do let me know if they reappear for you. I may end up dropping Google as this site’s ad provider if it keeps this up — that is, if I don’t drop Google anyway for firing workers upset that it successfully created Project Nimbus from the famous science fiction novel Don’t Create Project Nimbus.

Second, I know that the Dark Mode function is pretty broken again, often displaying dark gray type on a black background. I’m in discussions with the plugin provider about bug fixes, and also once again looking for alternatives that work more consistently. In the meantime, you can sometimes get it working by refreshing your browser; if that doesn’t work, just don’t use Dark Mode for now, and hopefully everything will be back in working order before your eyeballs explode from the screen glare.

And now for the news:

  • Nevada assemblymember Danielle Gallant tried, despite a very unhappy dog in the background, to explain her vote last summer for $600 million in public money for a new stadium to bring the Oakland A’s to Las Vegas, and ended up having to apologize for not understanding how the financing worked at all. “I hope future errors you make are met with more kindness than some of the responses I received,” tweeted Gallant, presumably inviting those among you who haven’t accidentally given $600 million to a billionaire sports owner to cast the first stone.
  • Chicago Mayor Brandon Johnson, who previously praised Chicago White Sox owner Jerry Reinsdorf’s proposed stadium development that would require $2 billion in public subsidies and said “everything is on the table here,” now says that some things are off the table: “I’ve always said that ownership has to put some skin in the game,” Johnson told reporters this week, adding that he opposes kickbacks of city ticket taxes to Reinsdorf to help fund the project.
  • If you’re a Buffalo Bills fan outraged that the team is charging as much as $50,000 for personal seat licenses before you can even buy tickets to their new stadium that is being built with over $1 billion in your tax money, good news: Now you can instead be upset about the fact that Gov. Kathy Hochul agreed to make the PSLs exempt from sales tax, costing you and your fellow New Yorkers around another $25 million. Or I suppose you can be upset about both, but life is short, you have to pick your priorities.
  • Tampa Bay Times opinion editor Graham Brink, who previously defended spending $1.5 billion in public money on a new Tampa Bay Rays stadium on the grounds of “collective pride,” is now back with a list of other ways it would allegedly be a good deal: extending the Rays’ lease will keep the team in town longer, their development partner is “the real deal,” they’re using stadium designers who’ve designed stadiums before, owner Stu Sternberg has an “astute front office,” and … that’s all he’s got so far, stay tuned for “Economists may say Rays stadium is a boondoggle, but aren’t puppies great?”
  • Meanwhile, if you ask St. Petersburg residents if $1.9 billion is too much to spend on a Rays stadium, they say yes, and if you ask them if a new stadium would be a good idea in the abstract without telling them how much it would cost, they also say yes! The truth must lie somewhere in the middle!
  • Where will the Kansas City Royals and Chiefs owners turn for stadium money now that voters told them where to stick their sales tax hike? “It’s not something that’s going to just kind of be thrown up into the ether out of nowhere,” says Kansas City Mayor Quinton Lucas of city funding, and a spokesperson for Gov. Mike Parson says there’s no state money in the works either. Clay County Presiding Commissioner Jerry Nolte says he hasn’t heard from Royals execs lately, and there’s no talk of fresh funding from Jackson County after the sales-tax plan failed, which leaves only … the team owners’ pockets? KMBC-TV for some reason doesn’t mention this option in their article, the internet must have run out of bits before they got to it. The Kansas City Star, meanwhile, reported on noted sports business expert George Brett’s thoughts on whether the teams will now move out of town, it’s truly not a great week for Kansas City journalism.
  • Now that the Arizona Coyotes are moving to Salt Lake City in the fall, everyone wants to know what the team will be called, and new owner Ryan Smith confirms that it will “start with Utah.” No word yet on what it will rhyme with or how many syllables, but presumably Smith will reveal that eventually — just maybe not this fall, don’t want to rush into things, “Utah Professional Hockey Club” sure has a nice temporary ring to it.
  • Tempe city councilmember Randy Keating has complained that the reason the Coyotes are leaving town is because team execs “ran a terribly inept campaign” for arena subsidies. Better luck next time finding ways to overcome massive public opposition, Randy, there’s got to be a way around this whole “democracy” thing.
  • A’s concessionaire Aramark threatened to fire stadium workers who openly criticize the team’s coming move out of Oakland, which turns out to be a violation of labor law, who could have known?
  • This Ringer article on fan opposition to the A’s departure is really long for anyone who already knows the basics, but its deep dive into the history of fan protest movements does quote Field of Schemes and also includes the priceless quote from Oakland activist Bryan Johansen that his goal is “to fucking haunt John Fisher for all of eternity,” so it’s worth it if you have the time.
Share this post:

Economists divided on whether Coyotes’ departure will hurt Arizona economy, if you only ask two economists

access_time personNeil deMause

With the Arizona Coyotes departing for Utah (for now), the Arizona Republic’s Sam Kmack set himself the task of determining what, if anything, this will mean for the local economy. Let’s see what the experts say!

[Grand Canyon Institute research director Dave] Wells believes the Coyotes’ departure will have “close to zero” economic effect, because of how consumers behave regarding entertainment spending.

“Most people have a limited leisure budget to start with. So, they’ll just reallocate it. You might see an uptick in attendance at ASU basketball games or something like that,” said Wells. He added that a “small core of people” in Arizona may now shift some of their spending to Utah to follow the Coyotes.

And:

[Arizona State University Seidman Research Center director Dennis Hoffman] pointed to three factors related to the Coyotes’ departure that could have an impact:

  • Canadian snowbirds choose to vacation in Florida or another warm state with NHL hockey, rather than coming to Arizona and spending cash here.
  • The loss of the roughly $200 million in revenue he expected the Coyotes would generate, plus the broader economic activity that initial income drives.
  • The loss of the NHL franchises employees who both spend money here and pay state income taxes.

Hoffman said “we could be losing significant money” because of the cash Canadian retirees have invested in Arizona’s economy. Hoffman said that money could “migrate” out of the state, if snowbirds chose Arizona because of the Coyotes.

“How many Canadian winter visitors have historically chosen to locate in Arizona as opposed to Florida because they can go to NHL games?” Hoffman asked. “It’s unknowable. But I think it does a disservice if we just say we’ll ignore it because it’s unknowable.”

And:

Nope, sorry, two economists is all we have time for today! All the better for framing this with a heading reading “Experts are divided” and a framing about how this has “reignited an old disagreement between two experts” over the Coyotes’ proposed Tempe arena deal, albeit a disagreement where one side (Hoffman) was being paid by the Coyotes for his time.

While this may be news to the Republic, there are other economists out there, many of whom have looked at things like what happens when a team leaves a city! As a public service to Kmack, I spent 30, maybe 40 seconds crafting an email to several of them yesterday, and here’s what I got back:

J.C. Bradbury, Kennesaw State University: If Dennis Hoffman honestly thinks that the Coyotes generate a significant economic impact on Phoenix, then he needs to write that up and submit it to peer review where it will be vetted by other economists. That’s the normal process for academic researchers. You don’t get to dismiss the academic consensus by flippantly stating the opposite to the media, especially after producing the estimates for a fee. That’s completely inappropriate, and it does a disservice to the community, which is largely ignorant of rigorous economics research standards. I’m at a total loss to understand why a PhD economist with an academic appointment thinks a pro sports team has such a large economic impact on the community. I mean, maybe I’m wrong; but the burden of proof is on him to demonstrate it to his economist colleagues who have found the exact opposite.

Victor Matheson, College of the Holy Cross: Anytime an economist says there are “untold benefits” from hosting a franchise, either the economist is too lazy to estimate them or is afraid of calculating them for what they might show.

As for actual losses, the state income tax losses from a group of highly paid athletes leaving the state is real, in my opinion, so that is a few million a year. There is an actual “feel-good” loss for the actual fans. (Of course, the fact that the Coyotes are moving suggests there aren’t many of those fans.) Other than that, pretty much no losses.

And the idea that Canadians might not relocate to AZ is absurd. Small numbers in the first place and no consideration that people bring costs not just benefits when they live in a community.

Geoffrey Propheter, University of Colorado: I agree with Victor’s take. It’s silly on its face that people from anywhere outside the state, let alone the country, travel to Arizona strictly because of the Coyotes and for no other reason in such large and frequent numbers to justify the cost of a consultant’s economic impact study, let alone the subsidies for the Coyotes themselves.

I’ll add that the income tax loss is a loss to state public goods. Players pay about $1.8m in state income tax this season, and based on anecdotes about salaries for non-players from NBA teams, I’d put the total (non-players + players) at $2.5-$3.5m. Which on a per capita basis means the hit to state public goods is less than 50 cents per person. The state’s general fund budget is $17.8 billion, or $2,405 spent on state public goods per person. So the income tax loss of the Coyotes leaving the state is at most 0.021% of the state’s total per capita spending on state public goods. Yes, there is a state income tax hit, and yes that translates in theory (ignoring fiscal illusion/obfuscation issues) into lower quantity and quality state public goods, but the magnitude of lost state public goods is so tiny I frankly have a hard time trying to figure out a practical comparison to make it meaningful.

But a little algebra tells me 235 people working 20 hours a week for 52 weeks at the state minimum wage will generate $3.5m in state income tax too. So if folks really care about that couple million dollars of state income tax, there’s other ways to get it.

Matheson: Yeah, I agree with Geoffrey about all of this. I like to put it this way regarding the potential $3.5 million in player taxes. At current interest rates, that amount is sufficient to finance roughly $50 million in stadium construction. So, if you propose a $1 billion stadium deal where the team pays $950 million in construction costs and the state offers up $50 million in subsidies, I probably wouldn’t argue too much.

Brad Humphreys, West Virginia University: New sports facilities do not drive migration between US cities

And there you have it: Economists are actually very much in agreement on whether the Coyotes leaving will have a significant impact on the Arizona economy (LOL, no), except for the one guy who used to work for the Coyotes. The answer must lie somewhere in the middle!

It’s still weird, though, that nobody at the Republic thought to call any other prominent economists to ask — wait, what’s this, also dated yesterday?

What does losing a pro sports team like the Coyotes mean for the metro Phoenix economy?

By Corina Vanek
Arizona Republic

[Phoenix’s] status as a sports hotspot translates little into economic activity, two sports economists said…

[Kennesaw State University professor J.C.] Bradbury said there is “no evidence whatsoever that communities are harmed when teams leave,” when looking at economic activity…

[University of Michigan professor emeritus Rodney] Fort said there are other, measurable benefits that come with sports teams, however. Those are outside ripple effects, Fort said, such as increased sales for businesses near stadiums, making a market more attractive for people to move to and creating a sense of value for fans. The benefits can be small, like if someone goes to a bar to watch the game and buys a drink, but they could add up to notable economic activity…

But, Fort said, it is important to note that those effects are “a drop in the bucket” to a place like Phoenix, which has an annual budget of $6 billion. The economic impact of a sports team annually is about the same as the impact of a large anchor department store, he said.

So one economist says there’s no evidence that economies are significantly harmed when a team leaves, however, another economist says that communities may be harmed, but not significantly. The answer must lie somewhere in the middle!

Anyway, Arizona Republic left hand, meet Arizona Republic right hand. You two clearly have lots to talk about.

Share this post:

Cardinals owner to demand upgrades to 18-year-old stadium that could cost Missouri taxpayers $600m

access_time personNeil deMause

In case you haven’t noticed by the flood of posts on this site of late, we’re in the midst of a sports subsidy demand boom, with a record number of team owners seeking public money for either new or renovated stadiums and arenas. And that’s been especially the case with baseball, where in the last three years alone we’ve seen: the Cleveland Guardians owner get $285 million for stadium upgrades; the Milwaukee Brewers owner get $471 million in renovation money; the Arizona Diamondbacks owner demand either a new or renovated stadium, they still can’t decide; the Baltimore Orioles owner get $600 million in stadium renovation money plus $150 million in tax breaks and development rights plus a potentially bottomless pool of money for future upgrades; the Oakland A’s owner get $600 million toward a new stadium in Las Vegas; the Kansas City Royals owner push for $1 billion in public money for a new stadium; the Tampa Bay Rays owner demand $1.5 billion in cash and tax breaks and discounted land; and the Chicago White Sox owner demand $2 billion toward a new downtown stadium project.

And now, the Riverfront Times has discovered, we can add another baseball baron to the list: Bill DeWitt Jr., owner of the St. Louis Cardinals, whose son and team president Bill DeWitt III tells the alt-weekly that the family’s 18-year-old stadium, built with the help of about $130 million in state funds, county forgivable loans, and city tax breaks, will need a “significant capital infusion” in two to five years, and guess who’ll get to pay for it?

It’s “too early” to detail what the improvements would look like, he says. “Our goal would be to handle whatever back of the house things need to happen and to fix [them], as well as probably create some cool and interesting new features for fans.”

The owners would likely seek public money for that, he adds.

When asked how much such a project would cost, DeWitt III says it would likely be in a similar range to recent Milwaukee Brewers and Baltimore Orioles projects. Those are $500 million and $600 million taxpayer investments, respectively.

DeWitt III didn’t go into detail about how the money would be raised, likely because he and his dad haven’t figured that part out yet; and likewise didn’t go into detail about how they expect to pin the tab on taxpayers when their lease runs through 2041 and prohibits them from moving during that time. But this is clearly a trial balloon to anchor expectations of how big a public tithe the DeWitts are expecting, so that if the ultimate ask gets whittled down to, say, $450 million, it looks like a relative bargain for taxpayers.

The Riverfront Times article on this (backed by the River City Journalism Fund, because that’s the only way serious journalism happens these days) runs 4,600 words, and includes in-depth look at the history of Cardinals stadium shenanigans, including tidbits about:

  • The DeWitts succeeded in getting public money for their current stadium by threatening to move across the Mississippi River to Illinois.
  • Though the DeWitts claim to have paid 90% of the construction costs of that stadium, stadium cost expert Judith Grant Long of the University of Michigan says it’s more like 79% — and that’s before counting city tax breaks, infrastructure costs, or spending on municipal services, or public subsidies for the stadium’s accompanying Ballpark Village.
  • That Ballpark Village, which was supposed to “revitalize downtown,” has instead helped lead to the closure of several local restaurants by creating new dining establishments that competed with them for fan spending, including the two-story Cardinals Nation bar/restaurant owned by the DeWitts.

And more! It’s well worth a read, for a reminder of how journalism can still work, at least when you have a crowdfunded nonprofit giving reporters the time to do actual research.

As for why the surge in recent baseball stadium subsidy demands, which will reach one-third of the league when the next owner shows up with their hand out — I’ll take a stab and guess the Pittsburgh Pirates, though there are lots of contenders — there are a bunch of factors: lots of teams with stadiums built in the ’90s and ’00s with soon-to-be-expiring leases, a feeding frenzy to get subsidy deals done before MLB expands and takes two move-threat target cities off the table, and just the keeping-up-with-the-Joneses effect you get when some rich guys get suitcases full of public cash and their frenemies see it and decide they should get the same. And so long as owners’ demands are successful — and most of them have been, though the jury’s still out for the Royals, White Sox, and D-Backs — there’s no reason this trend is going to stop, ever. Get comfortable, you and I still have a lot of quality time to spend together over the coming years/decades/centuries.

Share this post:

White Sox’ real-estate partner did jail time for Iraqi assassination plot, here’s why that’s bad for Jerry Reinsdorf

access_time personNeil deMause

Let’s check in on the Chicago Bears and White Sox stadium situations, through assorted quotes that have appeared in what’s left of newspapers:

  • “[There is] next to no appetite to fund a new [White Sox] stadium with taxpayer dollars.” — Illinois state senate president Don Harmon
  • “If the Bears can get it done in Chicago, I think they’ll try to do it. If they can’t get it done in Chicago, this is just me guessing, I think they’re going to be right back here [in Arlington Heights].” — Arlington Heights school district lobbyist John Dunn
  • “Mr. Auchi never met or spoke to Saddam Hussein.” — attorneys for Nadhmi Shakir Auchi, the 86-year-old Iraqi-British billionaire who owns the South Loop land where White Sox owner Jerry Reinsdorf wants to build his stadium

So, uh, yeah. The biggest bombshell, obviously, is the Chicago Sun-Times’ lengthy investigation of Auchi, who twice had visa applications rejected by the U.S. State Department on the grounds of “crimes of moral turpitude,” which may or may not be related to that time in 1959 when he and Hussein were among 78 Iraqis convicted of trying to assassinate that country’s prime minister, Abdul-Karim Qasim. (Qasim had taken power himself in a military coup that had assassinated the previous prime minister, and was eventually overthrown and killed four years later in a suspected CIA-backed plot.) Auchi has been operating through his property manager the Related Companies, and until now had mostly stayed out of the spotlight.

That Reinsdorf’s partner in his proposed downtown development is a foreign billionaire with a history of light murder plots may not be the most important part of his $2 billion subsidy demand, but it’s certainly not going to help at a time when state officials are already unenthused about the idea: The same Sun-Times article that quoted Harmon continued, “There might be some [state legislative] members who could be open to the idea, but there simply aren’t nearly enough of those folks right now to cobble together a majority of 30 votes in the Senate and 60 in the House and a governor’s signature.” So Reinsdorf — and Bears owner Virginia Halas McCaskey, who at 101 is a whole 13 years older than the White Sox owner — need a groundswell of support to get stadium deals done in their lifetimes, and questions of exactly how chummy his real estate partner was with Saddam Hussein aren’t likely to help.

Of course, this is Chicago, and this is real estate, and lots of funny things can happen when both those things are involved. One more quote:

  • “I don’t know about you, but sometimes I feel as though there’s an entire world going on out there I know nothing about.” — Chicago Sun-Times sports columnist Rick Telander

You said it, Rick! Not sure I would have admitted it in the newspaper column where I’m paid to know things and write about them, but points for honesty.

Share this post:

Three ways to think about the Coyotes’ sort-of move to Utah

access_time personNeil deMause

The first rumors that the Arizona Coyotes would relocate to Salt Lake City for the 2024-25 season raised a lot of questions: Why now, when team owner Alex Meruelo was just two months away from bidding on land for a new arena in Phoenix? Would the NHL really be happy with trading one of the larger NHL media markets (albeit with not much historic enthusiasm for the NHL) for a much smaller city that’s also not a hockey hotbed? Why would Utah Jazz owner Ryan Smith be paying $1.2 billion (or maybe $1.3 billion; reports continue to vary) for the team, but Meruelo only receiving $1 billion, with the rest being shared among other NHL owners?

Over the weekend, more details emerged, and they only raise more questions:

  • While all of the Coyotes’ assets, including its players and right to actually play NHL games, are being sold to Smith and transferred to Utah, Meruelo will retain the Coyotes name, logo, and trademarks, as well as the minor-league Tucson Roadrunners.
  • Meruelo will have five years in which to finalize a new arena, in which case he’ll immediately be given the right to buy an expansion franchise for the same $1 billion he received for the Coyotes.
  • Accordingly, Meruelo is going ahead with his Arizona land bid, and if he wins, he’ll presumably begin to pursue funding for an arena, likely using a state “theme park district” tax surcharge that remains murky exactly whether it should really be a public subsidy. (I asked three prominent sports economists and got back one “probably,” one “I don’t think so,” and one “let’s cross that bridge when we come to it.”)

To help make sense of all this — none of which has been officially announced, mind you, with Meruelo himself issuing a “reply hazy, try again later” letter, though the Associated Press says a press conference is expected next week — let’s try conceptualizing what’s going on here in three ways:

  1. Meruelo is selling the Coyotes, and getting a replacement expansion franchise in Arizona once he gets an arena deal. This is how it’s mostly being framed in the media, and is strictly accurate. It sort of makes sense for everyone involved: Meruelo gets more time to negotiate an arena deal without racking up annual losses in Arizona; the NHL gets out of the embarrassment of a franchise playing in a college arena without having to worry about a legal battle with Meruelo, plus that $200 million it’s taking off the top of the sale price; Smith gets a team without having to go through expansion bidding wars; and commissioner Gary Bettman gets a new owner who, according to ESPN, has “spent several years building a level of trust” with him, read into that as you will. The main risk for the league seems to be that Meruelo could end up getting an expansion team at a bargain price if those bidding wars really take off, but the NHL may be fine with that if it means getting back into the Phoenix market with an acceptable arena deal.
  2. The Coyotes are going on hiatus to figure out their arena situation, while Utah gets an immediate expansion franchise to take its place. This is an equally valid way of looking at it, and makes the pros and cons even clearer: The NHL is solving its Arizona problem by putting the Coyotes on ice for a few years, while filling out the schedule by letting Smith jump to the head of the line for a new team in exchange for a 20% tip on the sale price. (Smith is also getting an established roster rather than having to pick players in an expansion draft, though given the current Coyotes roster that may not be that much of a benefit.)
  3. The Coyotes are going to be the NFL’s Cleveland Browns, where the team moves but the team’s name and identity stays. That’s Yardbarker’s take, but I’m not sure the parallel works: The NFL granted Cleveland a new Browns franchise in exchange for stadium funding, yes, but that was all sparked by lawsuits over Art Modell moving the old Browns to Baltimore. If the Coyotes re-emerge eventually, though, it’d be the same in terms of a team in one city being transferred to another one then being replaced, after a break, by a new team with the same name once a new venue has been built, so it kind of works if you squint.

There’s definitely lots of ways the Coyotes’ move to Utah can go wrong: As noted here previously, Salt Lake City would be by far the smallest market with two major-league winter pro sports teams, which will create a ton of competition for both ticket buys and TV eyeballs; and the Jazz’s Delta Center, while clearly a better NHL venue than the Coyotes’ current Mullett Arena if only because it has more than twice as many seats, is one of those NBA-optimized venues that sucks for hockey, at least until it gets the $500 million facelift that the state of Utah has promised it. But you can see where someone in the league offices could have made a good case for “So we want a team in Arizona but don’t have an arena there yet, and we have a guy in Utah who wants a team right now and has a marginally workable arena, maybe this can be the beginning of a beautiful friendship? Also, $200 million cash!” At least nobody here would be paying the purchase price by wiring a fraction of it and then claiming he’d left a bunch of zeroes off as a typo. Probably not, anyway. The NHL is always about trying new things.

As for the bigger picture: What, if anything, does the Coyotes’ sort-of move mean as far as how seriously cities should take relocation threats? The team is leaving Arizona after Tempe voted down $500 million in tax breaks for a new arena there, but that came less because either the team owner or the NHL wanted to leave so much as that Meruelo had painted himself into a corner by getting booted out of his old arena and moving to a 5,000-seat one. And Utah did apparently bump itself to the head of the new-NHL-team line by approving $500 million in arena spending, but only because the Coyotes situation called for an immediate solution and they were standing in the right place at the right time. Leagues and individual owners absolutely do shop around for stadium and arena subsidies when thinking about where to play, but that’s not all they think about — if it were, Arizona would now be getting the cold shoulder from the league, instead of an offer of an expansion slot in the next five years. The only truism here is that sports barons love leverage; how they then use it is up to them.

UPDATE: And The Athletic just dropped a tick-tock of what led to the current Coyotes resolution. Tl;dr: The NHL and NHLPA were both sick of the Mullett Arena situation, Meruelo didn’t want to sell but also couldn’t promise when he’d build a big-boy arena, and this was the compromise that was worked out. If that’s not how you think sports league franchise decisions should be made, go take it up with crony capitalism.

Share this post:

Friday roundup: NYC approves $780m NYCFC stadium in Queens, still doesn’t know what it’ll cost the public

access_time personNeil deMause

I keep meaning to find a place to mention it, and here is as good as any: sports economists J.C. Bradbury, Dennis Coates, and Brad Humphreys have taken up the task of updating Judith Grant Long’s epic database of stadium and arena deals, and the results are online as a CSV file. There are likely still going to be some debates about specific figures — the Buffalo Bills stadium is listed with an $850 million public cost, for example, because that’s what the New York Times said, but that leaves out state and county money set aside for future maintenance and upgrades — but it’s still a hugely useful resource for getting ballpark estimates (sorry) of both total and taxpayer costs. Bookmark it now, or just click the “Data” tab here anytime to find it!

That’s enough about that, let’s get to the news, oh the news, so very much the news:

  • The New York city council approved NYC F.C.‘s plan to build a Queens stadium across the street from the Mets‘ stadium, which is expected to cost $780 million and open in 2027. While construction costs are being covered by the team’s owners, Yankees owner Hal Steinbrenner and Manchester City owner Sheikh Mansour bin Zayed Al Nahyan, it’s still unknown exactly how much the city will be giving up in property-tax breaks and discounted rent (the city Independent Budget Office estimated $516 million) or how much the city will be spending on infrastructure for the project (which includes housing and other stuff too, so it’d be tricky to determine exactly how much of infrastructure costs should be charged to the stadium). Ah well, plenty of time to figure that out after the agreements are all signed! Queens councilmember Shekar Krishnan cast the only dissenting vote, declaring, “We are not facing a stadium crisis in this city. We are facing a housing crisis, an inequality crisis and a climate crisis. Now we’re looking at a proposal that gives away public land worth hundreds of millions of dollars in public financing for a commercial soccer stadium. What is the benefit for the people of New York City?” You mean the joy of visiting Naming Rights Sponsor Stadium isn’t enough?
  • Patrick Tuohey of the Show-Me Institute wants to know what happened to the 2022 Populous study of the Kansas City Royals‘ stadium that projected it would cost more to repair than replace, thanks to “concrete cancer,” since it’s been taken down from the KC Ballpark District website. Good news and bad news, Patrick: The report is still there on the Wayback Machine, but it provides no sourcing at all for its figures. It does print them in very large type, though, and how could anything in a 48-point font be wrong?
  • Jackson County legislator Sean Smith polled his constituents about why they voted how they did on the Royals and Chiefs stadium tax surcharge referendum last week, and determined it’s because nobody listened to their concerns and engaged in too much “fear-based campaigning” by threatening the teams would leave. Smith didn’t release any detailed results of his survey, though, so it’s left as an exercise for the reader to imagine what the public’s concerns were, exactly.
  • Adding insult to injury department: Workers for the Oakland A’s weren’t told by team management that the franchise was relocating to Sacramento next year and that they would all be laid off as a result, they saw it on the TV news. “Thank you for ruining our lives,” said one A’s bartender only identified by CBS Sports as Tony. (Also, the layoffs have reportedly already begun, because John Fisher has clearly determined you don’t need concessions workers when you’ve so effectively alienated your fans that no one will come to your games.)
  • The Atlanta Braves claim that a new survey found their stadium-in-the-middle-of-suburban-nowhere ranks 13th out of 30 teams in “walkability,” and we don’t even need to debate whether it’s a dumb survey because it turns out 13th actually means 21st because it turns out the dumb survey people don’t know how to break ties.
  • “Can Minor League Baseball Survive Its Real Estate Problems?” asks the New York Times, but those problems were created by MLB when it bought and contracted the minor leagues and then forced cities to scramble to upgrade stadiums to avoid being left without a chair when the music stopped. Try to keep up, New York Times! Even without a sports department!
  • D.C. United wants to build a stadium for a minor-league affiliate in Baltimore, and the Baltimore Banner article on how “there hasn’t been enough information shared about the project” doesn’t even try to ask how much it would cost or who would pay for it, this has not been a great week for journalism. Here are some tips, guys, start with those!
Share this post: