Friday roundup: Cincy stadiums still gobbling tax money, XFL to use old Rangers stadium, Crew stadium to require $50m+ in public cash

So very very much more stadium and arena news from this week:

Phoenix rushes through $168m in Suns arena subsidies in five days before new mayor can take office

After several months of behind-closed-doors negotiations, the Phoenix city council and Suns owner Robert Sarver have agreed to a plan for a publicly funded renovation of Talking Stick Resort Arena — to be voted on by the council next Wednesday, because five days is totally enough time for public debate on such things.

The terms of the deal:

  • The city of Phoenix will spend $150 million on arena renovations from existing car rental and hotel taxes, while Sarver will pay $80 million.
  • The city will also “pay $2 million annually for 12½ years into a new renewal and replacement fund, which will be used for future renovation needs”; Sarver will put in $1 million a year.
  • The Suns will extend their lease on the arena, which they can currently opt out of in 2022, through 2037. (They’ll have an option to extend it to 2042, but as we’re seeing with the current lease that technically runs through 2032, option years don’t mean squat in terms of holding teams to arena leases.)

That $25 million over 12.5 years is worth about $18 million in present value, so let’s call the total subsidy $168 million. (The team would pay the same rent on the arena as it does now, so there’s no new money coming back to the city to help pay off its costs.)

Several thoughts on this:

  • Phoenix Mayor Thelda Williams said that she was endorsing the subsidy because “This is our building. It’s our responsibility.” Which, yes, Phoenix does own the arena, but the upgrades are being demanded by (and will benefit the revenues of) its main tenant Sarver, so really the city’s “responsibility” ends with making sure the roof doesn’t cave in; anything beyond that is a gift to the Suns.
  • Spending $168 million for a 15-year lease extension is a public cost of $11.2 million per year, which would be among the worst deals yet for a city, though the Carolina Panthers and San Jose Sharks deals were still worse on a per-year basis.
  • The tight timetable for approval is, as discussed a couple of weeks ago, a transparent attempt to rush through an arena deal before the likely election of an anti-subsidy candidate for mayor in March’s runoff election. At the same time, the plan would get around laws requiring a public vote on new arena spending by terming this old arena spending, so it’s an evasion-of-democracy two-fer.

If you want more outrage, Arizona Republic columnist Laurie Roberts has plenty of it for you, in an article that features the priceless subhead, “Public Input, Schmublic Input”:

In fact, the deal’s already been cut and the votes rounded up. Phoenix Suns owner Robert Sarver has been meeting one-on-one this week with City Council members to get them on board.

All that’s left to do now is inform the public.

And:

“This is the best opportunity we have to keep that building viable for 15 or 20 years,” Zuercher said.

Meaning, in 15 or 20 years, it’ll be deemed a dump again?

Swell.

None of this will make the arena viable for hockey, so the Phoenix area can expect to go through this all over again with a new venue for the Coyotes. On the bright side, Arizona will be unlivable by 2050 thanks to climate change, so maybe these can be the last arenas the region ever builds before abandoning them to history like the Anasazi did.

Hillsborough County proposes going halfsies on $892m Rays stadium, unspecific about how public’s share would be funded

WTSP’s Noah Pransky reported yesterday afternoon that Hillsborough County Administrator Mike Merrill has finally provided some plans for how to pay for a new Tampa Bay Rays stadium. In a memo Friday to the county commission, Merrill laid out the following:

  • Rays owner Stuart Sternberg pays half the cost of an $892 million stadium.
  • “The remaining 50% funding would come from some, or all, of the following sources: private investment via an Opportunity Zone Fund; private investment by Ybor landowners via a Community Development District(s), authorized by the City of Tampa; and Community Redevelopment Agency (CRA) property tax revenues.”
  • Cost overruns and future maintenance costs would be paid for by Sternberg, who would also pay rent, but not property taxes.

On the face of it, that doesn’t tell us a ton, since those three public funding sources are very different in where the money would come from. The Opportunity Zones are a Trump creation that allows land development to be used as a tax shelter on capital gains taxes; it’s not entirely clear how the county would monetize this, though it’s certainly possible. CRAs are effectively tax increment financing, where any rise in tax receipts in an arena gets kicked back to pay off a project’s construction bonds. CDDs are similar, but are a tax surcharge, not cannibalization of existing taxes, so are somewhat easier on the current public purse.

Clearly those are all different kinds of subsidies with different pros and cons — the CRAs are the most straight-up of a cash grant, while with CDDs and OZs the concern would be more if the county would have to promise to backstop any shortfalls if the new revenues didn’t turn up, which is a thing that happens. On Twitter, Pransky took a guess at what the breakdown might look like:

And as for the likelihood of all this actually working to pay for a nearly billion-dollar stadium cost:

There are other options as well, including a 1% hotel tax increase that the county could put in place, which as Pransky notes would raise less than $100 million, but every drop counts.

The concern here is that Tampa is going to get caught focusing on “How can we find enough money to make this happen?” instead of “How much is it worth to taxpayers to make this happen?”, which as any experienced eBay bidder knows is a great recipe for paying more than you wanted to. There are some potentially not-terrible funding ideas here, but none of them are likely to get anywhere close to the kind of public money Sternberg is looking for — which raises the question, if Sternberg doesn’t think it’s a good investment to put more than a couple hundred million into a new $900 million stadium, are we sure that building one is a good idea in the first place?

Seattle gets NHL team without throwing tons of cash at an arena, this is what victory looks like these days

Seattle was finally awarded its long-awaited NHL franchise yesterday, which means as soon as today work can begin on Seattle’s long-awaited reconstruction of the Key Arena. Curbed Seattle has some renderings, none of which show much that’s super-interesting about the redesigned arena, except that it will feature roof-suspended video boards in geometric shapes that aren’t easily described, and hockey fans who for some reason wave banners and bring replica Stanley Cups to the game, while wearing a startling number of fedoras and wildly cheering no action on the ice at all:

It’s been a long, strange trip for Seattle sports, starting with the Sonics moving to Oklahoma City in 2008 in a hissy fit over not getting public arena cash, then a years-long debate over a new arena in the SoDo district that would-be basketball owner Chris Hansen wanted to build, then ultimately the abandonment of that plan mostly thanks to the opposition of port unions and the turn to the Key remodel instead, with hockey arriving first and maybe basketball later. While there is plenty to argue about the merits of the two sites — I anticipate a full comments section for this one — the one common thread was that the city steadfastly refused to throw public money at either deal, helped out by a voter initiative passed in 2006 that put in place the principle that taxpayers should get a positive return on any public investment in sports venues. As sports subsidy shakedowns go — and this absolutely started as a subsidy shakedown on the part of billionaire former Sonics owner (and former Starbucks CEO) Howard Schultz’s part — it’s about as happy an ending as you’re likely to see.

The as-yet-unnamed Seattle NHL team will begin play in 2021, notwithstanding that the above image prominently features “2020 season” on the arena video boards. Maybe Seattle sports fans are so excited about the return of winter pro sports that they’ll show up an entire year early just to cheer them on? There’s no accounting for people in fedoras.

County leaders demand Rays owner commit to extremely vague stadium terms before, well, sometime

Hillsborough County administrator Mike Merrill has declared that it’s time for Tampa Bay Rays owner Stuart Sternberg to declare whether he’ll accept the county’s plans for financing a new stadium:

“Our mission was to build a framework for a deal and this is the best we could come up with. We really need to hear from the Rays.”

If you weren’t aware there was any “framework” for a Rays stadium deal, this apparently happened on Friday, when Merrill sent a memo to the county commission outlining some extremely general terms. As reported by the Tampa Bay Times:

It says the Rays, the city of Tampa and Hillsborough County may each have to put up a reimbursable guarantee not to exceed $50 million.

The team would be required to pay for any construction cost overruns and to make annual rent payments. The Rays would also have to pick up the tab for stadium repairs, maintenance and future ballpark upgrades.

Like Raymond James Stadium, Amalie Arena, and Steinbrenner Field, the memo states, the baseball stadium would not be subject to property taxes except for private sections controlled by the Rays.

Those are all interesting pieces, but the memo entirely leaves out the biggest elephants in the room, which are who will pay how much toward the stadium’s construction cost, how much the team’s rent would be, and how the team and public would split any naming rights and other revenues from the venue. Without establishing those, it’s impossible to know how good a deal this would be for the Rays and for Tampa residents — and, honestly, impossible for Sternberg to say whether this is a framework that would work for him, though I suppose he could always say, “Sure, I’ll pay cost overruns,” figuring if he gets enough up-front cash and estimates high enough on the initial price tag he can cover any unexpected expenses.

Ken Hagan, the county commissioner who’s taken the lead in Rays negotiations, says he hopes for an actual term sheet spelling out funding to be ready by March. He also said that “it’s always been assumed the team would have to invest at least half of the cost,” though apparently “the team” could include private investors, and maybe naming rights money could count toward the “private” half, and really we don’t know enough about the missing pieces in any deal to tell what the public statements so far do mean in terms of who’ll pay for what.

Meanwhile, Hagan is threatening to sue TV station WTSP for reporting how Hagan’s maps of the proposed stadium site made their way to a Hagan-connected developer before the rest of the county commission even saw them, allowing him to start buying up properties in advance of the county securing the land. Hagan says he didn’t directly give the developer the maps; from the sound of things, the maps were actually passed along either by the Rays or by Irwin Raij, the county’s outside consultant.

Oh, and who’s set to be negotiating the Rays deal for the public?

Hillsborough leaders plan to create a negotiating team that will include: County Commissioner Ken Hagan, the county’s designated point person on a new stadium deal; Tampa Sports Authority President and CEO Eric Hart; a representative from the city of Tampa; and New York attorney Irwin Raij, who specializes in stadium deals.

This is going to go just great!

St. Louis officials overwhelmingly approve MLS deal marginally less onerous than one voters hated last year

The St. Louis Board of Aldermen voted 26-2 on Friday to give preliminary approval to tax breaks and free land for a new MLS soccer stadium, with final approval to come when and if the city actually lands a team. Which means it’s a perfect time for me to help throw some cold water on the board’s enthusiasm, via column by St. Louis Post-Dispatch columnist Tony Messenger (which he spoke to me for before the vote, but which ran this morning).

My only actual quote should be pretty uncontroversial:

“The latest plan is arguably less onerous for the public than lots of other stadium projects out there — and certainly better than the previous soccer proposal for St. Louis,” deMause says. “But that’s damning with faint praise, because the median in stadium deals is ‘pretty awful.’”

Most stadium deals are terrible, and this one is better than most! But it’s not the best, either, which Messenger notes by pointing to my recent Deadspin article on stadium deals that don’t suck, citing in particular the Orlando S.C. deal where the team owner paid for construction, land, and property taxes like a normal land developer. St. Louis mayoral chief of staff Stephen Conway retorts that Orlando’s situation is an “outlier,” which is true, but when you’re giving your own plan five stars out of five, by definition you’re saying it’s as good as any outliers. (What would an Orlando-style plan get, six out of five stars?)

Anyway, to recap and update what the prospective St. Louis MLS owners will get as part of the tax and land break package, with some numbers via city documents helpfully provided by Messenger:

  • A 3% sales tax surcharge on goods sold at the stadium. The present value of future taxes is estimated by the city at $21.3 million, but since the higher sales taxes which arguably would just force the team to charge lower face-value prices, it’s not fair to consider this entirely a city cost.
  • An exemption from half of city ticket taxes, with the other half funneled into a stadium upgrade fund. Project supporters say that all the other St. Louis sports teams get an exemption on this, so the soccer team should too; still, that makes it less “not a subsidy” than “a subsidy, but one that the city hands out like candy.” The city analysis estimates the value of this exemption at $11.6 million in present value.
  • An exemption of sales taxes on construction materials, which is estimated to cost the city $1 million in present value while saving the developers $4-5 million; no explanation is given in city documents how this bookkeeping magic occurs (the city sales tax rate is about equal to the state’s), so just roll with it.
  • Free state highway department land and an exemption on property taxes for it. This is the big unknown, since the city apparently threw up its hands and said, “Well, we’re not getting any money from the land now, so may as well give it away for free,” which is not how assets work. (Not that it’s stopped far bigger developers from trying the same argument.) Here’s a vacant lot in the same general vicinity selling for a little under $23 a square foot; if you figure at minimum about 500,000 square feet for a soccer stadium, then you’re looking at $10 million in forgone land value, plus whatever the city would be giving up in forgone future property taxes.
  • The state has already approved $30 million in tax credits, though since it doesn’t appear to be a rebate of any specific taxes, this is probably better thought of as “cash.” (Really, all tax rebates are better thought of as cash, since there’s no functional distinction between the two.)

Add it all up, and we’re looking at maybe $60 million in public subsidies, whereas the previous soccer stadium plan that was rejected by voters in 2017 would have provided … $60 million in city subsidies, plus $40 million from the state. So, yeah, this would be somewhat better, but not all that dramatically so. Probably the most honest way to present this to the public would be “We want a soccer team, and at least this way we’d get one at a mild discount over what some other cities are spending,” but maybe that’s just what “FIVE STARS!!!!!” translates into in the politician-to-English dictionary.

Friday roundup: Buffalo saber-rattling, Edmonton parking fee shortfall, Chicago music venues go to war against soccer plans

And in other news of the week:

  • This was actually last week, but I missed it then: Anaheim Mayor Tom Tait has led the city council in voting to conduct a new appraisal of the Angel Stadium property as Los Angeles Angels owner Arte Moreno prepares to opt out of his team’s lease next year. Councilmember Kris Murray, one of the two no votes, argued that this was tantamount to telling the Angels to leave; Tait replied that knowing how much the land was worth would be crucial to any stadium negotiations the incoming mayor will have with Moreno. The Gang of Four is going to miss Tom Tait.
  • The owners of the Buffalo Bills and Sabres have hired consultants CAA ICON and architecture firm Populous to “give us options” for renovating or replacing the teams’ existing venues. This is not necessarily the first step toward demanding new buildings, but it’s more of a step than the Pegulas have taken thus far, so certainly bears watching.
  • The Tampa Bay Buccaneers have been giving away unused tickets for free to their season ticket holders, to try to fill up the seats at their underattended games. Finally something that Los Angeles Chargers fans can point and laugh at! Both of them!
  • The $8.7 million a year that Edmonton was projecting to bring in from parking fees outside the Oilers‘ new arena turns out to be somewhat less: just $2.5 million a year, leaving the city with a roughly $57 million hole in its arena budget. City councillor Jon Dziadyk immediately leaped into action, blaming the reduced parking fees on people not wanting to drive downtown because there are too many bike lanes.
  • Hey, remember that minor-league soccer stadium a major Chicago developer wanted to build as part of a major Chicago development, originally pegged to luring Amazon to town but now with a life of its own? Turns out the whole thing would be funded by tax increment financing kickbacks, and would include three to five new concert venues to be run by the entertainment giant Live Nation that local concert venue operators say would drive their non-subsidized clubs out of business. The Chicago Tribune reports that the fledgling Chicago Independent Venue League “already had its new logo, a peregrine falcon wrapped with a snake, printed on black tee-shirts,” which honestly is going to be tough for any soccer team to top.

Portland MLB boosters have no team or stadium funds, but they do have ballpark drawings with an outfield tram, so there

In the world of vaportecture, renderings for a proposed stadium for a proposed expansion team for an expansion that isn’t even happening yet are the vaporiest tecture of all. So it’s perhaps not surprising that the Portland Diamond Project — the group that wants to bring MLB to Portland, Oregon, if MLB ever gets around to expanding — accompanied the announcement of its purchase agreement for Port of Portland land along the Willamette River with a bunch of images that are attention-grabbing to say the least:

Yes, that is a stadium with a gondola running right up into the right-field corner. Why? Why not! Kids love the gondolas! Look, here are some young adults — who given how long it’ll take to get this thing built if it ever is, are probably about eight years old right now — taking selfies on the gondola platform. That’s totally a thing that Kids Today of the future will do!

But more important, what’s up with that double-decker transparent roof that covers maybe 10% of the seating from the rain, but not the sun, even though baseball is a sport that stops play during rain but not during sun? Here’s another angle:

Okay, so you can have shade at the Portland ballgame, but only if you sit at one of the center-field umbrella-tables by the bicycle racks. Everybody loves maneuvering past people eating brunch while ignoring a nearby baseball game in order to park their bikes!

Finally, here’s another angle of the roof, in which it appears to have been designed for an entirely different rendering:

The sun reflecting off the roof is a nice touch, though — lens flare, everybody take a drink! — even if given the positioning of the stadium this means that the sun is actually in the north.

Still to be determined, according to the Oregonian’s report: “the terms of the agreement between the Portland of Portland [sic — outsourcing its copy editing to people who live in another state is clearly working out great for the Oregonian] and the Portland Diamond Project for the property, what stadium backers would pay to use Terminal 2 and who’s agreed to foot the multibillion-dollar costs of building a stadium and bringing a team to Portland.” So maybe planning for this stadium to become a reality the minute the earth spins off its axis is a fair assessment.

Senators owner denies asking for public arena funding, except for that time he did

Now that Ottawa Senators owner Eugene Melnyk is blowing up his LeBreton Flats arena plans by suing his development partners, the gloves are coming off. In the latest twist, Ottawa Mayor Jim Watson, who Melnyk’s suit claims threatened to withdraw support for the arena if Melnyk pulled out of the plans — yeah, I know, just go with it — said yesterday that Melnyk tried to get public money for the project even after promising “no government money” would be involved:

“Their original opening discussion with our staff is that they wanted the city to build the arena, and I said that we’re not in the business of building arenas,” Watson told reporters after the final council meeting of the term.

A Senators exec immediately denounced Watson’s statement, but in a classic non-denial denial:

In a statement released Wednesday afternoon, Nicolas Ruszkowski, the team’s chief operating officer, called Watson’s comments “disappointing and inaccurate.”

He said the two sides met at the city’s suggestion to talk about funding models, but when the city made it clear it didn’t want to be involved, the Senators moved on.

“Numerous options for the development of the site were discussed; including, for instance, the adoption of Edmonton’s arena development model. When informed that this was impossible, [Rendezvous LeBreton] moved on,” he said in a statement, adding Melnyk never demanded the city build an arena.

So the Edmonton model — which, as a reminder, involved more than $300 million in public cash, mostly from handing over property tax receipts from the entire area around the arena — “was discussed,” meaning somebody raised it. Then the mayor’s office informed Melnyk that that model wouldn’t work, and the mayor clearly wouldn’t have proposed it only to immediately un-propose it, so obviously it was Senators officials who asked about getting taxpayer money. But that’s not “demanding the city build an arena,” because it’s just different, okay?

Then Ruszkowski doubled down by saying that even though he would never have asked for tax dollars for the Senators, not giving them tax dollars is a double standard, because the city previously spent money on renovating its CFL stadium for the RedBlacks. That’s so unfair! Not giving Melnyk money that he would never think of asking for! The nerve of some people.

The A’s can’t move, so they better get a new stadium or else they’ll, um

If you’ve ever wanted the nonsensical way news outlets cover teams’ “need” for new stadiums displayed in the course of a few short sentences, the San Francisco Chronicle’s Scott Ostler has you covered:

The A’s options for moving to other cities are limited or nonexistent. Rooted in Oakland? More like stuck in Oakland. If they don’t strike a ballpark deal soon, it will be panic time for everyone.

Schaaf, recently re-elected, really would like to avoid going down in history as the mayor who waved goodbye to three pro sports teams.

I’ve read it three times now, and I don’t know how a human being with a fully functioning brain typed those first four sentences, and then that fifth one right after it. The rest of the column makes enough sense, but guys, I’m worried about Scott Ostler. Can someone check on him?

Everyone else, meanwhile, sit back and enjoy this rendering of A’s fans waving to the giant floating eyeballs beyond the team’s new right-field fence: