Rhode Island asks for split of PawSox naming rights, team threatens to leave town again

As Rhode Island House Speaker Nicholas Mattiello suggested back in October, the state legislature is revising its proposal for a new Pawtucket Red Sox stadium to cut down on the $38 million in taxpayer subsidies that were in the initial plan. The new provisions:

  • The team would split naming-rights revenue 50-50 with the city, instead of keeping it all itself.
  • The amount of stadium bonds would be increased from $71 million to $85 million (since the initial bond estimate failed to take into account things like paying the bond lawyers), with the team now paying off $41 million and the city and state $44 million.

This doesn’t exactly sound like a worse deal for the team — the extra $6 million in public cost would almost eat up any of the new naming-rights money at the going rates for such things — but I guess the PawSox owners were counting on the public getting stuck with all of those bond financing costs, because they declared themselves “concerned” over the new provisions:

The PawSox, with the overwhelming majority contribution of $45 million, the commitment of 30 years, and the responsibility of ballpark construction cost overruns, are taking the most significant and likely risks to ensure that this once-in-a-generation project comes to fruition for Rhode Island.

We hope we can keep the PawSox in Pawtucket, and we have offered unprecedented private funds to do so.

I am so trying this move the next time I engage in salary negotiations: “I’m taking the most significant risk here! I hope to remain with this company, and I am making an unprecedented offer to do so! Now, can I have $44 million, please?”

In very related news, the Worcester Business Journal interviewed a bunch of stadium experts (including me) about how much Worcester should offer to put up to lure the PawSox to that town, and came up with the conclusion “not much.” (Holy Cross economist Victor Matheson, who is pictured in a lovely photo tossing a baseball in the air, figured $5-10 million was a reasonable maximum.) The best line, though, goes to University of New Haven business professor Gil Fried, who after noting that the economic impact of a stadium is about the same as that of a Walmart, had this to say about stadium economic impact studies:

An economic study conducted for Pawtucket and the PawSox found a proposed $76-million stadium would pay for itself through new revenue…

Those studies – often paid for by officials wanting to justify building a stadium – have their detractors.

“Those things are a piece of junk,” said Fried.

You said it, pal.

Islanders and NYCFC shed no light whatever on their Belmont bids

There was a public “listening session” yesterday on plans for redeveloping land alongside Belmont Park, and both the New York Islanders and NYC F.C. made presentations, and “details” were “revealed,” according to the New York Post headline, and oh boy oh boy let’s see what we’ve got:

Reps for the NYCFC soccer organization, which currently plays at Yankee Stadium in The Bronx, say the team’s plans for a 26,000-seat stadium at the Elmont, LI, site would also include 400,000 square feet of retail and entertainment space, 15.3 acres of open space, a 5-acre park and 2-acre soccer facility…

The Islanders’ plan calling for an 18,000-seat arena was revealed to include an entertainment hub, hotel and retail village.

Wait, that’s it? We already knew pretty much all that — not down to the tenth of an acre, sure, but “sports facility accompanied by other development” was both teams’ plan all along. No details about how this would be funded? No renderings? Come on, we gotta at least get some renderings!

That’s not a rendering! There aren’t even any fireworks or lens flare! This Monday sucks.

(Here’s a video of the Islanders’ developer talking about how he used to build snowmen with Mets co-owner Jeff Wilpon when they were kids, which is something, I guess.)

Columbus could try to use “Art Modell Law” to force Crew to stay put

Ohio Attorney General Mike DeWine thinks he has a way to save the Columbus Crew from moving to Austin, and it involves a 21-year-old piece of legislation known as the Art Modell Law, officially Ohio Revised Code 9.67:

9.67 Restrictions on owner of professional sports team that uses a tax-supported facility.

No owner of a professional sports team that uses a tax-supported facility for most of its home games and receives financial assistance from the state or a political subdivision thereof shall cease playing most of its home games at the facility and begin playing most of its home games elsewhere unless the owner either:

(A) Enters into an agreement with the political subdivision permitting the team to play most of its home games elsewhere;

(B) Gives the political subdivision in which the facility is located not less than six months’ advance notice of the owner’s intention to cease playing most of its home games at the facility and, during the six months after such notice, gives the political subdivision or any individual or group of individuals who reside in the area the opportunity to purchase the team.

This was passed in 1996 in the wake of Art Modell moving the Cleveland Browns to Baltimore and the city coughing up big money for a new stadium to get a new Browns franchise, though it’s the first I’m hearing about it. (Joanna Cagan researched and wrote the Cleveland section of the opening chapter of Field of Schemes, so my knowledge of that deal isn’t quite as encyclopedic as it might be.) DeWine says his office has reviewed the law and believes it applies to the Crew, and is “prepared to take the necessary legal action under this law” to enforce the provision that team owner Anthony Precourt give Columbus six months to either find a local buyer or buy the team itself.

The law applies, according to state representative Mike Duffey, who asked DeWine to look into it, because, as the Columbus Dispatch puts it, “it is paying a below-market rate to lease state land for parking, the stadium sits on land that is tax exempt, and the state in 2009 provided $5 million for parking upgrades at the Ohio Expo Center, where lots just south of the stadium and are used by Crew SC fans.” Which all sounds reasonable enough to me, though I am not a lawyer, and in any case “reasonable” isn’t going to stop Precourt from going to court to fight it.

Of course, if the state or city were to sue and win, they’d then have to find an owner willing to buy the Crew. That actually may not be so difficult — if all else fails, Franklin County already owns the Clippers, so it has some experience hiring a professional manager to run a publicly owned sports franchise — and might actually be cheaper than ponying up for a new stadium would be, especially since then they’d get whatever profits the Crew are currently earning. Except, uh, there’s nothing in that law that I can see that says a team owner has to agree to sell the team to local owners at any particular price, is there? So what’s to stop Precourt from saying, “Fine, you win, but despite expansion franchises going for $150 million and my only spending $63 million to get my team four years ago, it’s such a glorious franchise that I won’t take a penny less than $400 million”?

And also, the law doesn’t seem to specify penalties, so what happens if Precourt just picked up and leaves? Does Ohio just have to sue to get back its past subsidies? Can it seize the team by eminent domain? I still have not gotten my law degree since two paragraphs back, so maybe these aren’t really such big worries, but it sure seems like there are a lot of lawsuits ahead for this project. Might be easier if Austin voters just tell Precourt to take his MLS-stadium-in-a-public-park plans and go back to Ohio.

Friday roundup: Battles over Blues arena, Vegas bond subsidy, Belmont land for Islanders

Let’s get right to this week’s remainders:

Yeah, it looks like Seattle is getting an NHL expansion team ASAP

Looks like Seattle is being fast-tracked to get an NHL expansion team now that it’s getting a renovated arena:

A Seattle ownership group has been authorized to file an application for an NHL expansion team that would begin play in the 2020-21 season, NHL Commissioner Gary Bettman said Thursday.

The cost of the team would be $650 million, and Commissioner Bettman said the NHL is looking at only Seattle for possible expansion…

“That doesn’t mean we have granted an expansion team,” Commissioner Bettman said following the Board of Governors meeting. “We have agreed as a league to take and consider an expansion application and to let them run in the next few months a season ticket drive.”

So basically, “show up with a $650 million check and some season-ticket pledges, and you’re in.” If anyone thinks that the Seattle ownership group — which includes both former Philip Anschutz lieutenant Tim Leiweke and Hollywood mogul Jerry Bruckheimer — can’t muster that, please raise your hand.

The only surprise here is that the NHL didn’t wait to use Seattle as leverage to get arenas for all the teams seeking them — hell, Calgary was already getting ready to freak out that this might cost them the Flames if they didn’t build a new arena, but now that’s off the table. Presumably the lure of $650 million in quick cash — up from the $500 million that the Las Vegas Golden Knights owners paid just last year, NHL deputy commissioner Bill Daly explained, because of market size differences (sure, okay) and “inflation” (um, in one year, seriously?) — outweighed the benefits of having a great move threat, especially when there’s always Houston for that.

Is an NHL franchise in Seattle really worth $650 million? The average team value, according to Forbes, is $594 million, though the magazine has a tendency to underestimate sale prices (though that could also just be a sign that team owners have a tendency to overpay for teams). That means Bruckheimer & Co. could presumably pick up a low-value franchise for a lot less than that and move it to Seattle, but by signaling that it’s expansion or nothing, the league cuts off that option and means the Seattle group has to meet its asking price if it wants an anchor sports tenant for its new arena.

Really, the only surprise here is that the NHL didn’t ask for $1 billion, because why not? Unless you think that sports league operators have any shame, which, nah, can’t be that.

County may refuse to cut check to Bengals for $2.67m in stadium operations costs

Among the many, many terrible provisions in the Cincinnati Bengals‘ stadium lease (holographic replay systems!) is one that, in the last nine years of the lease, requires Hamilton County to pay for $2.67 million a year of stadium operating costs. County officials have been trying to renegotiate that clause for the past year, and have gotten nowhere, so instead it looks like they’re going to straight-up refuse to make the payment and see what happens next:

Hamilton County Commission President Todd Portune told WCPO he has no plans of writing that check to the NFL team.

When asked if the Bengals are aware the county intends to ignore the request for payments, Portune said: “I think they know it’s coming.”

The Hamilton County administrator also did not include the payments in his proposed budget for 2018.

On the face of it, this sounds like a great way to get sued for breach of contract. (Portune says he has an “old opinion from the prosecutor” that the payments are illegal but can’t divulge it because of attorney-client privilege, which, that’s not how attorney-client privilege works, you know that, right, Todd?) But that may not actually be such a bad thing, for several reasons:

  • The Bengals’ lease only has nine more years to run, because the terrible, terrible lease only required them to stick around for 26 years rather than the 30 that is more standard in these things. So even if the team sues, and then threatens to move, they’re probably going to do that soon anyway, so might as well save $2.67 million a year in the meantime.
  • The rest of the deal, including that infamous state-of-the-art clause that the county has to buy the Bengals anything that other NFL teams get, is only going to get more expensive in coming years, as more NFL teams get other things that the Bengals don’t have. So if you’re going to break the lease, this is as good a time as any.
  • There aren’t any cities with newer stadiums out there for the Bengals to threaten to move to, so it would be a multi-year process for them to try to find one and get a stadium deal there, at which point the lease will likely be about to expire anyway.
  • Who knows, maybe the county really does have some kind of legal opinion that the lease clause is illegal? Anything is possible.

I don’t actually know if Portune is trying a “break up with the Bengals before they break up with us” gambit, but if so, it’s not a bad one at all. He told WCPO-TV that he’s hoping to start renegotiating a longer-term lease immediately rather than wait until 2026 is nearer, and this will certainly start the ball rolling in the right direction; given other recent lease extension deals, the county is probably looking at some pricey demands from the team owners, but may as well find out now. This is almost certainly going to involve move threats (or at least saber-rattling) from the team, and a huge uproar over which would be worse, Cincinnati losing its NFL team or throwing even more good money after bad on its stadium lease — but as we’ve seen before, you can’t win in the stadium negotiation game without playing hardball, so if that’s what this is, it’s a noble start.

Laney College slams door on A’s stadium plans, team heads back to drawing board

That record-scratching noise you just heard was the Oakland A’s stadium plans screeching to a halt:

The governing board of the community college that owns land on which the Oakland A’s want to build a new ballpark ordered the chancellor to stop plans with the team…

“We are shocked by Peralta’s decision to not move forward,” the A’s said in a statement Wednesday morning. “All we wanted to do was enter into a conversation about how to make this work for all of Oakland, Laney, and the Peralta Community College District. We are disappointed that we will not have that opportunity.”

So, um, yeah. We all knew this was going to be a potential problem with the Laney College site — as soon as the A’s started hinting at the site, Peralta Community College officials were saying that faculty and students would likely oppose it — but an outright “Don’t let the door hit you on the way out” was not exactly expected. Time for the A’s owners to go to Plan B, I guess—

[A’s President Dave] Kaval previously told The Chronicle there was no “plan B” if the ballpark site near Laney College didn’t work out.

Whoops.

 

Lightning offer to stay in Tampa 16 more years, only demand $61m in tax money to do so

Here is a headline from the business section of the Tampa Bay Times, “winner of 12 Pulitzer Prizes”:

Hold on to your Bolts: Lightning in talks to stay in Tampa through 2037

And here is the fourth paragraph of said article:

In exchange, Hillsborough County will commit $61 million over the next two decades to maintenance and upgrades of Amalie Arena, home of the Lightning and Tampa Bay Storm and one of the area’s top entertainment and concert venues. The money will come from the fifth cent of the Tourist Development Tax, a fee assessed on each night’s stay at a hotel or motel.

In journalism circles, this is a trick known as “burying the lede,” spelled that way either in order to distinguish it from the actual word “lead” or because journalists are just nuts. It’s a very bad thing to do, because readers who only get as far as scanning the headline — which, having spent some time with web traffic numbers in the age of Facebook, I would say is likely most readers — come away thinking “yay, more years of hockey!” and miss the part where it’s going to cost them an extra $61 million over the next 20 years.

And it’s an extra $61 million, no doubt about that, because there’s even more lede buried even further down in graf (yes, “graf”) #7:

The county owns Amalie Arena, but under the existing contract Hillsborough is not under any obligation to pay for maintenance or upgrades. That onus falls on the team, which runs the day-to-day operations.

This is becoming a standard ploy for team owners getting to the end of their stadium and arenas leases who don’t actually want new buildings (or don’t think they can get away with demanding new buildings) but do want to extort some kind of cash handouts in exchange for their continued existence. So how does $3.8 million a year (that’s $61 million over 16 years, since the Lightning already committed to staying put through 2021 in exchange for a previous bundle of public kickbacks) compare to other recent lease extension shakedowns?

So Hillsborough County taxpayers can at least say they’re getting a better deal than some other cities, though not all, and not even quite as good a deal as they got a few years ago. More to the point, though, did they have to give up this much? Lightning owner Jeff Vinik has not only expressed no interest in leaving Tampa, he has operating rights to a money-making arena, and is investing in a $3 billion downtown development project in the city. So the guy already has innumerable reasons not to flee town, even before handing him $61 million as a bonus. Far be it from me to tell Hillsborough County officials how to do their job, but are you guys sure you’re good at this whole lease negotiations part of it?

Seattle approves KeyArena renovation, Hansen still won’t give up on SoDo plan

Seattle’s KeyArena renovation plan is officially a go, as the city council voted 7-1 yesterday to approve a memorandum of understanding with Oak View Group to redo the former home of the Sonics (and current home of the Storm) in the hopes of luring both NBA and NHL franchises. Mayor Jenny Durkan still has to sign the MOU, but she’s expected to do that tomorrow.

Assuming this is the final verdict — there’s still a traffic plan to be worked out before construction can begin — it marks the end of a years-long debate that began with Chris Hansen proposing an arena in the SoDo neighborhood near the Mariners and Seahawks stadiums, and eventually, after a last-minute obstacle thrown in the way of the Hansen project by the Port of Seattle and its seaport unions, the city instead settling on hiring Tim Leiweke’s Oak View Group to renovate the city’s existing arena, which was just renovated 20 years ago, but that’s like 140 in arena years. Hansen subsequently issued a statement insisting that “our plan to build a 100% privately funded arena in SoDo represents the best chance to bring the NBA back to Seattle”; the OVG MOU bars the city from contributing financially to any other large arena, but presumably there would be ways of structuring a SoDo deal to get around this clause — the bigger question is whether Seattle could support two full-size arenas, which is probably a no.

There will no doubt be huge arguments about whether this is the right decision for the city, for basketball fans, and for residents concerned about traffic — I expect they’ll be starting in the comments section the instant I hit “publish” — but as I’ve noted before, this long, convoluted process at least got Seattle a deal that doesn’t cost much in public money, after losing a team in part because the city and state refused to cough up a ton of public money, and that’s got to be a win.

It’s considered likely that Seattle will land an NHL team first, since that league is salivating for a franchise there, and has an odd number of teams after approving the Las Vegas Golden Knights but no second expansion franchise, in part because Seattle didn’t have its arena ducks in a row yet. You have to wonder if maybe the NHL will wait a bit first to use Seattle as leverage for teams like the Arizona Coyotes and Calgary Flames and New York Islanders to extract new arena funding — but nah, there’s always Houston for that.

As for a new Sonics, that’ll have to wait until the NBA either expands (nothing on the horizon, supposedly) or a team relocates (no clear candidates right now, either), but you have to figure Seattle will be next in line or close to it. The only real question is whether OVG will agree to a friendly enough arena lease to lure an NBA team, if it thinks it can make more money from concerts. (OVG’s lease with the city earns it an eight-year extension if it can bring in either an NHL or NBA team, but there’s no bonus for doing both.)

In the meantime, Seattle is getting a franchise in the new minor-league North American Premier Basketball League, which will play somewhere as yet to be determined. The Seattle Weekly chose to headline this as “It’s Not the NBA, but Professional Basketball Is on Its Way,” which seems to imply that the WNBA’s Storm aren’t professional basketball players? I guess there’s only so much progress you can have in a city at once.

Pontiac Silverdome finally blown up, more or less

The Pontiac Silverdome is down. Repeat: The Pontiac Silverdome is down.

Demolition company president Richard Adamo said his company “couldn’t find the cords we believe were severed” that foiled the previous demolition attempt, so they decided to “reload the building the shoot it again.” Which presumably means workers had to go back inside a stadium that was teetering on the brink of collapse to load it up with more explosives — that’s the video that I want to see.

(Also, it looks to me like this explosion only knocked down the top half of the upper deck. Enh, good enough for government work.)