A’s owner wants control of Coliseum site for development, just without so much development

With the Oakland Raiders sorta kinda maybe thinking about moving to Los Angeles, it would seem that A’s owner Lew Wolff is sitting pretty to finally seize control of the Oakland Coliseum property so that he can build a lucrative mixed-use development to help pay for the costs of a new stadium. So, naturally, Wolff thoroughly confused everyone by announcing that what he really wants to see built around an A’s stadium is a giant parking lot:

Wolff said there is not enough land readily available at the Coliseum complex to build a stadium and satisfy the city’s desire for additional development, such as homes, shops, offices and a hotel.
The only way it could work, Wolff said, would be to build multilevel parking garages, but that would leave fans waiting in long lines to exit the garages and begin their drives home.
“Parking is a key issue for us,” Wolff said. “We want surface parking surrounding the ballpark wherever we build it unless we’re in the heart of a downtown.”

Now, no argument from me that A’s fans are going to want to park somewhere, and that multilevel parking structures are kind of a mess. (I still have nightmares about the New Haven Coliseum parking ramp.) But given that, as an astute Twitterer noted, back in 2010 Wolff went on and on about how an Oakland stadium would only work if it were surrounded by “residential entitlements” (i.e., the right for Wolff to build condos), it’s a bit odd to see the guy suddenly saying screw condos, parking lots are where it’s at!

The most likely interpretations, it seems, are that Wolff’s latest gambit is an attempt to tell Oakland 1) there’s not enough room for two stadiums plus other development, so get the Raiders offa our lawn, 2) you’re not giving us enough land, go back to the plan where 800 acres would be in play, 3) we don’t like those Coliseum City guys, let us plan our own development or it’s no deal, or 4) some combination of the above. Still, it makes for a bit of a muddled public message from Wolff — but then, muddled messages are kind of his specialty.

Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Rams owner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”

Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys, New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.

San Diego officials propose bold new Chargers funding plan: Borrow money, pay it back somehow

San Diego county supervisors testified before Mayor Kevin Faulconer’s Chargers stadium task force yesterday on ideas for funding a stadium, and man, are they terrible. (The ideas, I mean. Not the supervisors, necessarily.)

  • Supervisor Ron Roberts suggested that the county provide a “bridge loan” that could later be paid back by property and sales taxes on new development around a stadium — tax money that would normally go to the general fund to pay for schools and other public costs associated with new development, but would be instead diverted to repaying stadium loans … somehow. Also, Roberts didn’t indicate how the loan would be repaid if the development didn’t pan out as expected.
  • Another idea, from supervisors chair Bill Horn, was for the county to sell a revenue bond that would be repaid by revenues on … something. (In the inimitable words of U-T San Diego, “no payback source was suggested — though he said there would need to be one.”)

No offense, guys, but it’s not much of a challenge to come up with ways of paying for a stadium that just amount to “Borrow the money, then pay it back somehow.” The not-so-fancy footwork is apparently being inspired by a California law that requires a two-thirds public vote before adding new taxes, a voter threshold that is never going to be cleared for a San Diego stadium, no way, no how. So instead we have local officials trying desperately to think of ways to fund a stadium with existing taxes, which would then need to be made up somehow, and backstopped if they don’t come in sufficiently, and oh it all just makes your head hurt, doesn’t it? I’m starting to understand why Sacramento used an arena financing plan that involved using city parking revenues and then filling in the resulting gap with more city parking revenues and then filling in that resulting gap by shrugging a lot and changing the subject.

Indiana senate president says “funding our priorities” takes precedence over Indy Eleven stadium

So apparently the amendment to require that Indiana can only lose half its shirt on an $82 million Indy Eleven soccer stadium isn’t the only thing up in the air in the state senate: After the stadium funding bill passed the state house yesterday, senate leaders now say they might not even bring it up for a vote this year:

At a news conference before the House vote, Senate President Pro Tempore David Long, R-Fort Wayne, said there are other priorities before the soccer stadium.

“I don’t get too excited over it, but at the same time, I haven’t delved into it too deeply this year,” Long said of the stadium. “We’re really focused on funding our priorities. Those have to come first. If the soccer stadium makes fiscal sense, we’ll certainly consider it. … That’s an additional issue that might have to wait … and even then, I don’t know where it would go.”

This is pretty much the exact same thing that happened last year, which is why the stadium bill is being considered now instead. Long hinted he might be willing to consider the stadium once the state gets updated revenue forecasts in April, but it’s impossible to know whether that’s “I want to be sure we have the money” or “I want to wait until I can point to all the other things we need the money for.” In any case, a bill to give $82 million in public money to the owner of a minor-league soccer team so long as he promises to stiff the state on paying back no more than half of it is now dependent on the whims of one state politician, which is a pretty good microcosm of democracy in America today.

Cobb County admits it doesn’t know what Braves bridge will cost, that taxpayers will fund it

Hey, what’s up with that Atlanta Braves double-decker bridge that no one knows how much it’ll cost or how to pay for it, you ask? (You really need to work on your grammar.) Well, the Cobb County commission has hired an engineer to design it, but still can’t give any answer on the cost part:

When asked how much the bridge would cost, [] DiMassimo said the county is sticking by its $9 million estimate — a figure they came up with more than a year ago — before officials decided that building a bridge to support the circulator bus would be too expensive.

Asked if the bridge construction cost could be higher, DiMassimo said, “potentially.”

The rest of the article, by the Atlanta Journal-Constitution’s great Dan Klepal, is equally sad-hilarious and worth reading before it disappears behind the AJC’s paywall. My favorite two bits:

And:

This “build the stadium now and figure out how to get people to it later” plan just gets better and better, don’t it?

 

Indiana house to require Indy Eleven owner to stiff public on no more than half of stadium costs

The Indiana legislature is good for something after all, sort of! Yesterday the state house passed an amendment to the proposed Indy Eleven soccer stadium deal that would require the team’s owner to guarantee that new tax revenues would cover at least half the state’s $82 million cost.

“The purpose of the amendment is simply to make sure the public is not left to foot the bill for an underused or empty stadium,” Rep. Ed DeLaney, D-Indianapolis, said Tuesday on the House floor.

DeLaney said he didn’t ask for a 100 percent guarantee because he wanted a “fair and measured approach.”

Man, I really want Ed DeLaney as my bank loan officer. “Now, you understand that you’re going to have to pay back the loan, right? Are you good for it? How about this: Can you at least promise that you’ll pay back half the loan, and we’ll eat the other half? I’m sure that will seem fair and measured to my bosses.”

Of course, repaying half the state’s costs would still be way better than even the team’s own projections, which couldn’t manage to come up with enough ticket tax money to pay off even that much. (And independent estimates, including my own, have it doing much, much worse.) Also of course, though, the devil is in the details here: If Indy Eleven’s owner could “repay” the money by pointing to, say, sales taxes that his fans are paying or something like that, this could quickly get into have-your-cake-and-eat-it-too territory. Plus the amendment still has to pass the state senate before it goes anywhere. But, Indiana, so be glad for even baby steps, I guess.

Red Sox investors buy Pawtucket team, say it’s really more of a Providence idea

A bunch of minority owners of the Boston Red Sox are buying the team’s top farm club, the Pawtucket Red Sox, and their first order of business is moving them out of Pawtucket and into a new stadium in Providence:

Pawtucket’s McCoy Stadium will be home to the Triple A franchise for only a couple of more years, [Providence lawyer James] Skeffington said during an exclusive interview with The Journal.

“Pawtucket doesn’t have the infrastructure,” Skeffington said. “We can’t recreate what Providence has.”

The “target” for a new stadium, said Skeffington, is a piece of freed-up I-195 land he can see from his law firm’s office atop One Financial Plaza downtown.

Beyond saying that his group has a $60 million price tag in mind for the stadium, Skeffington didn’t say how it would be paid for, whether he’d be seeking public subsidies, or whether he’d pay rent on the public land that it would use, if the I-195 site is approved. This is kind of a big deal, given that the state of Rhode Island and the federal government just spent $610 million to move I-195 and free up 39 acres of land downtown, 20 acres of which was supposed to be sold for redevelopment — a baseball stadium could take up close to half of that acreage, so if the PawSox want access to the property without paying for it, that could amount to a huge opportunity cost.

It would also mean the likely end for McCoy Stadium, the team’s current 73-year-old home, which is not only one of the few surviving ballparks from the first half of the 20th century, but has a long and storied history, including being the site of the longest pro baseball game ever. Not that that in itself is a reason to retain it, and not that it’s necessarily going anywhere soon, given that all the team’s new owners have going so far are vague plans for a new stadium. Still, I’m going to try to swing by there this summer, just in case. If nothing else, maybe I’ll find out what “infrastructure” Skeffington thinks is missing from a stadium that drew a respectable 515,000 fans last year.

Inglewood approves stadium plan with no public vote, as construction cost nears record $1.9B

The Inglewood city council voted unanimously yesterday to approve an NFL stadium near the old Hollywood Park racetrack site, bypassing both the usual environmental review and the public referendum that would normally be required to bypass the environmental review. The project, spearheaded by St. Louis Rams owner Stan Kroenke, can now move ahead just as soon as—

An economic impact report commissioned by the city estimated the privately funded stadium with open-air sides and a clear retractable roof could be the most expensive in U.S. sports history: $1.86 billion.

Okay, so to paraphrase things Everett Dirksen never said, this Inglewood project is starting to get into some real money. I’m already on record as being skeptical of Kroenke being able to make an Inglewood stadium pencil out when we were talking about $1.5 billion; at $1.86 billion, which is more than half a billion more than the 49ers spent on their stadium in Santa Clara without needing to worry about any NFL relocation fees, it seems like madness. (Or leverage to extract more money from St. Louis.) But I guess we’re one step closer to finding out whether Kroenke is super-smart, super-crazy, or super-smart about appearing to be super-crazy.

There is still one other possible way the Inglewood stadium, even if it doesn’t collapse of its own weight could be blocked, which is that a petition drive could be launched for a referendum to block the deal from going through without a referendum. No word yet of anyone launching such a campaign, but I’m sure someone will do so eventually, because California.

Rays threaten to move out of St. Pete the year that Malia Obama turns 30

Now’s here some quality clickbait, courtesy of the Tampa Bay Times (“Winner of 10 Pulitzer Prizes”!):

Rays owner vows stadium search by 2022, with or without St. Pete’s okay

Whoa, Stuart Sternberg is throwing down the gauntlet! He’s going to straight-up ignore his lease with St. Petersburg and, wait, why 2022?

Sternberg made his unusually frank comments in a question-and-answer session with the Tampa Bay Times while he was in town for an annual Fan Fest celebration…

Assuming it takes at least five years to build a new stadium, will you start a regional search without St. Petersburg’s permission by 2022?

Absolutely. Before that. I haven’t thought of a timetable, but five years is a minimum from the time you would start the process to when you would ring the bell.

So: The Tampa Bay Times asked Sternberg if, given that it would take a few years to build a stadium, and the Rays‘ lease is up after 2027, he’d start looking around for stadium sites a few years before then. And Sternberg said — wait for it! — yes, he would. Though given that, as Noah Pransky (yes, him again) points out, Sternberg can’t actually start negotiating with any other cities before 2028, as spelled out in that lease (which the St. Pete council is refusing to let him out of), he’d be limited to just looking. Which you have to figure he’s doing already anyway, right? So, not much of a story, probably the kind of thing you’d bury in the back—

They don’t make Pulitzer Prizes like they used to.

Jaguars owner gets all confused about how blackmail works, threatens self if state money is denied

Not to be left out in all the California stadium excitement, the owners of the Jacksonville Jaguars are levying some threats of their own, saying that if the Florida state legislature doesn’t approve $30 million in renovation subsidies over the next 30 years, they just won’t renovate at all! Yeah! That’ll show ‘em!

As Noah Pransky of Shadow of the Stadium pointed out on Friday, though, this is a pretty stupid threat:

The Jaguars’ own subsidy application claims the $18 million club upgrade would net the team an additional $2.3 million per year (plus the naming rights).

So, assuming Khan has no trouble financing a construction loan, the Jags could conceivably just pay for the profitable club renovations themselves now and make their investment back in 10-15 years.  The state, however, would need about 200 years to recoup its investment based on its 6% sales tax cut of that “new” revenue.

So: A football team is considering a renovation plan that would both pay for itself and turn a small profit, but decided to ask the state to pay for instead, because then it would turn a large profit. And if the state doesn’t agree to it, the team owner will refuse to go ahead with the renovation, costing the state next to nothing but himself a good bit more. I wonder if he also has a gub.