Phoenix Rising co-owner vows MLS stadium will get no subsidies, other than “normal” ones

Since writing my post noting that Phoenix Rising hasn’t provided funding plans for its proposed MLS stadium yet, I’ve had an email back-and-forth with team co-owner David Rappaport. And he’s provided a bit more detail on his ownership group’s “no public subsidies” pledge:

Phoenix Rising FC is partnering with the Salt River Pima-Maricopa Indian Community and the Solanna Group, which is a real estate company owned by members of the Salt River Pima-Maricopa Indian Community, to construct a new, soccer-specific MLS stadium. No tax breaks or funding from the state of Arizona or federal government will be provided that are not normally offered to real estate projects in Native American communities. Stadium construction costs will be repaid from revenues generated by ticket, merchandise, food and beverage and sponsorship sales.

That’s a lot more specific, and helps rule out such things as tax-increment financing or other public kickbacks, which is definitely reassuring.

The question then is what that “not normally offered to real estate projects in Native American communities” clause means. Salt River is the same site that was considered and rejected for an Arizona Coyotes arena last year, so we have at least a little background on what kind of tax advantages a venue on Native American land would receive. The Salt River reservation has the same sales tax rate as Scottsdale (7.95%, marginally lower than Phoenix), but it promises other unspecific tax benefits. One of these could be a property-tax exemption for land owned by the reservation (same as for land owned by other governmental entities); if Salt River continues to own the property (or even just “has control over” it, which is considered the same thing by Arizona law), this could save Phoenix Rising a few bucks.

There’s also this:

The income of a corporation owned by an Indian tribe or tribal member is not subject to Arizona’s corporate income tax if its income is derived from businesses located on the reservation. Income from a corporation not owned by a tribe or tribal member, regardless of whether it is located on a reservation, is subject to the state corporate income tax. Corporations owned by tribes or tribal members that derive their income from non-reservation sources are subject to the income tax in the same manner as all other corporations with income in Arizona.

Again, if the ownership is structured right between Phoenix Rising, Solanna, and the reservation, there could be some tax benefits here, though it’s tough to say how significant they’d be without knowing more details.

Anyway, this is all reassuring, though I’ll still be eagerly awaiting a fleshed-out stadium funding plan. A typical MLS team brings in maybe $30 million in annual revenue, out of which it has to pay player payrolls (generally less than $10 million), plus other expenses; adding on $10-15 million a year in debt payments (if we’re talking about a $200 million stadium) would take a hefty chunk out of their ledgers. It’d help if they can keep costs down, but given they’re talking about a “climate-controlled” venue … I’m interested to see how it all pencils out, let’s just put it that way.

Clippers’ Inglewood arena plans face MSG suit, could require taking homes by eminent domain

The Inglewood city council, after voting last month to enter into an “exclusive negotiating agreement” with Los Angeles Clippers owner Steve Ballmer for a new arena, voted again on Friday to do the same thing, after getting a claim filed against it by the owners of Madison Square Garden on Wednesday for — you know what, let’s take this one step at a time:

  • Since February, there’s been talk that Ballmer wanted to build his own arena in Inglewood, possibly adjacent to the Los Angeles Rams’ (and Chargers‘) new stadium, so that he (and maybe Rams owner Stan Kroenke) could create his own entertainment district to compete with AEG’s L.A. Live next to the Clippers’ (and Lakers‘) current home at the Staples Center.
  • Inglewood councilmembers voted in June to approve that three-year negotiating agreement, which has no funding or operating details beyond “We wanna build an arena, let’s figure this out.”
  • Last Wednesday, MSG — which owns the Forum arena, formerly the home of the Lakers and now used mostly for concerts, and which is owned by James Dolan of New York Knicks and terrible singing fame — filed that claim for damages against Inglewood, claiming city officials asked them to give up their lease on parking lots across the street from the new football stadium site in April by telling them it was for a new “business-technology park.” Which, you’d think Dolan and his lawyers could have read the newspapers back in February to see this coming, but okay. MSG’s lawyers said if the city didn’t cancel the deal with Ballmer, they’d file suit.
  • Inglewood doubled down on Friday by voting unanimously to reauthorize the agreement with Ballmer, to meet any concerns that the June vote had taken place without public notice (one of the charges in MSG’s claim).
  • Friday’s vote was attended by 40 Inglewood residents protesting that the city was considering using eminent domain to force them off of their privately owned land to make way for the arena, or otherwise displace them by helping to gentrify their neighborhood.
  • Inglewood Mayor James Butts said no one was being displaced, that the arena would be built entirely on public land.
  • An MSG press spokesperson fired off an email to the Los Angeles Times saying that the land Ballmer is seeking contains hundreds of homes, apartments, and businesses, and “there is no question that residents would need to be displaced within this area.”

So, what the hell? The agreement itself includes this color-coded map by owner type:

The white parcels are the privately-owned bits of land, so, yeah, I’d say there should be some concern about eminent domain being used. In fact, I’d go so far as to say it’d be impossible to build an arena, let alone a surrounding entertainment district, without obtaining some private land.

Here’s what it looks like on Google Maps:

This is shaping up to be a big-ass mess, and that’s before we’ve even gotten into the question of who’s going to pay for it. Ballmer and Butts are going to need all of those three years, I’m guessing.

FC Cincy mulling Kentucky tax kickbacks to pay its entire stadium cost, and other week’s news

All the news that wasn’t fit to print this week:

  • FC Cincinnati now wants the Port Authority of Greater Cincinnati to own its stadium since Hamilton County doesn’t want to. (Does “own” mean “pay for”? Reply hazy, ask again later.) Or maybe Newport, Kentucky, since, according to team president and former city council members Jeff Berding, that would allow the team to recoup its entire $100 million through tax increment financing kickbacks of property taxes paid on the property. How would it generate a whole $100 million in TIFs? Reply hazy, ask again later.
  • Would-be Seattle arena builder Chris Hansen hired University of Washington public finance professor Justin Marlowe in May to compare the economic impact of his Sodo arena proposal to that of the KeyArena renovation plan, and he has issued his report, which says that the Sodo plan would create three times as much tax revenue for Seattle ($103 million over 35 years vs. $34 million for Key). On the other hand, the Key plan would include some kind of sharing of arena revenues, though that wouldn’t kick in until the Key developers got their share, and, yeah, basically it’s a muddle. On the whole, it seems to give the edge to Hansen’s plan, if only because that arena would pay property taxes, but I’d need to sit and break down the math to say exactly by how much, and I’ve been waiting for time to do that all week, so clearly it’s not happening. Reader exercise!
  • Oakland A’s executive VP Billy Beane promised that once the team gets a new stadium, it will stop trading all its decent players once they start to get expensive: “There’s only one way to open a stadium successfully, and that’s with a good, young team. … Really what’s been missing the last 20 years is keeping these players. We need to change that narrative by creating a good team and ultimately committing to keep them around so that when people buy a ticket, they know that the team is going to be around for a few years.” Which could make sense if a new stadium draws enough fans that having a winning team boosts revenues enough to pay for player salaries, though we’ve heard this song and dance before elsewhere.
  • The Nashville Sounds‘ new stadium was supposed to cost taxpayers $37 million, but it ended up costing $91 million.
  • What does $74 million in public subsidies buy Minnesota Timberwolves fans and staff? New seats, new restrooms, new locker rooms, an ice floor that doesn’t leak, two new loading docks, and a big glass wall, because everybody’s gotta have one of those.
  • The athletes’ village from the 2016 Rio Olympics is now a wasteland of unsold condos, because everything the Olympics touches turns to trash.
  • A homeless camp has arisen on the site of the planned Las Vegas Raiders stadium. Make your own metaphors.

No, there’s no reason to believe eight US cities are getting $2.4B in cricket stadiums, jeez

You know, I’ve now seen a whole string of articles reporting that San Francisco, Chicago, New York, New Jersey, Washington, DC, Atlanta, Orlando, and Dallas are all going to get new cricket stadiums as part of a $2.4 billion dollar spending spree by the organizers of a new professional cricket league, and I feel it’s my duty to say: No, they’re not, everybody chill. At least, they’re not any more than when Global Sports Ventures announced it with a press release back in January, then proceeded not to announce any actual stadium plans over the next six months. Here’s an SBNation interview where GSV chair Jay Pandya talks about how starting a pro cricket league (note for anyone who actually cares about cricket: really a T20 league, which isn’t regular cricket) is totally something that could happen because some Americans traveled to Australia to watch the cricket World Cup and there were three exhibition games in the U.S. in 2015.

Not asked in that interview, or any of the recent articles: Why on earth should we take seriously a business plan that involves trying to earn back $2.4 billion in stadium investments by selling tickets to a version of cricket that most cricket fans don’t even like? It’d be kind of rude, I know, but that’s what journalists are there for, right?

Suns owner: We want to stay put in renovated NBA-only arena, or else … something

Phoenix Suns owner Robert Sarver said a whole bunch of stuff yesterday to AZcentral:

Suns owner Robert Sarver told azcentral sports Wednesday that it’s “highly unlikely” the Suns will pursue a joint basketball/hockey arena with the Arizona Coyotes…

Sarver said his focus is on an upgrade of Talking Stick Resort Arena.

“This facility was built for basketball,” he said…

Sarver said building a new arena would have “maybe made more sense” four or five years ago when the cost estimate was $450 million to $500 million. The costs now, Sarver said, are “significantly higher.” Thus his focus on upgrading Talking Stick, which soon will be the second-oldest arena in the NBA.

“I think it’s the most economically viable alternative for the city and us,” he said. “I like downtown Phoenix. That’s my first preference. I think the NBA is more of an urban game. That’s our demographic.”

Sarver added that he’d like to say in downtown Phoenix but that, “if we can’t, we’ll explore other options.”

During the news conference Sarver said the Suns “have no choice” but to either modernize Talking Stick Resort Arena or build a new arena.

“Our arena is becoming outdated,” he said. “… We have to have an NBA-quality facility. I know that. The city of Phoenix knows that. Hopefully in the next couple of years we can start construction on something.”

Let’s unpack that: Sarver doesn’t want to build a new arena with the Arizona Coyotes because it’d be too expensive, and also he wants to stay in downtown Phoenix, but if he can’t upgrade his current arena there he’ll have to build a new one elsewhere because they “have no choice.”

That’s a big ball of contradictions, unless you take it as all tactical: Sarver is putting all his cards on a renovation of his current Phoenix arena, and wants to use moving elsewhere as a threat, not an actual option. You’d think he’d at least consider sharing digs with the Coyotes as a way to cut down on competition for concerts and things with another arena, but maybe he doesn’t want to have to partner with a franchise that can’t draw flies, or figures maybe the Coyotes will leave town and he can have a monopoly on the winter sports market, either of which is a reasonable enough gambit.

Sarver still isn’t saying much about how to pay for an arena remodel, just restating the “this place is almost 30 years old, time to send it to the Carrousel” mantra he’s been holding to for the last three years. Either he’s working behind the scenes on a funding plan, or he’s hoping state legislators will do it for him — again, either way, an understandable strategy. But eventually he’s going to have to actually say something concrete, at which point you have to hope Phoenix city officials will say: You said you have no choice but to build an upgraded facility and that you want to stay in Phoenix, so what are you going to do if we don’t give you money for it, hold your breath and turn blue?

Raleigh MLS bidders want state to raze government buildings to build them a stadium

Another day, another prospective MLS team looking for a “public-private partnership” to build a stadium. Today’s contender: Raleigh, where the owners of North Carolina Football Club (catchy name) want the state to raze a government office complex and give them the land for a soccer venue:

The 13-acre site, bounded by Peace, Salisbury and Lane streets, is part of the sprawling state government complex and houses several offices, including the Archdale Building and the State Capitol Police station.

NCFC wants to lease the land from the state, but it’s unclear whether government leaders are on board.

Yeah, it should be unclear, considering here’s what the site looks like now, per Google Maps:
That is a whole mess of stuff that is already built and would have to be replaced! Me, that probably wouldn’t have been my first ask, but maybe the team owners are thinking they can negotiate down to a public park or something.

Aside from this, there aren’t many details on how the funding for a stadium would work, other than that it would cost $150 million and, according to the News & Observer, “would generate $262 million a year in economic activity for North Carolina and create 1,960 jobs, according to Economic Leadership, an economic development consulting firm in Raleigh. It would generate $5.6 million in annual tax revenue for the state.”

A soccer team selling 20,000 seats a game for 19 home games at, let’s be generous and give them $30 a pop, plus $30 in concessions and parking, apply a 2x multiplier just for the hell of it, that’ll almost come to $5.6 million a year at Raleigh’s 7.25% sales tax rate. Assuming, of course, that all the North Carolina F.C. fans would otherwise be spending that money out of the state, which, um, yeah. This seems like almost as terrible an idea as that time El Paso tore down its City Hall to build a minor-league baseball stadium, so I really hope it happens, because I need new laughably tragic stories to tell during radio interviews.

County officials: No big money for Cincy MLS or arena redo, but maybe tax breaks or something

Hamilton County commissioners continue to make unhappy noises about funding either a new FC Cincinnati stadium or a renovation of Cincinnati’s arena, saying they have a lot of priorities other than new sports facilities right now:

All three commissioners are wary of repeating the mistakes they say county and city officials made more than 20 years ago, when new stadiums for the Bengals and Reds saddled county taxpayers with huge financial obligations.

“We’ve all lived to regret that,” said Commissioner Todd Portune.

Fellow Commissioner Chris Monzel said building stadiums, including the two the county already owns, shouldn’t be the business of county government.

“We have two facilities already,” he said. “That’s two too many.”

That’s pretty cut and dried, then, and—

The commissioners did not, however, rule out the possibility of helping proponents of a new arena and soccer stadium, even if they don’t approve a large public investment. While putting a higher sales tax on the ballot is the most likely way to raise big money, the county and city could pursue more modest measures, such as donating land, granting tax breaks or seeking help from state and federal grants.

So it appears the commissioners just don’t want to own a new stadium, but they’re maybe open to giving it public money? Or, more likely, they’re sending a signal that $100 million is a lot of money, and raising the sales tax just to renovate an arena that only really needs minor upgrades is a little nuts, but maybe ask for less and we’ll consider it. Which could be a reasonable “let’s not close any doors” approach, or could be a way to tell constituents that they’re not throwing money down any more stadium holes while secretly considering doing just that, or a combination of the two.

Phoenix Rising plans MLS stadium, let’s not worry about cost or how it’ll be paid for

In the mood to read an entire article about a new stadium plan that never discusses how much it will cost or who will pay for it? Then Soccer Stadium Digest has you covered!

Phoenix Rising FC, once considered a dark horse in this race, is one of the only candidates facing none of the obstacles to stadium development that hampers other markets…

[blah blah blah]

Situated at the intersection of major Valley arterials Loop 101 and Loop 202, the complex is an easy drive from…

[blah blah blah]

In May, the club secured financing with Goldman Sachs, which recently structured both Banc of California Stadium in Los Angeles and Audi Field in Washington, DC.

[etc]

Okay, yes, Phoenix Rising FC has partnered with Goldman Sachs as “structuring agent” for its stadium plan, but that just means they’ll be the bank that they borrow stadium funds from. How much will a 25,000-seat stadium cost? Dunno. Who’ll pay for it? Team execs have previously said it won’t require “public funds,” but as we all know, there are lots of means of getting taxpayer subsidies that can be counted as not public funds. (Tax kickbacks, for starters.)

It’s entirely possible that Phoenix Rising is set to build a new stadium on its own — as Orlando City SC (mostly) did — in which case it’d be worth applauding. (As much as one should applaud a private business for doing what private businesses should do without trying to fob costs off onto the public.) But it appears that the USL club’s owners aren’t being very forthcoming about their cost or funding plans beyond “don’t worry about it,” and the Phoenix-area and soccer media isn’t pressing them on it, which, c’mon guys. It’s fine to be excited about a possible new MLS team, but try to remember to do your jobs while you’re at it.

Miami is paying Jeff Loria’s share of All-Star policing costs, just because

And speaking of city officials lying down on the job and the All-Star Game, apparently Miami-Dade County got Miami Marlins owner Jeffrey Loria to promise to pay for security costs for this year’s game, but then the city of Miami went and paid for them anyway:

Under the team’s operating agreement for its heavily subsidized $515 million stadium, the Marlins are supposed to pay for off-duty police and fire services for “jewel events,” such as the All-Star Game…

Back in February, when the team asked the county to support the event by providing its police officers and firefighters free of cost, Miami-Dade Mayor Carlos Gimenez told the team that it would have to pay the bill due to the terms of its operating agreement…

But the team’s operating contract didn’t stop the city from agreeing early on to pick up the tab. Back in 2014, Miami Mayor Tomás Regalado — who like Gimenez used his opposition to the Marlins’ controversial stadium agreement to help win his election — committed in a letter to then-Baseball Commissioner Bud Selig that the city would pay for public safety “subject to available resources.”

This is actually slightly different from Boston’s arena charity contribution gaffe, in that Miami city officials knew that the Marlins were on the hook for police and fire services, then decided to go ahead and pay for it with public funds anyway, because it would make MLB happy and get them to award the game to Miami. I’ll leave it as an exercise for readers to decide whether that’s better or worse, but one thing is clear: Getting something put in writing isn’t worth much if the people signing it can arm-twist the government to take it back whenever they like it.

WashPost says economists predict $100m in MLB All-Star Game impact (spoiler: they don’t)

Hey, look, it’s another headline — this one in the Washington Post — claiming that hosting a sporting event would have huge benefits for a city:

The 2018 MLB All-Star Game could bring $100 million to D.C., economists say

If you actually read the article, only one economist is cited — Anirban Basu of Sage Policy, a consulting firm — who says that the All-Star Game has averaged $60 to 100 million in “economic impact.” (Remember, “impact” isn’t actual public revenues, it’s just money that changes hands in your city.) That seemed high to me, so I checked in with College of the Holy Cross economist Victor Matheson to see if he knew of any other studies. And lo and behold, he actually co-wrote one in 2001. It’s a bit involved in terms of stats and regression analysis, but in short, it says: Once you control for all the other variables that you’d expect to cause economic growth (as seen in other comparable cities), the actual impact of the MLB All-Star Game appears to be negative:

Our detailed regression analysis reveals that during the period 1973 to 1997, All-Star Game cities had employment growth below that which would have been expected. Instead of an expected gain of around 1,000 jobs in the year a city hosts an All-Star Game, employment numbers in host cities have actually fallen more than 8,000 jobs below what would have been expected even without the promised $60 million All-Star boost.

Is this one study, which looked at All-Star Games from 1973 to 1997, absolutely conclusive? No, of course not. But if journalists are going to assert that “economists” think something, they might want to at least google for what economists think, or even put in an email to one who’s actually studied it. (Matheson replied to my query within a couple of hours. On a Saturday.) Instead, the Post’s Alex Schiffer appears to have only contact (or read a press release by) Basu, a guy who says this stuff about the All-Star Game every year, and who appears to come up with his numbers just by assuming every ticket sold is new money to the economy, and then slapping on a multiplier. But then, Schiffer appears to be on the reprinting corporate press releases beat, so maybe we should cut him some slack … nah.