Cobb County gave Braves monopoly on all game-day parking, says it’s a “safety” thing

Just when you think the Atlanta Braves stadium deal can’t get any worse — it goes and gets worse! The Atlanta Journal-Constitution’s Dan Klepal dug up the latest gift that Cobb County has awarded the Braves owners: a ban on any private entities within a half-mile of the new taxpayer-funded stadium renting out their parking spaces to Braves fans.

Commissioners in February quietly passed an ordinance that outlaws property owners within a half-mile of the stadium from charging for parking during games and other special events at the stadium…

“This irks the (heck) out of me,” said [local office building owner Fred] Beloin, who has previously tangled with the county over zoning around the stadium, and was unaware of the ordinance until told about it an Atlanta Journal-Constitution reporter. “They say they’re increasing my property value and then they do everything in their power to make sure I get no benefit out of it.”

The ordinance closes off potential revenue for dozens of businesses that own more than 10,000 private spaces — many of which could compete with the team for parking revenue.

The way that it works: The new ordinance says that you need an “accessory special event parking license” to rent out your parking spots during Braves games, and such a license “will not be issued if primary access to the accessory special event parking area is from public right-of‐way within the limited access zone.” (I.e., if you drive there on a public road, i.e., everywhere within half a mile of the stadium.) The Braves themselves are exempt from needing a license, as a “major tourist attraction.”

Klepal’s article says that “the restriction could mean fewer parking options on game days, making it less convenient or more expensive to go to a stadium with no direct MARTA access,” but it’s unlikely that this is the Braves owners’ intent. Rather, it puts private parking lot owners over a barrel as the Braves try to negotiate to rent their spaces for use during games — as I told Klepal for his story, “One good way to get leverage is to make the thing you’re negotiating for worthless to the other party. And that’s precisely what Cobb County’s ordinance tries to do.”

As for the county and team officials that put this Braves parking monopoly in place, they say they never meant to discriminate against private parking lot owners, who they said can file appeals to the county if they want to rent out their own spaces on game days. Rather, they said, it’s about … safety. Safety?

“We know that when fans come to a Braves game, no matter where they park, they associate their experience with the Braves,” Plant said. “Our concerns focused mainly on two areas — safety of the fans and the free flow of vehicles through the areas around the ballpark.

“With that in mind, we requested that the county create an ordinance covering an area around the ballpark to protect fans who are attending the game and ensure that they receive the same safety, security and convenience provided in the lots we control.”

Run that by me again? Denying private parking lot owners the right to let Braves fans park there helps provide fans with “safety, security and convenience” because, I guess, quality control? Except that there’s nothing in the ordinance talking about the quality of the parking — the only way this ensures fan safety is if you assume the Braves can provide a safer experience than local business owners, which would be dubious even if we weren’t talking about a team that regularly has people fall to their deaths at games.

FoS reader Andrew Ross points out that this may be the lamest excuse for a self-interested policy since the Philadelphia Eagles tried to ban outside food at their stadium on the grounds that someone might smuggle in an exploding hoagie. It may well end the same way that controversy did, with team officials sheepishly repealing their attempt at a revenue grab amid the public uproar, but expect a few months of lawsuits first, at the least.

VA Beach arena gets new bank, news outlets forget to note public still paying off the loans

I wasn’t going to post anything about the latest Virginia Beach arena news, which involves the developers taking out their construction loan from a U.S. bank instead of a Chinese bank, but then I saw this headline:

VA Beach Arena to be funded by U.S. bank

Yeah, just no. The arena isn’t going to be funded by the bank; it’s going to be financed by the bank. The actual funds going to pay off the arena loans will come from a mega-TIF tax kickback of all property taxes, business license taxes, admissions taxes, arena meals taxes, construction sales taxes, the city’s share of arena sales taxes, and the top 1% off of the city’s 8% hotel tax, which will leave city taxpayers providing about $206 million toward an arena that will only cost $200 million to build. Sorry to be pedantic about the word choice, but it’s kind of a big omission when your headline gets entirely wrong who’s paying for your city’s new arena, you know?

Kraft considering Revolution stadium at demolished mall site, and, yeah, that’s about it

Now that Boston’s Olympic bid is mercifully dead, New England Revolution owner Robert Kraft (he also owns some team in that other kind of football) is shopping around for a new site for a soccer stadium, and is considering the site of an abandoned shopping-mall-turned-convention-center in Dorchester:

Robert Kraft’s hunt for a new home for the New England Revolution has led him to hold talks about building a soccer stadium in Dorchester at the site of the former Bayside Expo Center, now owned by the University of Massachusetts….

UMass bought the Bayside Expo for $18.7 million in 2010, after the center went into foreclosure. The university is currently tearing down the exposition hall as part of its plan to expand the UMass Boston campus to that site.

The Bayside Expo site was earlier floated as a possible place for an Olympic Village, which could have been converted to campus space afterwards; if UMass goes for Kraft’s plan, it would presumably be in exchange for lease payments, which the school could use to fund other expansion plans.

That brings us back to how Kraft plans to pay for all this, since he’d now have lease payments to UMass (or outright land purchase payments) on top of construction costs for what could be a $200 million stadium. The last idea the team owner floated was to have Boston pay for the building and get repaid via ticket taxes, which would only work if the taxes were something on the order of $40 a ticket, so that’s not going to work. Picking a site first and then hoping for the magic funding fairy to arrive is a time-honored sports owner tradition, if only because it’s easier to hit up public officials for construction dough once there’s a plan in place, but this seems like it has a long way to go before it even hits the vaportecture stage.

Flames and Calgary agree to keep discussing new arena, can’t agree on where to find $1.3B

The Calgary city council voted 12-3 on Monday to continue discussions with the Flames and Stampeders owners on a new hockey arena and football stadium, either via the mammoth CalgaryNEXT complex or a cheaper Plan B whose details have yet to be determined. And the two sides had very different interpretations of where things go from here, not least over what the actual price tag, which for CalgaryNext the city says will be $1.8 billion, while the team owners say they can do it for a mere $1.3 billion. First, Flames CEO Ken King:

“Frankly, who knows which may emerge better. We have a luxury here. We get to choose between what may be two very, very good ideas.”

And then, Calgary Mayor Naheed Nenshi:

“Certainly there’s a difference of opinion on numbers, but if I’m looking at their numbers they still say this is a $1.3 billion project. Obviously there’s a lot more questions, including who’s got $1.3 billion. … Even their best-case scenario is still a lot of money that we don’t have.”

There’s nothing wrong with talking, really, and Nenshi and the council seem to remain determined to take a hard line that any new venue proposals don’t involve shoveling piles of money at the teams that the public would never get back. This could drag out forever — which isn’t necessarily a bad thing, unless you’re King and his fellow Flames and Stampeders execs, wringing their hands about how their profits aren’t as big as they’d be if they got massive public subsidies for a new building or two, and I’m guessing most of you aren’t. Though with municipal elections coming up in 2017, you have to figure King and friends have in the back of their minds that maybe they can wait for a new, more-profits-friendly city government — I tried checking on Nenshi’s latest poll numbers, but they haven’t turned up, though I did discover that Calgary residents are strongly in support of playground swings.

ADDENDUM: And then there’s this:

Bills exec: New stadium wouldn’t help us, because Buffalo fans can’t afford pricey seats

Buffalo Bills president Russ Brandon gave a long interview to the Buffalo News yesterday in which he gave a good explanation of team owner Terry Pegula’s puzzling reticence to demand a new stadium like Roger Goodell and the rest of the league would like him to do. In short: A new stadium with luxury suites and all that wouldn’t help them much, because Buffalo.

“We have not met and discussed anything relative to all the noise,” Bills managing partner and President Russ Brandon said of the New Stadium Working Group, formed two years ago, that includes state and local political leaders. “We have not met since April (2014), right after (previous team owner) Ralph (Wilson) passed away, on a new stadium.

“We’re going to take a very slow, quantitative, objective view on what makes sense.”…

“We have made the model work on the Bills side, based on how we have built the business from a volume standpoint,” Brandon said. “So you have a lot of tickets in the building, general-admission seats in the building, 6,800 club seats, a lot of suites and price points have been fairly manageable, amongst the lowest in the league. As we go through market-condition studies and different things that you do when you look at things, like we’ve done previously with renovations, and as you update that information, you have to look and see what makes sense.

“The key is to realize that we are not LA. We are not Atlanta. We’re not Minneapolis. People say, ‘Oh, we’re very similar to Minneapolis.’ They have 28 Fortune 500 companies in that community. We have zero. We have to be a regional operation. We know that. That’s proven.

“But with a new stadium comes new economics. And with new economics comes a public-private partnership, (personal seat licenses), a lot of infrastructure cost. So we have to look at it in a very macro view and make sure that, as a community and as an organization, that there’s a partnership that exists that makes sense.”

There’s a lot to unpack there, but this is the first time I can recall a pro sports team owner arguing, Hey, our fans don’t have enough money to buy all the high-priced seats that a new stadium would give us, so what’s the point? Trying to make money on volume rather than by focusing on extracting as much money as possible from deep-pocketed fans goes against the sports tide in the post-Reagan economy, but it’s not hard to believe that Buffalo might still be a different world in this regard. (Though it’s also possible that Brandon and Pegula are just waiting for “a partnership that makes sense,” aka an appetite for more public money that would make a new stadium worth their while.)

The real question now is why Goodell keeps beating the new-stadium drum when the Bills owners don’t want him to. Is it because he thinks the league would somehow make more money even if the Bills owners are convinced they wouldn’t? Because having Buffalo in an old stadium hurts the argument of other team owners that they can’t possibly survive in their 20-year-old place? Because it doesn’t look shiny enough on TV? Because he’s just so used to playing bad cop that he can’t get out of character? All of the above? Your guess is as good as mine.

Columbus Dispatch editorial: Never mind, Blue Jackets arena is a money pit

I called out the Columbus Dispatch last week for a misleading headline implying that the publicly owned Blue Jackets‘ arena was turning a small profit, so credit where credit is due for a Dispatch editorial today pointing out exactly how and why that was oh so wrong:

Nationwide Arena reports it will end its fiscal-year budget on June 30 with a profit of $316,000. That’s a paper profit, courtesy of a public bailout and the kind of creative accounting that would land an ordinary property owner in foreclosure…

Most people would see their financial situations vastly improved if they, too, could dispense with property taxes and mortgage payments.

The editorial also notes that Columbus residents voted five times against using public money for a sports arena between 1978 and 1997, only to have the Blue Jackets pursue a privately funded arena in 2000 — and then demand a public bailout eleven years later because they claimed they were losing money. Fighting against sports subsidies is really hard when teams owners only have to bat .167 to get everything that they asked for.

Vegas says it’ll cut public Raiders stadium cost to $500m, would actually be $950m, math is dead

The Southern Nevada Tourism Infrastructure Committee met yesterday to discuss Sheldon Adelson’s proposed $1.4 billion Vegas stadium for the Oakland Raiders as promised, and it … suggested cutting $250 million from the public subsidies? Maybe?

On Thursday, [committee chair Steve] Hill announced a new proposal for funding that reduces the tax money used from $750 million to $500 million and raises the cut for the Las Vegas Sands and Majestic Realty from $650 million to $900 million.

“I’ll tell you point blank we’re disappointed by what we saw today,” said Marc Badian, Raiders president.

Or maybe not?

The panel, along with representatives from the Raiders, developer Majestic Realty Co. and Adelson’s Las Vegas Sands Corp., heard again that the project won’t cost the public more than $750 million.

Thankfully, the committee has uploaded the actual proposal to their website, so we can check it out and try to figure out WTF is going on. The public funding in the “alternative” plan, as you can see, is actually listed as $550 million in stadium bonds, which would be covered by hotel taxes. (In Adelson’s plan, the hotel tax would pay for $750 million worth of bonds.) There would also be $7 million a year for operations and capital improvements, plus $3.5 million a year to repay UNLV for lost events revenue at their current stadium, for a present value of about another $150 million.

Then there is the tax increment financing portion, wherein sales, ticket, and business taxes on the stadium and practice facility would be kicked back to Adelson and Raiders owner Mark Davis, amounting to … it doesn’t actually say how much this would be, but I previously estimated it at around $250 million. So we’re at $950 million in public cost — or  $800 million if you don’t include the future operations and other expenses, though you really should — which either way is a whole lot more than $500 million.

In essence what the committee has proposed is to say to Adelson’s crew: Dudes, you’re getting almost a billion dollars, let the tax increment money be part of that instead of asking for it on top. This is enough to make the private partners “disappointed” (they were hoping to have their subsidies and eat them too), but not enough to stop this from being the most expensive public NFL subsidy in history. It would be pretty sweet, though, if the Vegas Raiders deal fell apart because a billionaire and an NFL owner turned up their nose at a mere $950 million subsidy, because they couldn’t be bothered to stoop down and pick it up.

SD councilman proposes “Fan-Lord” owners as Chargers stadium solution, is probably trolling us

Speaking of announcements that weren’t all they were cracked up to be, San Diego city councilmember Carl DeMaio declared yesterday that he has a plan to raise $1.4 billion or more to build a Chargers stadium with no public money required. And how would that work, exactly?

Private developers, the Chargers, and individual fans would all receive ownership shares in the facility based on their initial investment levels. Instead of Personal Seat Licenses, fans can invest in Fan-Lord Ownership Shares in the facility.

He’s trolling us, right? The idea that you can somehow raise $1.4 billion in private capital by dividing up ownership of a stadium pie that is going to be worth way, way less than $1.4 billion in future revenues is amusing enough, but Fan-Lord Ownership Shares? That isn’t even good Game of Thrones fanfic, let alone an NFL stadium finance plan.

You can read the Powerpoint of DeMaio’s proposal here, but the main idea seems to be to turn regular PSLs into these super-PSLs that would include a share of stadium revenues, of which there won’t be any because all stadium revenues are going to be rolled into a laundry list of rounded-off payments, none large enough that they seem totally unreasonable, but at the same time none actually justified by any included market analysis:

Screen Shot 2016-06-24 at 9.30.02 AMLook, I think everyone would be thrilled if it turned out that the Chargers owners could raise private capital from fans and investors (and fan-investors, which I guess is what “Fan-Lords” would be) to pay for a new stadium and still have money left over to increase their profits over what they’re getting at their current stadium. All evidence, though, is that the numbers don’t come close to adding up to do that. If DeMaio’s plan turns out to be a proof of concept that a Chargers stadium is a money-loser and what the Spanos family wants isn’t so much a new stadium as the subsidies that come with one, that will be a useful addition to the public discourse, sure. But don’t be shocked when this turns out to have all the financial sense of a plan developed by underpants gnomes.

Coyotes owner announces planned arena site, won’t tell you where it is

Arizona Coyotes owner Anthony LeBlanc made his long-awaited announcement yesterday about new arena plans, and it’s that: He’s picked a site, but he’s not saying where it is. Seriously:

Coyotes president and CEO Anthony LeBlanc said Thursday afternoon that the team has chosen a site for its new arena and is working through the legal documentation of the real estate agreement.

LeBlanc declined to provide any other details, or name the site.

This is officially the weakest non-announcement ever, especially since there’s no way even to know if he’s telling the truth about having settled on a site. (I suppose the people he’s working out the real estate agreement with know, but if he later switches to another site before revealing what it is, how will anyone on the outside tell?) Technically, it’s an announcement in advance of tonight’s NHL draft, which is what LeBlanc promised, but it’s still not much more than waving a piece of paper in the air and claiming it has specifics on it.

It’s still pretty likely that the report from earlier this week is correct and LeBlanc is aiming for a site in Scottsdale that’s part of the Salt River Pima Indian Reservation, but it’s also possible that he isn’t, or that he is but he’ll change his mind later if a better offer comes along. I’ve been saying for a while that LeBlanc’s best leverage here is to get a bidding war going among various Phoenix-area governments, and it sure looks like he’s trying to drag that war out as long as possible.

Yes, Arlington would pay for more than 50% of Rangers stadium, but not because of ticket tax

So I was sitting around yesterday, waiting for NHL commissioner Gary Bettman to go on TV and announce the new Las Vegas expansion franchise, when this story from WFAA-TV in Dallas about the new $1 billion Texas Rangers stadium plans suddenly blew up all over the Twitterverse:

City of Arlington officials have touted a “50-50” private-public partnership to build a proposed $1 billion retractable roof stadium for the Texas Rangers.

A WFAA-TV investigation, however, has found taxpayers may instead pick up to 80 percent of the tab, which amounts to hundreds of millions of dollars more than initially promised by city leaders…

Tucked in the agreement is a clause called the “admissions and parking tax” that allows for a 10 percent surcharge on event tickets and up to $3 additional surcharge on parking. State law allows cities to collect and use the taxes to build their stadiums. Arlington’s agreement, however, allows the Rangers to use the admissions and parking tax revenues to help pay their half of the construction costs.

“If it really is a tax and could be used by the municipality, then in essence it’s just transferring revenue from the public sector to the private sector,” said Rick Eckstein, a Villanova University professor who studies sports stadium economics.

“There’s a sleight of hand here. There’s verbal gymnastics going on,” Eckstein added. “It’s relatively unprecedented in terms of stadiums I’ve studied over the last 20 years.”

Not to disagree too strongly with Eckstein (co-author of one of the best stadium books out there), especially since he’s right that tax money is fungible and shifting it from public to private pockets amounts to siphoning it off from the public treasury. But these particular tax surcharges are kind of special, to the point where we arguably shouldn’t consider them an additional public subsidy.

What it comes down to is the difference between existing taxes and tax surcharges, especially on items that are under the monopoly control of team owners. Think of it this way: When a sports team owner sets ticket prices, they do so with an eye toward maximizing the amount of total revenue they’ll bring in — basically, they set prices as high as the market will bear without driving fans to stay home and watch on TV. (Technically we’re talking net revenue rather than gross revenue here, but since the marginal cost of selling an additional ticket is close to zero — you might have to hire an additional tiny fraction of a hot dog vendor, but the players are all being paid to play regardless — we can ignore it for our purposes.) That means if that break point is $50, they’ll charge $50 — regardless of whether that’s $50 they get to put in their pocket or $45 in actual ticket value plus a $5 surcharge.

A similar effect is at work regarding parking, which is why most economists consider surcharges like these to come out of the owners’ pockets, even though they’re technically taxes. The owners could accomplish the same thing just by “taxing” themselves, in other words, though there are likely some tax benefits they get from paying this via the tax system rather than voluntarily out of their own pockets.

There are additional problems with the WFAA analysis, starting with the fact that the station’s reporters estimated $300 million in admissions and parking surcharges over 30 years, and added that on to the city’s existing $500 million obligation — but $300 million over 30 years doesn’t cost $300 million now, but rather more like half that in present value. (It’s like figuring a house mortgage: You count how much you need to borrow from the bank now, you don’t add up all your mortgage payments into the future.) So we’re already down to $650 million, and much of that $150 million added cost would really come out of the Rangers owners’ pockets, so really this is much ado about not all that much.

Which isn’t to say that the proposed Rangers stadium doesn’t have hidden costs: It has tons of them, from about $15 million in future rent rebates to free land and property tax breaks for parking lots to the city being on the hook for any of the Rangers’ share of bonds if team revenues fell short of covering them. Whether this gets the public share up as high as 80%, I couldn’t tell you, but it’s worth investigating. Get to it, WFAA investigative team!