Vegas MLS stadium plan includes $28.6m shortfall, another $60m in dubious revenue projections

The developers hoping to build a soccer stadium in Las Vegas have released a two-page term sheet outlining how the finances would work. According to the Las Vegas Sun, the split would be 74% public, 26% private, but city officials say once negotiations are finished it would be closer to 50/50.

It’s good that Vegas city officials are admitting that negotiations aren’t done, because man, is that one mess of a term sheet. As I noted in the Sun article, the stadium operating agreement gets just one line — “further legal review is needed” — which means that there’s no way to tell who will get revenues from naming rights and other stadium revenue streams, nor who will pay annual operating costs of the arena. As I also noted to the Sun’s reporter, but it didn’t make the published story, the plan includes $4.3 million a year in proceeds from “non-MLS events” — a figure that even the term sheet acknowledges is “on the aggressive (high) side” and which is probably downright crazy given the number of 20,000-seat venues already scattered around Las Vegas or in the works. And there’s no backup plan for what would fill that gap — which would cover about a third of the costs of the $200 million stadium — if the non-MLS profits don’t materialize.

Add in that there’s already a $28.6 million funding gap that needs to be filled, and this is not the most ironclad stadium financing plan ever seen. Hopefully there will be more actual numbers before the city council is set to take its first vote on the plan on August 20.

NYCFC stadium news: There is no NYCFC stadium news

Hey, NYC F.C. Chief Business Officer Tim Pernetti, what’s new on your plans for a soccer-only stadium in New York City, or maybe outside New York City?

Pernetti said there was “nothing new to report” on their search for a permanent stadium deal. “Same boring answer I gave you guys a while back,” he said. “It’s taking some time but at the same time we want to get it right. We want to take the time necessary to make sure we get it right.”

And what about a training facility, now that Manhattanville College has rejected the club’s overtures to train there?

“We are still looking at a couple of different options on a training facility,” Pernetti said. “We are not ready to talk about where we are going to go yet. We are trying to get some things ironed out but we expect to have an answer on that pretty soon.”

Probably best to get used to the weird soccer seating chart for Yankee Stadium, since it looks like the team will be there for a while. Apparently New York is going to be the poster child for teams willing to put up with bizarro seating charts in order to play in the city — which probably makes sense, given the size of the market, but is still an interesting turn of events. And kind of makes you wonder why New York needed to spend so much money on new stadiums for the Mets and Yankees when you can apparently play in a studio apartment and still rake in the dough.

UNLV stadium board member: Big ol’ sales tax hike would foot stadium bill nicely

When the University of Nevada-Las Vegas proposed building a $900 million football stadium back in February, school president Don Snyder said he would “look creatively” for ways to fund it. “Creatively,” it now appears, means asking for county-wide sales and hotel tax hikes:

A UNLV stadium board member, Regent James Dean Leavitt, proposed Wednesday that the Clark County sales tax and the lodging room tax be increased slightly to help pay for an on-campus domed stadium of 50,000-55,000 seats.

Leavitt said University of Nevada, Las Vegas students should also pay a suggested $100 toward a “perpetual fund” for major university projects such as a stadium or medical school.

Raising the county sales tax by 0.25% would generate an estimated $79 million a year in new revenues, while a room tax surcharge of 1% would generate $44 million a year; since $900 million in bonds would cost something like $60 million a year to pay off, this would certainly cover the bill. As to why Clark County would want to do such a thing, presumably Leavitt believes that stadium consultant’s nonsense about $500 million a year in economic impact from a new stadium, even though the actual operating profit is estimated to be just $13.9 million a year — or way, way less than the stadium bonds would cost to pay off.

Anyway, plenty of other members of the stadium board are opposed to one or the other of the tax hikes, so this will probably now enter the haggling stage for the time being. But with the board set to make recommendations to the state legislature by the end of September, it’s fair to say that we can see what direction this thing is heading in.

Wolff, Oakland agree on A’s lease; let the new stadium battles begin

Yeah, there’s no way Lew Wolff was going to let a few wording quibbles stand in the way of a lease extension he pretty much wrote himself. On Tuesday night, the Oakland A’s owner announced that he’d reached agreement with the city of Oakland on a new 10-year lease extension; while the Alameda County Board of Supervisors still needs to sign off on the plan, they were in favor of it all along, so it’s fair to say that this deal is done.

With that out of the way, Wolff can now move on to fighting with Raiders owner Mark Davis over who’ll get the rights to develop the Oakland Coliseum property, which increasingly looks like the prize that both team owners are looking to win in order to make new stadium deals happen. This looks set to be yet another multi-sided battle, in that not only are Wolff and Davis effectively bidding against each other, but each is no doubt going to try to extract the best deal out of Oakland and Alameda County, in terms of land price, tax breaks, and direct stadium subsidies. None of that has advanced much beyond the spitballing stage in either case, so we have lots and lots more fun battles to look forward to before there’s any kind of resolution here — assuming “resolution” is something you can ever really talk about in a sports industry where stadiums can be considered obsolete after only 14 years.

Glendale mayor seeks to overturn Coyotes lease after email shows councilmembers talked in secret

It’s baaaaaaaaaaack!

Glendale Mayor Jerry Weiers on Monday asked the state attorney general to investigate a previously undisclosed meeting of City Council members and an Arizona Coyotes attorney last June, days before the council approved a $225 million agreement with the team…

Violations of the Open Meeting Law can rescind actions taken by elected officials, which could potentially void Glendale’s deal with the team, which was then called the Phoenix Coyotes.

It’s been just slightly over a year since the Arizona Coyotes signed a new 15-year lease where the city of Glendale will pay them $15 million a year to play hockey in the arena that Glendale built for them. (They were the Phoenix Coyotes then, but as part of the lease the team owners agreed to change its name. But not to “Glendale Coyotes,” that’d be crazy.) It was one of the most generous sports deals in history, and only passed after councilmember Sammy Chavira made a last-second switch, so if it turns out that the whole thing was illegal, that’d be kind of a big deal.

Now, Mayor Weiers opposed the lease deal, so it’s not entirely unsurprising that he’s looking into trying to undo it. But according to emails obtained by the Arizona Republic, the evidence is kind of damning: Councilmember Gary Sherwood emailed councilmember Manny Martinez that he and councilmember Yvonne Knaack “spent over an hour with [incoming Coyotes attorney] Nick Wood last night,” and that “Sammy [Chavira] is already on board as he was with us last night.” Adding self-incrimincation to injury, Sherwood added, “Manny, please delete this email after you’ve read it.”

(Asked about this by the Republic, Sherwood defended holding secret discussions outside of public view by saying that he and Knaack only spoke with Wood over the phone, then spoke with Martinez and Chavira later. Which would still likely be a violation of the state Open Meeting Law, but hey, it worked for Cobb County.)

We’re still a long way from the Coyotes deal coming close to being overturned — among other things, even if last year’s vote turns out to be illegal, the council could just vote to reaffirm the new lease, this time without any hanky-panky. But if nothing else, this means we have more Glendale craziness to look forward to, which is always fun.

NFL could build L.A. stadium itself, charge team owner fees, and wait, how does this solve anything?

Sunday’s L.A. Times had a completely unsourced (unless you count a single quote from New England Patriots owner Robert Kraft) article speculating that the NFL could break the football logjam in Los Angeles by just building a stadium with its own money, then renting it to an NFL team. This could work, writes the Times’ Sam Farmer, in either of two ways:

  • The NFL pays for building the stadium, then earns its money back via a hefty “relocation fee” for whichever team moves in.
  • The NFL pays for building the stadium, then reimburses itself by selling naming rights, PSLs, and other goodies associated with the new building.

I’m sure you see the problem here: In the first case, any owner wishing to move to L.A. would effectively end up paying the cost of the new stadium, just funneled through the NFL. In the second, the owner would get a new stadium more or less free — but without the big revenues associated with a new stadium, which is the whole point of wanting one.

Now, paying for new NFL stadiums with PSL and naming rights revenue can work in certain situations — we’ve seen that with the San Francisco 49ers‘ Santa Clara stadium. But the 49ers had a strong incentive to remain in the Bay Area (since it’s where their fans already are), and the South Bay is an exceptionally lucrative market, and the 49ers are an exceptionally popular team, all of which makes for exceptionally big money from PSL sales. For other team owners, giving up either wads of cash or piles of future revenue streams to move to L.A. isn’t likely to seem too enticing when there’s still a chance of getting significant stadium subsidies out of their current home markets.

Really, NFL financing has the same problem as the developer-led stadium plans: Somebody has to pay the cost of a $1 billion stadium, and there’s only so much money to go around to pay construction costs and boost an owners’ profits. The only way this would be a game-changing option would be if the NFL decided it so wants to have a team in L.A. that it’s willing to take a loss on a stadium in order to get it done — but given that market size doesn’t matter much in football, I wouldn’t hold your breath.

The other possibility, of course, is that somebody leaked this “hey, we could build a stadium!” line to Farmer in an attempt to drum up articles making an L.A. stadium seem more feasible, thus putting perceived teeth into NFL teams’ move threats in order to get stadium cash out of their own cities. But naaaaah. The NFL would never be that Machiavellian, right?

 

Las Vegas soccer stadium developer says he knows a guy who says he can get an MLS team

Justin Findlay, the guy who is working with Cordish Companies to build an MLS stadium in Las Vegas so that Cordish can keep its expiring option on downtown land open, says that he can so totally get an MLS franchise for Vegas if he only gets a stadium. How does he know? The MLS deputy commissioner totally winked at him:

He was encouraged after entertaining MLS Deputy Commissioner Mark Abbott this week in Las Vegas. Abbott met with Las Vegas Mayor Carolyn Goodman and other city officials, toured downtown and got a sense of how MLS would work in Las Vegas.

Although league officials won’t comment on expansion possibilities, you can argue the MLS brass wouldn’t have traveled to Las Vegas if it wasn’t in serious consideration.

“Hearing right from the horse’s mouth, this is really a possibility,” Findlay said. “We just have to convert on our plan. There are no reasons why these big, big dreams can’t happen.”

On the one hand, MLS brass are likely fine with touring pretty much anyplace that’s potentially going to build them a stadium, because why not? (It’s also not like anyone ever passes up a business junket to Vegas.) On the other, MLS is clearly willing to throw teams at pretty much any city with a stadium, and with only one more franchise left to be assigned in the league’s planned expansion through 2020, might as well get the bidding war heating up. Worse comes to worst, if you have too many cities (and owners) offering to throw money at you, there’s nothing stopping you from expanding beyond 24 teams — or maybe seeing if David Beckham would like to settle in Vegas instead.

Broward mayor seeks analysis of costs of letting Panthers leave, ignoring 14 years left on lease

Well, now, this is interesting, kind of:

You might not be able to tell from her @bestmom39 handle, but Barbara Sharief is mayor of Broward County, and she here seems to be indicating that she’s asking an economic consultant to do a cost/benefit analysis of letting the Florida Panthers move out of the county rather than giving them $80 million. How much the Panthers’ presence is worth to Broward is a reasonable analysis to ask for — though given that the Panthers’ lease isn’t up until 2028, and Panthers owner Vincent Viola isn’t actually promising to stay any longer that I can tell in exchange for the $80 million, it’s worth wondering if maybe Sharief is asking the wrong question.

Red Wings promise to build “deconstructed” arena with public’s $300 million

The Detroit Red Wings issued renderings of their planned $450 million arena yesterday, and it’s … kind of interesting-looking, I guess?

Those buildings surrounding the arena are actually part of the arena, with the space between that and the arena structure proper being the concessions concourses. (Another rendering shows what appear to be glass roofs over the concourses, maybe?) The Red Wings are calling this a “deconstructed” design, and it’s something interesting to try, anyway, if only because it would make the arena a bit less monolithic from the outside. (Setting the arena floor 32 feet below ground level would help, too.)

It’s still not necessarily worth spending $300 million in public money and free land on, of course. But since that’s now water under the bridge, at least it’ll be nice if they can avoid a major public eyesore.

A’s lease squabble continues to transition into A’s-Raiders land squabble

The Oakland A’s lease copyediting controversy goes on, now with Oakland’s city attorney making still more “minor” changes to the document, and Alameda County officials charging that they’re anything but minor:

“The city attorney interpreted that to mean that she could go back and insert changes to the language that she had been attempting to get the A’s to agree to for weeks but they had rejected repeatedly,” Streeter said. “This is the kind of thing that we are now going to have to smooth over.”

This is all completely hilarious, but it’s the kind of thing that nobody is likely to blow up the entire lease talks over at this point. Even Streeter said Friday that a final agreement should be in place within “a day or so.”

Marginally bigger news is that A’s owner Lew Wolff has ramped up his battle with the Raiders over the Coliseum site by sending Oakland city administrator Henry Gardner a letter that, in the midst of much sniping at “mean spirited persons” who would criticize his new lease extension or his good faith, declares that once the lease extension is settled, he’ll explore “looking into the bond costs and JPA operating costs to determine if we can present an offer that would vastly reduce or even eliminate the annual City/County subsidy and allow us to develop and control our own destiny.” And Wolff adds that he has “not once said or assumed that the desired new A’s ballpark would rely on or seek public funding” — calling this a “total distortion” put forward by “some parties.”

At the risk of being cut off Wolff’s Christmas card list, this isn’t actually much of a promise: “Looking into” building a stadium while paying off the existing Coliseum bonds isn’t the same as actually doing so, and it’s been clear for a while that any subsidies Wolff would require would likely be in the form of free land and tax breaks, which sports team owners generally don’t count as “public funding,” even though it is. Really, we have no idea — and for all we know Wolff has no idea — what kind of financing and development plan an A’s stadium would require, so it’s impossible to say what kind of deal it would be for Oakland, either compared to giving the Raiders’ Coliseum City partners the rights to the Coliseum site, or compared to not handing it over to either team.

In any event, though, given the amount of verbiage in Wolff’s letter disparaging the city’s exclusive negotiations with the Coliseum City group over the site, it looks like he’s preparing to move on from fighting with Oakland over the lease to fighting with Raiders owner Mark Davis over the land, as expected. If they play their cards right, Oakland and Alameda officials could turn this into a nice bidding war for the site — though given recent events, it might be a bit much to expect those guys to even hold their cards without dropping them all over the floor.

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