The Phoenix city council is meeting today to discuss a possible new arena for the Suns, but as it’s a closed session we won’t know exactly what was discussed. What we do know is that the political landscape in Phoenix is crazily uncertain right now, thanks to last week’s election results:
- Four candidates for mayor split the vote such that none got a majority, meaning the top two vote-getters, Kate Gallego (43.9%) and Daniel Valenzuela (26.1%), will head for a March runoff. Gallego has declared that “it is not in Phoenix’s best interest to invest in an arena”; Valenzuela has been more open to the idea, though even he said during the campaign, “For too long, taxpayers have been expected to foot the bill for sports venues. This practice must stop now.”
- Since both Gallego and Valenzuela were formerly on the city council, both their old seats will be up for grabs in March as well, making for a significant swing on the nine-member city council (which includes the mayor).
The last time anyone in city government spoke out publicly about the Suns arena demands, it was to suspend negotiations after team owner Robert Sarver asked for $250 million in city money to fund renovations. Negotiations eventually resumed, but clearly nobody is super-eager to deliver bags of cash to Sarver’s door.
This stalemate can go on for a while yet: Sarver has until July 2022 to opt out of his lease in Phoenix, though obviously he’ll be working to heat up arena talks as that date approaches. What he would do if he did opt out is another story: While he’s previously said he’d “explore other options,” no other cities in the Phoenix area have been rushing to build him an arena either. I suppose Sarver could consider relocating to Seattle’s renovated KeyArena, which wouldn’t be much of a step down in terms of market size, but as an Arizona native he’d have to face being burned in effigy at all of his college reunions.
Really, the best bet for Sarver might be to come to an arena agreement fast, while interim mayor Thelda Williams, who is at least lukewarm to sports subsidies, is still in office. Though is past sports team owner behavior is any precedent, he’ll throw all his support behind Valenzuela, who will then lose, leaving team officials to tweet angrily about how life isn’t fair.
(Obligatory closing joke about how this mess is way more entertaining than watching the Suns play basketball.)
Well, well, well: Turns out after Calgary city officials rescued the city’s 2026 Olympics bid from the brink of death with a last-minute renegotiation with the Canadian federal government, city residents voted to send it right back to the grave yesterday, delivering a 56-44% verdict that the city should not offer to host the Games.
While technically the city council could still move ahead with the bid, since federal and provincial funding was contingent on a “yes” vote, that’s not going to happen:
Calgary Mayor Naheed Nenshi said “The people have spoken in big numbers, and have spoken clearly.”
When asked if the bid is dead, the Mayor said “Yeah, it’s very clear.”
With just seven months to go before the International Olympic Committee makes its decision on a 2026 host, this leaves only Stockholm and a joint bid by the Italian cities of Milan and Cortina in the running. And Stockholm’s new city government has declared itself opposed to using any public funding to build Olympic facilities or cover cost overruns, while the Italian national government has said it won’t contribute “one euro” to Milan-Cortina costs.
None of this is likely to turn out to be the long-awaited collective global middle finger to the IOC’s host city demands — either Stockholm or Milan-Cortina will likely figure out a way to host the 2026 Winter Games. But it is absolutely a sign that more and more cities are pushing back on the IOC’s insistence that host cities foot the bill for the Games — and cover any shortfall if they lose money, which they almost always do. It’s the reason why the IOC picked 2024 and 2028 Olympic hosts (Paris and Los Angeles) at the same time, and why the committee is constantly touting its promises to cut costs and reduce the number of white-elephant velodromes left scattered around the countryside in a Games’ wake. Push may not have come to shove just yet, but it seems to be heading there, and if it does it’ll make for some very interesting negotiations around the 2030 and 2032 Olympic bid races.
In case you somehow missed it, Amazon made it official this morning that its new 50,000-person second headquarters was going to be split into two 25,000-person sites, one in the Long Island City section of New York City and one across the river from Washington, D.C., in Arlington, Virginia. (Nashville, Tennessee, will also get an “Operations Center of Excellence,” which is maybe not the name you want to give your corporate outpost if people are already worried your company is an Orwellian nightmare.)
Attached to its press release, Amazon included the full memoranda of understanding for the New York, Arlington, and Nashville deals — since my purpose in life somehow seems to have evolved into reading these damn things and figuring out what’s hidden in them, I sat down to write up an analysis of the New York deal for Gothamist. The upshot: Between the city and the state, Amazon will cash in at least $2.5 billion in checks from the public (and probably more like $3 billion — see update below) in the form of tax breaks and other goodies. With Jeff Bezos in line for about another $1 billion from Virginia and a pittance of $60 million from Nashville — hardly worth counting the bills, honestly — that’s about $4 billion that America’s richest man will be raking in for the trouble of holding a year-long bidding war before doing whatever he wanted anyway.
A few further notes on this, from our usual perspective of sports subsidies:
- Damn, that is a chunk of change. Yes, an Amazon headquarters is arguably more valuable than a sports stadium — there’s no way even the busiest sports venue will employ 25,000 workers, and those it does employ only be there a few hours a day during the season of whatever sport it hosts — but even the Steinbrenners have never managed a $4 billion payday. Neither did Elon Musk. (Though Boeing did, and celebrated by laying off workers.)
- Modern subsidies are really hard to keep count of. Amazon’s press release fessed up to $1.5 billion in subsidies from New York and $573 million from Virginia, but that didn’t count $200 million from each state for bonus jobs created over 25,000, nor a $300 million infrastructure fund in Arlington, nor about $1.3 billion in off-the-rack tax breaks from New York City (I included $900 million of those in my Gothamist article, the New York Post’s Nolan Hicks found another $386 million), nor an additional infrastructure slush fund that will be created in New York from payments in lieu of property taxes. I’ve been staring at this thing all day and I still don’t feel 100% confident there aren’t additional hidden costs lurking about — which is par for the course for both sports and non-sports subsidy deals.
- Subsidies aren’t what determine location decisions. We’ve seen this before in sports, where team owners have used the threat of going elsewhere to shake down the cities they already want to be in for cash. But it’s especially bald-faced in this case, where other states offered as much as $8.5 billion for Amazon’s hand, only to have Bezos say, Sorry, our first love is big cities where techies want to live. At which point you have to wonder: If Amazon was going to go to NYC and D.C. anyway, why did those locales bother coughing up so much public money? As with sports venues, cities could be thinking, “These people on the other side of the table need us more than we need them” — but they’re largely not.
Anyway: New York just threw a giant wad of cash at Amazon, Arlington can comfort itself that its wad is at least a bit smaller, and all the cities that missed out don’t get the new jobs, but do get to keep their money. There’s probably a lesson in here somewhere, but given that everyone involved is steadfastly refusing to learn it, it’s hardly worth spelling it out.
It’s nonbinding Olympic referendum day today in Calgary, and New York Times sportswriter Michael Powell marked the occasion by flying all the way to that city to write about what a boondoggle the Olympics are on a Canadian typewriter. Though he also got the time for a sit-down with Calgary Mayor Naheed Nenshi, who shared a bit more of his thoughts on why he’s supporting the 2026 bid even though he generally pooh-poohs sports subsidies:
Mayor Nenshi said Calgary’s share would come in at a touch more than $400 million. The provincial Alberta government would fork over $700 million, and the federal government in Ottawa has promised a barrel of money, too.
“This is almost a tax rebate,” the mayor said.
Yep, it’s as suspected: Nenshi is for the Olympics because the vast majority of the money would come from the federal and provincial governments, so if he can land the Games and all of its associated infrastructure spending for just $400 million from his own budget, that’s a deal he’ll take. There’s a certain logic to it in an extremely parochial way, but really, “If my stupid colleagues in Ottawa are gonna blow a lot of taxpayer money on the Olympics, I want them to blow it in my town” is a disappointing position, to say the least, from a guy with a reputation for forward-thinking governance.
Powell also took advantage of those long Canadian nights to google Ernst & Young, who conducted the rosy study about a Calgary Olympics, and found this tidbit:
I nosed about afterward on the internet and noticed that Ernst & Young served as a richly compensated “exclusive provider” to the Rio Olympics. Previous Olympic cities, Ernst & Young noted in a news release, had seen arenas turn into white elephants. Not Rio, no no. “We have established sustainable postgame use for facilities” through a regimen of good governance and finance, the release said.
Two years later, Rio de Janeiro is stuck with a rumbling herd of white elephants, Olympic pools filled with rat feces, and a burned and collapsed velodrome and wrecked arenas.
At a bargain price of $400 million, who wouldn’t want that? Polls close at 8 pm Calgary time, and it’s likely to be close, so we may not know until morning whether Milan will win the 2026 Games by default.
This was feeling like a long week even before Americans with guns decided to make a late rush to break last year’s record for most people killed in major mass shootings. Fortunately, we have news in the field of whether to devote scarce public resources to boosting the profits of professional sports team owners to amuse us! Ha ha! Are we amused yet?
- Los Angeles has been selected as the host of next year’s inaugural World Urban Games, a thing that is like the Olympics only it involves sports no one cares about, like three-on-three basketball. (Though admittedly, the Olympics also involves plenty of sports no one cares about.) L.A. had to offer no actual money to be the host, just use of its sports venues, so if anyone actually travels to L.A. to see these things, there’s an actual chance this might work out to the city’s economic benefit! Crazy talk!
- The group that wants to bring an MLB team to Portland has pulled its offer to buy the city’s school headquarters to build a stadium on the site, saying it would be better used for affordable housing. (Read: The community hated the stadium idea, and they didn’t want to fight about it.) The group will reportedly announce a new site by the end of the month, but it’s not worth holding your breath over because MLB isn’t giving Portland a team in the immediate future, if ever.
- Saskatoon city officials are looking into building a new downtown arena for about $175 million because … they didn’t actually say why. The old one is old? Mark Rosentraub sold them on a new one? Not that a new downtown Saskatoon arena is necessarily a terrible idea, especially if the city can collect rent and other revenues from it, but an even less terrible idea would be focusing on “Do we need a new arena?” before jumping straight to “How can we build one?”
- There’s a new pro-ticket tax group in Columbus calling itself Protect Art 4 Columbus that describes itself as “a group of art enthusiasts, sports fans and other community members,” and if this isn’t an Astroturf group, they really needed to come up with a name that made themselves sound less like one.
- I do not have the energy to explain the beef between the wannabe Austin MLS team owner and the wannabe Austin USL team owner and how they’re both building stadiums and supporters of one stadium are accusing supporters of another stadium of lying about their ballot petitions by saying “we’re trying to build a soccer stadium” when it’s really to stop the other guys from building a soccer stadium, so just watch the video, it’s blurry and confusing and shot in portrait mode, just like the kids today all like!
One more election result from Tuesday, and it’s a mixed one for the Tampa Bay Rays, who saw voters approve a sales tax hike for transportation project that could benefit a baseball stadium, but also elect new county commissioners who may be more opposed to sports subsidies.
The sales tax hike first:
While money from the newly-approved new one-cent sales tax for transportation cannot be used to construct a stadium, it could provide much-needed funds for infrastructure around the stadium. It could also free up other county money to fund stadium-related expenses.
I’ve discussed previously here how broad tax pools can serve as slush funds for development projects, and there’s some concern here that this could happen with the transporation fund as well. Still, it would be tough to use either the money itself or other moneys it freed up for anything more than infrastructure, and a new Rays stadium would need a lot of money for things that weren’t infrastructure, so we’ll see.
Then there are the new Hillsborough County commissioners:
In District 5, Mariella Smith bounced Republican incumbent Victor Crist, who had been open to Hagan’s stadium dealings. Smith told 10News no general revenue funds should be used for a new Rays stadium but kept other possible funding mechanisms on the table.
She has also been critical of the secrecy surrounding the stadium talks.
In District 7, Democrat Kimberly Overman defeated Republican Todd Marks, who said he opposed subsidies for the Rays. Overman seemed more open to the possibility but said it wasn’t a “core issue” to her campaign.
It won’t be easy to get four commission votes to approve a new stadium deal if it involves any county money; conservative Republican Stacy White won re-election Tuesday in District 4, and several sitting commissioners have expressed hesitations about spending money from a tight county budget on a new Rays ballpark.
tl;dr version: Hillsborough may have a bit more money to spend, but it’s also likely to be less inclined to spend it. That December 31 deadline for Stuart Sternberg to opt out of his Tropicana Field lease is getting more and more interesting.
And in yesterday’s stadium- and arena-related election results:
- David Beckham’s Inter Miami stadium plan will move forward after 60% of Miami voters approved building a soccer venue atop city-owned Melreese golf course. Though as the Miami Herald notes, it will only move forward as far as the city commission, and “those votes were far from assured,” with a four-out-of-five-vote supermajority required for passage. There’s still time for Beckham to grab defeat from the jaws of victory here!
- San Diego voters appear to have approved San Diego State University’s expansion plans to the site of the old Chargers stadium, with 55% in favor as votes continue to be counted. Only 29% are currently in favor of the competing plan to build a “Soccer City” MLS complex on the site.
- Inglewood Mayor James Butts was reelected in a landslide, so the Los Angeles Clippers‘ arena plans will continue to move forward, though it still faces a legal challenge.
Next up: Next Wednesday’s big Calgary vote on whether to support the city’s 2026 Olympic bid. Remember to double all results and add 30!
In the midst of yesterday’s Election Day excitement, Deadspin ran my latest article for them, on what’s up with MLB’s much-rumored expansion plans. And though, as I tried to make clear in the article, where baseball expands and when will likely have less to do with what cities are “deserving” and more to do with the sport’s internal finances — in particular how much of an expansion fee they can demand, how adding new small-market teams will affect revenue sharing, and how adding new teams would affect existing team owners’ leverage to extract stadium subsidies — the comments section quickly filled up with debates over which cities should get new teams, and even how MLB divisions should be realigned once this happens.
All of which is still way more constructive and less pathetic than the Cincinnati Enquirer’s response to a throwaway line of mine about how small cities like Cincinnati probably wouldn’t be at the top of the expansion list if they didn’t already have teams:
As FoS correspondent David Dyte immediately pointed out, good thing I didn’t insult their chili.
Happy U.S. election day, when Americans will be waiting up to learn the fate of a bunch of stadium and arena proposals! And the direction of an entire nation, but this site doesn’t have time for that, so on with tonight’s sports venue scorecard:
- Miami voters will decide on Referendum 1, which would allow the city of Miami to waive competitive bidding and give David Beckham the right to negotiate a 99-year lease on the city-owned Melreese golf course, for the purpose of building a stadium there for his Inter Miami MLS club. Polls close at 7 pm Eastern; this being Florida, however, there’s always a good chance no one will know the results until December.
- In San Diego, voters will be faced with two competing ballot initiatives: Measure E, which would have the city lease 253 acres of land on the Chargers‘ former stadium and practice sites to developers of the proposed Soccer City, which would include a soccer stadium and other stuff; and Measure G, which would have the city sell the land to San Diego State University for a new campus, including a new college football stadium. Polls show Measure G winning and Measure E trailing; if both measures get a majority, whichever gets more votes will win; if neither measure wins, it’ll be left up to the mayor to determine what to do with the site. The San Diego Union-Tribune editorial board has declared that neither measure is worth voting for, while letter writers to the paper — yes, there are still people who express their opinions by writing letters to newspapers, in 2018! — are all over the place in how to best game the system. San Diego polls close at 8 pm Pacific, so expect to wait up for this one.
- Inglewood will elect a mayor today, and with incumbent James Butts in favor of a new Los Angeles Clippers arena and challenger Marc Little opposed, the outcome will be important for the city’s sports future. Polls close at 8 pm Pacific here as well, but a mayoral race is high-profile enough that we could see earlier projections.
- Contrary to what I implied on Friday, Columbus voters will not be deciding on a 7% ticket tax that would apply to all large sports and entertainment venues — but maybe not Ohio State University football, nobody’s actually sure — and use the proceeds to fund arts programs and the Blue Jackets arena, because while a vote is indeed coming up, it’s a council vote, not a public referendum. A completely unscientific poll of Columbus Business Journal readers shows massive opposition to the measure, but even if that were a valid measure, the city council can still do whatever it wants, because representative democracy, yay!
Vote early and vote often!
Happy last week before Election Day! Unsurprisingly, we lead off with a bunch of vote-related news:
- Tampa Bay Rays president Brian Auld says he’s confident team execs will be able to meet a December 31 deadline for stadium funding without having to ask for an extension, even though right now there’s currently a $300 million funding gap. Frequent FoS commenter Scott Myers has theorized that the Rays ownership is hoping Hillsborough County voters will pass a 1% sales tax hike for transportation on Tuesday, which would free up other public money to pay for transportation improvements for a Rays stadium; that doesn’t seem like it’d provide $300 million, but every hundred million dollars counts, so everybody watch the ballot results carefully. (Which you should be doing anyway. And voting!)
- The Columbus Blue Jackets owners, who have been criticized for being the main beneficiaries of a proposed 7% ticket tax in the city because their arena would get the lion’s share of the proceeds, surprised everybody this week by coming out against the tax, saying it “would materially harm our business.” Maybe this is reverse psychology to get residents to vote for the bill, since they’ll no longer think it’s a sop to the hockey team? Okay, probably not.
- Madison Square Garden has given $700,000 to the campaign of the chief challenger to Inglewood Mayor James Butts in an effort to block plans for a new Los Angeles Clippers arena that could compete for concerts with MSG’s Forum, and the Clippers have fought back with $375,000 in spending to support Butts’ campaign. Poor grass.
- In non-electoral news, the University of Connecticut is building a $45 million hockey arena on campus even though its team will continue to play most of its games in Hartford’s XL Center, just because its new NCAA conference requires an on-campus arena. (It also requires that the arena have at least 4,000 seats, but UConn got a waiver to only build 2,500 seats.) Since UConn is a public university, this technically means that public money will go into the project (though the university says it can pay for it from its own reserves), but mostly it’s bizarre to see an entire arena being built just to meet a technicality — what do you think the carbon footprint will be for this?
- Transit experts are worried that the 2020 Olympics will overwhelm Tokyo’s already-crowded subway system, though they may not be anticipating how much the Olympics tend to cause anyone not interested in the Olympics to stay the hell out of town. The government has been encouraging local businesses to stagger work hours and open satellite offices to accommodate Games traffic, since “everybody call in sick for three weeks” would be anathema to Japanese work culture.
- Opponents to Nashville SC‘s stadium plans are seeking a court injunction to block construction of a new expo center to replace the one that would be torn down to make way for the soccer stadium on the grounds that it would interfere with parking for a flea market, which is a first in my book.
- Louisville is officially not bidding for an MLS franchise (yet), which unofficially makes it the only city in the whole U.S. of A. that isn’t. How is MLS ever going to meet its dream of a franchise for every individual person in North America if these keeps up?
That’s all for this week — go vote! And try to fight your way past the journalism extinction event to educate yourself about all those downballot races and initiatives and such, since as we cover here every week, they can have huge consequences.