May 15, 2012
Rams seeking $700m in upgrades to 17-year-old, $280m dome
St. Louis Rams owner Stan Kroenke has finally revealed his secret wish list for upgrades to the Edward Jones Dome, and they're a doozy: Knocking down half the stadium and extending it outward to include larger concourses, two "party platforms," and a glass curtain wall; adding a sliding roof panel to let in air and sunlight on days when you want those things; and reconfigured seating to make the dome more attractive to non-football sports like basketball and soccer. The Rams didn't include an estimated price tag, but a construction company hired by the mayor's office did: a cool $700 million, or nearly twice what the entire dome cost when it was built in 1995, even accounting for inflation.
That's quite an ask, especially when it comes as a counter to a far more modest $124 million renovation plan offered by the St. Louis Convention and Visitors Commission, half of which would be paid for by the team. St. Louis Mayor Francis Slay's chief of staff, Jeff Rainford, told the St. Louis Post-Dispatch that the mayor will ask the CVC to reject Kroenke's plan by June 1.
All of this, really, is just posturing in advance of what everyone has known all along will be an inevitable arbitration hearing this summer to determine what's a fair public contribution to keep the stadium "top tier," as required in the Rams' incredible sweetheart lease. (ESPN.com reports that if the CVC accepts the arbitrator's decision, expected sometime in 2013, then the Rams would be bound by it.) Just as there's no way the Rams were ever going to accept a plan that came down to "how about we buy a new scoreboard and split the cost?", things like sliding roof panels are just begging to be bargained away first thing; it's not like one-quarter of current NFL stadiums — or, in fact, any — have mini-sunroofs.
When all is said and done, then, it's fair to guess that the final public cost of keeping Kroenke happy will be somewhere between $60 million and $700 million. That's a lot of middle ground, and I don't think anyone envies the arbitrator his job. But as the saying goes, at least now they can commence with haggling over the price.
San Francisco mayor invites Warriors to jump bay
San Francisco Mayor Ed Lee, who last chimed in on a potential Golden State Warriors arena in his city by saying it'd have to be built with private money, kicked off what promises to be an all-out cross-bay arena war yesterday, by issuing an open letter signed by all 11 city supervisors that invites the team to move to San Francisco "in time for the 2017 NBA season" and offers to "work with you to achieve this goal." The San Francisco Chronicle reports that Lee still would want to use "private financing," but that doesn't necessarily rule out the kind of tax breaks that other teams (including the Giants) have gotten to help grease the wheels for new buildings.
For now, with the Warriors ownership still publicly saying they want to remain in Oakland (where they'd be stuck covering $90 million in debt on the 1997 renovations to Oracle Arena if they moved by 2027), the S.F. threat is mostly likely to come into play as a bargaining chip for team owner Joe Lacob in trying to negotiate terms for a new arena in the East Bay. If he's successful, you have to hope he'll have the decency to send Lee a nice campaign contribution for his assistance.
Minnesota gov signs stadium bill, it's okay to talk about how crappy it is now
Minnesota Gov. Mark Dayton signed the Minnesota Vikings stadium bill yesterday, putting an end to one of the longest-running stadium campaigns in professional sports. Under the final bill, a new domed stadium will be built on the site of the Metrodome in Minneapolis, with a target opening of 2016; the city and state will put in $498 million (though operating subsidies could bring the total public cost to $800 million), while Vikings owner Zygi Wilf will put in $477 million (though that cost could go up if Wilf decides to make the roof retractable).
It all sounds very equitable — halfsies! — but there's a lot that that equation leaves out. First off, the Vikings will control all football-related stadium revenue, and as this is going to be a football stadium, that means the team will get vastly more than half of the proceeds from the new building. Second, Wilf's $477 million will largely be covered by new revenues: He'll be getting a $200 million loan from the NFL (really a grant, since it'll come largely from money the team would otherwise have to share with the league); plus maybe $210 million in naming-rights fees over 30 years (worth about $100 million in present value), since under the deal the state gets nothing from the sale of the name of the building it will own and pay for half of; plus an estimated $40 million in up-front seat-license sales.
These numbers are courtesy of an astonishing 1500ESPN radio column by longtime Minnesota journalist Patrick Reusse that ran last Friday — astonishing less because of the figures in it than the tone that Reusse took once the stadium deal was all but finalized:
We in the Twin Cities sports media were so amped up over getting a new stadium for the Vikings and thus maintaining them as a subject to write and talk about that not much time was spent looking at the financial realities.
We have allowed owner Zygi Wilf to be crowned as a patient, generous hero in the proceedings that led to the approval of the stadium on Thursday in the State Legislature. ... The truth is that at the new number for the team share, $477 million, this remains a marvelous deal for Wilf and the Vikings.
Both Minnesota Public Radio's Bob Collins and former Star-Tribune reporter (now independent blogger) Nick Coleman immediately tore into Reusse on Twitter, noting, as Coleman put it, "Failure: Little or none of Patrick Reusse's financial analysis of #Stadium deal was in StarTribune. Ever." (Collins called Reusse's first paragraph "a journalist admitting malpractice.) Indeed, Reusse's blog item includes citations of my own reporting on the $200 million NFL loan from December, so either he's only now gotten around to Googling for the details of the stadium finances, or he's been saving up critical material until it's too late to matter. Instead, Reusse has been writing such things as this column on how if a stadium isn't built, the Vikings will move to Los Angeles just like the Lakers did a half-century ago, which concluded:
Five decades later, that should be a lesson to us: Not only will those slicksters steal our football team ... they won't flinch to call themselves the Los Angeles Vikings.
That was on April 19, the day that NFL commissioner Roger Goodell flew to Minnesota to threaten that the Vikings would move, an action that received wall-to-wall media coverage that effectively jump-started the then-dead stadium bill.
In his current blog item, Reusse is quick to stress that he supported the stadium bill — "for the same biased reasons as other people making their living in the sports media," but also because he thinks that "an active downtown Minneapolis is the most-important element in maintaining a vibrant metropolitan area." That's certainly a legitimate position. But it might have been nice for Reusse to come clean about it fully to his readers — "this is a massive giveaway to the Vikings, but I still think it's worth it" — when there was still time to make a difference.
May 14, 2012
Newsday: Islanders lease is up in three years! Everybody panic!
When last we left the New York Islanders, owner Charles Wang was bemoaning the fact that he'd just gotten crushed in a public referendum on a publicly subsidized new arena, and promising only to stay in Nassau County until his lease expires in 2015. Today, it being (more or less) the one-year anniversary of the official proposal of the vague sketch of that doomed arena plan, Newsday has decided to ramp up the urgency of 2015 being only three years away, noting that "area business and civic leaders" (read: arena proponents) say that "a definitive plan has to emerge soon," or else ... something.
The paper cites as one reason for urgency that $750 million in state economic development funding must be applied for by June 15, so Nassau County needs to get on the ball if it's going to get in on that. However, it also notes that at most $25 million of those funds will go to Long Island, which isn't going to go far toward an arena.
The real urgency, then, is the threat of the team moving, which Wang has threatened he will do after 2015. The question is what his viable relocation options are: There's Quebec, which has a new arena in the works and a good hockey fan base, but pales in comparison to even the Islanders' sliver of the New York media market. There's Brooklyn, with an arena that's nowhere near big enough to be the regular home of NHL hockey. There's Kansas City, with its management contract that provides no incentive for the arena operators to provide a sweetheart lease to an NHL team, and an even smaller TV market than Quebec. After that ... Queens? Seattle? Duluth? While Wang certainly won't say it out loud, with these as the alternatives, staying put in an old arena in a huge media market starts to sound better and better, especially if you think another few years of waiting will bring the chance of the arena windfall you've been waiting on for years.
As we just saw in Minnesota with the Vikings, a key component of getting sizable public funds for a sports facility is at least having some kind of threat of a move to scare fans (and local legislatures) with. For NFL teams, the boogeyman has been Los Angeles; my early guess is the choice to be splashing across front pages on Long Island will be Quebec, but it's really too soon to tell, especially since another team like the Phoenix Coyotes could end up moving there in the next year or two. Check back as 2015 gets closer, and the newspaper headlines get more panicky.
Would Wrigley Field street fairs be unfair?
Last week, Chicago alderman Thomas Tunney critiqued parts of Mayor Rahm Emanuel's Wrigley Field work-in-progress renovation plan, in particular saying that closing streets on game days so the Cubs can run street fairs there "would be a problem for the residents of my community," and insisting that local businesses that sell tickets to watch the game from neighboring rooftops be accommodated.
This week, the Chicago Sun-Times reports that Tunney got $4,500 in campaign contributions from rooftop owners and $11,000 from a neighborhood business group that's opposed to the street fairs as unfair competition the week before his announcement, part of $171,356.50 that the alderman has gotten from the businesses over the years.
You could say that this explains why Tunney is picking on these two particular elements of the Wrigley reno plan to squawk about; on the other hand, you could also note that as a local business owner himself (Tunney owns the Ann Sather restaurants, home of what I can verify is the world's most amazing cinnamon bun), Tunney is likely going to stick up for his local business friends regardless.
In any case, there is a reasonable question here: Is handing over public roadways for the Cubs to use as retail space an unfair subsidy to one local business over others? (At least some of street-fair spending, after all, would almost certainly come at the expense of the local restaurants and souvenir shops that crowd the streets outside Wrigley.) The rooftop clubs seem to have less of a case — their business model is based, after all, on selling a view of the business next door.
A lot of this is no doubt going to depend on what the Cubs pay in rent for the street space, which has yet to be determined in the evolving negotiations. But it looks as if one major part of the inevitable fight isn't going to be protecting taxpayer's interests vs. making the Cubs owners happy, but rather settling the conflicting interests of competing business owners. Same as it ever was.
Newark's Prudential Center: How much "spurt"?
The Wall Street Journal ran an article last week on the "spurt of activity" in downtown Newark near the New Jersey Devils' Prudential Center, including two new hotels and several restaurants. This contrasts with my own reporting, in which I referred to the arena existing in "a wasteland of half-shuttered stores."
My last trip to the Prudential Center was last September, and I don't recall seeing an overwhelming change in the surrounding neighborhood, which is dominated by the largely delapidated Market Street and Broad Street shopping strips. That said, I didn't walk the entire neighborhood, and with the Prudential Center being very active, it's certainly conceivable that some more businesses might have sprung up to capitalize on the visitors. (It's long been noted that arenas, which can operate 200+ nights a year, can provide at least a small local economic boost, especially compared to stadiums that are dark all winter.)
Any Devils fans out there who do more than walk from their cars to the game who can comment on how much of the Journal's description is real and how much real estate hype? (Note that this appeared in the real estate section.) If not, guess it's time for me to go take in a Liberty game...
May 11, 2012
Vikings stadium approved, Rams, Raiders line up to be next
And it's official: The Minnesota senate yesterday passed the conference version of the Vikings stadium bill by a vote of 36-30, giving final legislative approval to the $1 billion project, which will receive $500 million in construction subsidies, plus about $300 million in public money for operating costs. (Or as the Los Angeles Times puts it: "The Vikings will pay $477 million of the stadium costs, the public $348 million and the city of Minneapolis $150 million." That would be The City of Minneapolis, LLC, presumably.) The Minneapolis city council still needs to sign off on the deal, as does Gov. Mark Dayton, but those are considered formalities.
Stadium supporters celebrated at the capitol, while opponents warned of pending doom ("We know there are going to families who are going to lose their house, probably their marriages, their cars, their livelihoods so we can enjoy football," said state senator John Howe of the expanded gambling that will help fund the project).
And, of course, everyone started focusing on the question of who'll be next to get a new stadium, now that Minnesota has set the baseline at $1 billion (fourth-most expensive NFL stadium ever) and $500 million in public construction subsidies (second-most after the Indianapolis Colts), reversing a trend that had seen the New York Giants, New York Jets, Dallas Cowboys, and San Francisco 49ers pay for more than 50% of their new facilities. The San Jose Mercury News' Mark Purdy wrote that "you can hear dominoes falling, all the way from Minnesota," opining that with the Vikings off the table for an L.A. move, "the [Oakland] Raiders are in good position to stare down Oakland officials and not blink." The St. Louis Rams, meanwhile, have upped the ante in their own stadium upgrade campaign, reportedly demanding that the Edward Jones Dome have its fixed roof replaced with a retractable one, something that 1) may not be feasible, 2) would come at an unknown cost, and 3) seems dubious how much benefit it would be for anyone, unless Rams fans are really steering clear of games because they can't see a patch of blue sky.
Not to be a broken record (in case any readers are too young to have seen a record, perhaps this will help), but it's important to remember in all this that Los Angeles currently has two new-stadium plans that have been officially designated by the NFL as unacceptable, thanks mostly to the fact that a team owner (or the league) would have to pay for most of the construction cost via either rent payments or a chunk of equity in the team. And maybe also because this not having a team in L.A. thing is just working great for the league's existing franchises as a boogeyman to scare local elected officials with. NFL owners, start your airplane engines!
May 10, 2012
Will new football stadiums outlive football?
Somewhere in the midst of my bleary-eyed watching of this week's Minnesota legislative debates over the Vikings stadium, I IMed a friend:
I really wish somebody would say, "By the time this stadium is paid off, football will be illegal"
Apparently Kyle Wingfield of the Atlanta Journal-Constitution has hacked into either my IM account or my brain, because he's thinking the same thing:
Before spending a few hundred million taxpayer dollars — for example, on a new stadium for the Falcons — it is worth mulling worst-case scenarios. The worst of the worst cases for the stadium is that, within a few decades, football as we know it is extinct. ...
The NFL faces 70 lawsuits covering more than 1,800 ex-players who claim the league knew the dangers of concussions but didn't fully inform players about them. ... [And] there are other threats. Only a fraction of those who play football are pros. What if colleges or high schools are sued by concussed ex-players? How hard would schools — which, unlike the NFL, have a purpose beyond football — fight? Or might they be more inclined to fold their programs, costing the NFL its de facto minor leagues? The supply of players could also drop if fewer parents let their children play the game.
Wingfield stresses that he's not predicting the imminent demise of the NFL, but when you're talking about building a stadium that probably won't be open for five years and then is expected to last another 30, it's good to take the long view. And the long view for football is indeed problematic: An excellent Grantland article cited by Wingfield paints some pretty believable pictures of how the NFL could disappear (or at least become a shadow of its former self, a la boxing), starting with liability suits, and going on through parents barring their kids from playing the sport and advertisers steering clear:
This slow death march could easily take 10 to 15 years. Imagine the timeline. A couple more college players — or worse, high schoolers — commit suicide with autopsies showing CTE. A jury makes a huge award of $20 million to a family. A class-action suit shapes up with real legs, the NFL keeps changing its rules, but it turns out that less than concussion levels of constant head contact still produce CTE. Technological solutions (new helmets, pads) are tried and they fail to solve the problem. Soon high schools decide it isn't worth it. The Ivy League quits football, then California shuts down its participation, busting up the Pac-12. Then the Big Ten calls it quits, followed by the East Coast schools. Now it's mainly a regional sport in the southeast and Texas/Oklahoma. The socioeconomic picture of a football player becomes more homogeneous: poor, weak home life, poorly educated. Ford and Chevy pull their advertising, as does IBM and eventually the beer companies.
There's a lot less money in the sport, and at first it's "the next hockey" and then it's "the next rugby," and finally the franchises start to shutter.
That's the doomsday scenario, obviously, and there's always the possibility that either the sport finds a way to play that eliminates the likelihood of traumatic brain injury (though don't hold your breath on that) or that it finds enough desperate youth from either the U.S. or elsewhere who are willing to trade their future mental health for a paycheck that they can keep fans interested (though that's pretty much how it went with boxing, which isn't a very promising comparable).
In any event, it's very much something that legislators should be keeping in mind before saddling themselves with 30-year stadium bonds: Unlike baseball and basketball and hockey (north of the Mason-Dixon Line, anyway) and maybe even soccer (though the jury's still out on whether MLS can really support all the teams it keeps tacking on), securing a football team for your city in 2012 should probably be seen as a risky long-term venture. And if you disagree, I've got a velodrome to sell you.
Vikings agree to accept only $800m in stadium subsidies
Sure enough, the Wilfs are not going to look a gift stadium in the mouth: The Minnesota Vikings owners agreed yesterday to pay an extra $50 million toward a new Minneapolis stadium, roughly splitting the difference between the $100 million hike the state house wanted and the $20 million increase the state senate approved. The revised legislation reconciling the two bills was approved in the house by a 71-60 vote at 3:30 this morning, and now heads to the senate.
From the sound of things, the Vikings have also agreed to the "blink-on" taxes on tickets, parking, and memorabilia that will go into effect if the state runs short of gambling proceeds to pay its share of the stadium; the Vikings did get back an exclusive five-year window to get an MLS team to play in the new dome, however.
So the final tally is:
- The state will put in $348 million, either from electronic pulltab gambling proceeds or from stadium user fees if that's not enough.
- The city of Minneapolis will put in $150 million in cash plus $189 million over 30 years for operating costs, a total that (counting the cost of borrowing the money, since the taxes to pay for it will be tied up paying off the convention center for the next few years) should come to around $375-525 million in present value.
- The Vikings will put in $477 million, plus $327 million over 30 years for operating expenses. The team will get 100% revenue from NFL events, while the city and state will get money from the occasional monster truck rally.
There are a couple of lessons you could take from all this. On the one hand, it shows that when state legislators make demands, team owners who previously said "not one penny more!" can actually find quite a few pennies in order to protect a nearly billion-dollar windfall. On the other, it shows that if team owners ask for the moon and the stars, they can usually count on being bargained down by only a couple of lesser planets.
May 09, 2012
And it's done: The Minnesota state senate just voted 38-28 to approve state funding of a $1 billion Vikings stadium bill, one day after the state house did the same. The two versions of the bill now go to conference committee to reconcile any differences, any then to Gov. Dayton for a certain signature.
Along the way, the senate voted for a whole passel of amendments, including an increase in the amount of money the Vikings owners would have to put in (but but only to $452 million, $70 80 milion less than the house voted for), a requirement that the NFL not black out any games, and a requirement that the state not overrule any requirement that the city of Minneapolis hold a referendum on sports funding — though money to redo the Target Center was then exempted from the no-referendum-out-clause provision, which pretty much makes it moot as that's the only piece that is certain to trigger a referendum. The senate also briefly voted to ditch the entire e-pulltab funding scheme and replace it with the user fees that the Vikings owners hate so much, but then immediately revoted to find that a bunch of senators had mysteriously switched sides in the previous five minutes.
At this point, the only holdup is likely to be the increased funding required from the Vikings, and with the final figure post-conference committee likely to be between an extra $30 million and an extra $100 million, that's likely a price that Zygi Wilf will be willing to pay. So congratulations, Minnesota, it looks like you just bought yourself a half billion dollars or so worth of football stadium. Or, as Sen. Carla Nelson called it per MPR's indispensible liveblog of the proceedings, a building where you "have a tenant that pays for half the construction cost and then operates it only about 10 or 15 days a year." Here's hoping you get a half billion dollars worth of enjoyment out of the world's largest rec room, because you can be sure the only significant money that comes in from it is going to be on 10 or 15 days a year — and take a wild guess which ones.
UPDATE: The senate also added several user taxes — 10% on suite sales, 10% on stadium parking, and 6.875% on sale of NBA memorabilia — as a backstop to the gambling money, which the Vikings also won't like. That can be negotiated down or away in conference committee, though, so it only remains to be seen whether the team owners (or five senators) are willing to blow up the deal over the presence or absence of this provision. That doesn't seem likely, though if this whole Vikings saga has made anything clear, it's that "likely" doesn't enter into the equation.
May 07, 2012
Minnesota house kicks off stadium debate by asking Vikings to chip in extra $105m
With three hours to go until midnight Central time, we're still nowhere near a final Minnesota Vikings stadium vote in the state house, let alone the senate. However, the Vikings owners did get an unpleasant surprise early in today's marathon session, when the house voted for an amendment to cut the state's contribution by $105 million (to $293 million) and raise the Vikings' contribution by the same amount (to $532 million).
The Vikings won't like that, clearly, but more amendments in the house are a near certainty, as are amendments in the senate if it gets that far, and then amendments in the conference committee that would be needed if both houses pass stadium bills. All of which is to say that we may not know anything more about the fate of the Vikings stadium bill tomorrow morning than we do tonight — and even after that, we could see protracted negotiations between the state and the team if what gets passed isn't what the Wilfs are looking for. You might want to get some sleep in the meantime ... but if you must watch, you can do so here.
UPDATE: The bill just passed the house, 73-58. Much shouting in the background in the house chamber, though I can't for the life of me tell whether it's cheering or a lynch mob or both.
Coyotes sold (maybe, if the public subsidies are rich enough)
This just in: The Phoenix Coyotes are being sold! Tentatively. Yes, again. Why are you giving me that skeptical look?
The prospective buyer this time around isn't Matthew Hulsizer, who tried to buy the team for $170 million in 2010, or Ice Edge Holdings, who tried to buy the team before that, or Jerry Reinsdorf, who tried to buy the team before that. This week's contestant is former San Jose Sharks CEO Greg Jamison, who according to tonight's press conference by NHL commissioner Gary Bettman (okay, actually according to tweets and liveblogs about the press conference, as I somehow wasn't already tuned to the pregame show of the Coyotes playoff game where Bettman announced the deal) is trying to close a deal to buy the team from the league, but will likely need to work out a new arena lease first to make sure it's worth his while.
The Coyotes lease, of course, is what's held up the last 43 buyers interested in purchasing the Coyotes, thanks to the fact that they all want not just the team, but a promise of big-time annual subsidies from the city of Glendale to boost their profits. According to Sportsnet.ca's Michael Grange, the deal in the works would guarantee the Coyotes $92 million in "management fees" over the next five years, meaning that Glendale taxpayers would be effectively paying more than half of Jamison's purchase price for the team — only not getting any equity in the team, or revenues from the team, or anything other than the right to buy Coyotes tickets at face value.
Though the dollar figures are a bit lower, that's pretty close to the same deal that Hulsizer wanted, and that fell apart because the libertarian Goldwater Institute threatened to sue the bejeebus out of anybody who tried to hand over public subsidies to a hockey team just for existing. Goldwater's lawyers are presumably still out there lurking, which has got to be one reason why Jamison has only announced he's "negotiating" to buy the team, not that he's actually buying it.
More on this when there are actual details in more than 140-character spurts. Until then, though, it's tough to argue with this guy's conclusion.
Vikings stadium vote today, nobody revealing secret surprise ending!
Now it's really D-Day for the Minnesota Vikings stadium campaign (V-Day? VD-Day? Oh, forget it), and nobody is venturing a guess as to what will happen when the state house and senate vote on the bill for a $1 billion downtown Minneapolis stadium today. In fact, the Minnesota media seem to be throwing up their hands in exasperation and not even bothering to speculate: The Star Tribune has only an AP story about unfinished business at the legislature and a brief item about Gov. Dayton going to a stadium rally and donning a Vikings jersey. (Yesterday it featured a column by Sid Hartman that, if you've ever read Sid Hartman on new stadium plans, you can almost certain imagine yourself without taking the time to read it.) The St. Paul Pioneer Press has a stadium FAQ. MinnPost sums up the other stadium reporting, little of which even attempts to determine a likely outcome.
The single exception is Minnesota Public Radio, which concludes that while "it's not clear how the votes will fall," there are "some signs the plan is gaining momentum." These run from the not-so-significant (the VIkings' Lester Bagley says it is, which he would) to at least one actual vote switching sides to pro-stadium:
Rep. Ryan Winkler, DFL-Golden Valley, a long-time stadium critic, now says he plans to vote in favor of the stadium bill.
In a statement Sunday, he complained the bill gives too much money to the Vikings and steps ahead of more important priorities. But he called it the only viable job and economic growth initiative to come out of this legislative session.
That's one vote, and whether others of Winkler's colleagues feel the same, who knows? But at least MPR made an attempt at reporting it.
Meanwhile, as we anticipate what's sure to be a crazy day, we can enjoy the unintentional comedy of house speaker Kurt Zellers, who on Friday tried to explain that he "misspoke" the day before when he told a radio interviewer that while he wasn't going to vote for the bill, "hopefully it will pass and hopefully the governor will have a chance to sign the bill." As clarifications go, though, Zellers' was lacking a bit in the clarity department (transcript courtesy of the Star Trib):
Reporter 1: "Can you explain what you 'misspoke' on? Do you not hope the bill will pass? Or do you hope the bill will pass?
Zellers: "I said what I said. I made a mistake. I can admit it."
Reporter 1: "Right but what was the mistake?"
Reporter 2: "You actually don't want it to pass, is that what you're saying?"
Zellers: "No."
Reporter 1: "You want it to pass?"
Zellers: "I'm not going to make any more mistakes."
Reporter 1: "Right. But you said you misspoke and you made a mistake. I'm trying to figure out what you think was the mistake. That's an honest question."
Zellers: "I corrected it."
Reporter 1: "So what's the correction?...Can you explain?"
Zellers: "I said that the Vikings are an asset I want to see them stay. And what was misinterpreted was that I wanted the bill (to) pass but I wasn't going to vote for it. I said I can't vote for the bill. I want to see the Vikings stay I think they're an asset, I've said that many times."
But let's cut the man some slack: It's been a long stadium fight, and we're all tired. Here's hoping that whatever happens tonight, at the very least everyone winds up voting the way they meant to. And if anyone else in the legislature is considering voting for the stadium as a "jobs and economic growth initiative," here's a little light reading, as well as some less light reading, to give some sense of how well that's likely to work out.
May 04, 2012
Kohl: Give me Bucks arena money, or we're outtie
Apparently I'm off the hook, because now Milwaukee Bucks owner Herb Kohl today started an arena campaign in earnest, saying that if he doesn't get public arena subsidies, the team may not be long for Milwaukee.
Of course, he didn't say it like that. He couched it in terms that sounded less like, you know, a threat:
"It's not something we talk about anymore. It has to be more than talk," Kohl said.
Kohl also said he would make a personal financial commitment toward a new arena, but said it would ultimately take a public and private combination to build it. Kohl said his personal financial commitment would not be insignificant.
And as for the whole moving thing, it's not your ol' pal Herb making that insinuation, oh no — it's those meanies at the NBA league offices:
Asked if he felt pressure from the league to build a new arena to keep the team, Kohl said, "They would say without a new facility, Milwaukee's chances of remaining a part of the NBA are not robust," he said.
Of course, hard-nosed American journalists can see right through these kinds of non-threat threats and promises to put some private money into a venture that will 100% benefit a private team. Which is why the Milwaukee Journal-Sentinel ran as the headline on its story:
Kohl says it's time for a new arena, he'll pitch in
Sonics exec on what new arenas do for regular fans: "Nothing"
Ther's a long article over at Deadspin by Jeremy Repanich, a low-level employeee of the Seattle Sonics before their move to Oklahoma City. And it includes some illuminating, if unsurprising, observations on the reasons why the owner of Seattle's oldest pro sports team decided to demand a new arena just 12 years after the complete reconstruction of his old one:
When a team can make the same amount of money selling two courtside seats as they can selling an entire section of the upper bowl, they'll target their sales strategies accordingly. Getting the affluent to your games means pampering them the minute they walk through the doors. At Safeco and CenturyLink fields, the Mariners and Seahawks do just that; they're gleaming palaces of conspicuous consumption that ensure that fans paying top dollar are given a premium experience with food, drinks, and seatside service delivered efficiently and comfortably. The Sonics couldn't do that. KeyArena had some low-budget exclusive hangouts, but nothing compared to the city's other stadiums. So when Sonics execs saw the Seahawks reaping all the attention and getting fat off a stadium financed in part by public money, they didn't feel happy—they were jealous.
Jealousy, though, isn't much of a campaign strategy, as Repanich started to learn once the angry calls from fans started pouring in. (With no talking points provided by team management, he resorted to telling callers that the Sonics "needed a new arena to be competitive in the league" — an argument he apparently grabbed out of thin air.) He then describes a staff meeting led by team president Wally Walker:
He went through a litany of minor reasons why the team needed a new arena: higher capacity, bigger arena footprint, more room for high-end concessions, more places for premium seat holders, a.k.a. the super rich, the people who could afford a pair of courtside season tickets for $70,000. These were the justifications he offered us to explain why we were asking for a heaping pile of taxpayer dollars. After Walker's spiel, a member of the sales staff asked the fateful question: "Wally, what will this arena upgrade do for Joe Sixpack—the regular fan?"
Dead silence.
After an uncomfortable few seconds, Walker said, "Well, nothing." The wind went out of me. It was as if he'd punched me in the stomach. Walker tried to backtrack, but the damage had been done. The battle for hearts and minds had ended before it'd even begun.
The whole article is a great read, and is especially recommended for anyone interested in what it feels like to work for an organization that is trying to sell tickets to the very fans that it plans to abandon the minute it can. If there's an odd note, it's that Repanich seems to reserve most of his ire for Walker and Howard Schultz, less for demanding a new arena and selling the team to out-of-towners when they couldn't get one than for being inept about the way they went about it. "I didn't see how we'd get an arena deal led by men who couldn't conceive of it as anything but a rich man's boondoggle, perpetrated on behalf of other rich people," Repanich writes. Howard Schultz, it seems, was worse than an envy-driven, greedy carpetbagger; he was a lousy liar.
May 03, 2012
New Vikings plan dead, old plan to face vote on Monday
Finished reading this morning's news item about the Minnesota Republicans' new proposal to fund a Vikings stadium, and how it was gaining traction? Good — now forget all about it, because that plan is dead:
Republican legislative leaders said Thursday they would drop a last-minute proposal to finance a new $975 million Minnesota Vikings stadium by issuing bonds directly tied to the state's general treasury. The House scheduled the Monday vote on an existing proposal reliant on a gambling expansion.
They said it's up to supporters, particularly Democratic Gov. Mark Dayton, to round up the needed votes. It is destined to be close.
"The fate of the stadium is now in the governor's hands," said House Speaker Kurt Zellers.
From the sound of things, the Republicans couldn't get enough support for their bill, so threw up their hands and said, "Fine, vote for your fershlugginer bill with the e-pulltabs and the racinos and the gambling, feh." (Okay, they probably didn't say "feh.") Whether the old bill stands a chance of passage is totally unclear now — Zellers says he opposes it, and the only reason anyone was taking the new plan seriously is that the old one didn't have a ton of support. But then, when push comes to shove and commissioners start rattling move-threat sabers, a lot of strange things can happen. It's going to be an interesting Monday — if things don't change another five or six times between now and then.
Now Minnesota GOP wants roof on stadium, just doesn't know how to pay for it
In yet another bizarre twist in the Minnesota Vikings stadium saga, the state Republican plan to save money by omitting the planned roof appears to be on the verge of becoming the leading candidate for passage this week. Also, it no longer omits the roof:
- The key piece of the Republican plan is now that it would ditch all the plans for e-pulltabs, racinos, and other things that sound like they're out of Blade Runner in exchange for a much simpler funding scheme: The state would sell $250 million in bonds, and pay it back out of general state revenues.
- The roof is back on, in part because it's needed to keep up the pretense that this is a "community facility" that is worthy of a state bond sale. But because the bonds would only raise $250 million, and a roof would cost an additional $150 million, more money would be needed — house majority leader Matt Dean, according to the Minneapolis Star Tribune, has indicated that a source of roof funds "has yet to be determined."
Hazy though it may be, the plan is attracting backers, if only because stadium advocates are resigning themselves to the fact that there aren't the votes there to pass the original plan that has been in the works the past few months. Gov. Mark Dayton, who yesterday morning called it a "hare-brained scheme," yesterday afternoon said it was an idea "absolutely worth pursuing"; Minneapolis Mayor R.T. Rybak said it may work "as long as they don't change what we need, what we laid out at the beginning"; and Vikings stadium point man Lester Bagley spelled out what "need" means here, specifying that the team is in for "$427 million upfront and $13 million in annual operating costs," and anything beyond that needs to be fronted by taxpayers.
Whether any of this gets anywhere is yet to be seen — Democrats have been critical of taking money straight from the general fund, as have some Republicans. Also, bonding bills require a 60% supermajority in the state legislature, which could make this bill even tougher to pass than one involving gambling proceeds.
Meanwhile, the Star Tribune has discovered that Minneapolis' contribution toward the stadium — $150 million in upfront cash plus $7.5 million a year in operating costs, the latter rising 3% a year — would actually go up or down depending on sales tax receipts. According to the Star Trib, the city's contribution could end up anywhere from $592 million to $890 million, but that's over 30 years; it's a bit hard to calculate present value without more detailed data, but something in the range of $375 million to $525 million seems like a reasonable guess.
MinnPost ran a good breakdown last week of the different city funding mechanisms (albeit before this latest revelation about floating sales tax contributions) and why they'll cost so much in interest payments (short version: the city would be borrowing against future tax revenues that won't start coming in until 2020), arriving at a total figure of $675 million, though again that doesn't appear to be present value. (It also doesn't include the cost in property taxes of moving stadium land off the tax rolls, though that looks to be a relative drop in the bucket at about $400,000 a year.) As MinnPost's Ed Kohler remarks: "Is it just me, or is $675,000,000 far larger than the $10 million figure that's supposed to trigger a city wide referendum?" Even if a stadium bill somehow makes it through the legislature, in other words, this could still end up being decided in court.
May 02, 2012
Rams reveal stadium demands, but not to you
As required by their lease, the owners of the St. Louis Rams yesterday submitted a counterproposal for keeping the Edward Jones Dome "first-tier," in response to the city's plan to roughly go halfsies with the Rams on $124 million in renovations. And the Rams' plan is ... they're not sayin':
The Rams and the St. Louis Convention and Visitors Commission, the public agency that operates the Dome, are not releasing the team's proposal, even though taxpayers would likely fund the bulk of the improvements.
Officials with the CVC had said they would be happy to release the plan, but only with the Rams' OK. They initially cited a confidentiality clause in the Rams' lease for the Dome.
But on Tuesday, the CVC rejected an open-records request from the [St. Louis] Post-Dispatch for the plan, offering a new argument by citing exemptions in the state's Sunshine Law.
The dispute here appears to be whether the current lease negotiations are part of new contract talks, which are exempted from open-records laws, or part of an existing lease, which isn't. The Post-Dispatch is challenging the ruling, though it doesn't look like the paper has gone to court yet to seek the Rams documents.
The Post-Dispatch did manage to eke out one tidbit of information, citing "sources" as saying that "the Rams' plan did not include a cost estimate." If true, that's going to make it pretty hard for an arbitrator to determine which plan is more reasonable if that's where things end up on June 15, as everyone expects. (Rams owner Stan Kroenke, it turns out, not only rejected the city's initial renovation plan out of hand, but also turned down an offer to shorten the lease by five years in exchange for ditching the "first-tier" language.)
Post-Dispatch columnist Bryan Burwell, meanwhile, insists that there's nothing to worry about from the gag order, since unlike the last round of lease talks, "this go-round has some good, honest creative tension in the room." Besides, says Burwell: "The CVC will surely reject the Rams' confidential offer by June 1, and the next step will be to head to arbitration, which will probably drag on until late December. And by then, we will all know every nut and bolt of this negotiation." Assuming the Rams proposal actually spells out nuts and bolts, that is.
May 01, 2012
Minnesota GOP: Wait, why are we building Vikings a roof again?
As pushback goes, it's small-scale, but it's still a sign that the delay in the Minnesota Vikings stadium bill could be shifting the momentum somewhat to critics of the deal: Minnesota Republican leaders are reportedly floating the idea of building a cheaper, "roof-ready" stadium instead of the $1 billion retractable-roofed model that has been pushed so far. No one's talking publicly right now, but the scuttlebutt is loud enough that stadium bill sponsor Sen. Julie Rosen ("It's worth taking a look at") and Gov. Mark Dayton ("[it] doesn't make sense in a rational or viable way") felt obligated to chime in.
Omitting the roof would probably mean that the stadium wouldn't be able to host Final Fours or Super Bowls, but that could be a worthwhile tradeoff for saving the $200-300 million that a roof is expected to add to the price tag. And the Vikings owners themselves have in the past said they'd be okay with a roofless stadium, so it's a worthy topic for debate as the legislature considers how to find the hundreds of millions of dollars the team is asking the public to ante up for the new building.
Of course, taxpayers would still be on the hook for close to half a billion dollars, so it's not like a roofless stadium will immediately resolve the issues of how to pay for one, or of whether it's a good use of public money. But it's a sign that the discourse is shifting from "How should we build this stadium?" to "What should we build, anyway?", which is potentially a tectonic shift in stadium debates. Add in that it only seems to be creating more acrimony between the state GOP and the Democratic governor — though admittedly, at a moment where the two are locked in a budget battle where acrimony is already the name of the game — and this one bears close watching.
Hornets' new round of tax subsidies to total $78 million
The Louisiana state house has slightly reduced the tax breaks being considered for the New Orleans Hornets (now in the process of being sold to Saints owner Tom Benson) from 15 years of $3.65 million tax rebates to 10 years. Though if you read the articles at the time it was first announced, it's only a ten-year lease extension, so giving 15 years of tax breaks never made sense in the first place.
Anyhoo, the Hornets' new round of taxpayer subsidies will now amount to only the ten years of tax breaks (worth about $28 million in present value, by my Excel calculations), plus $50 million for renovations to the New Orleans arena. In exchange, the Hornets promise to remain in town through at least 2024, which means that there should be no talk of new arenas and move threats for at least the next year or two. The state will also be required to file annual reports on the number of jobs created or retained by the tax rebate, which should at least make for some entertaining reading.
April 30, 2012
Vikings bill neither dead nor alive, check back later to see if waveform has collapsed
And in the news you've all been waiting for, the Minnesota Vikings stadium bill is ... well, not exactly dead, but not exactly alive, either. Gov. Mark Dayton said earlier today that "it's still breathing and they're still in session, so anything could happen," which doesn't exactly sound hopeful. But then, we've seen stadium success pulled from the jaws of defeat at the last second before, so "anything could happen" should probably be taken at face value.
And speaking of which, what happened over the weekend to cause the Vikings stadium to go from "air of inevitability" to feeling for a pulse? While there are still tons of complications around the exact form of public funding for the plan — racinos, for one thing, are apparently back off the table again — the main holdup appears to be a separate fight over the size of a state bonding bill and over business tax breaks that the Republican leadership is facing off with Dayton over. With no agreement there, legislators aren't inclined to spend time working to pass the stadium bill that Dayton wants, which raises the possibility that time will run out on the legislative session before stadium votes can be taken by the full house and senate.
Right now, there are no plans for a stadium vote today, but it also looks like the legislative session will drag on for a few more days while this stalemate over taxes and bonds continues, so there's still plenty of time to address the Vikings stadium once everyone is talking again. In the meantime, this should give state legislators some time to kick back and read state senator John Marty's letter outlining in detail why this Vikings stadium plan would be a financial disaster for the public in order to placate a team that has no viable threats of moving and which is just looking to increase its profits on the backs of taxpayers. If, you know, anyone is still interested in such things instead of just yelling "Eeeagh! L.A. Vikings!"
More rumors of new L.A. baseball stadiums than you can shake a stick at!
If you're tired of the Oakland A's and Tampa Bay Rays being the only baseball teams you read about on this site, you'll be happy to learn there's a new rumor in town: The Los Angeles Times' Bill Shaikin wrote this weekend that the Los Angeles Angels of Anaheim could be interested in moving to a new stadium in L.A. in a few years:
Moreno, the Angels' owner, and Angels Chairman Dennis Kuhl met this month with AEG President Tim Leiweke, a meeting first reported by the Daily News.
Neither AEG nor the Angels would discuss the meeting. Moreno was traveling and unavailable to discuss his stadium plans, Angels spokesman Tim Mead said.
However, the Angels can exercise an escape clause in their stadium lease in 2016. If they do not, they must remain in Anaheim until 2029.
That's a lot of speculation just to base on a single meeting, especially when AEG, after all, is in the business of running stadiums and arenas, not just building them. Still, that 2016 lease opt-out date is worth keeping in mind, especially since Moreno has to know that even if he doesn't intend to move, having the right to makes for great leverage if he wants to, say, demand even more upgrades to the not-that-long-ago upgraded Big A.
Shaikin, meanwhile, doesn't leave out the Dodgers, noting that while the team's new owners have sworn they don't want to leave 50-year-old Dodger Stadium, "[co-owner Stan] Kasten, the point man for new ballparks in Atlanta and Washington, could discover additional needs and wants, to the point where a new ballpark might not be much more expensive." Though he then goes on to note that a new stadium could cost "$800 million and up," which "the new owners might blanch at" after spending $2.15 billion to buy the team.
Still, it's nice that L.A. baseball now has its own rumors of baseball stadiums that may or may not ever be built, to go along with its collection of vaportecture football stadiums.
Toronto suburb plans new arena; push for NHL team next?
There could be a new player in the arena sweepstakes: The town council of Markham, Ontario (a suburb of Toronto) has voted to provide half the funding for a new $325 million, 20,000-seat arena that could play host to an NHL team to compete with the Maple Leafs.
How exactly the final bill will be paid is a bit unclear. Town officials claim that the $162.5 million in bonds will be repaid by "charges to developers and service fees at the arena," though so far as I can tell there's no written lease yet with the developer, GTA Sports and Entertainment. The rest of the money will come from GTASE, presumably from the profits from running a sports and concert arena in Canada's largest market — while normally I'm skeptical of arenas paying their own way (see Kansas City), the market size and relatively low construction cost make this one feasible, if by no means a slam dunk.
Meanwhile, the sports media have set about the important task of speculating how this as-yet-unbuilt arena will affect the NHL arena shakedown market. The National Post, citing another newspaper story based on the ever-popular "unnamed sources," says that "the proposal was being fast-tracked so a viable plan could be presented to NHL officials in case of a franchise relocation." The Post continues:
An NHL-ready arena in Markham becomes an excellent bargaining chip when the league wants to convince a city that already has a franchise that it needs to invest public money in a new or upgraded arena. The next time the teams in Phoenix, New Jersey or Florida, for example, run into financial problems, the prospect of a glittering new building awaiting them in hockey’s largest market will be used to get the owners a sweeter deal at home. That’s a nice franchise you have there, fellas. Be a shame if something were to happen to it.
Hey, that's my hyperlink joke!
The problem with using Markham as a NHL relocation target, or even as a move threat stalking horse, is that its territorial rights are controlled by the Maple Leafs, who are going to demand a king's ransom in cash to allow anyone else to move in. That, in turn, is going to make bringing in an NHL team look like not such a good deal for GTASE, since they should be able to easily enough fill dates with Lady Gaga shows, which don't require paying off the local sports monopoly. Not that that's going to stop the league from using it as an idle threat, of course...
April 27, 2012
Minnesota senate taxes committee debating Vikings bill right now
The Minnesota state senate taxes committee is meeting right now to discuss the Vikings stadium bill. (The full senate recessed until 8 pm Central, so sounds like they're expecting to be there a while.) Video here, discuss below.
Sacramento Kings arena is really most sincerely dead
More on Monday when I have more time, but: After meeting twice in two days with members of the Maloof family, Sacramento Mayor Kevin Johnson has declared the Kings arena plan dead. Yes, again. KJ cited "irreconcilable" differences, and said he'll now move ahead with his plan to build an arena with nobody to play in it.
More later.