Friday roundup: Coyotes late with arena rent, Winnipeg move non-threats, and good old gondolas, nothing beats gondolas!

If you missed me — and a whole lot of other people you’ve likely read about here, including economist Victor Matheson and former Anaheim mayor Tom Tait — breaking down the Los Angeles Angels stadium deal in an enormous Zoom panel last night, you can still check it out on the Voice of OC’s Facebook page. I didn’t bother to carefully curate the books on the shelves behind me, as one does, so have fun checking out which novels I read 20 years ago!

And on to the news, which remains unrelentingly newsy:

Share this post:

Pawtucket developer slashes size of soccer stadium project, still wants same $70m in tax subsidies

The Covid economy has developers all over rethinking construction plans, especially office projects, since it seems pretty likely not nearly as many people will be going in to the office in our future. And so it goes with Fortuitous Partners’ soccer stadium project for a USL team in Pawtucket, which was going to involve $360 million in apartments, shops, offices, and a hotel and conference center to go along with the $40 million stadium, and which now will include something less than that:

Brett Johnson, one of the cofounders of Fortuitous told the Pawtucket City Council on Wednesday night that the project was being scaled back. The former Apex site — the centerpiece of the project due to its highway visibility — is now being eliminated.

Johnson, who is also owner of the Phoenix Rising USL team, told the Providence Journal that his new price tag was “likely in the ‘low $300 million’ range.” The pandemic, he explained, has reduced demand for office space, though he could still add more offices later if those become a thing again.

But at least if the project is slimmed down, it won’t need so much in public tax subsidies, right? Hahahahahaha, no:

The project is still looking for $70 to $90 million in public financing. The company has hired high-powered Rhode Island lobbyists to try and secure the funding.

Or as the Journal says, in a sentence that manages to contradict itself in a single clause:

Johnson said Fortuitous still intends to privately finance the project using Opportunity Zone investments aided by tax increment financing with the city and state.

Kicking back $70-million-plus in tax revenues to get a $40 million minor-league soccer stadium (and a pile of other stuff) never seemed like the best idea, but it’s singularly worrisome at a time when minor-league sports is reeling and may never fully recover. Here’s Holy Cross economist Victor Matheson back in April on Pawtucket’s USL plans:

“This is a league with 100 teams and different tiers. Minor league sports are above everything the sort of thing to get crushed by coronavirus — everything they do is about getting people into the stadium. That’s not going to be happening with this team,” said Matheson.

“And this isn’t Lucchino — this isn’t John Henry, or Bob Kraft. These are often shoestring operations. [Coronavirus] could bankrupt a reasonably large number of teams in that league and suddenly this isn’t the league it was before,” added Matheson.

The tax increment financing plan still needs to be approved — I think by the state legislature, though it already approved a Pawtucket TIF district, so maybe just the city or the governor needs to okay it, really the reporting on this has been terrible — so there’s still time for things like public hearings, if anyone believed in those anymore. Maybe I’ll see if I can ask Matheson about it when he and I join up as part of this big Zoom get-together on the Los Angeles Angels stadium deal tonight at 9:30 Eastern/6:30 Pacific. I’m told it’s going to be broadcast live on the Voice of OC’s Facebook page, so check that out if you’re interested — I anticipate being very active in the comments…

Share this post:

Raiders renting out parking spaces at new stadium so fans can watch games on TV for $80 per person

Good news, Oakland Los Angeles Oakland Las Vegas Raiders fans! Even though you can’t buy tickets to see games in person, because of that whole “deadly pandemic” thing, you can still sit in a parking lot and watch the game on TV, and it’ll only cost you $400 per carload!

The Las Vegas Raiders sent an email to season ticket holders late Tuesday advertising the Tailgate Zone at Allegiant Stadium, where fans in vehicles with five or fewer occupants can park in a stadium lot and watch the team’s game Sunday versus the New England Patriots.

Fans will watch the action on a large LED screen and a stage will be constructed where Raiders special appearances and performances are planned…

Options range from $400 for the Tailgate Ticket package to $500 for the VIP package, with both including food and beverage packages. Fans are also allowed to bring additional food and beverages from home, including alcohol, which isn’t served at the event.

Okay, so on the one hand this isn’t the most outrageous thing ever. Tailgating is super-popular among football fans for reasons I still can’t quite fathom — it mostly seems to involve being drunk in public and something about jumping on folding tables? — but if people really want to pay $80 per person to sit in a parking lot and watch a big screen instead of doing the same in their living room, more power to ’em, I guess? And the $80 does come with some free nachos or something, and there will be a system of alternating cars and tailgate spaces so that people can still socially distance (because surely drunk football fans would never dare wander out of their designated zones to socialize with each other), so clearly at least a little bit of thought has been put into this.

On the other hand: This is the most outrageous thing ever! A team owner who just got $750 million in taxpayer cash to help build a new stadium so he could move his team out of its previous home is now making up for not being able to sell high-priced tickets to watch the game in person by selling high-priced tickets to watch the game on TV in a parking lot! In a just world, Mark Davis would open up the damn parking lot for free as thanks to Nevada residents for helping buy his new bauble, and maybe offer to sell them some damn overpriced nachos if they want! What is this world even coming to?

Also, I’m pretty sure that photo accompanying the article depicts a Raiders fan dressed as Cthulhu. This is the way the world ends, not with a bang but with severely overpriced cosplay. It had a good run — roll the tape.

Share this post:

Very bad article predicts where Sixers arena will go without discussing who would pay for it, this is just how journalism works now

Want to read a really bad article about Philadelphia 76ers owner Josh Harris’s quest for a new arena? Sure, who wouldn’t! But, you may be asking yourself, how do I know that I am identifying every possible bit of badness, for maximum schadenfreude action? Fret no longer, for here is a step-by-step guide:

  • Start by looking at the URL to see if it’s from a legitimate news source, or whatever passes for one these days. “Play Pennsylvania” appears to be a site about gambling in Pennsylvania, but all of its domain registration contacts are in Malta. This, it turns out, is because it’s owned by a Maltese lead generation company, “lead generation” being corporate jargon for “getting people interested in things.” The author of the article is at least an award-winning freelance journalist and former standup comic, but we’re not off to a great start.
  • On to the article itself: “The Sixers have made it clear they do not intend to rent the Wells Fargo Center (owned by Comcast Spectacor) beyond the expiration of their lease in 2031.” Sure, and I don’t intend to still be driving a 2013 car in 2031, but you know what? Unless I find one that saves me so much on operating costs that it’s a better deal, or someone buys me one, I probably will be.
  • “When you own a venue, you own the development rights and collect rent from every concert promoter, trade show and college team to whom you lease the space.” You also own the debt from building the place, and the additional revenues from renting it out are seldom enough to pay that off, especially in a city that would then have two similar-sized arena competing for concerts and trade shows. (Remember concerts and trade shows? Those were good times.)
  • “They have options. Of course, matters like ‘who pays for it/tax incentives’ and infrastructure will ultimately drive the decision.” Yes, matters like that! Now let’s never speak of who’ll pay for it again, because this is not that kind of article!
  • “Building another arena next to the existing one doesn’t make economic sense. … A new arena will need to be somewhat removed geographically from the existing Sports Complex and have the opportunity to develop other uses with it.” This is a worthwhile nod to the above point about arena glut, but also completely misses the point about how arenas compete: Being across town from another arena isn’t sufficient to avoid conflicts. That’s why New Jersey’s Izod Center shut down in 2015 after competition from Newark’s Prudential Center ten miles away (and also Brooklyn’s Barclays Center across two rivers) when it was paid to shut down by, hey look, it’s Josh Harris!
  • “Here are three locations the Sixers should consider for their new home.” This is the real point of the article, and look, I get it, the Sixers are in the news, and you write for a somewhat sports-adjacent sort-of publication, and “Where else could the Sixers go?” is the kind of thing that might get you a few clicks, and you’re probably being paid based on your traffic numbers. But “Where will the local team owner build his inevitable arena?” is a tired bad-journalism cliche at this point, especially if you’re not looking at how it would be paid for or if he would even want one if somebody else weren’t helping to foot the bill. Especially if you’re just speculating wildly without any apparent sources for where Harris might actually be looking. (Top three wild speculations, if you’re wondering: Camden, on the Schuylkill River near 30th Street Station, and “I dunno, maybe the suburbs somewhere?”)

To be fair, this post actually isn’t much worse than the kind of thing one frequently reads in the actual daily news media — but that’s more an indictment of the actual news media than an endorsement of this. Coverage of sports stadium demands has been pretty bad for decades, and now that reporting is being left to overworked, underpaid writers working for shadowy offshore gambling-promotion companies, it’s only going in the wrong direction. Media literacy is the only real solution at this point, so as long as there’s still money for quality schooling instead of it being siphoned off to pay for private development projects … oh. I see what you’re doing, sports barons — well played!

Share this post:

UK just closed soccer stadiums to fans for virus rates that wouldn’t bat an eye in most US states

Bad news if you’re an English soccer fan who was hoping to, say, check out one of those crazy high-scoring Leeds United games in person: Plans to reopen British soccer stadiums at limited capacity on October 1 have been scuttled by the U.K.’s fast-rising Covid rates.

Speaking to the BBC on Tuesday, cabinet office minister Michael Gove said that the Oct. 1 plans will now be paused.

“We were looking at a staged programme of more people returning,” Gove said. “It wasn’t going to be the case that we were going to have stadiums thronged with fans.

“We’re looking at how we can, for the moment, pause that programme, but what we do want to do is to make sure that, as and when circumstances allow, get more people back.”

Britain is indeed seeing a surge in Covid cases, even if predictions of 50,000 cases a day by mid-October assume that current rates of exponential growth continue, which even the government scientist who made the prediction called “quite a big if.” Here, check out the rolling seven-day average chart of new cases per capita:

That’s very ungood, and looks a lot like the abrupt rise back in March that led the U.K. to shut down stadiums and pretty much everything else in the first place, so good public health policy there!

But it does make one wonder: How do those wild Covid case rates in Britain compare to those in U.S. states that are allowing sports stadiums to admit fans? The current U.K. rate (against, seven-day rolling average) is 59.1 new cases per day per million residents; looking at which U.S. states are above that rate, we get, let’s see:

Gah! That’s 29 states plus the District of Columbia, if you don’t want to have to count for yourself. And even if not all those states are currently seeing upswings in positive tests, many are: Missouri, for example, which was the site of the very first NFL game of the season to allow fans, and where some fans were subsequently ordered to quarantine because they sat near a fan who subsequently tested positive. Missouri currently has a new-case rate of 238.8 cases per day per million, which is more than quadruple what’s led Britain to close its stadiums.

None of which makes open-air stadium attendance any more (or less) dangerous than we’ve discussed here before. But the best way to have safe public events during a pandemic, it’s extremely clear, is to tamp down the pandemic as far as possible, since it’s tough to catch a virus from a fan neighbor who isn’t infected in the first place. This isn’t to say there shouldn’t be universal precautions — masks are still good — but things like allowing fans into stadiums (or reopening indoor dining, where people are taking their masks off to eat and breathing the same air and really, it skeeves me out just thinking about it) should really be reserved for places where the virus rates are very low, like, yeah, New Zealand still looks good. Maybe the entire NFL should relocate there for 2020, if New Zealand would let germy Americans in, which you know it won’t.

Share this post:

Anaheim stadium protest raises question: When is $500m in land worth only $150m?

The People’s Homeless Task Force OC, the same group suing to block the Los Angeles Angels‘ stadium land sale for violating open meetings laws, held a small (about 20 people, per the OC Register) protest in front of Anaheim city hall yesterday, with signs reading “Stadium ‘Deal’ Sucks” and “Recall The Corrupt Mayor Harry Sidhu.” (Actually “The Corrupt Recall Mayor Harry Sidhu,” but I’m assuming they just forgot the caret.) The interesting part, though, came via the canned response they got from city spokesperson Mike Lyster:

“There’s nothing like baseball to generate speculation and strong opinions, and we welcome all voices. We stand by our process and still have more public consideration ahead of us. The only way to see more money from this site is to sell it without baseball, and that was not our goal. Development under this proposal would drive much-needed revenue for our city for years to come.”

Let’s break this down:

  • Opinions are good and part of the public process! Even when they’re wrong, like yours are!
  • The $500 million estimate for the value of the Angel Stadium property is for delivering it unencumbered by a baseball stadium, so unless you want to force the Angels out really it’s only worth the $325 million that Angels owner Arte Moreno agreed to. But no, that’s not how land value works: As we discussed here last December, the fact that Moreno is seeking a less-lucrative use of the land because he wants to keep the stadium on it (as does the city of Anaheim) doesn’t make it less valuable — if the land were for sale on the open market, he’d have to outbid rival developers who didn’t give a crap about baseball who’d be willing to pay around $500 million. So really Lyster is saying here “We’re giving Arte Moreno $175 million in free land to be sure Moreno wouldn’t have to choose between paying what the land would normally be worth or finding other land to buy for a stadium somewhere else,” which sounds a lot less defensible when you put it that way.
  • Lyster also evades the issue of the $175 million in kickbacks that Moreno is getting to build affordable housing and parks, because a new park in the middle of a baseball stadium development is totally worth the same to Anaheim residents as $46 million in cash they could use to build a park (or anything else) wherever they want, right?
  • This will provide the city with revenue, and revenue is good! This is the argument for pretty much all tax and land cost breaks for development on vacant or underutilized land: Without this development we would get nothing, so it’s all free money! It’s also a variant on the Casino Night Principle, where discounts for developers aren’t really discounts because if you go looking for your heart’s desire and it’s not already in your own backyard, you never had it to begin with, hey maybe I should call this the Wizard of Oz Principle?

This should all be a lesson in stadium subsidy economics, Rule No. 1 of which is Pick any number as the amount of public money going into a project, and you can probably find someone who can find a way to justify it. That’s not a justification for throwing up your hands and declaring the impossibility of objective reality — Arte Moreno really is getting $500 million in land for $150 million in cash plus some promises to build housing and parks — but it does help explain how one person’s massive subsidy can be another’s great deal. Toronto Blue Jays exec (and later MLB official) Paul Beeston once famously said of baseball finances, “Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me,” and the same principle applies here: There are people who make big bucks to change big numbers into small ones and vice versa, so it’s always important to take a hard look at the man behind the curtain.

Share this post:

Friday roundup: Drumming clowns, vaporgondolas, and the XFL rises shambling from its dusty grave

The magnets have shipped! Repeat: The magnets have shipped! If you want to get in on this, act now, or you might have to wait until I make my second trip to the post office.

This was an extra-busy news week, which felt like a bit of a return to normalcy after several months of sports team owners mostly focusing more on getting back on the field than on getting money to pay for new fields. But life can’t be put on hold forever, and by “life” I mean “grubbing for someone else’s cash,” because what is life if not that? (Answers may differ if you are not a sports team owner.)

Here’s a bunch more stuff that happened than what already made FoS this week:

  • That protest to call for the New York Yankees to pay their fair share of taxes or maybe just bail out local struggling businesses only drew about 10-15 people, according to NJ.com, but also “clowns playing a drum on stilts.” The site’s accompanying video features less than two seconds of drum-playing stilt clowns, and a whole lot of 161st Street BID director Cary Goodman talking about the plight of local businesses, and while I know Cary and he apparently paid for the clowns, I still say that this is a dereliction of journalistic duty.
  • Along those same lines, the gondola company owned by former Los Angeles Dodgers owner Frank McCourt has reportedly released new renderings of its proposed gondola to Dodger Stadium, but does NBC Los Angeles show us any of them? No, it does not. (I so yearn to see Cab-Hailing Purse Woman cast off her foam finger and hail a gondola.) We do learn that “the gondola system could move up to 5,500 people per hour in each direction, meaning more than 10,000 fans could be transported to Dodger Stadium in the two hours before the start of a game or event,” which seems to misunderstand how people arrive at baseball games, which at Dodger Stadium is mostly all at once in the third inning, and even more misunderstand how people leave baseball games, which is all at once when they’re over, at which point there would suddenly be a two-hour-long line for the gondola. McCourt’s L.A. Aerial Rapid Transit company says it will pay the project’s $125 million cost, but even if true — and you know I’m always skeptical when people ask for public-private partnerships but promise there will be no public money — that doesn’t make this much less of a crazy idea.
  • The XFL’s Los Angeles Wildcats might have to share their stadium this spring with a college football team, and, wait, didn’t the XFL fold? I swear the XFL folded. Oh, I see now that The Rock bought it, so: In the unlikely event that the XFL gets going again, its L.A. team will have to share digs with a college football team playing in the spring. Honestly having to use a football stadium more than 10 days a year just seems like efficient use of space to me, but sports leagues do get gripey about scheduling, even sports leagues that barely exist.
  • That Palm Springs arena being built by AEG now won’t be built in Palm Springs after all, but rather nearby Palm Desert, because the Agua Caliente Band of Cahuilla Indians, whose land was going to be used for the project, decided after Covid hit to “reevaluate what was going on just like most other businesses because they had so many other projects,” whatever that means. Given that the Palm Springs police and fire departments said they’d need tens of millions of dollars to provide services for the new arena, I think it’s safe to say that Palm Springs just dodged a bullet here.
  • The San Francisco 49ers are finally paying rent again to the city of Santa Clara, after initially trying to get out of it because their two exhibition games at home were canceled.
  • This Athletic article about the attempts in the 1980s and ’90s to save Tiger Stadium is paywalled and is not nearly as comprehensive as the entire chapter about the same subject in Field of Schemes, but it does have some nice quotes from Tiger Stadium Fan Club organizers Frank Rashid and Judy Davids (the latter of whom worked on a renovation plan for the stadium that would have cost a fraction of a new one, a scale model for which I once slept in the same room with when she and her husband/co-designer John put me up at their house during a FoS book tour), so by all means give it a read if you can.
  • If you’re wondering how $5.6 billion in subsidies for a new high-end residential/office/mall development in Manhattan is working out now that Covid has both residents and offices moving out of Manhattan, I reported on it for Gothamist and discovered the unsurprising answer: really not well at all.
  • The KFC Yum! Center in Louisville’s naming rights are about to expire, but KFC is talking about signing an extension, so with any luck we have many more years ahead of us to make fun of the name “KFC Yum! Center.”
  • That’s not how you spell “ESPN,” Minneapolis-St.Paul Business Journal.
Share this post:

NYC to refinance Yankee Stadium bonds, give Steinbrenner more cash, still not require him to pay property taxes

And in bond refinancing news:

Fitch Ratings released a report saying the New York City Industrial Development Agency (NYCIDA) plans to issue approximately $923 million in PILOT (payment in lieu of taxes) Revenue Refunding Bonds, Series 2020, issued for the benefit of Yankee Stadium LLC. The 2020 bonds will provide significant debt service savings relative to the prior schedules, with the majority of savings related to the PILOT and debt payments in February 2022-2024.

If the words “bond refinancing news” didn’t already put you to sleep, that paragraph probably did. But there are a couple of items that make New York City and the Yankees refinancing their stadium debt to take advantage of low interest rates more interesting than when you do it for your mortgage:

  • First off, Forbes reports that while the Yankees will still be paying off their stadium debt with pretend property taxes in order to take advantage of a now-closed IRS tax loophole, they’ll now be able to pocket any excess PILOTs (payments in lieu of property taxes) that aren’t needed for debt service and use them to fund their own operating expenses — which Forbes’ Mike Ozanian notes “provides some mitigation on the pressure for a quick recovery in revenues from the coronavirus.” (Translation: Will help boost Hal Steinbrenner’s bottom line.) There’s no estimate provided for how much money will be redirected from the city to the Yankees under this new provision.
  • As you may recall, there’s a push on to make New York’s sports teams actually pay property tax, as opposed to paying pretend taxes to themselves (as the Yankees, Mets, and Brooklyn Nets do) or just having themselves declared entirely tax-exempt (the Knicks and Rangers). One snag there is that the PILOT agreements were already signed years ago, so it’s tough to undo them. But! In order to refinance the debt so that Steinbrenner can save money, the city and the Yankees are having to tear up the old PILOT agreement and sign new ones — and there is nothing stopping the city from saying, “And while we’re doing you this favor, how about you start paying some damn real taxes to the actual damn city treasury, what with New York so strapped for cash that the mayor is furloughing himself?”

Obviously if the city tried to demand more in tax payments from the Yankees than they’d be saving under the refinancing, Steinbrenner would walk away from this deal. Why that would be a problem for the city is left unstated, though — while the Forbes headline implies that New York will be saving money under this deal, it’s unclear how that will happen, since right now all the bond payments are technically on the Yankees’ dime, with the help of the $1.2 billion in public tax breaks and free land they’re getting on the back end. At the very least, you’d hope that Mayor Bill de Blasio — who just this week declared that in terms of sports tax breaks “everything should be reevaluated especially at a point when the city is going to need resources for our recovery” — would be, you know, checking to see if the city can get something in exchange for doing Steinbrenner this solid, instead of just giving the Yankees some extra cash to help pay their light bill.

Share this post:

Worcester neglected to sign lease with WooSox before building them a $132m stadium, this will be fine, surely

Whut:

More than two years after Worcester city officials announced the Pawtucket Red Sox were moving to the Canal District, there is no formal lease agreement legally obligating the team to come to Worcester.

And about six months before the minor league baseball team is scheduled to begin play in a new $132-million public stadium, the city government still doesn’t own the property on which its ballpark sits, even as construction on the project is well underway.

As the Worcester Business Journal notes, these are important omissions not so much because the Triple-A Red Sox really might back out of their move — they’re getting more money in subsidies than it was initially budgeted to build their stadium, why would they turn that down? — than because this gives the team huge leverage in negotiating lease terms, not to mention the stadium land’s private owners huge leverage in negotiating sale and development terms.

The biggest immediate issue, as the Worcester Business Journal points out, is cost overruns: The initial $90 million price tag for the stadium hit $132 million in January, and could yet surpass the $150 million Las Vegas Aviators stadium for priciest minor-league ballpark ever. The city covered the initial round of cost overruns — partly through direct cash, partly through money that the WooSox are putting up and then getting repaid via future ticket tax money that otherwise would have gone to the city — and are going to be hard-pressed to get the team owners to cover any future rounds, what with their ability to say, “Gee, I dunno, there are plenty of other cities we could still move to…”

“What’s unfortunate about this is this should have all been worked out up front,” Marquette sports law professor Martin Greenberg understated to the WBJ. “This is not usual.” City officials getting their heads handed to them in lease negotiations is sadly all too usual, but forgetting to actually sign the deal before building the stadium, that’s breaking new ground, yeah.

Share this post:

Sixers owner waits six whole days after arena plan collapse to start plotting new arena plan

Me, six days ago, after Philadelphia 76ers owner Josh Harris’s plan for $700 million in public subsidies for a waterfront arena crashed and burned:

This is almost certainly not the end of Harris’s lobbying for a new arena, though: He still wants out of the building he rents from the Flyers once his lease expires in 2031, so there will almost certainly be a Plan B and C and all the way up to Floob. … The Penn’s Landing mini-saga is over for now, though, and 2031 is still a bit away, so expect a lull while Harris regroups and seeks his next opportunity.

So I might have been just slightly optimistic about that lull:

“They just want to control their arena. They don’t want to be a tenant at this point,” said Michael Barmash, a broker with commercial real estate firm Colliers International in Philadelphia, who is not helping in the search for a new site. “There are options out there.”…

What the Sixers may want most of all is to escape the Wells Fargo Center’s remote, parking-lot encircled corner of South Philadelphia in favor of a bustling enclave of restaurants, hotels and other amenities for fans to enjoy, said Thomas Hazinski, who advises teams and cities on stadium projects as a managing director with Chicago-based consultancy HVS.

Okay, so this isn’t Harris himself trying to jump-start new arena talks in the media, though he did issue a team statement that “we intend to explore all options in Philadelphia for when our lease expires in 2031,” which is well-established code for “let the bidding war commence!” And engaging in media campaigns by proxy is also a well-established tradition, so it’s reasonable to at least be suspicious that Harris has been talking to real estate firms and stadium advisors about how it’d be a shame if anything happened to the Sixers playing in Philly.

As for that “bustling enclave,” it’s tough to say if that’s what Harris really wants — all evidence is that arena-district spending by fans is pretty minimal, so maybe what Hazinski really means is that Harris wants to get to own a lot of stuff in addition to an arena, which would make more sense. Still, Harris has to know that the most lucrative part of sports venue development is the subsidies, and the best way to get those is to rattle sabers as early as possible about the possibility of your team moving across state lines, and oh look, there’s a mention of Camden in the Philadelphia Inquirer piece, right on schedule. Maybe we shoudn’t expect to wait too close to 2031 before the Sixers arena plans rear their head — after all, one person’s lull is another person’s campaign planning period.

Share this post: