February 03, 2012
49ers get $200m in NFL stadium funds they've been expecting since December
The NFL upped the ante on its aid to the San Francisco 49ers stadium in Santa Clara yesterday, increasing its offer of G-4 loans (which are really grants, since the recipients can "repay" them with other teams' money) from $150 million to $200 million. This was immediately reported as a huge boost to the Santa Clara project, with the San Francisco Chronicle blogging: "The move from Candlestick to Santa Clara became less of a mirage. Long Sundays on 101 became more of a reality."
Except that we already knew that G-4 loans were being increased to $200 million, and that the 49ers were likely first in line to get one. And the stumbling block for the Santa Clara plan at this point isn't so much the 49ers' share of the funds — they were only slated to pay for $150 million of the $1 billion stadium cost up front — but rather the $850 million in loans that the city stadium authority would be taking out for the rest of the construction tab, though I suppose the 49ers owners can use part of this NFL windfall to pay those back, as they've promised they'll do (though there's still much dispute about whether they're contractually bound to do so or not).
So, nothing to see here, move along. The only real news here is going to come not from NFL offices, but from the courts.
Goodell promises 34 NFL teams if L.A. gets one? Not so much
This was a weird news item to wake up to this morning:
Commissioner Roger Goodell says if the NFL puts a team in Los Angeles, it is probable the league would expand to 34 franchises.
Appearing Thursday night on "Costas Live" on NBC Sports Network, Goodell said the league "doesn't want to move any of our teams."
Why, exactly, would Goodell risk blowing the one thing the NFL is getting out of the two as-yet-unworkable L.A. stadium plans — leverage for team owners to threaten their home cities with a move to L.A. — by promising that any teams that move would be replaced with expansion franchises? True, it's not like Vikings fans will be entirely placated by "Don't worry, there'll be two expansion teams, and we'll have first dibs on one," but still it's an odd thing to volunteer on national TV.
Except that's not quite what Goodell said. To the videotape:
Key section:
Costas: Thirty-two seems like the right number for any number of reasons, the right number of teams. So if L.A. is going to get a team, it's going to be a team that will move. ... How likely is it that L.A. has a franchise sometime soon?
Goodell: It's hard, Bob. There's several issues. First you have to have the stadium. We're developing the stadium--
Costas: The city council there has approved the funds recently, right?
Goodell: There's two plans that are developing in Los Angeles, both of which we think have a great deal of potential. But really, we want to keep our teams where they are. That's the dilemma. Because not only do we have to get the stadium in L.A., then we have to find out how to get the team.
Costas: And 33 is unwieldy?
Goodell: You probably wouldn't go to 33. You'd probably go to 34. I would think you would have to do it by two.
In other words, the interpretation here could just as easily have been "Goodell says probably no expansion team for L.A., because you can't add just one." But that doesn't fit as well in the headlines.
February 02, 2012
St. Louis unveils plan for Rams to keep up with Joneses
Yesterday was the deadline in St. Louis' lease with the Rams for the city to come up with a plan for keeping the Edward Jones Dome "top tier," and the St. Louis Convention & Visitors Commission complied, issuing a $124 million proposal that would include: a giant field-spanning scoreboard like Jerry Jones' Dallas Cowboys have; 1,500 new club seats; and a new courtyard next to the dome that would be "almost like tailgating but without the cars," in the words of commission director Kathleen Ratcliffe.
The city would pay for $60 million of the upgrades, with the Rams footing the other $64 million. That's not likely what Rams owner Stan Kroenke was hoping for — in the famous words of Jerry Reinsdorf, "three-thirds/no-thirds is more of what we had in mind" — but if it boosts the Rams' revenue by even a few million dollars a year, it'd be a reasonable investment for the team. Of course, that only matters if Kroenke is thinking in terms of investments, and not "What can I extract from the city via this ridiculous lease that they signed?"
The Associated Press reports that Kroenke now has until March 1 to either accept or reject the offer or make a counterproposal; if no agreement is reached by June 15, the matter goes to arbitration (the AP doesn't say whether it's binding arbitration or not). St. Louis Mayor Francis Slay also promised in a blog post that "new local public dollars spent to make the facility 'top tier' will be subject to the prior vote of the people. If the CVC gets an agreement with the Rams, YOU will get the final say." Which is good, since it's the law and all.
February 01, 2012
Lexington task force proposes $300m rebuild of Rupp, convention center
If you're wondering what's been up with the plans to replace the University of Kentucky's Rupp Arena for these past four years, it's not transmogrified into a plan to renovate Rupp Arena, plus a bunch of other stuff:
The Arena, Arts and Entertainment District Task Force's final report envisions a $250 million to $300 million "transformation" of Lexington Center, including Rupp Arena, the Lexington Convention Center, the Civic Center Shoppes and immediate environs...
If financing is found, phased demolition and construction of the civic center and Rupp Arena could start as early as 2014.
"This important project will require a mix of local, state and private funding for construction," the report said.
The other change since 2007, apparently, is that Lexington is no longer focusing on using a tax increment financing to fund the construction; it can't help that its neighbor Louisville is having such trouble with its own TIF district. TIFs are still on the table, according to the Lexington Herald-Leader, but along with "naming rights of the arena, premium seating, advertising, sponsorships, concert and event promotions, concessions, stock offerings, state road funds, state tourism tax incentives, tax increment financing and new market tax credits."
Needless to say, that's a big mishmosh of arena revenues and public subsidies. Whether this deal makes fiscal sense is going to depend on which items the city and state choose from that menu, assuming they don't decide the whole thing is too rich for their blood.
January 31, 2012
Oakland calls time of death on Victory Court
This just in: Oakland's Victory Court stadium plan for the A's is officially dead, thanks to the demise of the state redevelopment agencies that would have funded it. But you knew that already.
We now return you to your regular programming.
Minnesota pushing e-pulltabs for Vikings; local governments still unsure of funding
For those of you who aren't sick to death of hearing the latest Minnesota Vikings non-plans, here's today's updates:
- The Minnesota state legislature has definitely settled on electronic pulltabs as the means of funding its share of stadium costs. The bill's main sponsor, Rep. Morrie Lanning, says the measure could raise $72 million a year, which would be more than enough to pay off the state's $300 million share; it's not clear whether anyone has looked at whether e-pulltabs would cannibalize other existing state gambling revenue, but hopefully somebody will before this thing is actually voted on.
- Ramsey County is working on yet another financing plan for its share of a stadium, after sales tax and food and beverage tax hikes were rejected by the state government. No hint yet what the new plan will be, but the legislature is willing to give them more time to think of something, especially since it's not like Minneapolis has figured out what it's doing, either. County commissioner Tony Bennett hopes to have a funding plan ready by next week, but it's always a bad idea to go holding your breath in these situations.
Santa Clara files lawsuit against 49ers stadium referendum
It looks like the San Francisco 49ers court battle has begun: Santa Clara Plays Fair is reporting (still not on their website, but they sent out a press release [UPDATE: now it's online]) that the city of Santa Clara has filed suit against the group's petition filing for a referendum on the revised stadium plan. The city had previously indicated that it felt the referendum was illegal, since a 49ers stadium plan (albeit not this one) was previously approved by voters in 2010; now the matter will be up to a judge — or in all likelihood, several, as it works its way through the inevitable appeals.
In other 49ers news, plenty of fans are still hopping mad about the sky-high prices for season tickets plus personal seat licenses that were unveiled last month. We'll see how many of them actually carry through with their threat to cancel their season plans once they're offered the chance to downgrade to cheaper, crappier seats — that helped alleviate some of the sticker shock faced by the New York Yankees, among others — but it can't be a good sign that one longtime season ticket holder is actually threatening to become an Oakland Raiders fan.
January 30, 2012
Vikings still mulling Arden Hills, add 4th Minneapolis site
Okay, the Great Minneapolis Vikings Stadium Site Search has officially jumped the shark in terms of ridiculous plot points: As if having four problematic stadium plans (five if you count Shakopee) on the table weren't crazy enough, now the Vikings say they're looking at yet another site in Minneapolis. This one, a few blocks away from the Metrodome, would allow the team to keep playing in its current home while a new one was built, rather than moving to the University of Minnesota's new stadium — something the Vikings owners don't want to do both because it doesn't have a roof and it doesn't allow beer sales, though that could change.
One possible reason for the Vikings to be opening this can of worms: Many NFL owners are apparently opposed to the team playing at TCF Bank Stadium, since they wouldn't be happy with either the reduced revenues the Vikings would be bringing in or the not-up-to-the-NFL's-lavish-standards facilities for visiting teams there. SB Nation has even speculated that this could push the Arden Hills site back onto the legislative radar after Gov. Mark Dayton called it "not viable." Is it time for someone to repropose Blaine yet?
Rams, St. Louis battle over London "home" games
A couple of weeks ago, new St. Louis Rams majority owner Stan Kroenke upped the ante in his simmering lease war with the city of St. Louis by scheduling one "home" game a year for the next three seasons to be played in London's Wembley Stadium. This was widely seen as a slap in the face of his hometown as he tries to angle for either a new or improved stadium to replace the 17-year-old one that was built by the city to lure the Rams in the first place.
Now, St. Louis has slapped back, insisting that playing home games across the Atlantic would violate the team's lease, which requires that the Rams play all their home games at the Edward Jones Dome. And then the team slapped back in return, issuing a statement that they "look forward to having amicable and meaningful dialogue with the CVC on many issues and believe those conversations should remain between the parties."
The issue here likely isn't over whether St. Louis fans get to watch one less game a year in person — after the last few years, Rams fans could be forgiven for wishing that their team played all its games somewhere far, far away — but rather that it gives the city a bargaining chip in its lease squabbles with Kroenke, who's trying to exercise a "state-of-the-art" clause to threaten to move the team if he doesn't get a new stadium. The city faces a Wednesday deadline to produce a stadium plan that could be implemented by 2015, or else the Rams could conceivably break their lease after the 2014 season — though as we've seen elsewhere, getting out of a lease doesn't do much for you unless you actually have someplace else to go.
Dolphins: We built our stadium all wrong, fix it please?
Miami Dolphins officials dropped by the Miami Herald offices on Friday, and one of the discussion items was the team's unhappiness with Sun Life Stadium's current seating arrangement:
"We have the furthest distance from the sidelines with our lower bowl in the NFL," {Dolphins president Mike] Dee said. "We have the fewest number of seats in that lower seating level between the 20 yard lines, between the goal lines, in the NFL. Not just the facilities that compete for Super Bowls. We've got to fix that ...
"At the same time, we may look to amend capacity in areas where we may have too much. Right now, we have the largest upper deck in the NFL -- 35,000 seats. The next facility in line is 27,000. The Redskins took 10,000 seats out of their upper deck this past year. We're looking at all those things to retrofit the stadium to today's standards."
And by "we," Herald reporter Armando Salguero makes clear, Dee meant "someone other than us":
[T]hat costs money. And neither the legislature, nor local politicians are volunteering to pay for that. The public would likely vote down a ballot measure for such expenditure. And owner Stephen Ross is in no hurry to spend the multiple millions of dollars it would cost to do the project.
Not noted in the article: The Dolphins actually own Sun Life Stadium, having built it in 1987 with private funds. (The distant sidelines were so that the stadium could also host baseball as a way of boosting revenues — something that worked even better when then-owner Wayne Huizenga sold the Marlins but kept collecting high-priced rent.)
For the moment, Salguero speculates that the Dolphins could tarp off part of the upper deck to reduce capacity, but it sure sounds like this is the start of a renewed Dolphins campaign to ask for public money to renovate their private stadium, after last year's attempts crashed and burned so spectacularly.
January 27, 2012
Canada: No arena subsidies if it's for a pro team
In yet another indication that Canada remains a different country from the U.S., the federal government is threatening to withdraw funding for an amateur hockey rink in Laval, Quebec, because it's learned that a minor-league pro team might move there:
There are growing rumours that the Hamilton Bulldogs of the American Hockey League — the farm team of the National Hockey League's Montreal Canadiens — are planning to move into the Laval arena when it will be built.
Ottawa is now warning that it will pull the plug on the project unless if obtains guarantees that the arena will not be used by an AHL or a major-junior hockey team. Otherwise, the government fears that it will be hit with a new round of lobbying for other sports infrastructure projects in cities like Quebec City, Edmonton and Regina.
"If we allow a breach in our policy, we're toast," a federal official said.
From the sound of it, part of the reason for the reversal was griping by city officials in Quebec City that the Laval arena was getting federal stimulus money and their own proposed NHL arena (which still isn't any closer to having a team than when it was approved last year) wasn't. Still, the concept that giving public money to one team might be a bad idea because it will encourage other teams to ask for it too is a notion that most U.S. officials would likely find ... well, foreign.
Minneapolis council opposes Mondale's stadium vote end run; legislature turns toward e-pulltabs
The latest in the Minnesota Vikings stadium scrum:
- State stadium negotiator Ted Mondale thinks he can get around Minneapolis' voter-approved ban on using city money to fund a stadium without a referendum by instead having the city vote to direct the funds to stadium authority, and then that body would spend it on a stadium, so that "it really isn't the city spending that money." Pretty clever, eh? Except that apparently Mondale never asked the Minneapolis city council about his idea, and a majority of the council now opposes funding a Vikings stadium without a public vote, after councilmember Sandra Colvin Roy declared that doing so would thwart the "will of the people." (She even cited the Occupy movement as a reason that government shouldn't so easily dismiss voters' concerns.) Minneapolis Mayor R.T. Rybak retorted, "We're not going to do a referendum in the city. We are going to have a referendum in a couple years when I stand for re-election." He might want to check with George Petak before saying that too loudly.
- It looks like whatever state bill emerges to fund a stadium will use electronic pulltabs in bars and restaurants as its funding mechanism — which should come as no surprise, given that that's pretty much the only option that doesn't involve either raising taxes or getting sued by Native American tribes. It's still early, though, and even if the state finds enough money for its share of a stadium, there's still the matter of the local government share (see above) that the Vikings are insisting on.
Indianapolis to lose money on Super Bowl
Every so often, I get a call from a journalist asking what I think the economic benefits are to a city of hosting a Super Bowl. To which I can now answer with a link to this Indianapolis Business Journal story:
Scores of businesses in and around Indianapolis are licking their chops in hopes of scoring a windfall from the city's hosting of the Super Bowl on Feb. 5.
But the city entity that manages Lucas Oil Stadium, where the game will be played, expects to lose money.
The Capital Improvement Board of Marion County is budgeting for total Super Bowl expenses of $8 million and revenue of nearly $7.2 million, leaving a loss of $810,000.
The main added costs are for extra police time and hiring of additional temporary workers. That's partly made up for new tax revenues from the estimated $200 million in spending that will go on in the city during Super Bowl week,
But that tax money is limited, in part because, notes the IBJ:
- The NFL is using its tax-exempt status (yes, the NFL is tax-exempt, and yes, lots of other people also think this is ridiculous) to get its wmployees out of paying hotel and restaurant taxes.
- Food and beverage taxes collected inside Lucas Oil Stadium also won't be going to the CIB, but will be diverted to the NFL.
However, Indianapolitans will at least get the thrill of watching the Super Bowl on TV and knowing that they could be there, if only they had tickets. Plus the free publicity that comes from the world learning what it's like in Indianapolis in January. With benefits like these, who needs tax revenues?
January 25, 2012
Santa Clara council rejects 49ers referendum, setting up court battle
As expected, the Santa Clara city council last night rejected petitions calling for a new referendum on a proposed $1.2 billion San Francisco 49ers stadium, ruling that while enough signatures were collected, the issue is not "referendable" because the project was already approved in a public vote in 2010.
Several people who spoke at what sounds like a raucous council hearing, however, raised questions about whether what the council passed in December is what voters approved two years ago:
But dozens of opponents showed up in force to complain they were "ripped off." They brought glossy 2010 campaign materials funded by the 49ers that showed the team, NFL and stadium revenues would be responsible for 88 percent of the project's cost.
"That is what this community bought, but that is not what you agreed to last month," stadium opponent Kate Grant said, holding up the campaign flier. "The terms of this agreement have changed dramatically."
The dispute is now almost certainly headed for court, which if history is any guide could take a while. With the 49ers hoping to break ground this spring, whether the referendum drive can stop the stadium from going ahead could depend on whether a judge is willing to grant an injunction against the project continuing — though it'll also be interesting to see how the bond market responds to a bond issue whose legality is being challenged in court. If nothing else, that planned 2014 opening date now seems even more optimistic than it did last month.
Florida homeless-shelter bill wouldn't actually recoup stadium subsidies
Apparently there's a small problem with that bill to require Florida stadiums that received public funds to double as homeless shelters. As Stephen Nohlgren of the Tampa Bay Times reports, the original requirement was introduced in 1988 to win support for allowing sales-tax money to be kicked back to help pay for construction of the stadium that went on to become Tropicana Field, current home of the Rays — a subsidy scheme that's since been used by numerous other sports teams. The bill, proposed by state senator Michael Bennett, would require that stadiums immediately set up shelters on off days, or else refund all the cash they've received.
And the problem? Take it away, Nohlgren:
But in fact, only one stadium listed by legislative analysts — the Miami Dolphins' Sun Life Stadium — is owned by a team that received the sales tax exemption. The other 17 are owned by cities, counties or public sports authorities. Refunds would be borne by taxpayers.
The bill doesn't seem to have much chance of passage in its current form, regardless, though it's always possible it will lead to some debate on legislation that would actually affect the sports teams that Bennett is upset about subsidizing. I wouldn't hold your breath, though.
January 24, 2012
U-T San Diego covers own stadium plan, mayor hates it
And we have our first glimpse at how U-T San Diego (the former San Diego Union-Tribune, renamed by its new developer/right-wing activist owner Doug Manchester) plans on covering the $1.5 billion Chargers stadium/convention center/kitchen sink plan proposed by its own publisher in Sunday's paper. Today, reporter Matthew T. Hall takes a look at the viability of the waterfront stadium plan, albeit under the somewhat self-aggrandizing headline "Waterfront stadium plan revives debate." Among the highlights:
- Chargers stadium czar Mark Fabiani says the team remains focused on a stadium at a bus yard in East Village, but that the waterfront site could be a fallback option.
- Union leaders, who would face the displacement of dockworker jobs, are "willing to listen."
- San Diego Mayor Jerry Sanders "declined to comment."
Not included in the piece: Any attempt at analyzing where on earth the money would come from for this plan. (Manchester made some suggestions of his own on Sunday, but they didn't add up to $1.5 billion.) Sanders' position, meanwhile, was reported very differently in other news outlets:
Mayor Jerry Sanders said Monday he opposes U-T San Diego's proposal for a new Chargers stadium and expanded convention center...
Sanders has expressed support for the stadium being part of a wider entertainment district, but not the way it was proposed Sunday.
"The city is ready to move forward now on a realistic plan to create thousands of jobs, protect our convention business and increase revenues for neighborhood services," Sanders said in a statement to City News Service. "We have to address these important priorities in a responsible way."
But at least the UTSD is all over the story of how much Twitter traffic its plan generated.
Santa Clara referendum petitions validated, vote still a ways off
The Santa Clara County Registrar of Voters has confirmed that Santa Clara Plays Fair has collected the 4,500 signatures required to force a vote on the $1.2 billion San Francisco 49ers stadium plan, which would require the city to put out $850 million in cash and get somewhere between all of it and not very much of it back.
Of course, Santa Clara has insisted that the stadium project isn't subject to referendum, so next stop will be, as promised, court. Stadium opponents have enlisted the ACLU to seek an injunction against starting stadium construction until the referendum issue can be settled.
Exactly how much the 49ers are committing to backstop the city's stadium bonds remains murky — I'm still puzzling my way through the rat's nest of the city's development agreement, and you're welcome to do the same if you want to play along at home. Though it's worth noting that Stanford sports economist Roger Noll did tell the Wall Street Journal last week that the city's return on its stadium investment could range "from pretty close to break-even to a catastrophe," which I'll take as validation of my own analysis.
Dayton: Crappy Metrodome site is only viable Vikings option
As if the Minnesota Vikings' stadium hopes weren't already looking dismal, Gov. Mark Dayton's office issued a statement yesterday making them even dismaler:
Minnesota Gov. Mark Dayton told Vikings owner Zygi Wilf on Monday that the team's new stadium will have to be at the Metrodome site if a stadium bill is to pass the Legislature this year, Dayton's spokeswoman said...
Dayton spokeswoman Katharine Tinucci said it's not that the Democratic governor necessarily prefers the Metrodome site. But he believes that the stadium must be at that site if the bill is to pass during the legislative session that convenes Tuesday.
Tinucci added: "I can't say this is the governor's favorite" site. Hey, hey, enough with the hard sell!
The bright side if you're the Vikings owners (or dark side if you're an opponent of spending hundreds of millions of dollars in public money on a Vikings stadium) is that Dayton is at least attempting to focus legislative attention on one site, unenthusiastic as he may be about it. We'll see if this tactic is enough for the legislature to actually act on it, or if they decide to punt the whole mess to 2013 in the hopes that the laws of mathematics have been revised by then.
Florida bill would enforce law to use public stadiums as shelters
A pair of Florida state legislators have unearthed an old law requiring that state-funded sports facilities be used as homeless shelters on days when there's no event on, and is out to enforce it. "These organizations have failed to follow the law for over 20 years," declared state rep Frank Artiles, co-sponsor of legislation that would require teams that have received public cash to return it if they don't obey the law. "This is the simply the State of Florida holding them accountable."
While it's hard to picture the Miami Marlins, say, setting up cots around the Red Grooms home run sculpture, the bill is certainly getting media attention, and now has attracted an amendment to require publicly funded stadiums to ban TV blackouts of games. Which sounds like it has even less chance of being enforceable, but it's certainly interesting, to say the least, to see what options people come up with for demanding conditions in exchange for public funding. Of course, it would be easier if somebody had thought to demand them before actually opening the public's checkbook...
Louisville arena TIF fund on verge of needing bailout
Hey, remember back in 2010 when it was reported that Louisville's tax-increment financing district wasn't actually generating any incremental taxes, and if things didn't improve the city would need to bail out its stadium fund with general revenues? Well, guess what:
The revenue needed to pay for the 15-month-old arena at Second and Main streets is falling short of expectations, putting the project at risk of failing to cover its debt and having its bonds relegated to "junk" status.
The main culprit is lagging revenue in a special taxing district that forms the foundation of the arena's financing plan and is supposed to provide the Louisville Arena Authority with more than enough cash to pay its $349 million in bonds.
Arena authority chair Jim Host told the Louisville Courier-Journal that he has no plans to ask the city for money immediately, but did apparently tell city officials that he will ask for as much as an extra $3.3 million a year starting in 2013.
There are already plenty of reasons to be wary of TIFs, among others that much of the "new" tax revenue is actually money that would have been collected somewhere else in your city regardless. But the scariest part for city officials may be their uncertainty — a relatively small shortfall in consumer spending that causes tax proceeds to go down, not up, and in the words of subsidy expert Greg LeRoy, "a liability that was supposed to be taken care of by the TIF is now eating the lunch of the general fund."
January 23, 2012
San Diego paper proposes own damn $1.5B Chargers stadium plan
The right-wing businessman who bought the San Diego Union-Tribune (since renamed U-T San Diego) has made clear what he meant in saying local newspapers should be "cheerleaders" for stadiums, penning an editorial yesterday that proposed spending $1.5 billion on a waterfront stadium, expanded convention center, sports arena, parks, and beaches.
To pay for it, U-T owner Doug Manchester proposes a mix of funding sources: the $520 million currently slated for use to expand the convention center, $200 million from the sale of the Qualcomm Stadium site, $90 million by diverting funds currently used to maintain Qualcomm (no word on how the new stadium would be maintained), $50 million from selling the Valley View Casino Center arena, $50 million from the sale of naming rights, and $63 million from ticket fees. "These are only some of the many innovative ideas" for funding the project, writes Manchester (or his editorial minions — it's tough to tell, since much of the editorial package is unsigned). They had better be, since by the numbers provided here, Manchester's plan is still more than half a billion dollars short of paying for itself.
The public reception of the plan so far is hard to tell, given that the only daily paper in the city is the one stumping for it, so understandably isn't sending its reporters out to discern whether it's viable. With any luck, the independent Voice of San Diego will soon remedy this, but for now we'll have to make do with its recent profile of Manchester, with its memorable blind quote: "If there is a hell, Doug Manchester is the face of it."
Vikings stadium debate to be pushed to 2013?
In what should come as a surprise to no one, the pile of quarter-baked stadium plans issued for the Minnesota Vikings last week isn't doing much to resolve the state legislature's plans for whether to build a new home for the team. State stadium czar Ted Mondale said Friday that "time is not on our side right now" for getting a stadium bill voted on during this year's legislative session that starts tomorrow, and there's increasing talk of just kicking the whole debate back to 2013, when money will suddenly grow on trees.
Meanwhile, Dayton last week threw cold water on the idea of raising stadium funds via racinos, noting that the state's Indian tribes, which operate legal casinos, could sue to stop the installation of slot machines at Minnesota racetracks: "Passage of racino legislation to fund a new stadium is speculative. Even if it were to pass, several years of litigation in federal courts should be expected. Proceeds from racinos could not provide the assured revenue stream to back state-issued bonds until that litigation was resolved." The tribes apparently wouldn't sue over installing electronic pulltabs at bars and restaurants, but there's little political support for that plan at the moment.
The St. Paul Pioneer Press, meanwhile, has a long article today on all the ways in which a new Vikings stadium could be bad for St. Paul, including a new commercial district in Arden Hills diverting shoppers from St. Paul businesses, and subsidies for Minneapolis' Target Center (which could be rolled into a stadium bill) making it hard for St. Paul's Xcel Center to compete for acts. The article includes these words, which should be chilling for any city hoping to pay off an arena by booking lots of concerts:
"It used to be who could give a better rate. I think it's going to come to a point in the not-to-distant future where it will be, 'Who can pay an act more to come?'" St. Paul City Council President Kathy Lantry said.
None of which should be exactly a surprise, especially since Minnesota already tore down one arena because of competition from the Target Center. It's suddenly news now to the Pioneer Press, though, apparently because "St. Paul officials and business leaders" are now "fretting" over these issues. Just so long as there are politicians saying this, and it's not just the paper being truth vigilantes.
January 20, 2012
Judge: Red Bulls owe property taxes on Harrison stadium
A New Jersey tax-court judge has ruled that the New York Red Bulls owe property tax to the city of Harrison, despite playing in a stadium built on land owned by a tax-exempt public agency. The decision, if upheld, means that the team owes $3.6 million in back taxes for 2010 and 2011, plus similar amounts going forward.
Without getting too deep into tax law, public land usually goes untaxed — but it can be taxed, or can be subject to payments in lieu of taxes, if it's used for a strictly private purpose. Given that all the money collected at Red Bull Arena flows to the Red Bulls, the judge ruled that the "public" nature of the land was an accounting fiction, and demanded that the team cough up.
Whether cash-strapped Harrison will see any money from this anytime soon is uncertain — the Red Bulls have promised to appeal, which could drag this out for years. (They're also still stiffing the city on $150,000 a year in rent.) But at least there's a chance of the city getting something back for its $80 million in land and infrastructure and $173 million new train station, aside from a bunch of muddy lots set aside for theoretical future development. (According to Business Week, payments from developers are running at just over one-tenth what was projected when the arena project was first planned.)
Given the number of teams that use the public-land, private-use dodge to avoid a stadium tax bill — which is to say, pretty much all of them — it's going to be interesting to see if this ruling sets any kind of precedent. Given that tax law varies widely from state to state, and who knows if this will hold up under appeal anyway, probably not, but it's an interesting idea for local governments to try to recoup some of the money they blew on stadiums in the hopes of sparking development that never arrived.
January 19, 2012
Dayton: Arden Hills "not viable," all Vikings sites have problems
Minnesota Gov. Mark Dayton gave a talk yesterday about the passel of Vikings stadium plans issued last week, and the upshot was: You call these stadium plans?
"There's not yet a stadium proposal with a complete and sufficient financial plan," Dayton said. "No site's sponsor has adequately resolved the major unanswered questions in order to merit the approval to proceed."
Dayton said he was disappointed that neither the Vikings nor Minneapolis or Ramsey County had come forward with workable finance, site and political plans. He called the proposal submitted by Minneapolis last week "meager."
"You can't make a decision until you have all the facts," Dayton said.
In particular, Dayton all but ruled out the Arden Hills site in Ramsey County that Vikings execs prefer, insisting that it's "not financially viable" and that "unless the Legislature is willing to change its insistence on a voter referendum before Ramsey County can impose any kind of tax increase, the only two feasible sites become the Metrodome and Linden Avenue, both in Minneapolis." But the Minneapolis sites have issues as well, not least that nobody's quite sure how to pay for them either.
Meanwhile, the chief stadium bill author in the Minnesota state house, Rep. Morrie Lanning, told the Minneapolis Star Tribune that while Dayton may have picked a front-running site, he has not: "I'm telling you, as stadium author, that's not where I'm at." At the same time, the rector of the Basilica of St. Mary, which is adjacent to the proposed Linden Avenue site, reiterated his opposition to the plan, saying he's concerned about both traffic issues and possible damage to the basilica from construction.
And as for the Metrodome, Minneapolis Mayor R.T. Rybak's favored site? The Star Trib reports:
Dayton said the Metrodome location could work for a new stadium, but he was concerned that in 30 years, the site had never spurred any nearby economic development.
Ah, yes, let's blame the Metrodome site for that. Because everyone knows that all other stadiums have sparked huge development booms nearby.
January 18, 2012
Sternberg, Foster meet, don't discuss much re: Rays
Tampa Bay Rays owner Stuart Sternberg and St. Petersburg Mayor Bill Foster met for over an hour (Tampa Tribune) or about two hours (Tampa Bay Times) yesterday, and shockingly didn't manage to resolve all the issues around where the Rays will play, how to pay for it, and how to prevent global climate change without asking people to consume less fossil fuels. Per the Times:
Sternberg didn't go into details in a short interview afterward, but said the team and Foster reached no deals on the Rays' future in the city. ...
Sternberg said the two sides didn't discuss potential locations for a future stadium and there was no talk of how the Rays might buy out their contract to play at Tropicana Field.
Much of the discussion focused on how the city might help the team with marketing and improving upon home attendance in 2011 that was next to last, Sternberg said.
Of course, depending on what you consider to be the Rays' "stadium problem," that last item could go a long way toward solving it: If the Rays can improve attendance at Tropicana Field, they don't need to go worrying about breaking leases and spending hundreds of millions of dollars on a new stadium just to field a decent team and turn a profit. (Not that the Rays have been exactly hurting in either department of late.) If nothing else, this could be a sign that Sternberg plans to tone down his "Let me out of St. Pete!" rhetoric and take more of a long view toward any possible relocation across the bay ... or it could be that he was just making nice at the meeting and will go back to complaining bitterly next week.