Live chat with Neil deMause and Heywood Sanders today, 1pm ET, submit questions starting … now!

More news after I run some errands [UPDATE: More news is now posted below on the main page!], but in the meantime, all the news you really need for today is that FoS convention center correspondent (and University of Texas professor, and book author in his own right) Heywood Sanders and I will be holding a live chat in the comments section of this very item starting at 1 pm today. Anyone can attend, anyone can ask questions, and anyone can ask questions starting now, though Heywood and I won’t be answering them until 1.

Fire away!


78 comments on “Live chat with Neil deMause and Heywood Sanders today, 1pm ET, submit questions starting … now!

  1. How much do you think the wrigley OF signs are going to net them? Could it really be worth all the trouble they are going through since they already got 17% of the rooftop revenues? Do signs pay that well? Also am curious how you see that all settling down- will there be any private rooftops in 2015? Are the cubs going to sell tickets to the ones they bought, and if so are they allowed to offer the infinite alcohol deals the private rooftops offer? Any chance at all the cubs and rooftops could compromise and give more than 17% to the cubs or are we long past that?

  2. Many people talk about Gillette Stadium as an example of a 100% privately funded stadium, or at least one where $0 public money was spent. Is that true? I know the city/county/state paid for road improvements around the stadium, which wan’t free, and there must be other costs that the public has been paying for, right?

  3. Are there any sports facilities or upgrades that were in some way funded with public money that are at least breaking even for the public? Examples that can be used as “good deals” for the public, or at least “not bad deals?”

  4. You’re in San Antonio. Can you talk about the history of the Alamodome? That stadium was built with the intention of luring an NFL team. That strategy worked in Indianapolis, where a new stadium lured the Colts to town, but it failed badly in San Antonio.

    What should San Antonio do with the stadium now? San Antonio would be a great market for professional soccer. Could/should San Antonio retrofit the Alamodome to work for pro soccer?

  5. Team owners seem very interested in securing bigger footprints to allow them to develop residential, commercial and entertainment venues around the new stadium/arena.

    In Detroit, the Ilitch family has secured 250 acres! And the new owners of the Milwaukee Bucks are looking for a large footprint for their new arena.

    75 acres at Nationwide Arena in Columbus in 2000; 72 acres at American Airlines in Dallas in 2001; 75 acres at Petco Park in San Diego in 2004.

    These are all built out now. Has anyone researched how much money owners have made from this ancillary development?

    Will get on the chat at 1 to hear your answers

  6. Hi, everybody! Heywood should be here any minute (if he isn’t already), so in the meantime let me tackle that Wrigley question…

  7. I don’t know how much the ad boards are going to sell for, but given that they’re going to be the only moving things to stare at during Cubs games (except for the Cubs, but they traditionally don’t move that much), I’m guessing a hell of a lot. Yes, I’d expect it would certainly be more than the Cubs are risking giving up from the rooftop owners. And yes, I certainly expect the Cubs to sell tickets to the rooftops they just bought — why not, now that it’s their money?

    As for compromise, that will likely need to wait until the lawsuit is resolved…

  8. Heywood, hop on the SA question now, while I look up some numbers re Gillette, okay?

  9. The Alamodome was sold by then-Mayor Henry Cisneros as a “multipurpose convention and sports facility.” Everyone knew about the NFL premise, but it was avoided in the campaign to sell a sales tax to build the Dome.
    The NFL never happened, in part because the media market is small.
    But it’s always been assumed that the other Texas NFL owners (ahem, Jerry Jones) didn’t want any competition on their turf.
    Proposals for an MLS team keep coming up, but they;re always tied to a purpose-built, open air soccer stadium.
    So we’re about to spend $41 mil on dome improvements, in part to keep trying to get the Final Four.

  10. Chris A.: Judith Grant Long has the public cost for Gillette at $103m in 2010 dollars, or 18% of the total cost. She doesn’t break it down, but I’m guessing that’s the roads and infrastructure costs. (Didn’t the public end up paying for a private road to take Patriots’ luxury suite holders to their own entrance?

    As for not-bad deals that involved public money, there aren’t a ton. I used to use the Minneapolis Metrodome as an example — the public put up a bunch of money, but got it all back through team rent and revenue sharing — but there is no more Minneapolis Metrodome for exactly that reason: The Twins and Vikings were sick of playing in a stadium that they had to pay for.

  11. Heywood, do you think that the media market is that big an issue for the NFL and San Antonio? They put teams in Jacksonville and Nashville, after all. I’d think that these days the holdup is more that everyone wants stadiums newer than the Alamodome, which is practically of legal drinking age.

  12. John G.: I have not seen any studies of profits from ancillary development, though it’s an outstanding research project for someone with the time and investigative chops. Especially since it’s clearly becoming a more popular way for team owners to reap hidden subsidies: “Hey, how about you throw in some free land that we can develop?” sounds a lot better than “Hey, can we have $300 million?” even if it ultimately comes to the same thing, as Anaheim Mayor Tom Tait revealed.

  13. John, on the “bigger footprints” question, my sense is that it represents an evolution of deal making politics around these facilities.
    You may recall that part of the pitch in selling the new Busch Stadium in St. Louis was the promise of new downtown development, “Ballpark Village,” next door. And the American Airlines Arena in Dallas was to be the “anchor” of Ross Perot Jr.’s Victory District development.
    But Ballpark Village was long in coming, and not nearly of the same scale as promised.
    And Victory hasn’t work quite as planned.
    So my sense is the “pitch” usually exceeds the reality.
    Take a look at Mark Rosentraub’s Major League Winners book for the full pitch.

  14. Thanks. Bucks owners are now looking for a bigger footprint for their arena. The ownership team includes several experienced real estate developers. I am exploring the theory that they will make a big chunk on the real estate investment…why should public subsidize it?

  15. I really can’t stress enough the shift to the “development” pitch as with the Red Wings arena.
    The economists have made the “it’s great economic impact” argument a lot tougher if the public has to be sold or there’s a vote, so “development!!” sounds a lot better.
    You might want to look at Tim Chapin’s “Sports facilities as urban redevelopment catalysts: Baltimore’s Camden Yards and Cleveland’s Gateway” article from the Journal of the American Planning Association.

  16. John, re your follow-up on Milwaukee…
    The real dilemma is how much anyone can actually realize in development, especially in a downtown core that has had some tough times. In Milwaukee, the case of the Grand Ave. Mall/Shops at Grand Ave. comes to mind.
    So I’m skeptical about much in the way of big new private investment. It worked for Petco in part because San Diego is a very different market, with a healthy demand for downtown hotels and housing.
    But I’ve already seen Rosentraub’s comments about the potential of the Bucks proposed arena.

  17. I concur with Heywood: “Development!!!” has become a trend in large part because it muddies the waters around costs and benefits. I saw this firsthand with the Brooklyn Nets arena, where there were so many moving parts (land subsidies, tax breaks, an arena, housing towers, a deck over old rail yards) that nobody, including me, could figure out an actual number for the full public subsidy. (It was definitely somewhere between $0 and $2 billion.)

    I’ve sometimes referred to these as “everything-but-the-kitchen-sink” projects. The more complicated the proposal, the better your chances of exceeding the attention span of elected officials and sports journalists and getting people to just go “Ooh, shiny!”

  18. Neil, no question that to get an NFL team here in SA, we’d need to build an entirely new stadium. The Alamodome might work for a few years as a temporary solution, but any team would want a new facility they could fully control.
    There have already been rumblings of a possible location somewhere BETWEEN SA and Austin, because we just don’t have the corporate base that would support club seats, suites, or much in the way of PSLs.

  19. Heywood: Rosentraub really, really likes downtown development per se, and tends to give these projects the benefit of the doubt. We’ve knocked heads on this in the past.

  20. Hey guys, are there any examples of publicly owned convention centers that are successful ? Downtown, cheap construction, major population center, a city everyone wants to visit while blowing off the convention… What’s the secret ?
    I’m interested because Seattle’s talking about expanding theirs underground, which seems like a big expense.

  21. Tim Chapin is the man on sports as development catalyst, IMHO. (His overall conclusion, if I can put words in his mouth: “Meh, but some aren’t as bad as others.”)

  22. On the convention center question, the REALLY BIG problem is the market competition.
    Cities have managed a 37% increase in center space since 2000, with no real increase in business.
    Las Vegas did a major expansion, doubling the center’s size, in 2002.
    So in 2013 (last year for the numbers), it did LESS CONVENTION/TRADESHOW ATTENDANCE than in 1997.
    Much the same when Orlando doubled at about the same time.
    Not a chance Seattle’s WSCC will see more business.
    The last expansion there didn’t produce any increase in attendance.

  23. I beleive “Development” is how Lew Wolf secured his arrangement to build a stadium for the Quakes. He got the city to rezone commercial property in south san jose to residential and used the profits from that to fund his stadium. The city then loses out on the potential tax revenue and we add more people to the Valley which makes traffic woes worse and burdens other city/county services we don’t have the tax revenue to keep up.

  24. Let me add one more thing on convention centers and Seattle.
    The consultants aways make grand promises.
    The last “market study” for the Seattle expansion came from Neil’s good buddies at CSL International.

  25. Wow, even Las Vegas and Orlando are succumbing to convention center glut? I thought you always said those two cities were the only exceptions?

  26. Jon: One thing I’ve always wanted to find out is the average revenue/cost to local government of residential vs. commercial vs. retail development. Each have their pros and cons, but none of them are solely a benefit to cities — or else New York City, by virtue of having grown the most, would have more money than it knew what to do with, right?

  27. Used to be.
    The market has really gotten tough, with everyone doling out incentives and freebees: http://chicago.suntimes.com/politics/7/71/161310/the-watchdogs-millions-in-taxpayer-subsidies-to-lure-conventions
    When LA, San Diego, and San Francisco are doling out $5 to 6 mil a year in free rent, things are really, really touch.
    So Chicago’s giving out $10 mil plus.

  28. Heywood, have you or anyone tried to quantify how much is being handed out each year total in free rent breaks for conventions?

    This seems like a huge hidden cost (or shortfall in revenue, if you prefer to look at it that way). We’re starting to see it in arenas, too, where arena glut is leading operators to offer concert promoters cut-rate deals just to fill their schedule.

  29. So… when the operator of the convention center is saying “we just can’t book certain acts because we’re not large enough” and they’re planning to double the convention space here in Seattle… the thing that’s being left out is that the next point of the negotiation was “of course we’re not going to pay more… we have just been offered larger space in the empty halls elsewhere”.

  30. The big problem is that the deals can be managed in a bunch of different ways. So it turns up in budget numbers in some cities, but not others. In some cases it shows as an increase in center operating loss–last year the Washington Convention Center in DC managed a $20 million operating loss, in part from rental freebies.
    And lots of times, the deals are behind the scenes, as in Nashville, where the hotels kick back to the center.
    So I keep trying…
    But it’s clear from the visible part of the iceberg that it is growing big time.

  31. ChefJoe, you’re absolutely right.
    The problem for Seattle is that San Francisco is expanding, LA is planning an expansion, San Jose has just done a (modest) expansion, and San Diego is still likely to try an expand, despite a recent court decision on the financing.
    As for the numbers, the WSCC in Seattle had 183,875 out of state convention attendees in 1997. Post-expansion, in 2013, it was 136,538.
    I’ll leave the “Ouch!” to you.

  32. Maybe it’s an inverse-square law. As you increase the size of your convention center to infinity, the attendance asymptotically approaches zero.

  33. Heywood: Do you think that there is a way to “control” the economic studies so that it’s possible to either have some idea of their accuracy *or* be able to evaluate the bullshit level of a particular study? I used to write these things for casinos and the process for determining the economic impact was basically a black box that spit out numbers that the developers love. And then when I worked for NYC I used to have to review these things and they were always inscrutable.

    Neil and I were going back and forth with someone from UCONN who’s department wrote an impact study of a potential hartford minor league stadium and the numbers were ludicrous, but he wouldn’t back down on them. Some of the initial assumptions often seem so flawed as to make the documents useless. Garbage in/garbage out.

    It seems like the only way to manage the process would be to present completely transparent competing studies. Or to completely discount the multiplier and work exclusively with hard costs and revenues.

  34. What I try to explain to the occasional journalist who asks is that it is true market phenomenon.
    If you’re just building more space at the same time everyone else is, you’re never going to get ahead.
    And in Las Vegas and Orlando/Orange County, the centers are financed by hotel room taxes that just keep going up–the wonders of casino gambling and Disney.

  35. David, that’s a big part of the reason Convention Center Follies ended up at more than 500 pages.
    I tried to pull apart the “economic impact” forecasts in a chapter, and I can pass it along to you later.
    The big thing is that the dear consultants assume that each and every attendee stays in town 3.5 days, thus using at least 2 or 3 hotel room nights.
    The reality actually works out to about one night per attendee.
    For the Javits in NYC, the numbers are far worse.
    PWC did an “economic impact” analysis for the Javits for 2013–595,000 total convention/tradeshow delegates, but only 256,000 “overnighters.” The rest were locals.

  36. And David, as far as the consultants’ math…
    I was doing a presentation in Tucson on one study, and put up a page from the study as part of my PowerPoint.
    They had a table of performance and forecasts, showing 5 conventions and 5 trade shows, adding up to “12.”
    The subsequent explanation from the consultant was that it was a table in Word that wasn’t updated from Excel, but everything was really right!

  37. Ha!

    Though as a frequent Microsoft Word user, I would not be the slightest bit surprised to hear that it thinks 5+5=12.

  38. I would love to read that chapter, if not the whole book. Working on and reviewing economic assessments was a very traumatic experience…

  39. Anyone else? We’re past the hour mark, but I can keep going if there are any other questions.

  40. Heywood and Neil,

    Thanks so much for this chat!

    Have either of you heard anything about what would realistcally happen to the EDJ Dome in St. Louis if a new stadium is built? The convention center? I’m imagining two huge stadiums, a convention center and a whole lot of empty dates.

    Heywood, any interesting notes about the origins of St. Louis’ convention center problems? As I remember, this whole mess started in the early 80s and has basically been one failed economic projection after another, compounded with a hotel.

    What makes anyone think more is better? Wait, you may have answered that already…

  41. “The current Edward Jones Dome would become ‘a competitive asset to use’ to attract conventions, Peacock said.”

    http://www.stltoday.com/news/local/govt-and-politics/planners-announce-open-air-riverfront-nfl-stadium/article_e1e77d44-59e1-50a1-87f4-17b56c6d233b.html

    Oh, I’m sorry, you said “realistically”…

  42. Neil, the talk has been that the Jones Dome would immediately fill up with more conventions once the Rams moved to the new venue.
    And Patrick Rishe at Webster U. has already weighed in with the argument that St. Louis would see a host of new major sports events at the Dome.
    The St. Louis saga is particularly funny or grim, depending upon your perspective.
    Then Mayor Schoemehl got a consultant study that said the existing center was underperforming circa 1984, in part because it’s environs on the north side of downtown were so grim. So they did the expansion, added the Dome, and the downtown folks built a big new downtown shopping mall across the street.
    Then the city financed a “headquarters hotel.”
    So now the hotel defaulted on its debt, and was bought for next to nothing.
    And the mall has effectively been demolished.
    But a new stadium will bring DOWNTOWN REVITALIZATION!

  43. My prediction of what would happen to the Jones Dome:

    http://www.fieldofschemes.com/2015/01/15/8355/meadowlands-arena-to-close-for-two-years-re-emerge-as-beautiful-butterfly/

  44. Adam, I don’t mean to try to sell more books, but Follies has a whole chapter on St. Louis. It turns out that the 1960s era consultant on the original convention center proposal said put it next to Union Station. If you build it on the north side of downtown, it will do half the business of a site near Busch Stadium or the train station.

    But the business guys, led by Lief Sverdrup, insisted on the north side site and got it. And the convention center has worked out exactly as the original consultant promised.

  45. I find this arms race for bigger convention centers and stadiums delusional. I can’t believe there are that many acts or events that can fill these places. I can only think of one or two stadium-filling acts and the political conventions only happen once every 4 years. (Although Billy Joel just announced his only California date at AT&T Park.)

  46. ChefJoe, if you’re still around or check back, I just looked at CSL’s market study for the Seattle expansion.
    How does a 55% increase in “direct spending” impact sound?

  47. It’s only delusional if you believe it in the first place.

    Heywood and I were discussing this a bit last night: Why on earth do city officials continue to believe the predictions of real-estate developers and their paid consultants, when they’ve been wrong time and again for decades? It’s something that’s deeply embedded in U.S. municipal political culture, for sure — maybe I should try to get the guys who wrote “Private Dollars, Public Stadiums” on here next, since that’s what that book is mostly about.

  48. Neil, let me chime in re our exchange last night.
    About “delusional.”
    The business leaders in St. Louis thought they had a commitment by Walt Disney to build an indoor version of Disneyland next door to Busch Stadium circa 1964.
    They were convinced with the stadium and the Arch, St. Louis was poised to be the great visitor center of the Midwest.
    Then there was the fiasco of the Spanish Pavilion from the NY World’s Fair.
    My take is that the business guys have the belief (or delusion) that these things will save “their” downtown.
    And somebody else always pays.

  49. CSL, needless to say, are the poster kids for “wrong time and again.”

    I’ve probably told this story before, but one time I was trying to get some info about a stadium economic impact study (not by CSL, someone else), and the press person finally said, “Listen, let me just put you on the phone with the economist who did the report, off the record.” And when I talked to him, he happily went on about how they’d accounted for substitution (spending in the stadium siphoning off spending on other things) for food but not for tickets, because “If you’re hungry you might buy a hot dog anywhere, but if you want a baseball ticket, you have to buy a baseball ticket.”

    I started to explain about how when I buy a baseball ticket it means I have less money to spend on other things, but he said, “No, no, see, you can buy a hot dog anywhere, but…”

    I gradually came to realize that 1) I knew more about economics than this guy, despite having taking one economics course ever, and 2) I clearly went into the wrong line of work.

  50. I think city officials let their egos get in the way. Springville had to have a monorail because Shelbyville put one in. (Simpson’s reference). “We just can’t be little ‘ol Anytown, USA” we can/need to be a destination like Vegas.” Problem is, if cities like LA, SF and San Diego have to shell out $ to get people to come, Anytown, USA doesn’t have chance in hell to improve its lot.

  51. Heywood, right, city officials always see these things through rose-colored glasses. But why? I mean, it’s been 20 years since the Simpsons’ monorail episode — you’d think everyone would know how the game works by now?

    The leading theories are the ones I laid out in my “Why Do Mayors Love Sports Stadiums?” article in The Nation a couple of years back: fear of being blamed for losing teams, desire for a big shiny thing they can point to as an accomplishment, desire to please campaign donors, desire to make the lobbyists please finally go away already. Still, it continues to amaze me the degree to which almost *all* local officials drink the Kool-Aid, when the vast majority of the public could see through it in a heartbeat.

  52. (I swear I did not read Jon’s comment before I made that Simpsons reference. Great minds.)

  53. What is your take on the Bucks arena? Do you think the state/city will cave? Democrat vs. Republican here so I think it will be good theatre.

  54. “Everybody is doing it” is definitely a factor. It’s way, way safer in terms of butt-covering for a mayor to do what all the other cities are doing than to go out on a limb by their lonesome. I imagine the sports-subsidy (or anything-subsidy) world would be very different if mayors were worried about getting laughed at when they went to mayor parties.

  55. Neil, which makes me conclude that they (the local officials) don’t want to really look at it.
    To add to your explanations, I keep seeing the fingerprints of the local business leadership in many of these things.
    And a big part of the dynamic is the ability to change the venue–to shift the deal and the financing from the city or county to the state.
    Just look at the Minneapolis or Atlanta stadium deals, or how it’s playing out now in St. Louis, where’s it the governor out front.

  56. Brian: The state of Wisconsin is all Republican, right? That’s where I’d expect to see some legislation coming from, if it does. (Not because Republicans are more prone to approving subsidies, necessarily, but because it’s easier to get controversial legislation passed in a one-party-controlled government.)

    I don’t expect any Bucks arena subsidy to be easy, though, or else it would have happened by now. Wisconsin is one of the few states to actually recall an elected official who cast the deciding vote for a stadium tax (for Miller Park), so that has to give politicians at least a little pause.

  57. And I did want to add for Jon, some places have a built in fiscal advantage.
    In Las Vegas, the LVCVA both owns the convention center (actually two) and markets the city.
    For this fiscal year, its revenues from hotel taxes and gaming fees is budgeted at $223.5 million.
    That builds a lot of convention space!

  58. And part of the problem is that in Milwaukee, the Wisconsin Center District owns both the existing arena and the convention center. So some folks want a convention center expansion instead of or along with a new arena.
    But look for Scott Walker to talk about “development potential.”
    And buy the way, the council has been working on a plan for a new downtown streetcar, just to add to the mix!

  59. Okay, last call for questions? I can’t speak for Heywood, but I have to take off at 3. (Or as the comment system, which seems to be using Nova Scotia time, would have it, 4.)

  60. Ahh, Neil!
    Can you guess what the folks in Halifax, Nova Scotia are busy building right now?

  61. A convention centre?

    Okay, that’s all we have time for today. Let’s have a huge round of applause to Heywood Sanders for devoting a chunk of his day to educating us about how everything is so much worse than we even imagined! Tip your waitstaff, drive safely, and we’ll meet back here next month sometime.

  62. Heywood, 200% increase in space and 55% increase in a projection agrees with Neil’s use of inverse-square laws. Sorry, got distracted reading about why someone would try to move a modern-ish building from NY to STL to honor their heritage.

    Maybe I should try pitching that to the seattle city council. Seattle is big into recycling so maybe we should move someone else’s old NBA arena here. We already recycled much of the KeyArena when that was rebuilt/refurbished. :-)

  63. ChefJoe, and a lot of money to pay for it!
    I actually predict a minus 10% in direct spending post-expansion.
    But they pay CSL more.

  64. Given what you know (admittedly there are a lot of unknowns), how would you assign probabilities of the following:
    A. Stan builds a stadium and moves to LA no matter what
    B. No matter what STL does, Stan builds a stadium only if LA gives him a certain amount of tax breaks
    C. St Louis builds a new stadium and the Rams stay
    D. St. Louis doesn’t build a stadium and the Rams stay as Stan is bluffing?

  65. Hey Neil,

    I was trying to reference that Lasry and Edens are big Democratic donors so republicans would be hessitant to hand money to them.

  66. Thanks for the reply on the Wrigley question. Hope to stick around for more of the next one of these.

  67. Josh: Reply cloudy, ask again later.

    Brian: I think “rich dudes” trumps “members of opposite party” in this case.

    Hope everyone enjoyed this as much as I did. We’ll have Heywood back at some point soon, but in the meantime I’m going to try to line up some other folks to guest on the next chat or two.

  68. Thanks Neil. It’s nice having people with different expertise drop in for these.

    FYI, your co-subcommittee testifier Nick Licata just announced his pending retirement from the Seattle City Council.

  69. Well, maybe not retirement completely but won’t run again for council/will focus on other efforts.