FoS 20: Nick Licata on how to fight for fairer stadium deals

I’ve written at length about how if cities want to avoid getting screwed in stadium deals, they should look to Seattle. (That was pretty much exactly the headline, even.) That wasn’t always the case — the Mariners and Seahawks deals were as big giveaways to team owners as you could find in their era — but starting with the passage of Initiative 91 in 2006, Seattle has been at the forefront of demanding that team owners and stadium and arena developers show how any public money spent on sports venues will pay off for the public.

A large part of the credit for that goes to Nick Licata, who — first as a founder of Citizens for More Important Things, which helped pass I-91, and later as a member of the Seattle city council — helped push for sports projects to be evaluated not just on whether they’d make the team owners happy, but whether they’d be good public investments. Since leaving the council three years ago, Licata has been working with cities nationwide on implementing more just local policies, both via a new book and as chair of the progressive governance group Local Progress. Listen below as we discuss the relationship between good government and good citizen activism, and we totally fail to reminisce about that time we both testified before Congress together.

ND: Hi, and welcome to episode four of the Field of Schemes 20th anniversary interview series. Today’s guest is someone who — and this is the first guest I’m getting this to say about — I first met when we testified before Congress together: Nick Licata, who’s been one of the driving forces behind ensuring that in particular the city of Seattle, but also cities in general, get stadium and arena deals that are fair for the public. After serving as co-chair of the community group Citizens for More Important Things in the 1990s — one of the community groups with the best titles ever — Nick served 18 years on the Seattle City Council, including several years as council president, before retiring in 2015; and since has authored the book Becoming a Citizen Activist: Stories, Strategies and Advice for Changing Our World. Nick, it is an honor and a pleasure to have you here.

NL: Thank you very much for inviting me to talk to you.

ND: You and I have talked over the years about Seattle and stadium deals in general. But I don’t actually know the story of how Citizens For More Important Things got started, and how you got involved in that.

NL: Well, I had been a citizen activist; I was not a city council member at that time. And I’ve always been concerned about how public money is spent, which is a concern that cuts across the political spectrum. And I saw that we were talking about giving literally hundreds of millions of dollars to a private corporation, and a lot of people were on board because they ran a professional sports team — in that case it was the Mariners baseball team in Seattle. And, you know, I’ve gone to the baseball games as a spectator for a long time. I was in Little League, that kind of thing. But it just struck me as, quite honestly, unfair. Why are we giving so much money to what is a business?

And so I made a few phone calls, and I ran into someone I didn’t know really well but who’s active in the Democratic Party, and he was saying yeah, we’re going to put together a group. We talked about a title, and came up with Citizens for More Important Things. It’s funny, ’cause I was just with him yesterday, Chris Van Dyk. And Chris initially thought, well, we’ll just run a few ads and we’ll just see what happens. You know, try to slow this ball down. And things got away from it. The media, actually even the media that was critical, liked the idea of a debate. Community groups responded very well. And then of course the folks that were, I would say, hardcore baseball fans were upset that we’d even question not spending hundreds of millions of dollars to what they say would save the team. So we were all of a sudden thrust into the middle of this great debate.

ND: But people forget that, this was ’95, and everybody always talks about how the Mariners made the playoffs and everybody rallied around them. But there was actually a public vote in Seattle right as the Mariners were about to make the playoffs, or just made the playoffs, and public funding was voted down, right?

NL: First of all, the vote was so close that initially— because we have, even then, a lot of voting is done by by mail — we thought we had perhaps lost the vote. But it turns out we won; we found out a few days later. And then we had a governor at that time, very progressive governor, Mike Lowry, a good friend of mine. But like I said before, the blinders sort of get put on when you talk about sports economics. There were very strong progressive or at least liberal Democrats who were like, “Well, we still gotta save the team, or we still gotta keep it here.” And they would bolster those arguments by basically arguing it’s economic development, which never panned out.

So in any case, he called a special session, which is not all that common, and called the senate and the house together in Washington state. And they came up with a slightly different funding plan, so they could argue that it wasn’t exactly overturning what we had voted down. But in fact in spirit it certainly was. And they ended up giving roughly $500 million to the Mariners.

ND: When did you first run for council?

NL: I ran for council in ’97 and then my first term began in ’98. And I was there till the end of 2015.

ND: And was that a direct result of you having seen what had gone on with, not just the Mariners deal, obviously, but what you’d seen going on as a citizen activist?

NL: Sure. Before then I was very involved in a lot of local issues. Funny you should mention that I did go to Congress talking about professional funding of sports teams; the first time actually I was brought to Congress — and this is both times as not an elected official, just as a community activist — I was there to argue against what they called redlining, and actually help get the legislation passed requiring banks to show where they were making investments: the Community Reinvestment Act. It’s amazing that I had those two opportunities.

So I was working as, of all things, an insurance broker, because I took responsibilities — raising my kid, along with my wife. I was still very involved in stuff, primarily around trying to stop the nuclear weapons arms race and things of that sort, environmental issues. And I was enjoying that far more than being an insurance broker. So I finally just quit that and said, okay, I’m doing so much of this activism, I was sometimes barely in the office — they used to ask me, do you still work here? I was actually scheduled to be management, and I just didn’t want to do that. So I said, “I’ll just leave. You can have all my business,” which consisted mostly of artists. And there was an opening on the city council, and I decided I’m just going to go for it. I figured why not — this is what I’m doing anyhow. Maybe I can get paid for it!

And amazingly I won. Although I quite honestly for a while there didn’t think it was going to happen, given that at that time we had two major daily newspapers, and they both came out against me, as well as the mayor and the majority of the City Council, and on and on. But I had a large network of grassroots people that wasn’t created overnight. It was created over literally a decade or more of working a number of different issues.

ND: That’s interesting, because I think one of the arguments that a lot of politicians would make in terms of not just opposing sports stadium deals, but taking a stand on a lot of issues is it’ll be the nail in the coffin of your career. And here you were somebody who was coming from the outside to some degree and did not have endorsements, but you had a lot of support because of all the grassroots stuff you’d been doing.

NL: Yeah. Actually, that lesson to me — well, two things. One is since I didn’t expect to win, and I did — I mean I tried very hard; it wasn’t like I was sloughing off — once I got in I said, okay, I’m sure that that they will come after me next time and I’m not going to worry about it. Tthis is my advice to anyone in office: You can’t look behind your back all the time, wondering who you’re going to offend or whatever. All you have to do is explain why you’re doing something. You’d be amazed how many people respect why you’re doing something. I had a number of people who actually thought differently about my position on sports teams — although the majority were actually in favor of my position. But they said, you know, you explained it. You didn’t make it personal. I really tried to avoid attacking personalities, but just laid out how what they’re saying doesn’t pan out. I relied a lot on research; I always do all my own research and data. And I noticed if you talk just rationally and respectfully to people, even though they disagree with you, at least in my situation luckily, they sort of cut you a lot of slack. They say okay, at least I know where you’re coming from.

A lot of people said that. So I was very fortunate. I got elected to five terms!

ND: How involved were you with Initiative 91? This is obviously one of the big turning points in the Seattle sports industry, right?

NL: By that time I was already on the council, and I was not the face of the campaign by any means. But everybody who was at the core of putting it together were people who helped me get elected, who I was in touch with. So I worked with them, basically helping design it. Certainly I became a strong supporter early on. I’ve always been writing up op-eds; I probably wrote an op-ed or two on it. The media sometimes would label me as the creator or originator, which is not true. There were people who put a lot more time and energy into it than I did. But because I had such a track record, sometimes the media doesn’t dig deep enough and they just use the quickest thing possible.

But I would say that the unions played a very strong role — SEIU in particular. And to the extent that they did, it was recognizing that if we continue to go forward as we have in the past, we’re literally taking money away from more important things. Our infrastructure is falling apart. We know we need to improve community-police relationships. We need to basically do things to help folks — at that time, homelessness was not the kind of problem that is overwhelming us today, but still, affordable housing was starting to get tight. So there’s a number of ways that we can use public dollars to benefit the most people and that’s what I’ve always argued. I even argued, if you want to subsidize sports, then do it in a rational way.

In fact, that’s what it was all about: We will loan you money at the best rate possible — the rate that they charge for government bonds. But still, it’s a loan. We’ve got to get our money back.

ND: Right. And that was the pioneering thing about I-91 is that there had been referendums before that mostly tended to say, you need to have a public vote before you can have approval of any expense on stadiums over a certain amount. Which was helpful, especially if you were in a city where otherwise it tended to all get done behind closed doors and presented as a fait accompli and nobody ever got to vote on anything. But I-91 was very different in that it wasn’t that — it was based on, okay, anything that happens here, the public needs to get a return on their investment. Which was an idea that had been kicking around in stadium circles for a while, but nobody had ever actually put into legislation.

NL: I mean, it passed overwhelmingly. It was no contest. And again, I’ve encouraged other cities to look at that as a model too: Avoid falling into the trap of, are you for or against baseball, football, basketball, whatever. Are you for in favor of our team or not? Our response was always yeah, we’re in favor of them. But, you know, not to the point that we’re going to take money away from babies and people who need assistance.

So let’s work out something that is reasonable. And the loan situation was very reasonable, and I think people saw it that way. It was like, okay, that makes sense. We’re giving in money for a certain period of time. But you’ve got to give us a return on it. And again, the return was so quite obviously very low, but it still made the point that this is not a giveaway. And I think people like that.

ND: Are you surprised it hasn’t caught on in more cities? I kind of am.

NL: Part of the reason it probably hasn’t is like all of these, I would say, creative solutions that you find in many cities on many different issues, is the need to really get that information out to the cities. You need an ongoing organization that distributes information so they can help one another.

I went from there doing a number of other things, one of which was creating this national organization called Local Progress. I pulled together the first meeting and it went awesome — in fact, I just got back from Minneapolis where we had our annual convening meeting, and we went from less than 30 people, by now it’s close to 800 members across the country, who are self-described progressive municipal officials, and that’s a the broad definition. But basically, yes, we believe in social justice, economic opportunities, making sure there’s racial equality. Those kinds of things. But also cities literally are experimental labs where people are doing things that are innovative, unless they’re stopped by the state and preempted, which is an ongoing battle.

So no one’s really taken that idea and run with it as hard as they could. You need an organization for doing that. Subsidizing sports teams is still a little bit off the radar for so many of the big issues — obviously you’re talking about immigration issues, obviously you’re talking about, unfortunately, violence of police to minority communities. So that is just higher on the agenda.

ND: Does it also hurt that the Sonics did leave after that? Obviously it wasn’t because of I-91, but—

NL: Yeah, it did obviously. The Sonics were always liked. But as I point out, the Sonics left because the owners decided to move. It wasn’t any politician, it wasn’t even the public. It’s a private enterprise. And they decided they wanted to go somewhere else. And that’s really the downside, sadly, of so many professional sports teams — with the exception of Green Bay — the communities really don’t have an investment in them.

ND: Right, or any kind of hooks in them.

NL: Leverage.

ND: As I think we said in our book, but we certainly said over the years, they always say “And now, your Chicago Bulls,” but they’re not really your Chicago Bulls.

NL: Exactly.

ND: I was going to say, it almost even seemed like the way that David Stern the NBA responded to the Sonics leaving, there was not just a “This team has the right to move,” but a “We’re going to make an example out of you.”

NL: Oh, totally.

ND: Because it doesn’t happen that often that teams leave because they are saying that they didn’t get a better stadium or arena deal. And it’s very much a “Well, you dared to make demands of the local sports team owner, and we just can’t have that.” And David Stern over and over again said, “We’re never going to give them another team unless things change.”

Which leads to my next question: It seems like in the long term, obviously the Sonics fans and basketball fans have been unhappy about the team leaving. But the way it’s turned out for the whole discussion that happened around Chris Hansen’s plan and now the Key Arena redevelopment, it really went a completely different way than it does in a whole lot of other cities because you did have I-91 as that governing principle. Regardless of what the specifics of the law said, the idea there was, well, you have to show how the public is going to get some kind of return on their investment.

NL: Yes, exactly. What it did is it created a framework that the public officials felt that the public had already spoken on and quite loudly. Technically legally they could probably still get around it, but I think I think we affected the culture to the extent that when professional teams, in this case, are looking at coming to Seattle, they figured, well, you know, they didn’t do too well. They didn’t really pay attention to what the public’s concerns were. So I think they wanted to make sure they mad an offer that was good enough that they couldn’t be attacked on those grounds. And the thing about Stern that’s funny to me — I think I even remember somewhere he actually personally at me once made some swipe and it was “Oh my god, this guy is so petty, I can’t believe it.” Identifying individuals in cities because, like you said, we dared to question, in that case, a sports clubs of millionaires, probably in some cases billionaires, that own these teams. And they just didn’t want to see their profits clipped.

ND: But at the same time, the way things have turned out — and certainly Seattle doesn’t have an NBA team now, but they certainly are being considered for one — it goes to show that if you have a decent market, the sports leagues can’t blacklist you forever. It would be cutting off their nose to spite their face for the NBA to say, “Well, Seattle treated us wrong, so therefore we’re just not ever going to go to Seattle again.”

NL: Right. If we were a different city it might play out differently. But the reality is it’s a marketplace. And if you have a good market and they have a good product, they’re looking around at their competition thinking, “I could tap this market.” And they look at the cost and the cost-benefit analysis. And the reality is that the kind of requirements we put on and the kind of discussion we’re having are not really going to affect the bottom line all that much. You just work it into the business pro forma and they go, yeah, this works, we can do it.

ND: Something that always gets to me is that city officials never seem to understand the leverage that they have. It’s a negotiation — you can’t just go in and make all the demands that you want, say okay, this is how it’s going to be. But if you’re a city official in a city of any reasonable size, you have a market that is valuable and you are able to put that on the table up against the sports team owner who has a sports franchise that is valuable in the same way. You can’t have a sports team without an owner and without a franchise, but at the same time you can’t have a sports team without a place to play.

And I guess I’m curious, as someone who spent a lot of time both in Seattle local government and also talked to other elected officials, if you have a sense of why that is. Why does it seem to be that whether it’s sports teams or it’s an Amazon or a Boeing or whoever it is, it always seems to be this idea of “We’ve just got to do whatever they say, because they’re the ones who control the economic activity and it’s just the way the game is played”?

NL: Well, that’s a good summary. I honestly agree. Most elected officers really want to do the right thing, they really want to benefit most people. But what happens so often is once they get into office, and even when they win without the support of big business, often they’re still intimidated by big business, or deep pockets. Because I think they lose faith in how they got elected — they lose faith in the potential strength that citizens have if they’re organizing. And that’s why one of the things I always argue is that once you get elected to office, you’re still a citizen. If you were an organizer before, you continue to be; and if you weren’t before, then you should become one. Because the only way you’re going to get anything passed as an official is if you can demonstrate to the other people that you’re trying to get votes from on the council, whatever, there are a lot of people supporting your position.

So I think what happens is that council members — or whoever gets elected — lose touch with their own base. And you have to remember that the folks with money are almost always more likely to be lobbying you. And most of them are very nice; a lot of them are very intelligent. It’s a very slow process of acclimating yourself to “Oh, these are reasonable people.” And then the worst thing that happens, I think — it really tips the balance — is that when they say, “Well, let’s study it,” inevitably they bring in consultants or economists who are probably predilected to noticing and measuring all those things that are good about having a sports team as opposed to lost opportunity costs, which they almost never measure.

And secondly when there’s what’s called a request for proposal, they shape the research in a way that almost inevitably leads you to the conclusion that having an investment of a hundred-plus million dollars is something that will benefit the city. They never do a cost-benefit analysis, a strict one — but they can point to some multiplier effect, which often, as you know, means every dollar they spend on getting the sports team is multiplying more jobs or more economic growth. And that’s a very loose number, if not imaginative.

So the elected officials set themselves up not to challenge the person on the other side of the negotiating table to do the best they can to help the citizens. It’s sort of “Oh, okay, we hear your argument, and we see that we got this study that isn’t really in-depth but it looks like it will support what your cause is.” And then they just roll over.

ND: Yeah, I feel like people in general misunderstand the role of money and the way it works in, certainly, local politics. I think there’s this idea that people are going in and buying politicians, either by offering campaign money or by outright bribes — or by something that’s more of a direct process. Whereas, and you’re not the first person I’ve heard this from, that it’s more about buying access. It’s about the fact that if you’re the big local business person, whether it’s sports or some other business, you can be the person who is having the lobbyists and the people who are constantly in the ears of local elected officials, whereas people who are not in that position have to do that the old fashioned route of trying to call people’s offices and get through to the right person. Is that a fair way of putting it?

NL: Yes. I mean, certainly large contributions do make a difference. And we have in Seattle caps on contribution limits. The last I checked, $750 is the most you could give in any four-year period. So it’s not a whole lot.

But think about it: If you collect ten of those, that’s a lot easier than trying to collect hundreds of twenty-dollar contributions. And also if you look at almost any election, and I’ve looked at Seattle’s and a couple of other cities, you find almost inevitably less than 2 percent of the people voting are giving any money whatsoever to a candidate. So the money makes a difference, but it’s also the access. You remember who gave you money last, you remember who endorsed you. And you build this sense of feeling comfortable around them — feeling like they’re not really trying to manipulate you. And often, quite honestly, the way I’ve found that key businesses — sports teams, whatever — work is that for the most part they don’t care about what you do, particularly in Seattle, on social policy issues. But when you’re talking about something in their play box, they are there a hundred percent and you better be too, or they’re just going to remember that they can come back after you.

ND: Is there any way to do anything about that? Just the fact that once you’re in elected office you are soaking in this world of the business-politics complex, whatever you want to call it, that is going to be steering you towards a certain view of governance.

NL: Well, the short answer is yes. And the longer answer involves basically looking at public financing of campaigns that will allow people who are not wealthy not to be beholden to special interest groups once they get into office. It doesn’t guarantee you’re going to win. But Seattle passed the most unique public financing arrangement in the country, called Democracy Vouchers: Essentially every resident in Seattle up to a certain age gets what’s called a voucher — fifty dollars, and you can give that to a candidate, and the candidate field then can help finance their campaign.

But other cities have various formulas for doing public financing. And what’s really interesting, as a side note, is that with public financing what they’ve discovered is that the group of people who are less likely to run unless they know that they can raise money are women. So an unintended positive consequence of public financing that you find more women running for office.

ND: More broadly, how do you see things going both in the sports stadium world and in terms of how these kinds of decisions about how our money is spent get made? I periodically get asked, “Do you think the tide is turning?” because there’s some success here or there, and I’m always like, “I don’t know, the last five times I predicted the tide was turning I was wrong, so I’m always hesitant to predict it now.”

But this is something clearly you’ve been working on, especially since since leaving the Seattle council and helping form this organization. Are there promising signs? Are there directions that you see are ways to work towards getting to the point where maybe we won’t be having to have this same conversation in another 20 years?

NL: Yes, I do. I believe that strongly. And I as evidence point to, say, over the last two or three decades, what we’ve seen is that cities, particularly our larger cities, have had much more responsive elected officials to their local voters than I think in prior years. And I would measure that by the number of cities who — and you’re in a better position than I am I think — have looked more with a critical eye at just opening up the coffers for professional sports teams, but also at a number of issues that have developed in cities. The last number I’ve seen, up to 10 million people have had higher minimum wages, benefited from them, who live in cities where they’ve passed increasing the minimum wage. That wouldn’t have happened two decades ago. Same thing with paid sick leave. In other words, a number of laws have been passed by councils and mayors who I believe have benefited from the grassroots organizing. But also it’s like changing the culture in that it’s no longer, first of all, white men with cigars in a backroom — you have more ethnic, racial diversity — and also with the growth of public financing, which has been around for a little but growing, you’re getting a more diverse group of people who are in office.

One of the things that I find going around the cities and talking about my book Becoming a Citizen Activist — I always go to talk to people on city councils — one of the arguments that is used that weakens democracy is “The government’s bad” or “We want to shrink government” and “Government’s the enemy.” Well, depends on the government. If you’re talking about dictatorship, yes, that’s true. If you’re talking about democracy, then I don’t think that’s true — in fact, you want a democracy that has a functioning government. Because if you don’t have a functioning government in a democracy, then power is going to fall to those who have the most wealth — who have the most access to those in power and most access to politicians.

And what we’re now seeing is a battle going on. The states are not as close to voters as cities are, and in states like Arizona, for instance, the citizens in a number of cities passed bans on plastic bags because they were concerned about the environment. The state legislature is controlled more by big money, and passed laws that said cities can’t do that any longer. That’s true for any number of other bills or regulations that local cities could pass that states that are more, I’d say, in the pockets of people who have large donations try to override them.

So there is an ongoing struggle right now. We haven’t turned the corner, but we have made progress and the only way we’re going to continue to make progress is to continue to build on what we’ve already accomplished. And to continue to support organizations outside of government, but also people who are in government to make sure that they’re working with a wide range of constituents as possible.

ND: Well, I, for one, promise to try to live long enough to see this change completed if you do.

NL: Right, we all do. This is the thing: I’m somewhat of a believer that we’re never going to live in nirvana, okay? There will always be challenges; there will always be things that are not right; there will always be shortcomings to people that you elect to office. But the moment you believe that it’s not worth trying, then it’s like walking away from the game, because the people left at the table playing the game are totally going to get their way, because they’re not going to look out for your interest.

So two things I keep in mind is: One, you have a choice — you have to participate in the game of politics and the game of democracy, because if you don’t someone else is going to run your life. And secondly, you should enjoy that game. It’s like sports. You got to think about it as: This is not just good for everyone and yourself, and not only does it create good, but it’s a good process to go through. That’s why I’m a strong believer in democracy and argue that we have to, if nothing else, protect the vibrancy of our democracy.

ND: Now I’m kind of wishing that I were writing a new book, because that would have been a perfect closing quote.

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3 comments on “FoS 20: Nick Licata on how to fight for fairer stadium deals

  1. A really good interview… it almost gives us…. hope?

    Qu: Do you think that the expansion of sports leagues (and the consequential ‘reduction’ in the number of available and viable markets) is having any real impact on the stadium extortion game today? How about going forward?

    We are already seeing what appears to be a practical limit on MLB host cities… and it’s not a theoretical or mathematical maximum… it’s that there just aren’t many available markets that could support the MLB model (even with a sweetheart stadium deal). There might be a couple of places they could go, but I’m doubtful either would be top 15 markets… they are more likely to be bottom 6 markets.

    Of baseball’s last four expansion teams (Col, Arz, Mia, TB), which have really proven to be slam dunk successes? Some are better than others, obviously, but none are exactly economic drivers for the league. If Montreal, Portland or a third team in NY/NJ was added, are they more likely to be a new Red Sox or a new Marlins?

    Similarly, the NHL has added some really questionable markets (Phoenix, Carolina, Florida, Columbus, Nashville, Winnipeg v2, Ottawa). I understand the “geographic footprint” argument, and the value of being in all of the top 20 media markets in North America. But looking at the Coyotes alone, since 2003 (when they moved to the desert) the franchise has lost more than $500m on operations (more than $600m by some estimates). About half of that (since revenue sharing was created) is actually revenue that was earned by OTHER teams tipped into the black hole in Glendale.

    So, there’s value in being in a market… but I’m not convinced that the real or perceived value of having a franchise in Phoenix is worth what the NHL as a whole has paid to keep one there.

    Vegas was a cinderella story – in year one. Full credit to ownership as well, they did pretty much everything right. But let us revisit this great success in year ten and see how they are doing.

    As has often been said, the NFL could put a team literally anywhere and it would make money… the last expansion teams in that league are doing just fine (ok, financially just fine…). But apart from non-US based expansion (be it London, Toronto, Mexico City etc), where can they go now?

    Back to St. Louis or San Diego? San Antonio? A third LA or NY team?

    Looked at from the opposite direction, what would be the economic downside if the league left Indianapolis, Buffalo and Jacksonville?

    And what of the NBA? As stated in the interview, they have more or less red flagged Seattle as a place they won’t go back to until the political climate for giving billionaires tax money eases.

    Yet Seattle is pretty much at the top of the expansion list and has been roughly since the Sonics left. Who else is even on this “list”?
    If they don’t expand to Seattle, where will they expand to?

  2. I don’t think expansion has had much impact, no. Sure, there are no more top-15 markets out there, but that’s been true since the leagues had 20-24 teams each, which was a generation ago at this point.

    There’s always a balance between wanting to grow the pie as large as possible and wanting to divvy it up amongst the fewest owners — but that was as true for the Original Six NHL as it is today. If MLB could get $2 billion a pop for expansion teams in Louisville, Portland, Montreal, and San Antonio, I bet it would hand them out tomorrow — well, day after tomorrow, leaving tomorrow to demand that those cities all agree first to stadium deals.

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