Pawtucket soccer developers announce plans to seek Trump tax breaks for stadiums in Baltimore, Cleveland, and more

The story of the $45 million Pawtucket minor-league soccer stadium seeking upwards of $70 million in tax breaks and the story that the United Soccer League is seeking to leverage Trump’s Opportunity Zone tax-break districts for more stadiums just had a baby, and it is this:

Fortuitous Partners Brett Johnson and Berke Bakay announced that they are looking to do developments in Baltimore, Cleveland, and other cities around the country…

Johnson during the interview said that Fortuitous Partners is also looking at Baltimore, MD; Cleveland, OH; and other cities for their opportunity zone driven sports complex model.

Opportunity zones, as I’ve written before, sound simple but get fiendishly complex in their details. On the surface, they’re just like other tax-subsidized districts like “enterprise zones” and “empowerment zones,” where developers get a tax break for building in “disadvantaged” areas, which is theoretically supposed to help the disadvantaged residents. (A report by Good Jobs First notes that the results of those earlier subsidy zones have been “not encouraging,” with little in the way of new economic activity and even less in the way of new jobs for locals.)

But the tax break that an opportunity zone earns a developer is a weird one: You get exempted from paying capital gains tax, but only on businesses that are owned by a “qualified opportunity fund,” meaning developers (or soccer teams) would likely need to set up a new shell corporation to own whatever it was they wanted to dodge taxes on. How that works, and what the IRS will let investors get away with, is still being figured out — the Trump administration implemented opportunity zones without really figuring out first how they would work, which is kind of turning into its brand — but clearly these Fortuitous folks think they know how to do it, or at least are trying to get dibs on lots of opportunity zone land for soccer stadiums and then will figure out the details later. Baltimore and Cleveland journalists, you might want to get on this, if there are any of you left.


33 comments on “Pawtucket soccer developers announce plans to seek Trump tax breaks for stadiums in Baltimore, Cleveland, and more

  1. I’m shocked! shocked to find that wily capitalists are continuing the long, honorable American tradition of exploiting loopholes in complex legislation written largely by self serving lobbyists, politicians, and bureaucrats.

  2. re: the “Good Jobs” report, this is pretty standard stuff unfortunately.

    The sad fact is that the poor people in these “disadvantaged” districts rarely have the trades training or experience to get the high paying construction jobs… so those jobs – practically without exception – go to skilled trades and other workers from outside the region. If the locals get anything at all, it tends to be the low end jobs (basic labourer, janitor, security, working in the cafeterias etc). And those are often temporary in nature.

    Having worked on major construction projects in my younger days (I once worked on an expansion project that cost $700m and created just 10 additional full time jobs…), I do not have a solution to propose for this -other than to not use megaprojects as a means to allay poverty… something they practically never do – unless you consider making some millionaires into billionaires an effort at allaying poverty. The types of skilled trade and engineering jobs we are talking about literally cannot be done by workers without the appropriate training and experience. This takes a minimum of 5-10 years to accrue in most trades and engineering roles.

    It’s a military level catch-22. If the people in these regions possessed the skills and training to do the jobs that are coming, for the most part they wouldn’t be poor and probably wouldn’t be living in the disadvantaged area in the first place.

    The notion that a megaproject can help poor people is practically always incorrect. Often it is a deliberate lie told by the projects’ proponents – those who DO stand to gain significantly from the project.

  3. To John: We have a real & viable Solution. It’s Called “Stocks for Stadiums” We can now underwrite sports stadiums and offer everyday average citizens, even the basic “(basic labourer, janitor, security, working in the cafeterias etc) the opportunity to be an investor and also benefactor of sports stadiums. Think I’m crazy? This plan is been approved by the SEC – That would be the Securities & Exchange Commission. So Yes, – it’s real. You can Buy – Hold and Sell Stocks in these Sports Stadiums and be a participant in the earnings like Parking revenues, Food & merchandise revenues, advertising revenues, paid to you the stock holder as stock dividends. you do not need to be a gazillionaire to be apart of a Sports Stadium anymore.
    As Mr. Neal deMause article,- You should check your liberal bias at the door and do more research. The Opportunity zones have been in the works for a decade – long before Trump became POTUS. In fact, it was also initiated by a bipartisan group including Cory Booker (D). Trump, for your attack comment, had very little to do with it. See Here => www.forbes.com/sites/forbesdigitalcovers/2018/07/17/an-unlikely-group-of-billionaires-and-politicians-has-created-the-most-unbelievable-tax-break-ever/#74b219441485

    Before you attack Trump – Check your facts !!

    -Cheers !

    • The problem with selling stock in stadiums is that stadiums typically don’t make any money — all those revenue items that you list go to the sports team tenants, not the stadium owners. Sure, you could arrange a lease where the team repaid the stockholders in concessions revenues, etc., for their capital, but then why wouldn’t the team owner just finance it themselves? These people are billionaires, it’s not like they don’t have plenty of access to borrowing.

      As for Trump and Opportunity Zones, I’ve read that Forbes article before, but it doesn’t change the fact that Trump implemented this idea that had been kicking around in development-subsidy-wonk circles for a few years. If you want to blame Cory Booker as well, though, I’m always game.

      • Neil: That actually isn’t a problem in fact – Our market research has found:
        1) Fans Want a seat at the table, 2) They would rather have the choice to be invested and hold that value than to be taxed yet again to subsidize another billionaire sports team ambitions. Don’t believe me? ask a Green Bay Packers Fan How much they get in returns on their money? Yet in 2012 The Packers Raised 67 Million for Stadium Renovations in 12 weeks. Did ANY Fans get ANY ROI => Nope ! They just want to be participants with their home town team. So your argument is as Fails again Please Try Again !

        • If your argument is that fans can be snookered into giving money to their teams for new stadiums while getting nothing back in return, I’d say that very much still is a problem.

          (Also, the Packers are of course a special case, since they’re owned by thousands of private fan shareholders. Something tells me this wouldn’t translate well to teams owned by billionaires, though it might be an option that F.C. Barcelona could try.)

          • Neil: You fail to understand – 1) Green bay packers fans are invested in the TEAM & not the Stadium 2) We are promoting Fans & average everyday Citizens can now be invested in their STADIUM … not a Team ownership structure. So there is an important Difference here you need to understand. This is NOT a plan or model or scheme to “Snooker” anyone. This is market based solution to the Actual real scam of billionaires getting cities to tax citizens to pay for their sports stadium ambitions where citizens get nothing in return for being taxed ! Why do you think Mayor Libby in Oakland won’t give Dave Kaval & the A’s ANY Tax payer funding for the new stadium ? Do you fail to understand that also? Here is very basic example -Easy to understand… Any City USA wants to build a sports stadium for their home town team… It will cost 100 Million. The owner of USA Sports Team demands the City fork over 100 Million to build a stadium for their Team OR… they are going to pack up and move to Vegas (Sound Familar?) Like the Raiders. The City doesn’t want to incur the anger of avid sports fans when their home team leaves SO the City obliges and increases taxes on citizens to build a sports stadium – There is ZERO return on that Investment. It’s free tax payer money for billionaires… (That’s the Current Model) OUR MODEL, is,… We step in and offer to build this coveted sports stadium for them & we don’t need ANY tax payer money at all (The City likes this) ( (Taxpayers likes this) & The Team get’s their new stadium to play in ! FANS win because they are now actual Stock holders (holders of actual value) on the STADIUM,.. (which is the Real Estate underlying the value of the Stocks issued) Fans get to help support their Community & Home town Team. The Billionaire Team owners, No longer have extortion leverage (aka: Excuse to get free taxpayer money) to leverage getting a New Stadium built for their business interests for free. Thus => Shazam !!!…, We Solve the tragic problem of Billionaires stealing money from taxpayers using city governments as their mechanism to gain free business subsidies… If you need an even more simple explanation, perhaps one that a 5 year old can understand… Please let me know. Happy to help you.

          • Hang on, I’ll be right with you after I’ve restarted my perpetual motion machine.

  4. No Problem. – I enjoy the debate. I welcome anyone that thinks they can explain why this doesn’t work??? Please do try.. I invite it !

    • Who is the “we” you are referring to in your previous post re: “Our research shows…”?

      What organization do you represent?

      With respect to your other claims, any “investor” in the stadium side of sports extortion gambit you are proposing will be fleeced every bit as badly as Mr. Trump’s Casino employees/investors were. The stadiums do not make money: the teams that control them do. All a “citizen investor” would be doing is donating their money to an investment fund that will never turn a profit – a fact I’m quite sure your organization is well aware of.

      Your “plan” will not work for the following reason:

      The $400m stadium in which the franchise plays will lose money on operations each and every year. It will do so because the franchise that plays in it (owned by a private sports cartel member) will pay less than the stadium’s annual operating cost to do so, never mind offering any contribution to the capital construction cost.

      After 20-30 years of playing in this stadium and paying less than, say, $2m annually to do so (leaving a $4-8m hole in the operating budget each of those years), the private sports cartel franchise owner will demand a new stadium. Your corporation will by that point be holding $150-180m in accrued operating losses (assuming it can find ongoing financing… which is going to be tough on an asset that is depreciating at 15-20% per year), plus $20m-50m in as yet unpaid property taxes and compulsory upgrades that the franchise owner has demanded and is due under contract.

      Assuming you aren’t going to try to sell PSLs to your fan funded facilities (btw, franchise owners tend to want all those revenues too… along with the naming rights for the stadium they didn’t pay for and don’t own in order to avoid paying the property taxes your group will be paying), you are going to struggle to cover that $200m hole.

      Even if you have some vague idea how you might cover that $200m plus shortfall, you will then run into the problem of demolition costs for the stadium the franchise owner no longer wants to play in, and the problem of trying to find a new group of fools willing to plunk down their hard earned money so a billionaire can avoid saying he wants tax money for another new stadium.

      What you fundamentally appear not to understand is that if the billionaires were willing to pay reasonable market rent on a stadium the current con game (as well as this website, in all likelihood) would not exist. Host cities would simply use municipal bonds to fund construction and then charge enough rent to cover operating, capital improvement and debt service costs annually.

      Forming a corporation to take in <$2m in annual revenue with annual operating expenses in the $5-10m range and associated non operating expenses in the $2-4m range solves nothing.

      What your plan is selling is akin to the Florida swamp land sales of the last century… and to use your own insult, it is something any five year old should be able to see through.

      Please provide the name of the organization you represent (as well as any affiliates) so that I can ensure I avoid any financial exposure to same. Thank you.

  5. Thanks for your reply John:
    Who is the “we” you are referring to in your previous post re: “Our research shows…”?
    With respect to your other claims, any “investor” in the stadium side of sports extortion gambit you are proposing will be fleeced every bit as badly as Mr. Trump’s Casino employees/investors were. (Ok 1st …Trump has NOTHING to do with this but if it makes you feel good… Have at it) The stadiums do not make money: the teams that control them do. (True ? So why should Taxpayers subside these Billionaires for Free ? – that’s Logical) All a “citizen investor” would be doing is donating their money to an investment fund that will never turn a profit – a fact I’m quite sure your organization is well aware of. (As per my Previous Comment – FANS & Citizens want a Seat at the Table & Not forced to pay another TAX imposed upon them by government to support another Billionaire & their Sports Team Ambitions – Hmm That sounds Rational !!)
    Your “plan” will not work for the following reason:
    The $400m stadium in which the franchise plays will lose money on operations each and every year. It will do so because the franchise that plays in it (owned by a private sports cartel member) will pay less than the stadium’s annual operating cost to do so, never mind offering any contribution to the capital construction cost. (Ok – 1st You make statement without supporting facts. Many if not ALL these Franchises MAKE money in several ways. Not least of them is equity value growth of the sports Franchise itself, Exogenous of any Stadium) (2nd Construction Costs are born from the investment in the stadium, Investors Invest and pay for the Building of the Stadium That’s Normally called Initial capital business Investment, Same as if you wanted to open a coffee shop You buy the building and coffee machine before you can sell any coffee => Simple) (3rd – You mention The lease will be for less than the stadium annual costs. This might be true in many cases – But this is a business cost efficiency issue, Perhaps if you built a Stadium without a giant Fish Tank Behind home plate ( See Miami Marlins Stadium) your Costs would be more efficient and less than your lease payments See validation facts here => www.youtube.com/watch?v=xcwJt4bcnXs

    After 20-30 years of playing in this stadium and paying less than, say, $2m annually to do so (leaving a $4-8m hole in the operating budget each of those years), (Yes this is true – again speak to the operating efficiency of the stadium – Do you need a Fish tank at a Baseball game ?) The private sports cartel franchise owner will demand a new stadium. (It is interesting you use the Sports Cartel description. On this we agree. & Neil’s web page is correct – It’s 100% a Billionaires Scam on taxpayers – We want to change that & we know how to do it.) Your corporation will by that point be holding $150-180m in accrued operating losses (assuming it can find ongoing financing… which is going to be tough on an asset that is depreciating at 15-20% per year), plus $20m-50m in as yet unpaid property taxes and compulsory upgrades that the franchise owner has demanded and is due under contract. (First you make substantial assumptions which influence the potential outcome dramatically. Equally relevant is (a) What if the stadium could be operated efficiently (cut out the fish tanks at home plate) to cover costs and maybe even make money – Yes that’s Possible. (b) Generally Speaking – Real Estate is one of the best investments investors can make. – Why should a Sports Stadium be ANY different? Real Estate Assets appreciate in value over time – Your house value is more than it was 10 years ago. That’s a fact. If you securitize real estate assets – you as an investor have the ability to hold that value – Your stock value over time will increase. Further – why is it an automatic assumption that property taxes won’t be paid? Property taxes on a large skyscraper gets paid why should a stadium be any different? It holds revenue generating events just like ANY business does. Compulsory upgrades? This is a Cartel tactic that is not a rational inclusion as to why our model would not work in reality. Our model does work and strips away the extortionary powers the “Cartel” hold over cities. So,.. Your example here is a real problem which can be stopped. A stadium CAN & Should be operated Efficiently without cartel demands. That seems pretty rational to me !!)
    Assuming you aren’t going to try to sell PSLs to your fan funded facilities (Nope – PSL’s are another SCAM, in my opinion) (btw, franchise owners tend to want all those revenues too… along with the naming rights for the stadium they didn’t pay for and don’t own in order to avoid paying the property taxes your group will be paying), (We are singing the same tune here…) you are going to struggle to cover that $200m hole. (As described in my reply – Cost Efficiency is an important part of this mix. Which can cover the 200 Million Hole You describe – Unless you still MUST have that Giant Fish Tank behind home plate of course?)
    Even if you have some vague idea how you might cover that $200m plus shortfall, (Already covered) you will then run into the problem of demolition costs for the stadium the franchise owner no longer wants to play in, and the problem of trying to find a new group of fools willing to plunk down their hard earned money so a billionaire can avoid saying he wants tax money for another new stadium. (Who ever said the occupying sports team is the ONLY interested use of a stadium and facilities? This is a false argument entirely. MANY stadiums are used for many other reasons – In fact a new user of these facilities are Esports a burgeoning Billion dollar industry that can also fill a sports stadium Check it out.)
    What you fundamentally appear not to understand is that if the billionaires were willing to pay reasonable (Reasonable ?… On what other planet or parallel universe are you reefing to?? ) market rent on a stadium the current con game (as well as this website, in all likelihood) would not exist. Host cities would simply use municipal bonds to fund construction and then charge enough rent to cover operating, capital improvement and debt service costs annually. (Yes & this is a common practice in fact one that we are not necessarily opposed to but we have a better model & plan that’s better than using Muni Bonds)
    Forming a corporation to take in <$2m in annual revenue with annual operating expenses in the $5-10m range and associated non-operating expenses in the $2-4m range solves nothing. (Where are you getting these numbers? AND it’s not about creating a corporation it’s about offering a new and better way in the real market to solve a massive problem – That’s what it’s about !)
    What your plan is selling is akin to the Florida swamp land sales of the last century… and to use your own insult, it is something any five year old should be able to see through. (Ha – Well I appreciate the reply – But securitizing Real Estate and ownership stock shares in a stadium is not selling Florida swap land Ask any REIT to validate that.)
    Please provide the name of the organization you represent (as well as any affiliates) so that I can ensure I avoid any financial exposure to same. Thank you. ( I appreciate your endorsement, Our associated parties which would include registration with the Securities and Exchange Commission Using Regulation A+ Title IV – Tier 2. Take some time to look that up and learn about it then call the SEC and ask if this is something that can be used for Sports Stadiums – you might find it Enlightening! – Cheers & Thanks for your attempted counter argument.)

      • Hi Neil: This issue is about our model and the solution to the problem – isn’t it and not us personally? We have also learned that there is a lot of emotional & political fever that’s involved in this debate. People love their sports teams and that’s a great thing. We seek to solve this massive problem in our cities. We do have a Viable and Real Solution & I seek to keep the debate about that & not about me personally which people seem to want to do. I am the solution provider – If you’re open minded enough to listen ? which many people are not. We have several expert legal minds who have reviewed this and agree with us. This is a Real Solution but it WILL bring on many who want to attack us. IF you are actually open to hearing how we can provide this real solution to the market I’m happy to talk to you directly, But if you just want to attack us ? That isn’t going to solve anything and is a waste of time & energy. If you want to chat on the phone & learn more ? Let’s do it,… but i don’t seek those that just want to attack ! Cheers !

    • Still waiting for you to explain how you’re going to use a money-losing stadium to repay investors. And please try to respond in fewer than 100,000 words this time.

      The only partial response I can see in that bout of logorrhea above is “if sports teams won’t pay us, we can rent our stadium out for e-sports,” which, uh, yeah.

      • 1) Your premise starts with an invalid assumption. Is it impossible to have a stadium that is not “Money Loosing” ?
        2) Try Starting with the Premise that sports team Must pay for using the facilities that changes the whole debate – Do you pay to rent a car or rent an apartment or lease office space? Why should Any sports organization get free rent – ? please explain that ?

        • 1) Given the cost of stadium construction and the minimal marginal revenues that flow from moving from an old stadium to a new one, I think the appropriate question here is: What scenario do you envision where a stadium wouldn’t be money-losing?

          2) Great idea for teams to pay a high rent, but then, as John noted, you don’t need to involve shareholders to pay off a stadium — you can just have the local government do it and get repaid in rent. (This is precisely what Minneapolis did with the Metrodome, until the Twins and Vikings got sick of paying rent and demanded new stadiums that didn’t require them to pay any.)

          • Ok – First, I never suggest “High” Rent Further,. The new stadium for the Golden State Worriers didn’t use any taxpayers money. (that I know of). Therefore, money loosing or not,.. it is possible to have a sports stadium & Development without taxpayer subsidies. Further, Why not just TRY and ask sports fans and citizens,… IF… they are interested in INVESTING in the Stadium and not being required to pay taxes for it? I strongly believe people will overwhelmingly say: “YES – I DO want to invest”. Regardless of dividends or not ( Ex: Green Bay Packers example) Who has even tried that ??? So you can’t destroy something that never even been tried… Another example: Citizens to the Wright brothers:… – You want to build a machine that will fly? You’re crazy ! You can’t do that !! ya ok – Watch us !!

            Further,… “you don’t need to involve shareholders to pay off a stadium — you can just have the local government do it and get repaid in rent” … Ok this is also a false argument => WHY should Government be involved in paying off the stadium at ALL. ? Isn’t again taxpayers money too? …. Because it promotes community Jobs?…. That’s 100% BS That Said – I get it… you’re a liberal Hack & Trump hater,.. you See the world through a prism that Government is the solution to all problems. However – I can assure you it is not – Just ask the VA administration. – Cheers !!

          • The Golden State Worriers (sic) don’t play in a stadium, they play in an arena. And it’s one that has no competition for arena-scale events in the city it’s in, which is in one of the largest metro areas in the U.S. … so it’s not really a model you can build on.

            But you’re right, they laughed at the Wright Brothers! And at the Marx Brothers! I’ll consider your case rested.

  6. Ok – I’m waiting to hear your rational & logical explanation as to why Sports team should be provided Free (or essentially Free) Rent on the facilities they play in.? ….. Waiting…..

  7. In fact this “model” has been tried. So saying that it’s a new idea is false.

    What you are proposing is that citizens/residents will voluntarily invest in shares in a stadium that pay no dividend and, in all likelihood, cannot be resold (whether you actually prohibit this like the Packers do, or whether there is just no market for money losing shares on which there will be an annual cash call just to cover operating losses I don’t know).

    The model you are describing is EXACTLY what municipalities used to do. Money is raised from the general public (by force rather than voluntarily in your case) to build a sports facility and that facility is rented to franchise owners on a cost plus basis. We know this doesn’t work because sports franchise owners began refusing to pay the rent and suggesting that unless the burden of rent was excised they would move their teams elsewhere. Municipalities – generally under pressure from a small but vocal body of citizens and advocates – caved.

    Your example – in which the financing allegedly comes from voluntary commitments – will be no different.

    You seem to have misunderstood where the artificial scarcity actually exists. It is not on the stadium side (there are many facilities that most sports franchises could just rent if they were willing to pay). It is on the franchise issuance side.

    That’s how artificial scarcity works.

    Your model hinges on a sports franchise owner being willing to pay for something he currently gets for free (and in some cases, less than free in that some teams are actually paid to play in the facility taxpayers built for the owner).

    Tell me, CJ, if you were offered the choice between a free Ferrari with lifetime maintenance and fuel paid by the manufacturer and having to pay $350,000 for one and cover your own operating costs, would you take the second option?

    Like I said above, this scheme sounds like a 1940s Florida swamp land scam to me.

    One last question: If you do get depositors to fork over their money but either cannot start construction or find a tenant, what happens to the depositors money? Do you refund it in full?

    Or do you buy the land first and then reserve the right to use the depositors’ money for “other purposes” if a stadium plan cannot be worked out?

  8. > Hi John: I understand your perspective and historical reference, However, this has actually never been done. The Stock that is Issued (which would be approved & regulated by the SEC) is also legally able to be registered and traded on the NASDAQ or OTC markets – that’s not say it automatically will be, but if it makes sense, it can be. You Mention:…. “Your model hinges on a sports franchise owner being willing to pay for something they currently get for free”? …No it doesn’t – but I get your point & yes this is a major problem that needs to change and be fixed & thus is what we seek to change…. Taxpayers should not be forced to pay for or subsidized Billionaires Sports team Stadiums. Simple as that !! Sports teams hold negotiated Lease contracts on the arenas and stadiums where they play. If they decide to default on their lease,… then logically they would endure lawsuits for that default and could be threaten with very large penalties and costs for defaulting,… so they have an incentive NOT to do that. That is a logical solution to solving your stated problem – Or,.. do you advocate that we should just let these Billionaires run amok & continue to rape & pillage taxpayers? BTW – Do you have a solution that changes or improves or prevents taxpayers from getting screwed on this Issue? I would like to hear what your solution is? Please Do Share? It’s fine to criticize someone else’s plan,… but please,… if you have a better solution – Please DO Share what YOUR solution to this problem is then.. Don’t just attack & criticize without offering your more intelligent solution – Please ! I’m waiting,…. -Cheers

    • As I have already made clear, the plan you are promoting is that franchise owners should pay FMV rent for their facilities. They used to do that, with municipalities issuing bonds to fund construction and the franchise owners paying enough rent to cover both the bonds and operating expenses (more or less).

      No one disputes that franchise owners should pay fmv to lease stadia (other than the sports leagues and owners themselves, along with a handful of paid shills who tend to weigh in on stadium proposals in the target city). The problem with your plan is that you are competing with a model where the option is free. If you have any history in business (I will assume you do, please advise), you understand this.

      As I have already asked you (and you refused to answer), would you take the option of a $350k Ferrari and paying your own operating costs and maintenance vs a free Ferrari and a $0 maintenance contract?

      That is what you are expecting that franchise owners will do. Obviously, they will not do that. Nor, I suspect, would you.

      You will not change the current model of free (or paid to play in some cases) stadia by using privately raised funds to build a stadium and then offer to lease it to a franchise owner for $15-18m annually. So long as they have the option of a free or nearly free facility, you will find no takers for your so called private funding (or fractional ownership) stadium model. If owners were willing to do that, they would simply take out the construction mortgage themselves and play in their own facility… they get the tax breaks associated and also will eventually OWN the facility.

      So, I’ll ask again, what happens to the depositors money if you cannot find a franchise willing to pay to play in your building (planned or existing)?

      I’m still waiting for an answer on how you cover several million dollars a year in operating costs, a few million more for the reserve/capital funds, and how you cover property taxes on a stadium that will have no paying tenant?

      No business can defeat a competitor who gives away their product for free. Right or wrong (and it is most definitely wrong), that is the model you are planning to compete with. The only hope would be that the competitor goes bankrupt… and since the competitor is the local (and often state and federal) government this is highly unlikely.

      My solution is very simple and is in fact already covered under interstate commerce laws: States should be barred from offering inducements for business to leave one state and set up shop in another. That isn’t working so well in all kinds of markets as you’ve probably noticed. Foxconn and Wisconsin are just one current example of an absolute disaster in the making. It’s not just sports franchise owners who do this. Nevertheless, governments across North America seem utterly unwilling to stop throwing money at sports facilities which are publicly funded and then effectively gifted to billionaires.

      Regarding your lease break comments… you might want to look at the lengthy history of sports teams who HAVE simply walked away from leases. As I suspect you know, courts have the ability to set aside lease or other contractual obligations that they feel are an obstacle to a businesses survival… put more simply, the city of Glendale’s famous “$700m” lease break fee turned out not to be worth the paper it was written on… yet that very clause was a key term that swayed councillors to vote to approve construction of the arena.

      There are two things you can’t get blood out of: A stone and a professional sports franchise owner. If you want to try this with your own money I say go for it. If you are trying to raise money from sports loving fans it seems to me all you are doing is substituting yourself (or your corporation) into the role of the municipal authority. Since you lack the power of direct taxation and no other visible means of covering the inevitable operating shortfalls you will encounter, I would suggest to you that your business model is doomed to failure and your investors will rapidly see their investment vaporized.

      If you disagree, please tell me how you will cover the operating shortfalls, property taxes and capital upgrades the facility you build with money taken on consignment will need?

      Also, when you are negotiating with Jerry Reinsdorf and discussing terms with him… and he brings up his infamous “our model is you pay 3/3rds and we pay no thirds” plan… maybe you can tell us how you can sway him from that position?

      Your leverage as a builder of a privately funded stadium with no tenant and more than $1m a month in operating costs is what, exactly?

      The reason I am so critical of your plan is that it is a NON plan. If your model was more standard residential real estate (say apartments which you build for $75k/door and plan to rent for $1100/mo) and you were competing with a municipally subsidized apartment complex where the rent was free, the municipality provided utilities at 1/3rd their actual cost and also provided a capital upgrade fund of $2,000 per year per unit… how do you think your business would do?

      That is what you are proposing. It is ludicrous. If you want to use your own money for that I obviously have no objection. But if you propose to take money from investors/donors, it’s a different matter entirely.

      You can certainly argue that the taxpayers ought not to be providing free facilities. I agree with that 100%. Providing the sports owner with an option that requires them to pay $15-20m annually instead of nothing isn’t really an option, is it?

  9. This market solution will be a very great, great thing for our nation. And it will be a great, great thing for our neighbor to the north, Canada. It is really amazing!

    Many of our great, great cities want new arenas and stadiums for their sports teams. And we think this will do that for them!

    God bless capitalism! God bless America!

    I am afraid you will not find many Stadium Securities takers on this site. Unfortunately, most of us have been radicalized by Nola Agha, Robert Baade, Michael Leeds, Joel Maxcy, Victor Matheson, Roger Noll, Allen Sanderson, John Solow and of course, Neil DeMause.

  10. Thanks Tim & Fair enough… I have found there are basically two types of people in this type of debate. 1) Those the enjoy complaining and telling the world how horrible something is, (and never do anything about it)… and 2) Those that acknowledge that something can be better and do something about it. THOSE are the people that change the world and make it better place for all, and there are plenty of them out there,.. whom I’m certain you also can name from their accomplishments. – Cheers !

    • Then there are those of us who enjoy complaining and telling the world how horrible things are, then doing something about it! Preferably something involving flaming torches!

  11. Possibly you failed to see the irony of the site to which you posted comments.

    Yes. I am in agreement with you. Fans do want a seat at the table. If you’re not in the room, you’re not at the table, your voice isn’t heard. In the famous words of Congresswoman Shirley Chisholm, “If they don’t give you a seat at the table, bring a folding chair.” I see the Bundesliga where fans voices are heard by their clubs as a model.

    Notice I said clubs. Not franchises. The sports model in this nation is very different from that of Germany. Germany allows clubs to rise from the lowest rungs to the top tier, it is based upon ability and skill, not money. The sports model this nation employs is based solely on capitalism. To play you must pay (even the National Premier Soccer League, the 4th tier in the US soccer pyramid and for the most part an amateur league, requires an expansion fee).

    In this nation, rarely have the voices of fans mattered. In fact, it is quite the opposite. Complaints arise all the time about the intertwining of politics and sports. Even here on this site. Not so on the rest of the planet. Politics and sports go hand in hand. Whether you believe this to be good or bad, despite politics and public monies being used to fund sports stadiums, you are expected to sit on your hands once inside the arena.

    Where you and I diverge is the usage of a capitalism, specifically stocks and securities, to solve the existing funding of stadiums using public monies. Among many things I have been in this life, an Accountant by degree and profession and Corporate Tax Auditor, are but two.

    Yes, I am in agreement with you. Real estate has value, real estate appreciates over time, except for that little thing called the Great Recession of 2007 – 2008. Where I strongly disagree with you is the position that a sports stadium is real estate. I see a stadium as nothing more than a wasting asset, a leasehold improvement, especially as newer stadiums are built. Only the land upon which the stadium sits has value (or the franchise itself, although I find MLS franchise valuations to name a few highly debatable, has value).

    To expect the communities citizens and fans to purchase stocks or securities in a wasting asset is beyond unfathomable. These stocks or securities don’t have the slightest potential of increasing in value, isn’t that the purpose of purchasing of stocks and securities? You sit on them with the belief they will increase in value over time.

    Further, only 54% of the US hold stocks or securities, directly or indirectly through mutual funds ( https://www.politifact.com/california/statements/2018/sep/18/ro-khanna/what-percentage-americans-own-stocks/ ). Added to that, approximately 80% of households live from paycheck to paycheck ( https://www.usnews.com/news/the-report/articles/2019-01-11/stretched-thin-majority-of-americans-live-paycheck-to-paycheck https://www.forbes.com/sites/zackfriedman/2019/01/11/live-paycheck-to-paycheck-government-shutdown/#77f839fa4f10
    http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-According-to-New-CareerBuilder-Survey
    https://www.bankrate.com/banking/savings/financial-security-june-2019/
    https://www.cnbc.com/2019/03/14/heres-how-many-americans-are-not-saving-any-money-for-emergencies-or-retirement-at-all.html
    https://www.cbsnews.com/news/a-quarter-of-americans-have-no-emergency-savings/ ) and 45% of households have less than 6 months emergency savings set aside. And given all that data, the way out of the publicly funded stadium issue is the purchase of stadium stocks or securities by the communities citizens and fans that generate no value to the shareholder, other than to grant ownership rights to a wasting asset.

    No.

    Notice I have taken a completely different tack than John Bladen. Who’s commentary I strongly agree with. The only small quibble l have has to do with the issue of franchise scarcity.

    There would be no franchise scarcity if the elected leaders in this nation stood up and said “No” to the demands by billionaire owners for publicly funded stadiums, as the City of Hamilton elected leaders did recently or as Canada’s federal government told the NHL Ottawa Senators. You once asked, “Why do you think Mayor Libby in Oakland won’t give Dave Kaval & the A’s ANY Taxpayer funding for the new stadium?” Simply put, Mayor Libby Schaaf is saying “No” to the Oakland Athletics to publicly subsidizing a new stadium. Just as the very brave Councilpersons Denise Barnes and Jose Moreno did in the face of opposition from their fellow colleagues and public comment at the travesty of the December 20, 2019 Anaheim City Council Meeting.

    Lastly, it takes the combined voice of a community to make it loud and clear “No” publicly subsidized stadiums. Whether it be a referendum, as was the case in San Diego of which there were two, or at a City Council Meeting, as was the case at a Richmond, Virginia Council Meeting. If all else fails, it’s time for pitchforks and flaming torches.

    But here, I have done your homework for you (in addition to a less than politically correct response very late last night).

    This is a short list of sports franchises wanting new arenas or stadiums. The very last figures are average attendance figures. Potential equity investors for arena and stadium funding. Good luck to you and your organization.

    Albuquerque, New Mexico. Pop 560,218 cma 1,171,991. Soccer specific stadium for USL franchise. Owner: Peter Trevisani. New Mexico United. 12,693 (2019).
    Austin, Texas. Pop 964,254 cma 2,168,316. Stadium for MLS franchise. Owner: Anthony Precourt of Precourt Sports Ventures. Austin Bold (owner: Bobby Epstein). 2,395 (2019).
    Boise, Idaho. Pop 228,790 cma 709,845. Multi-purpose stadium for Boise Hawks and potential USL franchise. Owner: Agnon Sports & Entertainment LLC. Class A Short Session Northwest League Boise Hawks. 3,416 (2019) 3,321 (2018) 3,196 (2017) 3,094 (2016).
    Calgary, Alberta. Csa 1,392,609. Stadium for CFL franchise. Owner: Calgary Sports and Entertainment Corporation. Calgary Stampeders. 27,027 (2019) 26,339 (2018) 27,380 (2017) 27,474 (2016) 30,376 (2015).
    Charlotte, North Carolina. Pop 872,498 cma 2,569,213. Soccer specific stadium for MLS franchise. Owner: David Tepper.
    Charlotte Independence (owner: Dan DiMicco). 1,750 (2019) 1,679 (2018) 1,615 (2017) 1,375 (2016).
    Charlotte, North Carolina. Pop 872,498 cma 2,569,213. Stadium for potential MLB franchise. Owner: Don Beaver. Triple-A International League Charlotte Knights. 8,554 (2019) 8,980 (2018) 9,109 (2017) 8,974 (2016) 9,428 (2015) 9,686 (2014).
    Concord, California. Pop 130,487. 4 city area 269,896. Soccer specific stadium for USL franchise. Owner: Mark Hall.
    Detroit, Michigan. Pop 672,662 csa 5,336,265. Soccer specific stadium for potential MLS franchise. Owner: Tom Gilbert, Tom Gores and Martha Firestone Ford. National Premier Soccer League Detroit City FC (owner: David Dwaihy). 5,548 (2018).
    Elmont, New York. Pop 33,198 msa 7,869,820. Arena for NHL franchise. Owner: John Ledecky / Scott Malkin. 12,443 (2018-19) 12,002 (2017-18) 13,101 (2016-17) 13,627 (2015-16).
    Glendale, Arizona. Pop 250,702 cma 4,857,962. Owner: Alex Meruelo / Andrew Barroway. Phoenix Coyotes. 13,989 (2018-19) 13,041 (2017-18) 13,095 (2016-17) 13,350 (2015-16).
    Halifax, Nova Scotia. Pop 316,701 cma 403,390. Stadium for potential CFL franchise. Anthony LeBlanc of Schooners Sports and Entertainment. 6,000 potential season ticket requests per SS&E.
    Hamilton, Ontario. Pop 536,917 cma 763,445. Arena for junior ice hockey. Owner: Michael Andlauer. Ontario Hockey League Hamilton Bulldogs. 4,090 (2018-19) 4,251 (2017-18) 4,114 (2016-17) 3,844 (2015-16).
    Indianapolis, Indiana. Pop 867,125 csa 2,431,361. Soccer specific stadium for potential MLS franchise. Owner: Ersal Ozdemir. Indy Eleven. 10,734 (2019) 10,163 (2018) 8,395 (2017) 8,396 (2016).
    Jacksonville, Florida. Pop 903,889 csa 1,631,488. Soccer specific stadium for National Premier Soccer League (NPSL) franchise. Owner: Robert Palmer. NASL II Jacksonville Armada FC. 3,032 (2017) 3,499 (2016) 7,927 (2015).
    Las Vegas, Nevada. Pop 644,644 csa 2,462,015. Soccer specific stadium for potential MLS franchise. Owner: Brent Lashbrook. Las Vegas Lights. 7,711 (2019) 6,786 (2018).
    Las Vegas, Nevada. Pop 644,644 csa 2,462,015. Stadium for potential MLB franchise. Owner: Las Vegas Baseball Club LLC. Triple-A Pacific Coast League Las Vegas Aviators. 9,299 (2019) 4,746 (2018) 5,057 (2017) 4,882 (2016).
    Miami, Florida. Pop 470,914 csa 6,828,241. Soccer specific stadium for MLS franchise. Owner: Jorge and Jose Mas, Marcelo Claure, Masayoshi Son and David Beckham. Inter Miami CF.
    Miami, Florida. Pop 470,914 csa 6,828,241. Soccer specific stadium for USL franchise. Owner: Ricardo Silva. NASL II Miami FC. 5,172 (2017) 5,427 (2016).
    Montreal, Quebec. Pop 1,704,694 cma 4,098,927. Stadium for potential MLB franchise. Montreal Expos (owner: Jeffrey Loria. Sounds vaguely familiar. How do you spell former Miami Marlins owner). 9,369 (2004) 12,662 (2003) 10,025 (2002) 7,935 (2001).
    Nashville, Tennessee. Pop 692,587 cma 1,930,961. Soccer specific stadium for MLS franchise. John Ingram. Nashville SC. 5,000 season tickets sold to date (2020) 6,999 (2019) 9,561 (2018).
    Nashville, Tennessee. Pop 692,587 cma 1,930,961. Stadium for potential MLB franchise. Owner: Masahiro Honzawa and Frank Ward – MFP Baseball. Triple-A Pacific Coast League Nashville Sounds. 8,631 (2019) 8,741 (2018) 8,861 (2017) 7,099 (2016) 7,965 (2015).
    New York City, New York. Pop 8,398,747 csa 22,679,948. Soccer specific stadium for MLS franchise. Owner: City Football Group. New York City FC. 21,112 (2019) 23,211 (2018) 22,177 (2017) 27,196 (2016).
    Oakland, California. Pop 426,410 csa 9,666,055. Stadium for MLB franchise. Owner. John J. Fisher. Oakland Athletics. 20,521 (2019) 19,427 (2018) 18,219 (2017) 18,784 (2016).
    Oceanside, California. Pop 179,835 tri-cities 397,711. Arena for indoor soccer franchise. Major Arena Soccer League (MASL) San Diego Sockers. Owner: Phil Salvagio. 3,162 (2015-16) 3,688 (2016-17) 3,284 (2017-18) 4,181 (2018-19).
    Oklahoma City. Pop 649,021 cma 1,396,445. Soccer specific stadium for USL and potential MLS franchise. Owner: Bob Funk Jr. & Tim McLaughlin. Oklahoma City FC. 4,442 (2019) 4,298 (2018) 4,293 (2017) 4,950 (2016).
    Orlando, Florida. Pop 285,713 csa 3,129,308. Stadium for potential MLB franchise. Double-A Southern League Orlando Rays. 2,382 (2003) 2,113 (2002) 1,376 (2001) 925 (2000).
    Pawtucket, Rhode Island. Pop 71,847. Stadium for potential USL franchise.
    Phoenix, Arizona. Pop 1,660,272 cma 4,857,962. Soccer specific stadium for potential MLS franchise. Owner: Berke Bakay. Phoenix Rising FC. 6,752 (2019) 6,380 (2018) 6,126 (2017) 1,470 (2016).
    Phoenix, Arizona. Pop 1,660,272 cma 4,857,962. Stadium for MLB franchise. Owner: Ken Kendrick. Arizona Diamondbacks. 26,364 (2019) 27,688 (2018) 26,350 (2017) 25,138 (2016).
    Phoenix, Arizona. Pop 1,660,272 cma 4,857,962. Arena for NBA franchise. Owner: Robert Sarver. Phoenix Suns. 15,293 (2018-19) 16,843 (2017-18) 17,284 (2016-17) 17,107 (2015-16).
    Portland, Oregon. Pop 653,115 csa 3,239,335. Stadium for potential MLB franchise. Owner: Short Season LLC. Class A Short Session Northwest League Hillsboro Hops. 3,516 (2019) 3,429 (2018) 3,379 (2017) 3,470 (2016) 3,774 (2015). Note: Hillsboro, Oregon. Pop 108,389.
    Quebec City, Quebec. Pop 531,902 cma 800,296. Arena for potential NHL franchise. Quebec Nordiques (owner: Marcel Auburn). 14,397 (1994-95) 14,564 (1993-94) 14,981 (1992-93) 13,666 (1991-92).
    Queensboro, New York. Pop 2,278,906. Soccer specific stadium for USL franchise.
    Raleigh, North Carolina. Pop 469,298 csa 2,201,103. Soccer specific stadium for potential MLS franchise. Owner: Steve Malik. North Carolina FC. 4,118 (2019) 4,730 (2018) 4,471 (2017) 5,058 (2016).
    Richmond, Virginia. Pop 228,783 cma 1,263,617. Arena for ?????
    Sacramento, California. Pop 513,330 csa 2,414,783. Soccer specific stadium for MLS franchise. Sacramento Republic FC. Owner: Ron Burkle of Sac Soccer & Entertainment Holdings LLC. 10,439 (2019) 11,311 (2018) 11,569 (2017) 11,514 (2016).
    San Antonio, Texas. Pop 1,532,233 cma 2,518,036. Soccer specific stadium for potential MLS franchise. Owner: Spurs Sports & Entertainment. San Antonio FC. 6,763 (2019) 6,942 (2018) 7,152 (2017) 6,170 (2016).
    San Diego, California. Pop 1,453,775 cma 3,317,749. Stadium for NFL. Owner Dean Spanos. San Diego Chargers. 57,024 (2016) 66,772 (2015) 65,432 (2015) 64,205 (2014)
    San Diego, California. Pop 1,453,775 cma 3,317,749. Soccer specific stadium for potential MLS franchise.
    Saskatoon, Saskatchewan. Pop 246,376 cma 301,097. Arena for ?????
    Seaside, California. Pop 34,165 cma 269,482. Stadium for USL franchise. Owner: Ray Beshoff.
    St. Louis, Missouri. Pop 302,838 csa 2,911,945. Soccer specific stadium for MLS franchise. Owners: Taylor Family and Carolyn Kindle Betz of Enterprise Holdings Foundation, Jim Kavanaugh of St Louis Scott Gallagher Pro LLC / World Wide Technology. St. Louis FC. 4,532 (2019) 4,271 (2018) 4,571 (2017) 4,923 (2016).
    St. Petersburg, Florida. Pop 265,098 cma 2,870,569. Stadium for MLB franchise. Owner Stuart Sternberg. Tampa Bay Rays. 14,552 (2019) 14,259 (2018) 15,477 (2017) 15,879 (2016).
    Tampa, Florida. Pop 392,890 cma 3,069,511. Stadium for potential MLS franchise. Owner: Stuart Sternberg. Tampa Bay Rowdies. 5,497 (2019) 5,869 (2018) 5,849 (2017) 5,878 (2016).
    Vancouver, British Columbia. Pop 631,486 cma 2,463,431. Stadium for potential MLB franchise. Owner: Canadian Pacific Railway. Class A Short Session Northwest League Vancouver Canadians. 6,210 (2019) 6,292 (2018) 6,303 (2017) 6,177 (2017).
    Worcester, Massachusetts. Pop 185,877 cma 923,672. Stadium for Triple-A International League franchise. Owner: Larry Lucchino. Triple-A International League Pawtucket PawSox (average attendance). 5,254 (2019) 5,982 (2018) 6,406 (2017) 6,076 (2016) 6,572 (2015) 7,367 (2014) 7,827 (2013).

    Canada pop, cma’s are 2016. USA pop, cma’s, csa‘s are 2018 estimates except for California, California’s pop, cma’s, csa’s are 2020 estimates.

    Attendance from Kenn Blog except following. MLB attendance from Baseball-Reference. MiLB attendance from ballparkdigest. NFL attendance from Statista. NBA attendance from Insidehoops. NHL attendance from HockeyDB. CFL attendance from CFLDB. Southern League attendance from StatsCrew and MiLB.

    • How did I forget Canada’s and the US capitals?

      Ottawa. Pop 934,243 csa 1,323,783. Arena for NHL franchise. Owner: Eugene Melnyk. Ottawa Senators. 14,553 (2018-19) 15,829 (2017-18) 16,734 (2016-17) 18,085 (2015-16).
      Washington. Pop 705,749 csa 9,665,892. Stadium for NFL franchise. Owner: Dan Snyder. Washington Redskins. 65,488 (2019) 61,028 (2018) 75,175 (2017) 78,304 (2016).

    • Free market capitalism is not the answer for curing society ill’s, specifically the public subsidy of sports stadiums for billionaire owners.

      Business in a free market economy exists for one reason only. Profit (there’s more than one, but will leave it there for now). There more profit, the better. Business is not there for the good of society or to cure its ill’s.

      That’s the purpose of government. To provide for that which business does not provide. Bridges. Fire and police services. A city’s infrastructure. A justice system and prisons. Roads. Schools. Etc.

      Yes, I believe government has its responsibility to promote a city or a region’s culture. Culture includes civic events, museums and yes, sports aka sports stadiums. But that support does not come at the expense of government’s main purpose, the paragraph above, especially not 100’s of millions of dollars worth.

      In this case, it requires an entire society and it’s government to simply say “No.” For elected officials who buy into the hype of economist Andrew Zimbalist (co-author along with Roger G. Noll of Sports, Jobs, and Taxes; The Economic Impact of Sports Teams and Stadiums. Zumbalist has now gone over to the dark side for the almighty dollar), the local Business Journal, the local Chamber of Commerce and local business leaders, you vote them out of office for misuse of public funds. Your funds. It’s that simple.

      Remember, 9 out of 10 (90%) economists say there is no measurable economic benefit from a new arena or stadium.

      * Nola Agha, University of San Francisco.
      * Robert Baade, Lake Forest College.
      * Michael Leeds, Temple University.
      * Joel Maxcy, Drexel University.
      * Victor Matheson, College of Holy Cross.
      * Roger G. Noll, co-author Sports, Jobs, and Taxes; The Economic Impact of Sports Teams and Stadiums. Stanford University.
      * Allen Sanderson, University of Chicago.
      * John Solow, University of Iowa.
      * Neil DeMause, co-author along with Joanna Cagan of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit. Website: FieldofSchemes.Com. Twitter: @FieldofSchemes. Facebook: Field of Schemes. (After all, if you can’t trust a native New Yorker, who can you trust? :o)

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