FC Cincy mulling Kentucky tax kickbacks to pay its entire stadium cost, and other week’s news

All the news that wasn’t fit to print this week:

  • FC Cincinnati now wants the Port Authority of Greater Cincinnati to own its stadium since Hamilton County doesn’t want to. (Does “own” mean “pay for”? Reply hazy, ask again later.) Or maybe Newport, Kentucky, since, according to team president and former city council members Jeff Berding, that would allow the team to recoup its entire $100 million through tax increment financing kickbacks of property taxes paid on the property. How would it generate a whole $100 million in TIFs? Reply hazy, ask again later.
  • Would-be Seattle arena builder Chris Hansen hired University of Washington public finance professor Justin Marlowe in May to compare the economic impact of his Sodo arena proposal to that of the KeyArena renovation plan, and he has issued his report, which says that the Sodo plan would create three times as much tax revenue for Seattle ($103 million over 35 years vs. $34 million for Key). On the other hand, the Key plan would include some kind of sharing of arena revenues, though that wouldn’t kick in until the Key developers got their share, and, yeah, basically it’s a muddle. On the whole, it seems to give the edge to Hansen’s plan, if only because that arena would pay property taxes, but I’d need to sit and break down the math to say exactly by how much, and I’ve been waiting for time to do that all week, so clearly it’s not happening. Reader exercise!
  • Oakland A’s executive VP Billy Beane promised that once the team gets a new stadium, it will stop trading all its decent players once they start to get expensive: “There’s only one way to open a stadium successfully, and that’s with a good, young team. … Really what’s been missing the last 20 years is keeping these players. We need to change that narrative by creating a good team and ultimately committing to keep them around so that when people buy a ticket, they know that the team is going to be around for a few years.” Which could make sense if a new stadium draws enough fans that having a winning team boosts revenues enough to pay for player salaries, though we’ve heard this song and dance before elsewhere.
  • The Nashville Sounds‘ new stadium was supposed to cost taxpayers $37 million, but it ended up costing $91 million.
  • What does $74 million in public subsidies buy Minnesota Timberwolves fans and staff? New seats, new restrooms, new locker rooms, an ice floor that doesn’t leak, two new loading docks, and a big glass wall, because everybody’s gotta have one of those.
  • The athletes’ village from the 2016 Rio Olympics is now a wasteland of unsold condos, because everything the Olympics touches turns to trash.
  • A homeless camp has arisen on the site of the planned Las Vegas Raiders stadium. Make your own metaphors.

No, there’s no reason to believe eight US cities are getting $2.4B in cricket stadiums, jeez

You know, I’ve now seen a whole string of articles reporting that San Francisco, Chicago, New York, New Jersey, Washington, DC, Atlanta, Orlando, and Dallas are all going to get new cricket stadiums as part of a $2.4 billion dollar spending spree by the organizers of a new professional cricket league, and I feel it’s my duty to say: No, they’re not, everybody chill. At least, they’re not any more than when Global Sports Ventures announced it with a press release back in January, then proceeded not to announce any actual stadium plans over the next six months. Here’s an SBNation interview where GSV chair Jay Pandya talks about how starting a pro cricket league (note for anyone who actually cares about cricket: really a T20 league, which isn’t regular cricket) is totally something that could happen because some Americans traveled to Australia to watch the cricket World Cup and there were three exhibition games in the U.S. in 2015.

Not asked in that interview, or any of the recent articles: Why on earth should we take seriously a business plan that involves trying to earn back $2.4 billion in stadium investments by selling tickets to a version of cricket that most cricket fans don’t even like? It’d be kind of rude, I know, but that’s what journalists are there for, right?

Suns owner: We want to stay put in renovated NBA-only arena, or else … something

Phoenix Suns owner Robert Sarver said a whole bunch of stuff yesterday to AZcentral:

Suns owner Robert Sarver told azcentral sports Wednesday that it’s “highly unlikely” the Suns will pursue a joint basketball/hockey arena with the Arizona Coyotes…

Sarver said his focus is on an upgrade of Talking Stick Resort Arena.

“This facility was built for basketball,” he said…

Sarver said building a new arena would have “maybe made more sense” four or five years ago when the cost estimate was $450 million to $500 million. The costs now, Sarver said, are “significantly higher.” Thus his focus on upgrading Talking Stick, which soon will be the second-oldest arena in the NBA.

“I think it’s the most economically viable alternative for the city and us,” he said. “I like downtown Phoenix. That’s my first preference. I think the NBA is more of an urban game. That’s our demographic.”

Sarver added that he’d like to say in downtown Phoenix but that, “if we can’t, we’ll explore other options.”

During the news conference Sarver said the Suns “have no choice” but to either modernize Talking Stick Resort Arena or build a new arena.

“Our arena is becoming outdated,” he said. “… We have to have an NBA-quality facility. I know that. The city of Phoenix knows that. Hopefully in the next couple of years we can start construction on something.”

Let’s unpack that: Sarver doesn’t want to build a new arena with the Arizona Coyotes because it’d be too expensive, and also he wants to stay in downtown Phoenix, but if he can’t upgrade his current arena there he’ll have to build a new one elsewhere because they “have no choice.”

That’s a big ball of contradictions, unless you take it as all tactical: Sarver is putting all his cards on a renovation of his current Phoenix arena, and wants to use moving elsewhere as a threat, not an actual option. You’d think he’d at least consider sharing digs with the Coyotes as a way to cut down on competition for concerts and things with another arena, but maybe he doesn’t want to have to partner with a franchise that can’t draw flies, or figures maybe the Coyotes will leave town and he can have a monopoly on the winter sports market, either of which is a reasonable enough gambit.

Sarver still isn’t saying much about how to pay for an arena remodel, just restating the “this place is almost 30 years old, time to send it to the Carrousel” mantra he’s been holding to for the last three years. Either he’s working behind the scenes on a funding plan, or he’s hoping state legislators will do it for him — again, either way, an understandable strategy. But eventually he’s going to have to actually say something concrete, at which point you have to hope Phoenix city officials will say: You said you have no choice but to build an upgraded facility and that you want to stay in Phoenix, so what are you going to do if we don’t give you money for it, hold your breath and turn blue?

Raleigh MLS bidders want state to raze government buildings to build them a stadium

Another day, another prospective MLS team looking for a “public-private partnership” to build a stadium. Today’s contender: Raleigh, where the owners of North Carolina Football Club (catchy name) want the state to raze a government office complex and give them the land for a soccer venue:

The 13-acre site, bounded by Peace, Salisbury and Lane streets, is part of the sprawling state government complex and houses several offices, including the Archdale Building and the State Capitol Police station.

NCFC wants to lease the land from the state, but it’s unclear whether government leaders are on board.

Yeah, it should be unclear, considering here’s what the site looks like now, per Google Maps:
That is a whole mess of stuff that is already built and would have to be replaced! Me, that probably wouldn’t have been my first ask, but maybe the team owners are thinking they can negotiate down to a public park or something.

Aside from this, there aren’t many details on how the funding for a stadium would work, other than that it would cost $150 million and, according to the News & Observer, “would generate $262 million a year in economic activity for North Carolina and create 1,960 jobs, according to Economic Leadership, an economic development consulting firm in Raleigh. It would generate $5.6 million in annual tax revenue for the state.”

A soccer team selling 20,000 seats a game for 19 home games at, let’s be generous and give them $30 a pop, plus $30 in concessions and parking, apply a 2x multiplier just for the hell of it, that’ll almost come to $5.6 million a year at Raleigh’s 7.25% sales tax rate. Assuming, of course, that all the North Carolina F.C. fans would otherwise be spending that money out of the state, which, um, yeah. This seems like almost as terrible an idea as that time El Paso tore down its City Hall to build a minor-league baseball stadium, so I really hope it happens, because I need new laughably tragic stories to tell during radio interviews.

County officials: No big money for Cincy MLS or arena redo, but maybe tax breaks or something

Hamilton County commissioners continue to make unhappy noises about funding either a new FC Cincinnati stadium or a renovation of Cincinnati’s arena, saying they have a lot of priorities other than new sports facilities right now:

All three commissioners are wary of repeating the mistakes they say county and city officials made more than 20 years ago, when new stadiums for the Bengals and Reds saddled county taxpayers with huge financial obligations.

“We’ve all lived to regret that,” said Commissioner Todd Portune.

Fellow Commissioner Chris Monzel said building stadiums, including the two the county already owns, shouldn’t be the business of county government.

“We have two facilities already,” he said. “That’s two too many.”

That’s pretty cut and dried, then, and—

The commissioners did not, however, rule out the possibility of helping proponents of a new arena and soccer stadium, even if they don’t approve a large public investment. While putting a higher sales tax on the ballot is the most likely way to raise big money, the county and city could pursue more modest measures, such as donating land, granting tax breaks or seeking help from state and federal grants.

So it appears the commissioners just don’t want to own a new stadium, but they’re maybe open to giving it public money? Or, more likely, they’re sending a signal that $100 million is a lot of money, and raising the sales tax just to renovate an arena that only really needs minor upgrades is a little nuts, but maybe ask for less and we’ll consider it. Which could be a reasonable “let’s not close any doors” approach, or could be a way to tell constituents that they’re not throwing money down any more stadium holes while secretly considering doing just that, or a combination of the two.

Phoenix Rising plans MLS stadium, let’s not worry about cost or how it’ll be paid for

In the mood to read an entire article about a new stadium plan that never discusses how much it will cost or who will pay for it? Then Soccer Stadium Digest has you covered!

Phoenix Rising FC, once considered a dark horse in this race, is one of the only candidates facing none of the obstacles to stadium development that hampers other markets…

[blah blah blah]

Situated at the intersection of major Valley arterials Loop 101 and Loop 202, the complex is an easy drive from…

[blah blah blah]

In May, the club secured financing with Goldman Sachs, which recently structured both Banc of California Stadium in Los Angeles and Audi Field in Washington, DC.

[etc]

Okay, yes, Phoenix Rising FC has partnered with Goldman Sachs as “structuring agent” for its stadium plan, but that just means they’ll be the bank that they borrow stadium funds from. How much will a 25,000-seat stadium cost? Dunno. Who’ll pay for it? Team execs have previously said it won’t require “public funds,” but as we all know, there are lots of means of getting taxpayer subsidies that can be counted as not public funds. (Tax kickbacks, for starters.)

It’s entirely possible that Phoenix Rising is set to build a new stadium on its own — as Orlando City SC (mostly) did — in which case it’d be worth applauding. (As much as one should applaud a private business for doing what private businesses should do without trying to fob costs off onto the public.) But it appears that the USL club’s owners aren’t being very forthcoming about their cost or funding plans beyond “don’t worry about it,” and the Phoenix-area and soccer media isn’t pressing them on it, which, c’mon guys. It’s fine to be excited about a possible new MLS team, but try to remember to do your jobs while you’re at it.

Miami is paying Jeff Loria’s share of All-Star policing costs, just because

And speaking of city officials lying down on the job and the All-Star Game, apparently Miami-Dade County got Miami Marlins owner Jeffrey Loria to promise to pay for security costs for this year’s game, but then the city of Miami went and paid for them anyway:

Under the team’s operating agreement for its heavily subsidized $515 million stadium, the Marlins are supposed to pay for off-duty police and fire services for “jewel events,” such as the All-Star Game…

Back in February, when the team asked the county to support the event by providing its police officers and firefighters free of cost, Miami-Dade Mayor Carlos Gimenez told the team that it would have to pay the bill due to the terms of its operating agreement…

But the team’s operating contract didn’t stop the city from agreeing early on to pick up the tab. Back in 2014, Miami Mayor Tomás Regalado — who like Gimenez used his opposition to the Marlins’ controversial stadium agreement to help win his election — committed in a letter to then-Baseball Commissioner Bud Selig that the city would pay for public safety “subject to available resources.”

This is actually slightly different from Boston’s arena charity contribution gaffe, in that Miami city officials knew that the Marlins were on the hook for police and fire services, then decided to go ahead and pay for it with public funds anyway, because it would make MLB happy and get them to award the game to Miami. I’ll leave it as an exercise for readers to decide whether that’s better or worse, but one thing is clear: Getting something put in writing isn’t worth much if the people signing it can arm-twist the government to take it back whenever they like it.

WashPost says economists predict $100m in MLB All-Star Game impact (spoiler: they don’t)

Hey, look, it’s another headline — this one in the Washington Post — claiming that hosting a sporting event would have huge benefits for a city:

The 2018 MLB All-Star Game could bring $100 million to D.C., economists say

If you actually read the article, only one economist is cited — Anirban Basu of Sage Policy, a consulting firm — who says that the All-Star Game has averaged $60 to 100 million in “economic impact.” (Remember, “impact” isn’t actual public revenues, it’s just money that changes hands in your city.) That seemed high to me, so I checked in with College of the Holy Cross economist Victor Matheson to see if he knew of any other studies. And lo and behold, he actually co-wrote one in 2001. It’s a bit involved in terms of stats and regression analysis, but in short, it says: Once you control for all the other variables that you’d expect to cause economic growth (as seen in other comparable cities), the actual impact of the MLB All-Star Game appears to be negative:

Our detailed regression analysis reveals that during the period 1973 to 1997, All-Star Game cities had employment growth below that which would have been expected. Instead of an expected gain of around 1,000 jobs in the year a city hosts an All-Star Game, employment numbers in host cities have actually fallen more than 8,000 jobs below what would have been expected even without the promised $60 million All-Star boost.

Is this one study, which looked at All-Star Games from 1973 to 1997, absolutely conclusive? No, of course not. But if journalists are going to assert that “economists” think something, they might want to at least google for what economists think, or even put in an email to one who’s actually studied it. (Matheson replied to my query within a couple of hours. On a Saturday.) Instead, the Post’s Alex Schiffer appears to have only contact (or read a press release by) Basu, a guy who says this stuff about the All-Star Game every year, and who appears to come up with his numbers just by assuming every ticket sold is new money to the economy, and then slapping on a multiplier. But then, Schiffer appears to be on the reprinting corporate press releases beat, so maybe we should cut him some slack … nah.

Boston teens discover that Bruins owner stiffed city on recreational facilities for 24 years

A group of Boston teenagers trying to find funding for a new community hockey rink and stumbling upon a 24-year-old plot by the owners of the local sports arena to scam city recreational facilities out of money sounds like the best YA novel ever — and it is. Or would be, if not for the fact that it all totally happened:

The discovery was the result of a painstaking search that involved a civics lesson in legislative sausage-making, the close eye of a neighborhood activist, and a bit of detective work by several determined teenagers…

[In 1993,] Jeremy M. Jacobs, the developer of the new Boston Garden, ultimately agreed to hold three charity events a year, with net proceeds going to the Metropolitan District Commission, which maintained the city’s recreational facilities, such as pools and skating rinks…

[Michael Reiskind, a longtime member of the Jamaica Plain Neighborhood Council,] shared his recollections with Ken Tangvik, director of organizing and engagement for the Hyde Square Task Force, during an April meeting on the development site…

Tangvik, who said the tip “was a gift,” then deployed his youth organizers to look up the Massachusetts laws enacted in 1993, and they found, “An act furthering the establishment of a multi-purpose arena and transportation center.” One section of the law stated, “The new Boston Garden Corporation . . . shall administer . . . no less than three charitable events per year . . . and shall pay the net proceeds . . . to said Metropolitan District Commission.”

The students were astounded.

“Let’s just read this one more time,” [Lorrie] Pearson recalled thinking.

In short: For the last 24 years, Boston Garden (now named after some bank or something) has been supposed to be holding three charitable events a year, and giving the proceeds to city recreational facilities. Instead, it’s been holding, um, none. So that’d be a 72-charitable-event backlog, which the youth organizers are hoping they can use to convince the arena’s owners Delaware North (run by Jeremy Jacobs, owner of the Bruins) to kick in some money toward a new community hockey rink in Hyde Square, something the neighborhood and surrounding poor communities have been without since two local ice rinks were closed because of disrepair in the ’90s.

Hopefully that will happen, but in the meantime: How the hell did a multi-million-dollar contractual obligation of the Bruins’ owner go unnoticed by everyone in city government for 24 years? If 17-year-old kids can read the legal language and figure it out, you’d think so could anyone at City Hall, no? If I’m at the Boston Globe, at least, I’d be calling every budget director for the last two decades and pointing out that they just got shown up by a bunch of meddling kids.

New Coyotes CEO: Arena deals are like vampires, this is a totally good metaphor to use

New Arizona Coyotes sole owner Andrew Barroway and his new CEO Steve Patterson opened their mouths this week and lots and lots of words fell out, so let’s get right to them. First, Barroway:

“We’re going to get a new stadium here. It’s just a question of when,” Barroway said. “We’re going to make it happen. I think we’ve put the people in place to get it done, I can tell you we are aggressively pursuing all options and we have to make it work. We don’t have a choice.”…

“Failure’s not an option. We have to get it done.”

That’s all more or less meaningless, unless you take Barroway literally at his word and think, “You have to get it done, one way or another? Okay, then, quit asking Phoenix-area governments to help you with subsidies, since you have to get it done even if it requires paying with your own money, right? Also, it’s an ‘arena,’ not a ‘stadium,’ you bozo.”

And now, Patterson, who was picked for the job in part for his experience shepherding sports venue deals for the Houston Texans and Portland Trail Blazers:

“I think any professional franchise needs an arena that suits the needs of the fan base and can provide a best-in-class experience. … I recognize there’s a lot of hard work to do, but I’m optimistic we’ll have a second generation of Coyotes fans growing up here in the desert.”…

“Arena deals take time, talks and negotiations. They’re kind of like vampire movies. You go to the coffin a dozen times and you think they’re dead, but they keep rising back up. Every single deal I’ve been involved with was thought to be dead a dozen times and then it rose back up.”

Vampires. You know, soulless creatures of evil that you have to stake through the heart to be sure they don’t rise up and kill you? Those things. We gotta get us one of those, and failure is not an option.

The Coyotes arena situation is going to continue to provide entertainment value at least until Phoenix becomes uninhabitable, guys.