Rays owner still distracting press from stadium subsidy demands by wavering on stadium site

The minute that the city of St. Petersburg approved letting the Tampa Bay Rays buy their way out of their lease and seek other stadium sites in the local area, I was worried that Rays owner Stuart Sternberg was going to turn this into a “Where will the Rays’ new stadium go?” debate before anyone considered who was actually going to pay for one. In entirely unrelated news, here’s a humongous article in the Tampa Bay Times all about how Sternberg plans to rank prospective stadium sites now that he’s discovered you can’t just point at them and say “I’ll take that one”:

“We had some ideas on locations that just weren’t available, that I thought would have worked perfectly, but they’re off the table,” Sternberg said before the Rays’ game at their spring training site in Port Charlotte. “So we’re sort of moving down our list to Nos. 2, 3 and 4.”

He likened the Rays’ stadium search to a team setting up its pitching rotation.

“It’s like starting pitchers, you have five of them and sometimes No. 4 is better than No. 2, but rarely better than No. 1,” Sternberg said. “The No. 1 is the No. 1. I hate to be mixing these sort of metaphors, but it sort of works in this case.”

First off: That’s not a mixed metaphor, as it’s perfectly consistent; it’s just a stupid metaphor, as pitching rotations are set up to have five choices because you need five days’ worth of pitchers, whereas you only need one stadium site. Also, you’re required to have some kind of pitcher on the mound every game, whereas if none of the stadium sites work out, Sternberg can simply remain with the status quo at Tropicana Field.

But anyway, what’s still on the table as far as Sternberg is concerned, from the nine sites floated last summer? Not the Heights site in Tampa (the landowners don’t want a stadium there), or the site of Jefferson High School (local elected officials don’t like it), or the sites of Albert Whitted Airport or Al Lang Stadium in St. Pete. Evicting 372 low-income families from the Tampa Park Apartments is still a potential option, and there’s still a few other places in and around Tampa-St. Pete that won’t be underwater for a while, so expect Sternberg to keep looking.

But now I’m falling into the trap: The bigger question isn’t where to put a stadium, but how to pay for one. Sternberg still hasn’t provided much in the way of details beyond the need for “a public-private partnership that would support the construction of the Rays next generation ballpark“; if he’s smart, he’ll keep it that way until he finally settles on a site, in the hopes that everyone will be so relieved about getting to stop debating locations that they’ll be happy to sign a blank check for construction. It’s not a sure strategy, but it’s certainly worked in the past, and it sure appears to be the endgame he’s preparing for — with the aid of the Tampa Bay Times, which assigned five people to work on this story and didn’t bother to quote a single person who wasn’t either a Rays official or a local politician in favor of building a new stadium. Oh, journalism.

Coyotes’ $170m tax kickback bill is mostly dead, owners go back to drawing board

So if Arizona Coyotes owner Andrew Barroway and NHL commissioner Gary Bettman though that threatening vaguely that the franchise “cannot survive” in its existing arena in Glendale was going to shake loose money from the state legislature, yeah, no, that’s not happening. State senate president Steve Yarbrough told the Arizona Republic yesterday that “I have no expectation that that bill is going to move,” and even the bill’s sponsor was reduced to mumbling something about how where there’s life, there’s hope:

[Sen. Bob] Worsley, who pushed the bill through a committee he chairs in February, said it “may be the case” the legislation is in trouble. Yet he noted that no bills truly are dead until the Legislature adjourns.

So assuming that the bill to write as much as $1 billion in blank checks to local sports teams for new buildings isn’t going anywhere, now what? Barroway and his co-owners may not be getting paid $8 million a year to run the Glendale arena anymore, but they still have a fairly cushy lease that has already been extended through 2018, so they can easily keep going year-to-year while trying to find some other Phoenix-area elected body eager to throw public money at them. They could try to move the team, but the options there aren’t much better: Quebec would require selling the team to Quebecor, Seattle still doesn’t have an NHL-ready arena, and other cities are even more of a shot in the dark. The real answer here appears to be “if you’re going to buy a hockey franchise, maybe don’t buy one that plays in a non-hockey hotbed and has never been able to draw flies,” but Barroway and company have made their bed, so honestly unless you’re a Coyotes fan, there’s no reason to worry about how they choose to lie in it.

Cavs arena subsidy demonstrators go to Detroit to demand of Gilbert: Can we get a cut, too?

Points for creativity to opponents of Cleveland Cavaliers owner Dan Gilbert’s $70 million in glass wall subsidy demands, who took buses to Detroit to stage a protest on a melting public ice rink outside Gilbert’s Quicken Loans offices:

“We’re not all in,” the crowd of more than 150 chanted…

Stacy Mathews of Cleveland said there’s no guarantee that the community would benefit from a public investment in the arena.

“I don’t have any personal feelings against Dan Gilbert,” she said. “I don’t know him personally, but I just hope with the movement and changes that he’s trying to make for his team that he would also do that for the city as well. Cleveland right now are going pretty good, but there are still areas in Cleveland that need to be addressed. There are still many poor areas … (and resources needed) in the schools and things of that nature.”

Look, here’s video!

<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/dcDsBl5OdzY” frameborder=”0″ allowfullscreen></iframe>

Those aren’t necessarily the snappiest soundbites — and definitely isn’t the snappiest chant — and appears to be a bit of a pivot from “this is a stupid subsidy” to “if Gilbert is going to get $70 million in free public money, either he or the city of Cleveland should throw some money at other local needs as well.” This all appears to be heading toward a battle over a community benefits agreement, and you know my feelings about those.

Meanwhile, the Cleveland city council has introduced legislation to approve the Gilbert arena subsidy, and is expected to cast a final vote by mid-April. There may be some haggling over the details, but it looks like the plan to give a billionaire $70 million for no coherent reason at all is likely to sail through without much difficulty — and without Gilbert even having to come up with his own chants.

Brooklyn arena losing even more money since Islanders and their sweetheart lease arrived (UPDATE: not!)

When last we visited Brooklyn’s Barclays Center, it was losing millions of dollars a year, and arena (and Nets) owner Mikhail Prokhorov was threatening to evict the New York Islanders in 2019 because he thought he could do better without them. Now, Forbes’ Michael Ozanian reports (or not! see below) that the arena is losing even more money since the Islanders moved in:

Brooklyn Arena LLC, the arena arm for the Nets that operates the Barclays Center, post an operating loss of $45.6 million last season, according to the 2015-16 financial statements. That was the first season the Barclays Center hosted the NHL team.

The prior year Brooklyn Arena LLC posted an operating loss of $38 million.

Now, keep in mind that “operating loss” doesn’t actually mean “loss”: More than $30 million of that figure is for depreciation, which is just a way of telling the IRS that you should owe less in taxes on your building because it’s getting older. Assuming the depreciation figure has stayed roughly the same, and using Atlantic Yards/Pacific Park Report’s Norman Oder’s earlier estimate that the arena had lost $5-6 million the previous year, this would up the arena’s actual red ink to about $13 million after the Islanders arrived.

The reason for this is pretty clear once you look at the arena revenue figures that Oder reported on last week:

BarclaysThirdPartyEventProfitSummary1In short, the Barclays Center only really brings in any significant revenue from concerts — everything else is almost a wash. (Though it’s interesting that sporting events got more profitable the year the Islanders arrived — assuming that’s not just tricksy bookkeeping.) So you can see why it might make sense for Prokhorov to give the heave-ho to the Islanders and their deal in which the arena owner pays the team a flat fee ($37.5 million, per Ozanian) in exchange for its ticket-sales revenues, in hopes he can do better booking more concerts.

In any case, it’s clear that the deal to bring in the Islanders has pretty much sucked for Prokhorov, thanks to wildly overoptimistic assessments of how many Islanders fans want to go see games in a too-small arena a long train ride from where most of them live. It seems to be working out significantly better for the Islanders owners, according to Forbes figures, which raises at least the possibility of a lease renegotiation, at least a short-term one, that guarantees the Islanders owners less money. Though it’s hard to predict this early in the game, especially since there’s an arena sucker born every minute.

URGENT UPDATE: Michael Ozanian screwed up, and Forbes doesn’t employ fact-checkers:

I was wrong. The exact opposite is true. The Barclays Center posted an operating profit of $46 million with the Islanders for the year 2015-16, versus an operating profit of $38 million in 2014-15.

I inadvertently inserted minus signs instead of plus signs. A spokesperson for the arena operating company gracously called me today to point that out.

Okay, first off, apologies for not double-checking Ozanian’s numbers, but I (wrongly) assumed that the dude literally in charge of the most important sports business coverage in the country could read a spreadsheet. Or somebody else at the magazine could.

I could try to backtrack and figure out what we now know about the Islanders’ worth to the Barclays Center and vice versa, but I want to actually have time to spend quality time with the numbers before saying anything more. Meantime, go stare at the “event profit summary” that I reposted from Norman Oder above, since he’s a professional and actually knows what he’s doing.

 

Denver Post levies Coors Field upgrade demands, says it only wants to protect taxpayers, really

So this is kind of weird: On Saturday, the Denver Post ran an editorial arguing that in lease renewal talks between the Colorado Rockies and the state-run Denver Metropolitan Major League Baseball Stadium District, taxpayers shouldn’t be on the hook for any renovation costs:

[District chair Ray] Baker said instead he’s hoping to craft a long-term lease that would be in the best interests of taxpayers and protect the asset that is the stadium. He said engineering studies have shown the stadium needs $200 million in infrastructure improvements to last for another 20 to 30 years.

We don’t think taxpayers should be on the hook for those construction needs, given that the initial lease so badly inhibited the stadium authority’s ability to raise long-term capital needs.

What’s weird about that? First off, the Post is actually a minority owner of the Rockies, so it’s more than a little odd to see their editorial board insisting on protecting taxpayers from their own demands. But also, this was the first mention of any potential renovation costs to Coors Field at all — not a peep out of the paper’s news reporters before this, or any other news outlet at all.

Read to the very end of the editorial, and it’s maybe clearer what’s going on:

Significant revenue sources need to be dedicated for the structural, electrical, water and sewer needs of the stadium.Without that, it’s likely voters will be asked to approve a new tax again to fund those needs, and that would be a hard sell this time around.

The bad news is that the Rockies, now an ingrained part of our cultural scene, could pack up Dinger, the dinosaur, and Nolan Arenado, the third baseman, and leave town.

Unlikely as that would be, it’s not unprecedented, and it’d be a sad day in LoDo.

Now we’re getting somewhere. Read between the lines, and it appears that Baker, the Rockies’ landlord, wants more funding to snazz up the stadium he runs in the future. The Rockies could choose to pay for any upgrades, obviously, but Baker wants a dedicated revenue stream — the editorial hints that this should be a cut of ticket sales and concessions — so what better way to lobby for one than to get the local paper to insist that it’s vitally necessary to avoid sticking taxpayers with a bill that doesn’t even exist yet?

The real message here, then, isn’t about urgent lease talks — the Rockies owners can unilaterally choose to renew their current deal for another 15 years — than to put a bug in the public’s ear that Coors Field is in urgent need of repairs, and somebody’s gotta pay for it, or else the team may leave. It’s nice and all that the Post is choosing to side with Baker that that somebody should be the team owners and not general taxpayers, but significantly less nice that the paper is trying to shift the goalposts to “We need $200 million, how are we going to pay for it?” at a time when nobody aside from the stadium manager is saying that upkeep of a stadium will cost almost as much as it took to build in the first place. In fact, that seems like the kind of claim that should be investigated by, you know, journalists. Wonder where the Post could find some of those.

UPDATE: Ah, this makes it all somewhat clearer: Apparently the Rockies owners are refusing to sign their lease extension, trying to use it as leverage to get the state to hand over development rights to the Coors Field parking lot in exchange for the team taking on maintenance and upgrade costs. (Aka “the Los Angeles Angels gambit.”) With this as the backdrop, the Post editorial makes even more sense, if by sense you mean “trying to shift the debate in favor of someone else paying for unneeded upgrades,” which is about as much sense as is on offer today.

Kings tripling what they charge Sacramento State for graduation ceremonies, thanks to new arena

It’s Friday, so let’s celebrate the end of a long week with a sad tale of how not to write an arena lease, courtesy of the Sacramento Bee:

The Sacramento Kings more than tripled the amount they will charge Sacramento State for commencement at the new Golden 1 Center compared to their old home, according to a document obtained by The Sacramento Bee.

Last spring, the university paid $59,842 to hold seven spring graduation ceremonies at Sleep Train Arena.

Sacramento State’s new contract with the Kings Arena Limited Partnership asks the university to pay a base fee of $50,000 plus “additional charges” not listed in the contract to have graduation at Golden 1 Center. University officials estimate those charges, which include traffic management, camera operators, lighting and stagehands will add another $140,595 to the bill – for a total cost of $190,595.

This is sad and bad for the state university campus, which will now be out an additional $130,000 that it could have used for, you know, school stuff. But hey, vagaries of the market and all, so what you gonna do, right?

Except that Sacramento’s deal with the Kings was that the city could use the new arena for nine “civic events” per year — and the Sacramento State graduation, which was previously held at the Kings’ old arena, wasn’t included. (It’s expected that all nine this year will be high school graduations.) So instead, one side effect of giving the Kings $255 million in city subsidies for their new arena is that the local university has to pay more for their graduation costs, because the venue is shinier now. It’s the kind of thing that the city could easily have remedied by demanding that Sacramento State get access to the arena in exchange for throwing public money at it, but Kevin Johnson had other things on his mind at the time.

Of course, another side effect is that the city of Sacramento is now out $255 million. You can spend the next three days determining which is the insult, and which the injury — happy weekend!

Bettman to Calgary: New arenas are shiny, c’mon and give Flames tax money for one already

Look out, Calgary! NHL commissioner Gary Bettman has come to talk at you about why you should build the Flameswealthy oil-executive owners a new arena whether you want to or not:

“I actually spent an hour this afternoon with the mayor. We had a very cordial, open, candid conversation,” Bettman said. “I’m hopeful that the city and the Flames can be on the same page so this can move forward as quickly as possible.”

And what message did Bettman bring to Mayor Naheed Nenshi? If you had “I will not be shackled to a rusty girder,” you win the pool:

Calgary’s Scotiabank Saddledome is an “old, antiquated, inefficient building” that “doesn’t hold a candle to what has been done in new arenas,” NHL commissioner Gary Bettman said after touring the facility Wednesday.

Speaking to reporters ahead of Wednesday’s game between the Flames and Boston Bruins, Bettman repeated his comments from a day earlier, when he said the city is in need of a new arena.

“In terms of amenities, in terms of facilities, in terms of egress and the like, for all the events that go here, this building was built in the 1980s, they don’t build buildings like this anymore,” he said. “It’s a grand old building, it’s got a great roofline, it’s historic in many ways, but … these aren’t the facilities our hockey teams typically have.”

And for good measure, he dropped in the “arenas cause unspecified good economic things” argument:

“I’m not sure that people that focus on the deal in the appropriate way would say no taxpayer money,” said Bettman. “If in fact, a new project with development creates new revenues and new taxes that didn’t exist before, reinvesting it in the city, reinvesting it infrastructure, reinvesting it in quality of life, seems to make a lot of sense to me.”

Whether it makes sense to Nenshi — who has shown an admirable dedication to actually doing the math on a Flames arena project to see if it would work for the city — is going to be another story. But Bettman got his message, or the Flames owners’ message if you prefer, across in the media, and that’s what this game is all about at the moment. At least until the CBC website starts up an Actually Doing The Math section.

Virginia Beach okays $206m arena subsidy, pats self on back for getting a new mortgage banker

Looks like Virginia Beach will be getting its new taxpayer-subsidized arena after all, as the city council met in closed session on Tuesday, as it likes to do, to approve a new version of the financing plan that it had all but killed last fall:

The council met with City Attorney Mark Stiles in closed session Tuesday night, and he told members that the financing is in line with the deal that was approved in December 2015, according to a Facebook post from John Moss. The council agreed with Stiles’ assessment, which means it would not require a new vote.

“See you at the ground breaking this fall,” Moss wrote.

The arena funding plan is hideously complicated, you may recall, with kickbacks of property taxes, business license taxes, admissions taxes, arena meals taxes, construction sales taxes, the city’s share of arena sales taxes, plus the top 1% off of the city’s 8% hotel tax, plus cash for infrastructure and land costs. It all adds up to about $206 million worth of subsidies for a $220 million arena, which, um, yeah. The main concession the city seems to have negotiated since October is that JP Morgan will now be the lender on the stadium construction costs instead of a Chinese bank, which also, um, yeah. But let’s all applaud Virginia Beach city officials for saying no to developers, everybody!

Virginia Beach will now spend the next 30 years debating whether to pay to renovate their new arena to lure an NBA or NHL team, because nobody’s going to want to play in a building opened way back in 2017, sheesh, get real.

Miami officials to Beckham: Build stadium or get off the pot already

No, David Beckham still hasn’t figured out who’s going to finance his proposed new MLS arena in Miami yet. And yes, Miami officials have noticed, and are starting to wonder how long they should be expected to wait on this stadium plan:

“How long are we going to negotiate for the use of that [county-owned land] before we decide that maybe that ought to be made available for some affordable housing?” Commissioner Xavier Suarez asked Monday during a meeting of the county’s Housing and Social Services committee. “Are we going to wait for these folks forever before we use that property for something more?”

He’s got a point! As does commissioner Audrey Edmonson, whose district includes the proposed stadium site, and who griped that the commission has gone months since last hearing from Beckham’s ownership group: “Are they bringing a stadium there? I haven’t heard anything.” Team Becks, meanwhile, has resorted to having their PR firm defensively tweet that they hope to have a team in place someday, maybe:

It’s not entirely clear what the holdup is, but “no banks think that investing in a soccer stadium in Miami just because a famous guy would run the team is a hot idea” is a likely candidate. There’s no reason this standoff can’t continue forever — or at least until Beckham loses interest or MLS runs out of expansion franchises to dole out, and the latter seems likely to happen never — so gird yourself for more of these headlines for the foreseeable future.

 

Cuyahoga moves $70m Cavs subsidy forward, because mumble mumble “maximize assets” something

Cleveland Cavaliers owner Dan Gilbert took another step closer to getting $70 million in arena renovation subsidies on Tuesday when a majority of the Cuyahoga County Council voted to move the funding bill out of committee. A full council vote is expected on March 28, and unless somebody unexpectedly gets cold feet, the $140 million bond issue — half of which will be repaid by Cavs rent payments, the other half by ticket taxes and hotel taxes that currently go to city and county coffers — should pass easily.

Let’s check out what some county council members had to say!

“I do not think the deal is perfect but I do think the Quicken Loans Arena is by far the most important of Cuyahoga County’s entertainment and sports facilities. It is a vital and essential part of our economy.” —Dan Miller

“This is our facility and we will take care of it.” —Michael Gallagher

“This deal is not either/or or now or never but how and when.” —Shontel Brown

Well, at least nobody cited any dumb reasons like fear that the Cavs would move without a new glass wall or that arenas create scads of jobs or anyth—

“There is a threat the Cavs might leave and it is my job to have some stability. We own this building and we need to make sure our asset is maximized.” —Sunny Simon

“We need to maintain an economic driver that will not only keep my residents employed.” —Anthony Hairston

The Greater Cleveland Congregations group, which has opposed the deal and called for Gilbert to at least put money into a community development fund in exchange, was roundly ignored by the county council. The big wild card now is the Cleveland city council, which also has to sign off on the deal, and hasn’t even scheduled hearings — as Cavaliers CEO Len Komoroski noted, the team wants to start construction this summer to be ready for hosting an All-Star Game in 2020 (other cities like Houston and Orlando are bidding for it as well, but you’ve got to be prepared, right?), so they’re going to be pushing hard for an early decision. Here’s hoping the city council at least comes up with some better cliches before casting their votes.