Friday roundup: Battles over Blues arena, Vegas bond subsidy, Belmont land for Islanders

Let’s get right to this week’s remainders:

Handicapping Deadspin’s “Worst Stadium Scam” Vote

Deadspin is holding its second annual Deadspin Awards, and among the categories, you will be excited to know, is Worst Stadium Scam. And it’s set to be a tight race, with these candidates, not all of which are technically from 2017, but let’s not nitpick:

  • The Raiders robbing Las Vegas
  • The Flames trying to rob Calgary
  • The Falcons robbing Atlanta
  • The Louisville Cardinals robbing Louisville
  • FC Cincinnati robbing Cincinnati
  • The Pistons and Red Wings robbing Detroit

Even though these seem mostly selected by which stories were covered by Deadspin in the last year (Nashville SC robbing Nashville didn’t make the cut, nor did the Cavaliers robbing Cleveland), that’s a pretty solid selection. The Raiders and Falcons stand out for the scale of the subsidies — the Raiders will get $750 million in state cash while paying zero rent, while the Falcons will end up getting almost that much over time — and the Falcons have the bonus scamminess of hiding $400 million of their payday in a “waterfall fund” that will keep paying out long after the stadium’s opening. The Flames and FC Cincinnati haven’t been successful in their shakedowns yet, but are notable for trying (and failing) to get a more team-friendly mayor elected in the former case, and for demanding subsidies on the grounds that their owner has never asked for them before so he’s due in the latter. The Red Wings and Pistons are getting about $350 million in public money from a bankrupt city (or from a state that is otherwise starving a bankrupt city, at least), while the Louisville basketball arena deal is just a nightmare without an end.

I’m not going to reveal how I voted, except to say that it was a tough decision, and I won’t be unhappy at all if one of my second choices takes home the prize. Go cast your ballot now, and give extortionate corporate behavior and terrible public policy the shiny trophy it so desperately deserves.

Vegas paper says Raiders stadium “could” prompt development, in pioneering move of subjunctive journalism

The Las Vegas Review-Journal has presumably not needed to be in the business of boosterism for a new Raiders stadium since its owner, Sheldon Adelson, was cut out of the stadium deal early this year, but old habits die hard. So we have this article from Saturday’s paper, which looks at whether development is taking off around the stadium site, and follows this thought process:

  • There hasn’t been a ton of new interest in buying up land around stadium site.
  • One developer did buy a 2.5-acre parcel for about six times the going rate per acre, and now other landowners are looking for premium prices as well.
  • Conclude that whether or not the stadium actually results in new development, “at the very least, it seems the Raiders’ arrival has pushed up some property values.”
  • Run all this under the headline “Las Vegas Raiders stadium could spark nearby projects,” because in an infinite universe, anything could happen.

I’m honestly kind of sorry to have spent this much of your time and mine on this, but it’s important to see how that “stadiums bring economic development” meme we were just talking about spreads: A whole lot of people are going to see that headline in their daily newspaper (or, let’s be real, in their Facebook feeds) and think, “Oh, hey, maybe that Raiders stadium deal will be a boon to the surrounding area!” Whereas all that’s really happened is one guy gambled by spending $7.25 million on a plot of land the size of 2,500 king-size mattresses, and now everyone else is hoping that their property will be worth more now, and, bingo, newspaper headline. Thank god for journalism, or we might be forced to use the evidence provided by our own eyes.

Ban on tax-exempt bonds would add $100m-plus to Nevada’s costs for Raiders stadium

That provision in the U.S. house tax bill to bar use of federally tax-exempt bonds for pro sports facilities is already starting to freak out proponents of the Oakland Raiders‘ planned $1.9 million stadium in Las Vegas, which is set to use $750 million in public bonding:

“We stress-tested the model for things like higher interest rates,” [Nevada economic analyst Jeremy] Aguero said. “We understand the potential that comes with either legislative risk, or interest-rate risk or development risk, for that matter. I wish I could tell you it’s going to cost X amount of dollars in order to make it work but we need to go through the exercise of making sure we understand all the components of that legislation because that’s not the only one that will affect municipal finance.”

Okay, sure, figuring out how exactly this bill’s passage would affect the Raiders stadium costs is complicated. Figuring out roughly how much it would affect it, though, is dirt easy: Tax-free bonds typically allow an interest rate 1-1.5% below taxable bonds. So adding that much to the financing costs on the state’s $750 million would mean an extra $7.5-11.25 million a year, which over 30 years, converted into present value … I get between $115 million and $173 million worth of added interest costs.

So that’s a hefty chunk of change, and the big question would be who would pay it: The state or Raiders owner Mark Davis? That all depends on what it says in the team’s stadium lease — and in all likelihood it just says “we’ll use tax-exempt bonds,” meaning the whole thing would need to be renegotiated to settle who’d be on the hook for the extra cash. That would certainly be interesting.

(Note: It’s also important to remember, as I almost didn’t while writing this headline, that this would not be an increased cost of the stadium — it would just be shifting $115 million to $173 million worth of costs from the federal treasury, which would have been subsidizing it with tax exemptions, back to the state. It would make a hidden subsidy less hidden, in other words, but somebody’s paying those costs regardless.)

Friday roundup: A’s pollution woes, Falcons roof woes, Hansen email woes, and more!

Whole lot of news leftovers this week, so let’s get right to it:

  • It’s not certain yet how serious the environmental cleanup issues at the Oakland A’s proposed Peralta Community College stadium site are, but anytime you have the phrases “the amount of hazardous materials in the ground is unclear” and “two possible groundwater plumes impacted by carcinogens” in one article, that’s not a good sign. Meanwhile, local residents are concerned about gentrification and traffic and all the other things that local residents would be concerned about.
  • There’s another new poll in Calgary, and this time it’s Naheed Nenshi who’s leading Bill Smith by double digits, instead of the other way around. This poll’s methodology is even dodgier than the last one — it was of people who signed up for an online survey — so pretty much all we can say definitely at this point is no one knows. Though it does seem pretty clear from yet another poll that whoever Calgarians are voting for on Monday, it won’t be because of their position on a Flames arena.
  • The Atlanta Falcons‘ retractable roof won’t be retracting this season, and may even not be ready for the start of next season. These things are hard, man.
  • Nevada is preparing to sell $200 million in bonds (to be repaid by a state gas tax) to fund highway improvements for the new Las Vegas Raiders stadium, though Gov. Brian Sandoval says the state would have to make the improvements anyway. Eventually. But then he said, “I just don’t want us to do work that has to be undone,” so your guess is as good as mine here.
  • Pawtucket is preparing to scrape off future increases in property tax receipts for a 60- to 70-acre swath of downtown and hand them over to the Pawtucket Red Sox for a new stadium, an amount they expect to total at least $890,000 a year. Because downtown Pawtucket would never grow without a new baseball stadium, and there’s no chance of a shortfall that would cause Pawtucket to dip into its general fund, and nobody should think too hard about whether if minor-league baseball stadiums are really so great for development, this wouldn’t mean that property tax revenues should be expected to fall in the part of the city that the PawSox would be abandoning. Really, it’ll all be cool, man, you’ll see.
  • Somebody asked Tim Leiweke what he thinks of building a new stadium for the Tampa Bay Rays for some reason, and given that he’s a guy that is in the business of building new stadiums, it’s unsurprising that he thinks it’s a great idea. Though I am somewhat surprised that he employed the phrase “Every snowbird in Canada will want to watch the Toronto Blue Jays when they come and play,” given that having to depend on fans of road teams to fill the seats is already kind of a problem.
  • The study showing that spending $30 million in city money on a $30-million-or-so Louisville City F.C. stadium would pay off for the city turns out to have been funded by the soccer team, and city councilmembers are not happy. “There’s something there that someone doesn’t want us to find,” said councilmember Kevin Kramer. “I just don’t know what it is.” And College of the Holy Cross economics professor Victor Matheson chimed in, “I expect for-profit sports team owners to generate absurdly high economic estimate numbers in order to con gullible city council members into granting subsidies.” I don’t know where you could possibly be getting that idea, Victor!
  • Congress is considering a bill to eliminate the use of federally tax-exempt bonds for sports facilities, and … oh, wait, it’s the same bill that Cory Booker and James Lankford introduced back in June, and which hasn’t gotten a committee hearing yet in either the House or the Senate. It has four sponsors in the House, though, and two in the Senate, so only 263 more votes to go!
  • A Miami-Dade judge has dismissed a lawsuit charging that the sale of public land to David Beckham’s MLS franchise illegally evaded competitive bidding laws, then immediately suggested that the case will really be decided on appeal: “I found this to be an extremely challenging decision. Brighter minds than me will tell me whether I was right or wrong.” MLS maybe should be having backup plans for a different expansion franchise starting next season, just a thought.
  • The New York Times real estate section is doing what it does best, declaring the new Milwaukee Bucks arena to be “a pivotal point for a city that has struggled with a decline in industrial activity,” because cranes, dammit, okay? Maybe somebody should have called over to the Times sports section to fact-check this?
  • And last but not least, Chris Hansen is now saying that his SoDo arena plan missed a chance at reconsideration by the Seattle city council because the council’s emails requesting additional information got caught in his spam filter or something. If that’s not a sign that it’s time to knock off for the weekend, I don’t know what is.

Rams to charge record PSL price, Cavs arena subsidy moves ahead, and other news of the week

It’s Friday again, so let’s go spanning the world:

  • The Los Angeles Rams are considering charging a top personal seat license price of as much as $225,000, just for the right to then buy season tickets for $350-400 per game. This seems like a bit of a reach when the payoff is just that you get to watch Rams games, but I guess Stan Kroenke needs to try to recoup his $2 billion in stadium costs somehow — and at least if it all goes south, he’ll be the one on the hook, not taxpayers.
  • Some Canadian bank bought the naming rights to the Toronto Maple Leafs arena away from some Canadian airline. Is this going to buy it valuable market exposure and name recognition that will justify the $40 million a year expense? Not on this blog!
  • The LED lights at the Atlanta Falcons‘ new stadium make football look all weird.
  • Shreveport Mayor Ollie Tyler says spending $30 million on an arena for a minor-league basketball team is a great idea that only “naysayers” don’t appreciate. “I think sometimes we don’t believe in ourselves and some of our urban areas we don’t believe that we are able to make things happen,” she says. If Mayor Tyler needs a reelection campaign theme song, I have a suggestion.
  • “The Federal Aviation Administration has determined that the Oakland Raiders‘ proposed stadium in Las Vegas would not be a hazard to aircraft.” Huzzah!
  • Would-be St. Louis MLS owner Paul Edgerley says he’s still ready to pay $150 million for a franchise, and $100 million toward a stadium, as soon as someone comes up with the other $60 million in construction costs. Noted.
  • Cleveland Cavaliers owner Dan Gilbert has officially reinstated his plan to do $140 million of renovation work to the team’s arena, with Cuyahoga County paying for half the cost. ”This is corporate welfare at its worst,” said Steve Holecko of the Cuyahoga County Progressive Caucus, after his erstwhile coalition partners the Greater Cleveland Congregations withdrew petitions against the arena subsidy after getting a promise of two mental health crisis centers from the county. Holecko’s group doesn’t plan to mount another ballot challenge on their own, though, so construction work is set to begin later this month.
  • Mikhail Prokhorov is ready to sell the Brooklyn Nets, but will hold onto the Barclays Center, after renegotiating the team’s lease so that it will pay less rent to the arena. This … does not seem like the smartest way of going about things, but maybe Prokhorov is figuring he’ll give up future rent revenue in exchange for a higher sale price now on the team? Or maybe he’s just not very smart.

Friday roundup: Everybody still has lots of dumb stadium ideas, sun keeps rising in east

And aside from the Cleveland Cavaliers arena subsidy returning from the dead, Mrs. Lincoln, here’s how some of the rest of the week in stadium and arena news went:

  • Chicago is looking at closing some streets to accommodate DePaul University’s new city-subsidized basketball arena, because of course they are.
  • The new arena for the Detroit Red Wings and Pistons will have a Kid Rock-themed restaurant, because of course it will.
  • San Diego mayor Kevin Falconer wants to build a professional lacrosse stadium, even though the owners of the city’s newly created lacrosse franchise say they don’t need one, because of course he does.
  • Rhode Island state senate president Dominick Ruggerio says he hopes the state legislature will vote on $38 million in public funding for a new Pawtucket Red Sox stadium in November, despite not believing the team has a viable threat to move to Worcester if it doesn’t get what it wants, because “You know what, we’ll get criticized for anything.” And you know, he’s got a point: No matter what elected officials do, there’s somebody somewhere who won’t like it, so might as well do whatever they want, right?
  • The Las Vegas Raiders’ stadium construction could be delayed because nobody realized until now that they needed Army Corps of Engineers approval to remove a flood culvert. (The Raiders have agreed to pay the $1 million cost, at least.)
  • Dave Zirin at The Nation has examined how Joel Osteen’s dithering over whether to let Hurricane Harvey evacuees into his megachurch has its roots in the Houston subsidy deal that turned the Rockets‘ old arena into the church in the first place, and I put in a cameo to note that while littering the landscape with redundant current and former sports venues is one way to create a lot of hurricane shelters, it’s probably not a very cost-effective one.
  • Wells Fargo released a report that “real stadium construction spending” on new sports facilities has “climbed 80 percent over the past five years” to $10 billion per … something. And are they counting money committed, or actual construction money spent, and does this count both private and public funds? I guess we should cut Wells Fargo some slack, they have a lot on their minds these days.

Raiders still don’t have a place to play in 2019, but they will have a see-through video board

The Las Vegas Stadium Authority got its first look at the financial agreement for the new $1.9 billion Raiders stadium on Thursday, and — oooh, look, see-through video board!

It’s, like, a window looking out, and a video board looking in, so all the people outside on the highway can see football and all the people instead can see the highway and, um, anyway, shiny!

As for more salient details, they were thin on the ground. The Raiders are planning to get a $600 million loan from Bank of America, plus use $250 million from personal seat license sales; what revenue stream will be used to secure the B of A loan, or what happens if PSL sales fall short, nobody’s reporting. Here’s what B of A’s rep said at the authority meeting:

[Elliott] McCabe said the bank’s negotiations with the team includes consideration of the Raiders’ $378 million relocation fee. McCabe and Bank of America have worked on NFL stadium projects across the country, which he said gives the bank a high level of confidence that the team will be able to meet its obligations.

The stadium will also have a sliding tray where a grass field will be grown outdoors and then move into place for football games, similar to what the Arizona Cardinals have. As for other details like a non-relocation agreement, parking, and what happens in case of shortfalls or cost overruns, that’s all TBD. As is this one small detail:

There’s also some concern about cash flow in 2019 because the team doesn’t have a lease for a stadium that year. It will play in Oakland Alameda Coliseum this year and in 2018.

Yes, not having a stadium to play in for an entire year could result in some concern about cash flow. Not to mention whether players will have to call extra timeouts whenever a car comes down the street. Surely this will all be worked out in plenty of time, because that always works out fine.

A’s stadium plan wins friend, Vegas mulls Raiders transit, and other news of the (short) week

I’m going to be on a plane tomorrow to a faraway land, so let’s do the week’s news roundup a day early:

  • Peralta Community College District chancellor Jowel Laguerre now says he’s into the Oakland A’s tearing down his administrative offices in order to build a stadium, so long as they hire his students to work there: “The A’s are in the business of hiring people, and we’re in the business of developing people, so it makes sense to have these conversations.” I can see it now: Laney College, Your Gateway to a Career in Hot Dog Marketing and Sales! (Also the A’s still need to figure out how to squeeze a stadium onto a tiny site, but one battle at a time, I suppose.)
  • Clark County is smarter than Cobb County, it turns out: The Nevada county’s planning director, Nancy Amundsen, said this week regarding the new Las Vegas Raiders stadium: “If it’s determined that they need a pedestrian bridge at this location, or they need wider sidewalks on these streets, or they need streetlights here or there — any upgrade of the infrastructure based on the development on the site — we can request that in the development agreement.” The county commission still needs to do it, mind you, but at least thinking of it ahead of time puts them ahead of the folks who negotiated with the Atlanta Braves around their new stadium and its pedestrian bridges.
  • That El Paso court case over whether the city’s new arena can host sporting events or just concerts and such turns out to be due to the city’s project consultant, according to one neighborhood group opposed to the arena: “David Romo says sports consultant Rick Horrow is to blame for the city stripping the arena ordinance of the word ‘sports’ in favor of ‘multi-purpose performing arts facility.'” If that name sounds familiar, it’s because Horrow has been selling small cities on his “raise the sales tax and build an arena plus a whole of other stuff” model for decades now — he’s the man who talked Oklahoma City into building a new arena with public money (which worked out okay in that the Thunder eventually moved there) and tried to push the same model for such things as an NFL stadium in Birmingham, Alabama (which would not have worked out okay at all). Romo cites Horrow’s own book, which advises, “De-emphasize, even in triumphant cities, the sports model,” and “Each individual project, on its own, will have little chance of passage. together, bundled, is the most enticing way to present the idea to voters.” Except when you write yourself into a corner with bond paperwork that says your new building isn’t for sports; but then, Horrow will probably have collected his fee by then and moved on to the next town.
  • St. Louis’s MLS expansion bid, which pretty much disappeared after voters rejected spending $60 million on a soccer stadium this spring, may not be dead after all! According to alderman Joe Vaccaro, “I have been hearing rumblings and I have certainly no facts.” Or, you know, it might still be dead.
  • Pictures of D.C. United‘s new stadium set to open next year! Spoiler: They don’t look like much. Also spoiler: They don’t really look like the stadium will be ready by midseason 2018 as the plan is (United will start the year on a lengthy road trip to accommodate the construction schedule), but soccer stadiums are a bit simpler to build than those for other sports, so maybe?
  • “Colorful, glossy flyers urging residents to ‘Stop the Stadium!’ and ‘Take Action Now’ were left on doorsteps around the [proposed Miami MLS stadium] area late last week, paid for by a new group called the Overtown Spring Garden Community Collective.” David Beckham really can’t catch a break.

I’ll be back here … Monday? Later than that? It all depends on how well I can navigate whatever weird metric internet they have where I’m going. In the meantime, use the comments on this post as your open thread on any breaking news, and buy David Beckham a muffin or something, he’s probably needs some cheering up.

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.