- Columbus Crew owner Anthony Precourt says the lawsuit to force him to offer the team for sale to local owners before moving it to Austin is groundless, since he made “significant investments” in the team “both on and off the field” and yet the team isn’t making money hand over fist like he’d like it to. I would have gone with “fine, you can buy the team if you want, my asking price is one quattuordecillion dollars,” but that’s why Precourt pays himself the big bucks.
- Oakland Raiders management says it has identified room for 27,000 parking spaces within 1.5 miles of its Las Vegas stadium, and 100,000 spaces within three miles. “Now, obviously, people don’t want to walk three miles, so you have to have a pretty strong infrastructure program and transportation plan in place,” said Raiders president Marc Badain. “We’re working on all of that.” Cool, get back to us!
- Residents of the West End opposed to building an F.C. Cincinnati soccer stadium on the site of a revered high school football stadium there are all about “maintaining disinvestment, maintaining the status quo and not closing racial and economic gaps but keeping them divided,” Cincinnati Mayor John Cranley said this week. “I think that’s wrong.” But enough with the pandering to your constituents, Mayor Cranley what do you really think about them?
- Because no arena project can truly be cost-free for the public, the new Muni Metro stop being built at the Golden State Warriors‘ new San Francisco arena has now risen in cost to $51 million, and the city of San Francisco hasn’t figured out how to pay for $17 million of that yet. Not that a new mass transit stop isn’t a public benefit for people other than Warriors fans, but just saying.
- This is what Wrigley Field looked like as of a couple of weeks ago. There’s still time before opening day, so hopefully this renovation will go better than the Chicago Cubs‘ last big one.
- Does an “asteroid the size of a sports stadium” zooming past Earth count as stadium news? It does to my custom RSS feed for “stadium” news, so enjoy!
I’ve pieced together this week’s news roundup via WiFi made from powdered limestone and gum-tree resin, so if I missed anything important, let me know and I’ll pick it up starting Monday. In the meantime:
- The state of Connecticut approved spending $10 million to renovate Hartford’s Dillon Stadium if it can lure a USL soccer team. In totally unrelated news, the last guy who promised to lure a soccer team to Dillon Stadium is awaiting sentencing for embezzling city funds spent on the project. Second time’s the charm!
- That Koch Brothers–sponsored bill to ban sports subsidies in Arizona that got all the attention last week is now apparently dead after it was opposed by the League of Arizona Cities and Towns, Arizona and Greater Phoenix Chamber of Commerce and Industry, Greater Phoenix Convention and Visitors Bureau and the Arizona Lodging and Tourism Association. Maybe it’ll have better luck in one of the other 24 states where Americans for Prosperity said they were introducing it, but I wouldn’t hold your breath.
- The Cincinnati Enquirer’s Politics Extra column says that the West End is going to get gentrified against its will whether it likes it or not, so shouldn’t it be by a local guy who wants to build an F.C. Cincinnati soccer stadium as part of it, and not “a developer from, say, New York or Chicago who doesn’t know or care about you or your homes”? Yes, it really truly says that.
- The Oakland Raiders‘ Las Vegas stadium-building company is proposing to provide a $5 million bond to restore the stadium land to its original condition in the event that construction has to be halted partway through if it goes bankrupt. This is simultaneously an excellent way to safeguard the public interest in all contingencies (except for the $750 million the public would be out either way, obviously) and also really not the kind of thing you want newspaper readers to be thinking about when your new multi-billion-dollar stadium project is about to get underway. Here’s hoping Roger Noll is wrong about this thing having a shot at working.
- The Miami-Dade County lawsuit against the Marlins‘ former owner Jeffrey Loria and current owners Derek Jeter and Friends over not cutting the county in on a share of the team sale proceeds went to court yesterday, and probably something happened, but it’ll be next week before the latest news story loads for me, so somebody recap anything important in comments, okay? I’ll see you next week.
The Washington Times had a big article yesterday on the Oakland Raiders‘ lease for their new stadium in Las Vegas, and how it contains a provision that would prevent the state from trying to recoup its $750 million in stadium costs by levying new taxes on the team down the road:
An unusual provision in the Raiders agreement with the state allows the team, currently playing its final seasons in Oakland, to break the lease and look for another home if Nevada attempts to impose new taxes over the next three decades on the team, stadium, fans or players. That includes visiting teams and fans as well.
The provision applies to any “targeted tax” aimed at collecting revenue specifically from players or fans. It would not protect the team or its fans from any new taxes applied generally on businesses or individuals across Nevada, however.
I’m quote in this article, calling the lease clause “adding insult to injury” since it “makes sure Nevada taxpayers never see a penny from the stadium.” Which is true, but what the Times left out was that I mentioned this isn’t unheard of — other teams have leases that prohibit local governments from levying team-specific taxes as well. This is probably because I didn’t actually cite any examples to the Times reporter — I was busy and couldn’t look any up — but a quick search through the FoS archives reveals two examples right off the bat:
- The Cincinnati Bengals and Reds owners have lease clauses that allow them to block ticket tax surcharges during the course of their leases, and did so in 2010.
- The owners of Minnesota United asked for limits on that state’s ability to impose future taxes on the team, though I’m having a hard time confirming whether that provision made it into the final lease agreement. (The world really needs a database of stadium leases. Get right on that, world, okay?)
I realize this isn’t overwhelming evidence, but it is a sign that the Raiders clause isn’t entirely unprecedented, even if the Times reports that Temple economist Michael Leeds said, in the paper’s words, that this provision “goes beyond anything he has ever seen.” And it makes sense that team owners would try to forestall ticket surcharges: As we’ve covered before, targeted ticket taxes tend to mostly come out of team owners’ pockets because, unlike other taxes, they reduce the amount of money an owner can get away with charging for tickets. So if you sign a 30-year lease and then the state turns around and says, “Hey, $10 surcharge on all your tickets, we get the money!” and you can’t get out of the lease, that’s a huge chunk of change that is suddenly going out of your pocket and into the public’s.
Which, of course, is exactly why it’s so disappointing that the Raiders lease contains this clause — with the state already on the hook for $750 million, a ticket tax would have been one of the only ways for taxpayers to get some of that money back. But the Raiders had smart contract lawyers, so that’s not going to be happening. Evidence really is accumulating that Mark Davis may be smarter than he looks.
The University of Nevada-Las Vegas has cut a deal with the Oakland Raiders to rent their new Las Vegas stadium once it opens in 2020, and it sounds like the university made out pretty well:
Per the draft agreement, UNLV would be able to sell as many as 70 percent of the anticipated 100 luxury suites for its six annual home games in the $1.8 billion stadium. The university would keep money from those sales, as well as club level and non-premium seat revenues as well. Off-limits would be 22 “owner’s level” suites and eight other designated suites.
The first draft terms would have given the Raiders exclusive right to sell luxury suites and club seating for UNLV football games as part of larger packages including Raiders games and other major events…
UNLV maintains control of its parking destiny as well, a notable change from the deal first proposed by the Raiders. The agreement explicitly states that “no portion of UNLV’s property will be used by (the Raiders) for parking for Raiders’ home games or other stadium events.” It also allows UNLV the right to use and maintain revenue from the stadium’s 2,375 on-site parking spaces.
UNLV also can use any off-site parking sites obtained or leased by the Raiders, but the Raiders would keep revenue from those areas.
Given that Raiders execs initially wanted to keep all the luxury-suite money from UNLV games (only paying the university the equivalent price for regular tickets) and to use 80 acres of school land for parking, this is a nice bit of negotiating by the university. That they were able to pull it off no doubt comes down to one line in the Las Vegas Sun article about all this:
Senate Bill 1, the state legislation approved in October 2016 that provided $750 million in taxpayer funds to build the stadium, required the Raiders to share the facility with UNLV’s football team as a condition of receiving the money.
When there’s $750 million at risk, that’ll bring the other side to the negotiating table in a hurry. Not that UNLV doesn’t still deserve props — as we’ve covered here before at length, not every public negotiator knows how to use leverage even when it’s handed to them on a silver platter. But at least one public institution showed it could drive a hard bargain, even if it decidedly wasn’t the state stadium authority.
Let’s get right to this week’s remainders:
- I read this headline from earlier in the week “Miami Open Moving to Dolphin’s Stadium” too quickly, and thought for a second “Yes! David Beckham has come to his senses!” But no, it’s the Miami Open tennis tournament that’s maybe moving to the Dolphins‘ stadium (and also not a single dolphin’s stadium as the punctuation might suggest), and anyway now the tournament probably isn’t moving to the Dolphins’ stadium because Miami-Dade County wants to get paid all that it’s owed for past tournaments first, and hell with that. The Miami Open could now move out of Florida or even the U.S., which … how does that even work? Can you just move a tennis tournament to Zurich or something and declare, “Now we’re the Miami Open of Zurich, everyone has to come play here instead”? Clearly I don’t understand tennis, which is just how I like it.
- St. Louis Comptroller Darlene Green tried to stall the St. Louis Blues arena renovation subsidy agreement that she hates (with good reason) by signing the paperwork as a judge had ordered, but refusing to actually hand over the signed documents. That didn’t work.
- The Tampa Bay Times insists that giving the Lightning $61 million in tax money to upgrade their arena in exchange for a lease extension isn’t really a subsidy, because it’s tax money that couldn’t have been spent on teacher pensions anyway. Seriously, guys, how many times do we have to point out that money is fungible, so the hotel-tax money could be spent on some other tourism-related expense, and that could be used to free up cash for other things, including, sure underfunded teacher pensions? Didn’t the Iran-Contra affair teach you anything?
- One of the three contenders for Belmont Park property who is not the New York Islanders or NYC F.C. dropped out of the bidding this week, saying the requirements for the project “appear to create a selection process that has been predetermined.” That sounds like “too rich for my blood” to me, but Horse Race Insider insists it means the Islanders have this all but locked up, and who am I to question Horse Race Insider? If so, next question will be whether the team’s owners really go ahead with building a new arena there with their own money (presumably, since they haven’t yet hinted at asking for public funds), or just use it as leverage to shake down the Barclays Center owners for a sweetheart lease extension.
- A Nevada congressman is asking the conference committee deciding the final terms of the nightmare tax bill that if they won’t restore tax-exempt bond financing for stadiums (the House version would outlaw them, the Senate version wouldn’t), to at least include language grandfathering in the Las Vegas Raiders stadium on the grounds that “many communities across the country have benefited from the tax-exempt status of bonds for professional stadiums.” All the other kids’ moms let them!
- Things that didn’t pass the smell test this week: an affordable-housing deal in Brooklyn, Montana State University taking money from the Koch Brothers, the Edmonton Oilers losing a game to the Philadelphia Flyers, dog poop fines in Melbourne, Australia, opposition to marijuana legalization in Alberta, and Real Salt Lake‘s property tax assessment.
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.
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 where to buy lorazepam online 0 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.)
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.
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.