Friday roundup: Panthers owner donated to Charlotte officials during stadium lobbying, St. Louis MLS didn’t need $30m in state money after all, and what time the Super Bowl economic impact rationalizations start

Happy Friday, and try not to think about how much you’re contributing to climate change by reading this on whatever electronic device you’re using. Though at least reading this in text doesn’t require a giant server farm like watching a video about stadiums would — “Streaming one hour of Netflix a week requires more electricity, annually, than the yearly output of two new refrigerators” is one of the more alarming sentences I’ve read ever — so maybe it counts as harm reduction? I almost linked to an amusing video clip to deliver my punchline, wouldn’t that have been ironic!

And now, the news:

Hamilton votes down $130m junior-hockey arena as “giving money away” to a rich dude

When last we checked in on the Hamilton Bulldogs, the (I’m going to get this right this time, I swear) junior hockey team’s owner was demanding a smaller stadium or else he’d leave town, and the city council was on board with considering building a “right-sized” arena for as much as $130 million to replace the city’s existing one. So I honestly had to blink a couple of times to be sure I was really reading today’s news that the council has voted down the plan as stupid and a waste of public money:

Councillors voted 11 to 3 against participating with Hamilton Bulldogs owner Michael Andlauer in a development at the mountain mall…

A report presented by authors Glen Norton and Ryan McHugh from the economic development and planning department (EDPD) … recommended “no further action be taken” in terms of moving forward with the project, citing cost and location as issues as well as the potential “negative perception” associated with downsizing to a capacity of fewer than 10,000 seats…

[Mayor Fred Eisenberger] defended the city’s current downtown arena and suggested further investment in FirstOntario Centre as a more feasible option.

“But to continue to disparage a facility that is actually probably as good a facility as any that are around other than in size, I think is a little disingenuous,” said Eisenberger…

“It really comes down to the feasibility and whether or not we can afford it and what kind of asset are we going to get at the end of the day?” said [Coun. Brenda] Johnson. “We’re not getting an asset. We’re just giving money away to a private investor who’s going to benefit.”

Okay, so admittedly Andlauer had significantly blue-skied the city by lowballing maintenance and operations costs on a new arena and the price tag of building parking garages, and was trying to stick the public with three-quarters of the costs of his new building — that’s just what sports team owners do! For city analysts to actually notice, and then city officials to read the analysts’ report and vote a plan down as a result, is extremely unusual, and makes me think we’ve somehow passed into an alternate dimension where decisions are made based on common sense and not keeping the local very rich guy happy.

As for what happens now, Andlauer already moved an AHL team out of town two years ago, then moved it again two years later, so clearly he’s willing to pack up the moving vans in order to punctuate his hissy fits. On the other hand, Hamilton is in a virtual tie with Quebec City for the largest city in Canada without an NHL team, so Andlauer might not find greener pastures quite so easily, and if he does, you have to imagine somebody else would interested in locating a team in Hamilton if he leaves. Sure, he or they could always try to demand upgrades to the current arena as part of any deal — and the mayor did leave the door open for that, so Hamilton taxpayers aren’t totally out of the woods yet. But still, it’s nice every once in a while to see some elected officials willing to say publicly when the local sports team owner is wearing no clothes.

Saskatoon to maybe build $175m arena to save local businesses “millions,” this is surely great fiscal management

Saskatoon city officials have been talking about building a new downtown arena for years now, and for years now I’ve been relegating it to the small bullet points in Friday roundups, because it’s such an amorphous plan (the dollar figures have wavered between $175 million and $375 million) and because Saskatoon’s arena doesn’t even have a major pro sports team playing there, just the Blades (junior hockey) and Rush (lacrosse) and Rattlers (minor-league basketball). But that all ends today, and not just because Global News chose the report on this with the irresistible headline “Saskatoon city councillors want fewer homicides, new arena in 2020.”

No, the real kicker is this:

[Saskatoon councillor Randy] Donauer compared the SaskTel Centre to a used car, saying a responsible steward needs to plan for its replacement. He also said that concert promoters had told council that the SaskTel Centre is missing amenities which would keep attracting A-list talent to the city.

He said local businesses would lose out on “millions” of dollars if entertainers went to another venue in another city.

First off: Used cars have lots of moving parts that tend to break, while stadiums are mostly steel that can last effectively forever if protected from corrosion, so this is a terrible, terrible analogy. But more importantly, here we have an elected official saying, presumably with a straight face (Global News didn’t include video of Donauer’s comments), that his city needs to spend hundreds of millions of dollars on a new arena because otherwise local businesses would lose millions of dollars if Paul McCartney and Barbra Streisand kept on skipping stopping in Saskatoon.

I am not an expert on Canadian finance, but I’m pretty sure hundreds of millions of Canadian dollars are still hundreds of times more than millions of Canadian dollars, so, you know, even if you see the main job of city governments is to prop up local businesses’ profits, maybe there would be cheaper ways to help Saskatoon businesses than building a whole new arena? Maybe?

Right now it looks like the Saskatoon council is only going to work on identifying a site for an arena in 2020, with any actual money to be allocated down the road, possibly because the city is already almost at its debt limit. So there’s still a long ways to go before anything gets decided, which will hopefully give Donauer a bit more time to learn about how money works.

Worcester adds $20m more in tax money to baseball stadium because it forgot how gravity works

The Worcester Red Sox stadium project has always been on the pricey side as minor-league baseball stadiums go, both in terms of projected construction cost ($90 million) and projected public subsidy (around $100 million — yep, the builders were set to get more in tax kickbacks and infrastructure funds than they actually spent on construction — so news that it’s facing significant cost overruns is not really what anyone needed to hear:

Construction costs for Polar Park have increased by $9.5 million over initial estimates, while costs to acquire the properties needed for the ballpark, relocate businesses and prepare the site for development have run roughly $20 million more than what was anticipated.

That has prompted city officials to negotiate changes to the agreements with the ballclub that will be playing at Polar Park starting in 2021 and for the private development that will be built as part of the overall $240 million redevelopment of the Kelley Square/Canal District area.

These “negotiated changes” are that the team will cover the $9.5 million in increased construction costs, while the city will cover the $20 million in added land acquisition and site prep costs. Part of the team’s costs (according to the city manager’s report that starts on page 59 here) will be covered by a doubling of the 50-cent ticket fee that was planned for WooSox games; the city’s costs will be funded by increasing the size of the tax increment financing district where future rises in property tax revenues will be siphoned off and used to pay for land acquisition costs.

Worcester city manager Edward M. Augustus Jr. told the Worcester Telegram that the stadium “will continue to pay for itself” and that no “existing” taxpayer money will be diverted to pay for it, which is a clever bit of wordplay to get around the fact that $20 million in future tax money that would have gone to the city will now instead go to site prep costs — and if tax revenues don’t rise as much as expected, Worcester will absolutely have to dip into existing funds to cover the shortfall.

The best part of all this, though, is Augustus’s explanation for why the city’s site costs have risen so much:

“Due to a number of unknown factors, particularly related to business relocation costs, and the need for a more complicated retaining wall system resulting from the steep grade of the site, those costs total $20.69 million,” Augustus said.

I’m sorry, did you say “the steep grade of the site”? You mean despite years of planning, nobody noticed until now that the site is on a hill, and that when you cut into a hill you need to build retaining walls to keep the hill from falling on your new stadium? Clearly this was an unknown and unforeseeable factor, and not an example of lowballing projected costs so that local elected officials (and one economist, though not most) could think it was a better deal!

Wichita may spend way more than $75m on stadium development, but local news has no interest in telling you

The Wichita city council passed its 2%-sales-tax-surcharge district yesterday, in an “emergency declaration” to allow the tax to kick in starting in April, when the new Wind Surge Triple-A baseball stadium it will help fund is set to open. Show of hands, Wichita news outlets, which among you explained why it was an emergency, what the projected $13 million in tax revenue over 22 years will fund, or what would have happened if the tax district hadn’t passed?

  • KWCH-TV: “Mayor Jeff Longwell said it was necessary to pass the 2% sales tax this year. ‘So we can start collecting that tax to potentially use what its intended for which was described today to pay off various different bonds the ballpark, the amenities that are going to be down there,’ he said. Longwell’s last day in office as mayor is next Monday.” No help there, though the non-bylined story certainly implies that the “emergency” was that the mayor wanted to get this done before ending his lame-duck term.
  • KFDI-FM: “The revenue generated from the district will be used to help with the design and construction of the stadium, utilities, parking and improvements along the river corridor, as well as surrounding development on the west bank.” Except the stadium has already been designed and will be almost done with construction by April, so what’s the rush, KFDI reporter George Lawson?
  • Wichita Eagle: “Money from the sales tax hike and the increase in property taxes generated by the new development will be split between the city government and the private-sector developers. The city will get the first $10 million to help offset the cost of the new $75 million ball park. The developers will get the next $30 million to help pay for their project costs. Anything above that $40 million will be split 50-50 between the city and the developers.” So some of the money (from both sales taxes and property taxes) will go to pay for stadium costs, and the rest to subsidize surrounding development — that’s actually potentially a lot more than just the $75 million in stadium subsidies that’s previously been discussed, but it’s hard to tell without projections of how much tax revenue is at stake here, which Eagle reporters Dion Lefler and Chance Swaim don’t provide.

You know, I do my best here to report on and analyze these deals from my apartment in Brooklyn, but ultimately I’m reliant on journalists in local communities to do the initial reporting, since I don’t have the time and resources to do the legwork on basic facts of a stadium plan. In this case, I actually called and emailed the Wichita city council’s press liaison, plus emailed a city councilmember who is a friend of a FoS reader — neither has gotten any response so far, so I’m in the dark as you are on this. (We do know that the stadium is getting $40 million in STAR bonds — essentially sales tax increment financing, where any increase in state sales-tax revenue in the area gets kicked back to the stadium rather than going to public coffers — but the sales-tax surcharge is on top of that.)

Many journalists tend to shy away from running stories that say “Here’s what elected officials claim, but we don’t know if it’s true,” either because they fear it would make them look unduly skeptical or because they don’t take the time to ask the right questions or because they are afraid of challenging assertions that no one else is — but, you know, those are all things that are literally their job. When they don’t do it, we’re left with “Wichita is taking a bunch of tax money, we’re not sure how much, and giving it to somebody for something,” which is not a great way to hold elected officials accountable. Unfortunately, there aren’t too many ways to hold journalists accountable, other than publicly shaming them, so: Hey, Wichita newspeople, you can’t journalism your way out of a paper bag! That’ll show ’em.

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

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

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

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

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

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

Wichita council to vote on giving $8m in sales tax surcharges to Wind Surge because reasons

The Wichita city council is set to vote today on creating a “Community Improvement District” with a 2% sales tax surcharge that would go towards paying for a new stadium for the Triple-A Wind Surge, home of the hideous mutant fly-horse chimera, and … frankly, I’m confused. The sales tax surcharge district has been described as part of the funding plan for the $77 million project (along with kicking back new sales and property taxes around the stadium) at least since last March, and the stadium is set to open in April, so what exactly happens if the council votes down the plan? Does the city need to come up with another funding stream? Do the Wind Surge owners threaten to dismantle the stadium and sell it for parts? Or is this just another case of a city seeking to subsidy a project that would happen with or without the subsidy?

I’ve reached out to the Wichita city council to ask what the deal is, but haven’t heard back. In the meantime, this is what we do know: The sales tax surcharge is expected to raise $13 million over 22 years, according to city officials, which would be a present value of around $8 million, less if most of the new sales tax revenue would come further down the road, which is likely. And the money would not only help pay for the stadium but somehow also “help pay for new growth nearby,” according to, uh, Eli the TV Guy, though he didn’t specify how. The Wichita Business Journal reports that the sales tax surcharge money would be “used for the design and construction of the stadium utilities, parking and other improvements related to the stadium, river corridor improvements and surrounding development on the west bank,” but that still doesn’t explain how the stadium itself will then be paid for, or what happens if the tax district isn’t approved.

More news if and when I get more information, I guess. But this is yet another example of the terrible state of journalism today: Wichita has a daily newspaper, a business newspaper, and multiple TV stations reporting on this story, and yet still Wichitans are getting next to no information about where their tax money is going or why. Stenography journalism has always been a blight upon the news world, but budget cutbacks are its oxygen — when you only have a handful of reporters and editors forced to cover everything under the sun, it’s way too tempting to say, “Enh, just write down what the city press release says, find one person on the street who likes it and one who doesn’t, and move on to the next story.”

Even the World Bank gets this, but for some reason they haven’t been interested in funding quality journalism in Wichita, so instead it’s left to you and me to shame the local news outlets into doing a better job. Is it working yet?

Friday roundup: Stadium trends, phantom soccer arenas, and the inevitable narwhal uprising

Welcome to the first weekly news roundup of the fourth decade during which this site has been in operation — unless you’re one of those people — which is kind of scary and depressing! I know I didn’t expect in 1998 that there would still be a need for Field of Schemes in 2020, but no one likes to give up a good grift when they see one, and for the last few decades nobody’s been able to make rich people in the U.S. give up much of anything, so here we are.

Seeing as I don’t want to even think about whether we’ll still be having this conversation in 2030, let’s get right to the news:

  • In the midst of a long New York Times article about how cool the new Golden State Warriors arena is, because the future, Temple University economist Michael Leeds asserts that it’s an example of “a trend since the Great Recession that, with some notable exceptions, cities have been much less willing to open up a pocketbook and fund a stadium or arena.” While “some notable exceptions” is a large caveat, I’m still not convinced that cities were all that much less willing in the Teens than the Aughts to cough up sports venue money — in California, sure, but then what of Nevada and Arlington and Georgia and Milwaukee and Indianapolis? I’ve emailed Leeds to ask for his data, but really what the world needs is a fresh dose of updated Judith Grant Long spreadsheets.
  • Major League Baseball says its plan to stop providing players to 42 minor-league franchises is not actually a plan to “eliminate any club,” and it’s minor-league owners’ fault if they insist on going bankrupt instead of pulling themselves up by their own bootstraps and joining unaffiliated leagues. Also, this latest missive was apparently prompted by objections by Sen. Richard Blumenthal to the elimination of the Connecticut Tigers, who are in the process of being rebranded as the Norwich Sea Unicorns, and now all I can think about is: What’s a sea unicorn? Is it just a narwhal? Is Norwich now on the Arctic Ocean? What ship is the sea unicorn the captain of that earned it its captain’s hat, and how is it going to fire that harpoon-bat with its flippers? And at what? Is it a whale that has turned against its own kind? Or is it turning against humanity in revenge for our destruction of its habitat? Maybe MLB is just trying to protect us from the animal uprising, which if so they really should have mentioned it earlier in their statement.
  • The owners of the San Diego Sockers, which are an indoor soccer team, implying that there must still be indoor soccer leagues of some sort, are looking at building a 5,000- to 8,000-seat arena in Oceanside, which would cost dunno and be funded by ¯_(ツ)_/¯, but which team execs swear would be more affordable than paying rent at their current arena in San Diego and arranging schedules for their 12 home games a year. I can’t see anything that could possibly go wrong with this business plan!
  • Remember that $60 million soccer stadium for the NWSL Seattle Reign and USL Tacoma Defiance that was proposed for Tacoma last July, with negotiations expected to be completed by the end of the summer? The Tacoma News Tribune does, and notes that such details as how it would be paid for “all still remains to be seen,” though city sales tax money and hotel tax money could be on the table. This is clearly going to require more renderings.
  • English League Two soccer club (that’s the fourth division in English soccer, for English soccer reasons you either already understand or don’t want to know about) Forest Green Rovers are planning to build an all-wood stadium that will supposedly be “the greenest football stadium in the world,” but even if the timber is “sustainably-sourced,” wouldn’t it have less carbon impact to leave both the trees and the oil to fuel the construction equipment in the ground and keep on playing at this place that is just 14 years old? The narwhals are not going to be happy about this at all.
  • Should Syracuse build an esports arena? A gaming industry exec is given op-ed space to say: maybe!
  • How can anybody say that sports stadiums don’t create an economic spinoff effect when local residents can charge $10 a car to let people park on their lawns? That’s it, I take back everything I’ve said the last 22 years.

Friday roundup: Nashville and Miami stadiums still on hold, cable bubble may finally be bursting, minor-league contraction war heats up

Happy Scottish Independence Day! And now for the rest of the news:

Manfred meets with Sanders about minor-league contraction, mumbles promise of “solutions” that will make everyone happy somehow

Now here’s a sentence I didn’t expect to be writing this week: MLB commissioner Rob Manfred met with U.S. Senator and Democratic presidential candidate Bernie Sanders yesterday to talk about MLB’s plan to eliminate 42 minor league affiliates. Afterwards, Manfred issued a statement to the press:

Blah blah importance of professional baseball to communities blah blah obligation to local communities to ensure that public money spent on Minor League stadiums is done so prudently blah blah blah safe playing facilities blah blah we remain confident that solutions can be reached that satisfy the interests of all stakeholders.

In other words, there is no reason this cannot be all things to all people just because some people want the teams to stay and others want them to go away, why would you even think that?

Sanders replied something about how Manfred is “open to solutions” and added that he and other members of Congress will be “carefully monitoring the progress of negotiations on behalf of fans.” So yeah, the public statements at least are just a pro forma “we talked” notice, with no indication that any particular action will result. That’s likely going to turn on how careful that Congressional monitoring is, and how close it cuts to a potential revision of MLB’s antitrust exemption, which was put in place by the Supreme Court but which Congress can overturn with legislation — that Manfred found it necessary even to meet with Sanders shows he’s concerned about this, but that he issued such a perfunctory mealy-mouthed statement afterwards suggests that he’s not all that concerned, not yet, anyway.