Memphis buys itself a money-losing minor-league stadium after team gives out free hot dogs

That plan to have the city of Memphis bail out the minor-league Redbirds by buying their money-losing stadium while selling the money-making team to the St. Louis Cardinals is now a reality, with the city spending $24 million on the deal. The Memphis Flyer reports that “the loans would not be paid for directly from the city coffers,” but it actually seems to mean that it would be paid for by diverting tax money that the city would otherwise receive, since the bonds would mostly be paid off with “tax credits [and] tax rebates,” with the Redbirds chipping in a comparatively piddly $300,000 a year in rent.

The Flyer touts this as “keeping the Memphis Redbirds baseball team in Memphis for the next 17 years,” which I suppose it does, though given that Memphis is by far one of the largest Triple-A baseball markets, you have to wonder if the team really would have left without a bailout. (Especially since even if it left it still would have been saddled with the stadium.) It’s possible the deal could work out okay for Memphis if it gets enough revenue from the ballpark, but as I still can’t find any indication of who’d get what revenue streams (concessions, parking, etc.), it’s tough to predict. Suffice to say that it wouldn’t be much of a bailout if the Cardinals weren’t getting to keep most of the revenues, though, so I’m not overly optimistic.

The Memphis city council voted 8-4 to approve the plan, after the team rallied fans to show up at the hearing in Redbirds regalia:

Proponents of the park purchase filled the seats at Memphis City Hall Tuesday and roared with applause as the approval vote tally was read. The fans of the deal sported red, Redbirds t-shirts, foam fingers, baseball caps and rally signs that read “Vote Yes – Rally for AutoZone Park.”

Hundreds gathered at AutoZone Park Tuesday afternoon for a rally in support of the city’s purchase of the ballpark ahead of Tuesday evening’s vote. The crowd gathered were given free hot dogs, hot chocolate, Redbirds baseball hats, and beanies.

I take it all back: $24 million in public funds in exchange for free hot dogs is totally worth it.

When community ownership goes bad: Cardinals to buy Triple-A team, Memphis left with stadium upgrade costs

When advocates of community ownership want to point out that the “rich guy owns the local team and extorts tribute” model is not the only one for sports franchises, they tend to point to the several minor-league baseball teams that are owned by the public. (There are a couple of Canadian Football League teams as well.) One of these is the Memphis Redbirds, the Triple-A affiliate of the St. Louis Cardinals, which since 1997 has been owned by a not-for-profit corporation run by local civic and business leaders. The arrangement was set up by local self-storage facility baron Dean Jernigan, who declared at the time, “If the main identity of a city is tied to a sports team, who are we going to entrust this to?” — though it undoubtedly didn’t hurt that putting the team in the hands of a non-profit would enable it to get a lower interest rate on construction bonds on AutoZone Park, which cost a then-minor-league record $80 million to build.

If you were hoping that a business-leader-run non-profit designed around a tax dodge was going to end well, sadly, this is not the case: The team defaulted on its stadium bonds in 2009, was put up for sale, and now is looking at being bought by the Cardinals, while the stadium would be bought by the city of Memphis:

The agreement calls for the St. Louis Cardinals (“Cardinals”) to acquire the Memphis Redbirds and the City of Memphis to acquire AutoZone Park. The City would then lease the ballpark to the Redbirds through a long-term lease agreement. The agreement includes a significant capital investment in AutoZone Park to add features that will significantly improve the overall fan experience.

That sounds ominous: The Cardinals would get the team — the 8th most valuable minor-league franchise in baseball, according to Forbes — and the ability to sell tickets, while the city would get the stadium and the obligation to “improve the overall fan experience,” which usually means “we want all the latest scoreboards and stuff that all the other teams with stadiums less than 12 years old have.” It’s possible the Cardinals will offset that cost through rent payments, but no details are available — apparently even members of the city council have only been informed via press release.

The council is set to vote on the deal on December 3. Hopefully by then someone will have told them what they’re voting on, but as we’ve seen recently, that’s not always considered a requirement.

Study: Minor-league ballparks not quite as completely useless as big-league ones

All you journalists and editors out there who like man-bites-dog ledes, check it out: There’s a new contrarian dog in town, and it’s Reason’s A. Barton Hinkle, who starts off an article with this monster of a sentence:

Is everything we know about sports stadiums wrong? Not really. But it might not always be right, either.

Boom! Time to step up your game, #slatepitches!

So, what exactly is the not-always-right thing that we don’t know about sports stadiums? In short: Minor-league baseball teams might actually have a small but positive impact on local economies.

The work comes from Nola Agha, an assistant professor of sports management at the University of San Francisco. It appears in the Journal of Sports Economics and arrives at what Agha terms “an unexpected outcome”: Certain types of teams and facilities can produce gains in regional income (albeit small ones: about $67 to about $117 per capita). This contradicts “the vast majority of academic research” on big-league sports, which “has found nonpositive effects on income…employment…sales tax revenues…and spending.”

I haven’t read Agha’s paper yet (it’s on my list), but this finding isn’t exactly surprising: Since one of the main complaints about sports facilities’ alleged economic benefits is that they mostly reshuffle spending in a region (the “substitution effect”), and minor-league teams tend to play in small cities and towns where reshuffled money is more likely to come from outside the city limits, you absolutely should expect to see a bigger economic gain.

Of course, minor-league teams come with their own pitfalls, first among them that they don’t stay put very long, raising the risk that any small boost in economic activity will be short-lived. (Hinkle notes that affiliated minor-league teams stick around for an average of 16 years, far better than the four-year lifespan of the average independent league team, but still pretty crappy if you’re paying off 30-year stadium bonds.) And Agha didn’t make any attempt at a cost-benefit analysis, meaning that even if per-capita income does creep up, it may not be enough to make the expense of building a new stadium, even at a minor-league price tag, worth it.

It’s a nice addition to the pile of stadium economic impact research, anyway. Coming on the heels of Geoffrey Propheter’s exhaustive research on NBA cities, it shows promise that economists are starting to be able to refine their view of stadium and arena subsidies from “not worth a damn” to “sometimes worth a fraction of a damn, depending on the circumstances.”

Area Americans disagree on what sports facilities do for (or to) cities that build them

Moyers and Company has a bunch of stadium-related stuff up on its website, including a repost of its 2008 segment on the funding of the New York Yankees‘ new stadium, plus a collection of essays by local community activists and stadium experts on what new sports facilities have done for their cities. (Disclosure: I helped suggest a couple of the essayists.) Among the highlights:

“I invite you to take a walk around the neighborhood and see for yourself if that has happened. Businesses have closed and the remaining ones are hurting as the Yankee organization has moved many of the services inside the stadium.” —Joyce Hogi, Bronx community activist

“Forbes Magazine consistently lists Stockton as the most miserable city in the nation. For those who love Stockton, the arena is a great addition to the city; ‘I never thought Stockton could have something this nice,’ is a common refrain.” —Lori Gilbert, Stockton Record features writer

“When someone sits down with a beer and hot dog, virtually everything they see is owned by the District of Columbia. Yet all of the money earned from the stadium — tickets, concessions, advertising — goes to the team owner, Ted Lerner.” —Ed Lazere, D.C. Fiscal Policy Institute

“The stadium’s opening has been one of the greatest economic drivers for our city, providing thousands of jobs and an expanding sales tax revenue. If you combine this new revenue stream with the $500,000 expected annually from the Cowboys’ new naming rights deal with AT&T then Arlington is on pace to pay off the stadium ten years earlier than anticipated.” —Arlington Mayor Robert Cluck

Add it all up and, well, I’m not sure there’s any consensus, other than that stadiums are expensive, and that people like sports. But it does do a decent job of describing the elephant.

Long Island pol gripes that Cosmos stadium would create traffic because no one would go there wait what?

If you’ve been thinking, “Hey, it’s been a long time since Field of Schemes has written about that crazy $400 million New York Cosmos stadium plan,” here, have a Long Island politician complaining about how the crazy thing about it is that it would create too much traffic:

“It’s a bad idea for the region,” said [Nassau County Legislator Carrié] Solages (D-Elmont), who is worried it could create a traffic nightmare for local residents. “Soccer does not have the draw it needs to survive here.”

The Cosmos also got a brief mention in my just-posted interview on The ‘Cast (on YouTube, but it’s audio-only), so go listen to that as well if you like. Though we didn’t really delve into the problem of how to deal with the traffic jams created by nonexistant minor-league soccer fans.

St. Paul Saints stadium funding gap could be as high as $29m

If you’re depressed about the state of newspapers after this, here’s something to cheer you up: a long post on the Minneapolis Star Tribune’s website that actually lays out the math for a proposed stadium deal and reports its findings. The stadium in question is for the minor-league St. Paul Saints, it’s set to cost $66 million, and nobody knows where nearly half that money will come from. Simplifying the article’s charts a bit:

Ballpark Construction Capital Cost: $66.1 million

Upfront Capital Cost Breakdown (by Municipality / Private Entity):
State of Minnesota: $27,000,000
City of St. Paul: $9,000,000 *Agreed to provide $17 million
St. Paul Saints Organization: $1,500,000

Total Monies Available: $37,500,000 *$66.6m Total Cost with $37.5m Avail. in 2013 = $29m shortfall

The Saints have also agreed to pay an additional $340,000 a year, though as they won’t own the building, the article notes, this is more reasonably considered “rent” than an actual contribution to the construction cost. And in any event, this still leaves the stadium with a rather large shortfall, in part because of increased environmental cleanup costs, in part because the Saints tacked on some new features to make their minor-league park “first class,” and in part because St. Paul officials apparently have some trouble with addition.

The story goes on to estimate the tax revenue benefits to Minnesota, and while the numbers are a bit speculative, it’s clear that the total impact amounts to “not much.” If the Saints are able to increase attendance from 5,000 to 6,000 per game (the new stadium is supposed to hold 7,000), concludes the article, “For St. Paul to make up its end of the financing bargain, they would need to immediately impose a $1.13 tax per ticket sold over the next 25 years, not accounting for debt service payments.”

There’s more that could be done to fine-tune this analysis, but in all it’s a fine piece of reporting, and we should applaud the Star Tribune for having one of its reporters actually crunch the numbers rather than just taking team marketing claims at their word. So, props to Nathaniel Hood, who is … “a transportation planner and blogger living in St. Paul”? Wait, this is an op-ed post on the paper’s YourVoices section, not something that the Star Tribune assigned to one of its own reporters? Okay, you can go ahead and be depressed about the state of newspapers after all.

El Paso stadium so awesome it created economic growth before it was even planned

There’s an old rule that the best way to read the New York Times is backwards, because the articles generally hide the most important information at the end. So let’s try that with yesterday’s article on the new Triple-A baseball stadium being built in El Paso:

  • El Paso is in the “very early stages” of redeveloping its downtown, according to a local real estate executive.
  • Downtown El Paso is already on the upswing, thanks to Mexicans from Ciudad Juárez across the border who visit to avoid rising violence in their home city.
  • “Local investors have been transforming disused downtown properties into rental apartments, restaurants, bars, retail shops and office space for several years.” This “was going to happen” with or without a baseball stadium, according to one local developer.
  • The $50 million baseball stadium to bring the current Tucson Padres (as yet unnamed in El Paso) to town, for which the city is spending $35 million and tearing down its City Hall, won’t even open until next year.
  • The headline: “Baseball Stadium Bolsters El Paso’s Resurgence.”

Yup. Backwards.

MLS commissioner: We won’t wait forever on Queens soccer stadium, because forever is a long time

MLS commissioner Don Garber has “set a time limit” on how long New York City has to approve a $300 million soccer stadium in a public park in Queens, or else he’ll take his expansion franchise and go elsewhere, according to the New York Daily News. And what is that time limit exactly?

“If we’re not successful we’ll throw our hands up, and it’ll be far sooner than three years we throw our hands up,” Garber said, after his opening season address.

“Then we’d take a step back and see if there’s another market. Three years is too long. I don’t want to put a year limit on it. But if it’s not making progress, the time will come. There’s a lot of activity in other markets.”

Okay, so not actually a time limit in the sense of having a set time, or a set limit. But he’s not going to wait forever! Because that’s not technically possible.

Meanwhile, the New York Cosmos not-actually-yet-even-a-minor-league-franchise, not to be upstaged by Monday’s leaked Queens MLS stadium renderings that really aren’t, released a whole friggin’ YouTube video of their own plans for a freaky-looking stadium at Belmont Park, complete with a remarkably large number of computer animated people cheering on a second-tier soccer club, plus old footage of Pele. Though if they really wanted attention, they should have gone with an even bolder choice of video producer.

Florida bill to subsidize soccer stadiums clears first committee vote

That bill to give sales-tax kickbacks to pretty much any sports franchise in Florida that doesn’t already get them moved ahead yesterday, as a state senate committee unanimously approved giving $2 million a year to two MLS franchises for the next 30 years. For good measure, the senate commerce and tourism committee also approved giving added tax breaks to Lockheed Martin and Fidelity National, which have already gotten nearly $7 million in subsidies apiece, and could still consider requests for additional money from the Miami Dolphins and Jacksonville Jaguars.

For those keeping score, if the MLS bill is signed into law, it would leave the Orlando City Soccer Club just $45 million short of its $75 million subsidy demand for a new stadium. ($2 million a year for 30 years adds up to just $30 million in present-day expenses because some of it would have to pay for interest on bonds.) It would also potentially open up a road to subsidies for these guys, though they’d have to actually join a real league first.

Revived USFL pitches “mid-sized” stadiums as economic boost

Sending out a press release saying you’re going to start (or restart) a sports league is cheap, so hey, why not the USFL? Only this press release has a novel twist:

San Diego, Calif. (February 11, 2013) – The United States Football League (USFL) announced today that it has signed a confidential agreement with an established real estate development company to build multiple commercial developments throughout the United States, with the centerpiece of each development to be a mid-sized stadium to host a USFL team…

Each development will contain a USFL football stadium, a sports and entertainment complex, residential and retail space. The USFL and its development partner plan to build the new developments across the spectrum of small, mid-size and large markets, with the goal of bringing economic development to underserved areas and creating jobs and a sustainable economy for these selected cities.

There’s nothing in there about asking for subsidies for these projects, but the bit about “economic development to underserved areas and creating jobs and a sustainable economy” certainly sounds pitched for mayors of small towns with medium-town dreams. (The press release also claims that the development company would benefit “by securing an anchor tenant for developments,” but if there are really development companies out there that think a USFL team would be a solid anchor tenant, I have some pointing and laughing I want to do.) More info as it’s available, I guess, but this is one to keep half an eye on, anyway.