Santa Cruz considering replacing eight-year-old arena with new one to “woo” minor-league basketball team

Move over, Knoxville — Santa Cruz is ready to take the lead in the “looking to build a new sports venue despite the Covid budget crunch” race. The Santa Cruz Warriors G-League team’s lease expires after next year, and the city is reportedly looking to “woo” the team into staying put beyond that, according to the Santa Cruz Sentinel. And what, precisely, do they mean by woo?

A city-sponsored market and arena project feasibility study by consultant Victus Advisors concluded in 2017 with support to build a permanent arena in an expanded footprint on the existing location, top among several preferred locations. [Santa Cruz economic director Bonnie, I’m assuming, the Sentinel article didn’t actually bother to give her first name or ID] Lipscomb said Tuesday that she recognized that right now was, “from a fiscal standpoint in the middle of a pandemic, the worst time to come forward asking for a public subsidy.” Lipscomb clarified she was not asking city leaders for that this week. City Manager Martín Bernal later further elaborated that building a new arena would be a public-private effort, not a “100% or primarily a public type of project.”

So nobody is asking for any kind of public subsidy, just a “public-private” effort that wouldn’t be “primarily” public. Got it.

As for the outmoded arena in need of replacement, it was opened way back in … I’m sorry, did you say 2012?

Okay, so technically this is classified as a temporary building: It’s a metal frame with an air-supported roof. (The city loaned the Warriors $4.1 million to help build the place, most of which has been paid back, according to Lipscomb.) Still, air-supported roofs have been used for plenty of permanent structures in the past, and nothing seems to be falling apart at the current arena. The Warriors owners — who are, let’s be clear, the same billionaires who own the Golden State Warriors) may want a snazzier place, but that wouldn’t seem to be Santa Cruz’s problem.

Except, of course, for that expiring lease, which gives the team owners that all-important leverage. Along with the fact that basketball is unusual among North American sports in having only a single 29-team minor league when there are hundreds of cities that could potentially support a minor-league basketball team — while Joe Lacob and Peter Guber would have been insane to move the Golden State Warriors out of the Bay Area, their G-League affiliate could probably do just fine in Fresno or Sacramento or Vacaville, which makes it way easier to get a bidding war going, or at least threaten your city with the possibility of a bidding war, which as we’ve seen time and time again is a great way to get local development officials talking about “public-private partnerships.”

And all this makes me wonder whether, even if the Covid recession causes a brief lull in sports subsidies, we could see a huge surge once it’s over, if not before then. We already have the likelihood of a large swath of minor-league baseball teams getting disappeared next year; and still more minor-league teams across several sports may go belly-up if they run out of cash while waiting for fans to return. And while that may be terrible for the sports industry as a whole, for the teams that survive, it hands them a convenient gun to hold to the heads of their current homes: With plenty of other empty stadiums out there to choose from, give us what we’re asking for, or else.

That’s going to be a tough call for city officials: Dip into recession-ravaged budgets to give money to the local sports team, or risk losing one of your few local businesses. (I almost wrote “major businesses,” but that’d be pushing it for a business that’s only open at most 70 days a year — though there is some evidence, at least, that minor-league teams are better at siphoning off spending from the next town over than their big-league counterparts.) Again, we’ve seen which way most cities tend to go on that decision, so it’d be crazy for minor-league sports owners not to at least try.

Friday roundup: Vikings get $6m in upgrades for two-year-old stadium, Sacramento finds rich guy to give soccer money to, CSL screws up yet another stadium study

No time to dawdle today, I got magnets to mail, so let’s get right down to it:

  • The Minnesota Vikings‘ two-years-and-change-old stadium is getting $6 million in renovations, including new turf, and taxpayers will foot half the bill, because of course they will.
  • Billionaire Ron Burkle is becoming the majority owner of the USL Sacramento Republic, so now Mayor Darrell Steinberg wants to give the team “tens of millions of dollars” in infrastructure and development rights and free ad signage so that he can build an MLS stadium. “The richer you are, the more money we give you” is the strangest sort of socialism, but here we are, apparently.
  • Concord, an East Bay suburb until now best known as “where the BART yellow line terminated until they extended it,” is considering building an 18,000-seat USL stadium. No word yet on how much it’ll cost or how much the city will chip in, but they probably first need to wait to see how rich the team’s owner is.
  • Not everyone in Allen, Texas wants to live across the street from a cricket stadium, go figure.
  • Everybody’s favorite dysfunctional economic consultants Convention, Sports & Leisure have done it again, determining that Montreal would be a mid-level MLB market without bothering to take into account the difference between Canadian and American dollars. (Once the exchange rate is factored in, Montreal’s median income falls to second-worst in MLB, ahead of only Cleveland.) CSL explained in a statement to La Presse that it wanted to show “the relative purchasing power” of Montrealers, and anyway they explained it in a footnote, so quit your yapping.
  • The Milwaukee Brewers are going to change the name of their stadium from one corporate sponsor to another, and boy, are fans mad. Guys, you know you are free to call it whatever you want, right? Even something that isn’t named for a corporation that paid money for the privilege!
  • Local officials in Maryland, Virginia, and D.C. are still working on an interstate compact to agree not to spend public money on a stadium for Dan Snyder’s Washington NFL team, though passage still seems unlikely at best, and the history of these things working out effectively isn’t great. Maybe it’ll get a boost now that team execs have revealed that the stadium design won’t include a surfboard moat after all. Nobody respects the vaportecture anymore.
  • The libertarian Goldwater Institute is suing to force the release of a secret Phoenix Suns arena study paid for by the team and conducted by sports architects HOK, but currently kept under lock and key by the city. (Literally: The study reportedly is kept in locked offices and is only allowed to be accessed by a “very limited number” of people. Also, a citizen group is trying to force a public referendum on the recently approved Suns arena subsidy, though courts have generally not been too keen on allowing those to apply retroactively to deals that already went through. And also also, one of the two councilmembers who voted against the Suns subsidy thinks the city could have cut a better deal. Odds on any of this hindsight amounting to anything: really slim, but maybe it can help inform the next city to face one of these renovation shakedowns, if anyone on other city councils reading out-of-town news or this site and ultimately cares, which, yeah.
  • Oakland Raiders owner Mark Davis and Los Angeles Rams owner Stan Kroenke signed agreements to cover the NFL’s legal costs in any lawsuit over those teams’ relocations, and they’re both being sued now (by Oakland and St. Louis respectively), and NFL lawyers are really pricey. Kroenke is reportedly considering suing the league over this, which I am all for as the most chaotically entertaining option here.
  • Wilmington, Delaware is being revitalized by the arrival of a new minor-league basketball team, so make your vacation plans now! Come for the basketball, stay for the trees and old cars! Synergy!

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.

Portland approves $31m in NBDL arena tax breaks

The Maine Red Claws minor-league basketball team has been approved for a 30-year, $31 million tax exemption for a planned $100 million project that will, according to the Portland Press Herald, “include two office buildings, a hotel, an arena/convention center, a concert hall and a parking garage.”

No clue how they build all that for $100 million, and also not sure exactly how the financing on this works — press reports say that the city will receive $26.4 million from the project over 30 years, but not whether that’s rent payments or expected economic activity or what. One hopes at least that they get the Times in Maine, and read it before approving this deal.