Pawtucket proposes $70m-plus in tax kickbacks for $45m USL stadium

There’s a winner in the competition to build on the riverfront site where the Pawtucket Red Sox turned up their noses at building a new stadium, and it’s … the crazy soccer stadium complex with the mountains in the background! (Helpfully blurred out in the latest rendering.) And according to the Providence Journal, while the USL stadium itself would only cost $45 million, the bigger project would stand to make a lot more than that in tax kickbacks:

The stadium would be the first piece of a larger, multi-part, mixed-use project Fortuitous is calling “Tidewater Landing,” that would take advantage of federal “Opportunity Zone” tax breaks…

The plan hinges on approximately $70 million to $90 million in public support, most of it from the state through a “tax increment financing” plan that allows the developer to use a portion of new tax revenue generated around the development to pay for construction. That total includes infrastructure like the pedestrian bridge, public parks and river walks on both banks of the Seekonk.

The bigger project includes 200 apartments, 100,000 square feet of shops and restaurants, a 200-room hotel with an “indoor sports event center,” and 200,000 square feet of office space, though it’s not clear whether all of that needs to be built in order for the tax subsidies to kick in. Also not clear: Where all of that $70-90 million would come from — the Journal says only $10 million would come from the city, so would some of it be state sales tax kickbacks? (Or maybe they mean that it would be $10 million in cash and the rest in tax increment financing, which somehow isn’t “city money” because Casino Night.) Also, why wouldn’t it require state legislative approval even if this would be a state-designated tax redirection zone. So many questions that the Journal could have answered, or at least asked!

All in all, this Pawtucket plan exemplifies a whole bunch of trends in the modern stadium game: throwing money at pro soccer because there’s a seemingly infinite number of available expansion franchises there (both in MLS and in the lower-level USL), providing public money via TIFs because it’s easier to pretend this is new money generated by the project even when it’s not, and the “kitchen sink” approach where you throw as many unrelated items into a development project as possible in order the muddy the financial waters to where everyone just throws up their hands at figuring out who’s being subsidized for what. Plus Opportunity Zones, the Trump-created tax break that is so confusing even tax experts aren’t sure how exactly it will end up working, and the ever-more-popular model of approving sports subsidies without legislative oversight. It’s the perfect crime. Er, downtown development project. I surely don’t know why I typed “crime.”

Queensboro FC still vague on how its stadium on a public university campus will work

Ever since last Tuesday’s announcement that New York City would be getting a new USL team called Queensboro F.C. in 2021, I’ve been trying to figure out where exactly this second-tier (soccer’s term for the top minor league) team would play. That was the holdup when the franchise was first rumored last winter, and while last week’s announcement mentioned a “new, modular stadium at York College in Queens that will have a capacity of around 7,500,” none of the news outlets appeared to have actually called York College to see who would build it or where it would go, important questions given that the campus, though conveniently located right by a major subway terminal, isn’t exactly bursting with huge swathes of vacant land.

So, I called. And was directed to a press spokesperson for the City University of New York school, who said she’d get back to me with a statement from the school’s president, but couldn’t “promise it will be today.” That was Thursday; it’s now Tuesday, and still no statement has been forthcoming.

I next tried the team itself, whose press representative told me yesterday they’d be back to me “shortly”; I’m still waiting. After that, it was on to city councilmember Francisco Moya, who has helped shepherd the team into existence and declared himself one of its first fans, whose communications director actually replied:

Queensboro FC will be playing in a modular stadium, which will be 100 percent privately funded through the club. The City is not involved in the arrangement between QBFC and York College.

That is slightly more of an answer, but not much of one. Where will this stadium be built? Does a “modular stadium” just mean a bunch of temporary bleachers that can be taken down and stored away when York College needs to use its track? Is York College being paid anything for use of its land? And does the public university have to get any city or state permissions before repurposing public land?

These are all kind of important questions, and it’s reflective of the sad state of journalism in this city (and in this country, and on this planet) that no one seems to have asked them — or, worse, has asked them and when they didn’t get answers, didn’t bother to mention that in their articles. (It’s also sad that an entire minor-league baseball team in Staten Island has been marked for elimination, and none of the city press has deigned to report on borough residents’ thoughts on that — or has just forgotten that Staten Island is a part of New York City, which is a thing that happens.) I’ll report back here if I learn of anything to add, but in the meantime: Friends don’t let friends reprint sports team owner press releases without at least trying to check their facts, okay?

Every city in U.S. now building a soccer stadium, or at least it seems like it

Some days it seems like this site is turning into Soccer Pitch of Schemes. I mean, seriously, check this out:

The reason for this flood of soccer stadium building has less to do with soccer being the sport of millennials or whatever, and more to do with there being umpteen gazillion soccer teams in the U.S. now, and more on the way, and lots of them not having brand-new stadiums of their own because sometimes there just isn’t time to do that before you have to collect some more expansion fees, you know? Which should cut both ways — if MLS and the USL alike are going to expand to every city with its own post office, you’d think that cities wouldn’t need to spend big bucks on stadium funding in order to have a shot at a franchise — but here we have Switchbacks president Nick Ragain saying of the Colorado Springs vote that “what it means is we have a long-term professional soccer team in Colorado Springs,” and nobody in the media rolling their eyes, so I guess these are questions that are not asked in polite society.

And speaking of soccer and the media not rolling their eyes, yes, an Argentine football team celebrated the reopening of its stadium with a giant holographic flaming lion as many of you have emailed and tweeted at me, but also it’s not really a hologram and fans in the stadium couldn’t even see it except on TV screens. Number of news articles pointing this out: one; number of news articles going “Oooooh, fiery lion!”: more than I can count.

Rendering of Pawtucket soccer stadium ends up revealing USL scheme to exploit Trump opportunity zones for federal tax breaks

Journalism takes all forms in these days of vanishing budgets and vanishing newsrooms, and sometimes it’s somebody spotting something on a website and going whuh?

That is, as the Valley Breeze notes, an image of a new soccer stadium and accompanying development on the Seekonk River in downtown Pawtucket. True, as the paper notes, this version of Pawtucket is “missing some downtown features and shows mountains in the background,” but clearly somebody at least went through the trouble of Photoshopping a soccer stadium onto some alternate-reality Pawtucket, which has to mean something.

And the Valley Breeze reporting staff (actually Valley Breeze managing editor Ethan Shorey, who in the absence of a masthead I’m guessing is the entire Valley Breeze reporting staff) went to the trouble of calling developers Fortuitous Partners and asking about the picture, and got confirmation that they’re “pursuing a $400 million project” in Pawtucket. Fortuitous — whose founder Brett Johnson also owns the Phoenix Rising F.C. USL team — was previously reported to be interested in building a USL soccer stadium on the site previously rejected by the Pawtucket Red Sox for a new baseball stadium. And Johnson had more to say about the project:

He described United Soccer as the fastest-growing sports league in the world, saying the company is exploring more than 60 markets that all have the potential to bring soccer, and leveraging the opportunity zones in every case.

Now that’s some news. Not the “exploring more than 60 markets” part — that doesn’t mean we’ll actually get 60 USL teams, though we’re already getting close. No, the interesting bit is that USL apparently plans to pick its stadium sites by locating teams in “opportunity zones,” the new Trump-created districts that allow developers to defer or evade entirely paying capital gains taxes on projected in “undercapitalized” areas.

As Billionaire Boondoggle author Pat Garofalo has reported, 52 existing major-league stadiums and arenas are already in opportunity zones. But because the main benefit to an opportunity zone is placing assets in an “opportunity fund” and then letting them gain in value tax-free — the language is hideously complex and even the forms are incredibly confusing, but that’s the best I’ve been able to figure out based on reading up on OZs and talking to tax experts — it seems like it would hold special appeal to investors looking to create a whole new entity, say a USL team, and then holding it within an opportunity fund so that the inevitable gains when USL teams turn out to be worth hundreds of millions of dollars despite everybody and their sister having one would be tax-free.

If you’re hoping for a dollar figure or even a guesstimate on how much this would cost the federal treasury, we are way too early in the game for that, sorry. But it is an indicator of how obscure changes in tax policy can shift an entire industry’s approach to its business model; sort of the way the 1986 Tax Reform Act’s okaying of using tax-exempt bonds for sports facilities helped spark the torrent of new publicly funded sports venues that followed. Capitalist free markets obey rules, yes, but those rules are set down by government policy, and tweaking one or two can make a huge difference in who gets to earn money how — which is no doubt why billionaires stayed up all night phoning Congressional legislators to get OZs passed into law.

Boise votes to require vote on soccer stadium funding, Charlotte votes for council set to okay soccer stadium funding

It was an oddly slow Election Day for sports-related votes — the big Oklahoma City vote on the latest MAPS sales-tax surcharge that would provide public money for a USL soccer stadium isn’t until December 10 — but there were a couple of notable items:

  • Boise, Idaho residents, facing a demand for a $50 million soccer stadium to lure a USL franchise, voted to require a public vote before the city can participate in any sports stadium project that costs more than $5 million in public or private money. (They also voted for a similar requirement for any library project costing more than $25 million.) That sounds like it should be airtight enough to avoid the legal pitfalls that befell Seattle’s similar Initiative 91 when it turned out to be unclear what a public “investment” meant — tax breaks? only direct cash? — but then again, since I-91 did its job fine in terms of preventing major sports giveaways, maybe it’s the spirit of the thing that counts.
  • The mayor of Charlotte and all the city council incumbents up for re-election got re-elected, and since the current city council has been largely willing to listen to Carolina Panthers owner David Tepper’s ask for $100-200 million in stadium improvement to bring an MLS team to town, that’s probably good news for that project. Or bad news for anyone who thinks that $200 million (or more!) to upgrade an existing football stadium for soccer is kinda crazy.

 

Friday roundup: Helicopter rides for rich fans, pricey bridge prices, and why Deadspin mattered

In case anyone hasn’t been following this week’s Deadspin drama, pretty much the entire staff has resigned over the past two days, following Tuesday’s decision by CEO Jim Spanfeller to fire acting editor-in-chief Barry Petchesky because the staff had responded to Spanfeller’s edict to “stick to sports” by posting a ton of excellent non-sports content. A few last posts have gone up the last couple of days, some to burn off features that were already scheduled to run and some to take classically Deadspinesque digs at management for burning down a popular website seemingly out of spite for continuing to do exactly what it had been doing for years before they bought it.

This is very bad news for journalism and America and humanity, and not only if you, like me, will miss the site’s potshots at our Big Wet President. There’s a popular notion that sports is just a fun diversion where the “outside world” of politics has no place — and that, as I hope the entire 21-year history of this site has made abundantly clear, is an extremely dangerous notion, because it means that concerns over what taxpayers are being charged for places to play sports or what athletes are being paid to play sports or who is allowed to speak out on what issues involving sports are dismissed with a Can’t we just watch the game? But games are serious — and lucrative — business, and can’t be divorced from the greater culture, any more than we should be just watching movies as pure entertainment without attention to the bigger issues involved. Deadspin was dedicated to erasing those lines and allowing its writers to address whatever they felt needed addressing at the moment, whether it was the meaning of who you’re seen sitting with at a football game or what we’re getting stuck in our rectums each year, and until and unless a successor emerges to pick up the torch, the world will be a sadder, dumber place.

(Already yesterday I read about Josh Hamilton’s arrest after his daughter said he threw a chair at her — a phrasing I owe to this excellent Deadspin non-sports article, incidentally — and wished I could read Deadspin’s analysis of it. Then I read about John Wetteland’s arrest for reportedly sexually assaulting a four-year-old child, and thought I wonder if maybe men’s sports should just be banned altogether at this point given the kind of behavior it encourages and realized Deadspin was probably my best bet for reading that take, too. It’s going to be a long however many weeks or months until something arises from Deadspin’s ashes, if that ever happens.)

Anyway, on to the weekly muddling of sports and politics:

  • The Indiana Pacers‘ arena will still be named after the bank that stopping paying for naming rights in June until the team has found a new naming-rights sponsor, which seems weird at first but actually makes total sense: It costs money to change the signage so why do it twice, and also the value of naming rights goes down with each new iteration of a corporate moniker that dilutes the name’s image for the public — quick, tell me what the Oakland Coliseum’s official name is these days — so calling it “Pacers Arena” or whatever for a few months might get fans to start calling it that permanently, and we can’t have that. And if you’re wondering why the Pacers get to sell naming rights to a building that was built entirely with public dollars and is owned by the public: It’s Indianapolis, Jake.
  • St. Louis’s new MLS stadium finally has a site picked out — Market Street near Union Station, if you’re scoring at home — and new renderings as well, though they look pretty much like the old renderings except for the one that is just a closeup of a kid riding on his parent’s (?) shoulders. The state of Missouri has received approval to sell 22 acres of land for the stadium to the city’s Land Clearance for Redevelopment Authority, which will then lease it to the MLS team for … oh, that doesn’t seem to have been reported. Just look at the pretty pictures and don’t worry your head about that nasty money business.
  • A public city database in Atlanta is indicating that the city’s $23 million pedestrian bridge for the Falcons actually cost $41.7 million, but the city insists it’s really just that they entered the same checks multiple times. I’m not sure “spent $23 million on a pedestrian bridge for a football team and also can’t do basic bookkeeping” looks much better, honestly.
  • The San Antonio Spurs — whose mascot is for some reason a kangaroo, is that a kangaroo? — have installed four new helipads so that fans can buy helicopter rides to games, which really tells you everything you need to know about 1) who sports teams are interested in marketing to these days and 2) just how ridiculously much money rich people in America have to burn these days.
  • Fresno FC owner Ray Beshoff has declared he “will almost certainly be relocating the team” because he hasn’t been provided with a new soccer-only stadium, unless “in the next two or three weeks if people come to the table with ideas or suggestions that we think are tenable.” This will come as a huge shock to fans who’ve been dedicated followers of the USL team since (looks up team on Wikipedia) March of 2018.
  • The San Francisco 49ers are raising ticket prices by 13% but giving season ticket holders free food and soda, which I guess means 49ers fans will be spending most of games from now on pigging out on all-you-can-eat nachos instead of watching the action on the field. Also, you can’t get the free food if you buy tickets on the secondary market, only if you’re the original season ticket holder. Or, I guess, borrow the season ticket holder’s free-food card? Or have a season ticket holder go up to the counter for you and get your nachos? I don’t live anywhere near Santa Clara and hate football, but I am very excited at seeing how fans figure out how to game this system.
  • Still nobody is sure which minor-league teams MLB will threaten to eliminate as part of its plan to restrict minor-league affiliates, or what criteria MLB will use for deciding who shall live and who shall die or whether MLB is even serious or just trying to scare minor-league players into not demanding they be paid minimum wage. I really should write about this for Deadsp — crap.
  • It rained at the Buffalo Bills game last weekend, so a local country music station ran a poll asking listeners: “Would you be in favor of a roof stadium or no?” Not included: any mention of what a roof would cost, or what WYRK has against the word “roofed.”
  • The corporate newspaper that helped gut a free daily by selling it to people who immediately laid off most of the editorial staff ran an article this week asking if the new New York Islanders arena will make it harder for the nearby Nassau Coliseum to draw events, but I’m not going to link to a union-busting-enabling outlet that put the article behind a paywall anyway, so let me just answer the question here: Duh, yes!
  • A former assistant to Inglewood Mayor James Butts has changed her testimony in the lawsuit against the Los Angeles Clippers‘ proposed arena, and Inglewood officials are asking that her revised testimony be rejected because they say she’s in “cahoots” with Madison Square Garden, which opposes the arena because it doesn’t want competition for its own arena nearby. Elephants, man.
  • The DreamHouse New Mexico Bowl has been canceled, because alleged film production company and title sponsor DreamHouse turns out not to exist, but rather to be a scam perpetrated by “a relentless self promoter who lies about nearly everything he says he does.”
  • A giant water droplet named Wendy has made a video suggesting that Washington’s NFL team should move back within city limits. Sorry, Sean Doolittle, this is actually the most 2019 Washington thing ever.
  • The Sunshine Coast Pickleball Association is seeking funding from the city of Sechelt for a new pickleball stadium. I don’t actually know where Sechelt is and am only dimly aware of what pickleball is, and I’m not going to ruin the perfect sentence above by looking either thing up.

Oklahoma City soccer team owner wants tax money for new stadium, because “economic boost” and “diversity”

When I relayed the news last week that Oklahoma City’s fourth iteration of its MAPS sales-tax hike was being eyed to fund upgrades to the Thunder‘s arena that was already built and upgraded with previous MAPS sales-tax hikes, I neglected to note that USL team OKC Energy F.C. also wants some tax money for a new soccer stadium, because why wouldn’t they? Their existing stadium was entirely rebuilt way back in 2015, which is a lifetime if you’re a stadium or a mayfly.

Team co-owner Bob Funk, Jr. had this to say about why he’d like between $37 million and $72 million in public money for a new stadium for his minor-league soccer franchise:

“This is an opportunity to once again set our city on a global stage. It will connect and unify Oklahoma City’s diverse cross-section of cultures and provide a powerful economic boost to our urban core.”

Note that Oklahoma City already has a USL team, so that’s not enough to set it on a global stage. (Nor is the presence of the Thunder, apparently, though that “once again” implies that global stages expire about as often as mayflies.) Moving the soccer team from one stadium to another, though, would be a powerful economic boost, something that KFOR explains thusly:

The first option represented a $37 million to $42 million investment for an 8,000-seat stadium that would accommodate soccer, high school football, rugby, lacrosse, concerts and festivals.

Organizers believe it could host more than 60 events each year, which would bring $60 million annually to the city.

The second option was a $67 million to $72 million investment with 10,000 seats, shade structures and other amenities to improve the fan experience. Additional restrooms would be included, along with a larger stage and secondary stage. Organizers say this venue could host more than 80 events each year, which would bring over $79 million to the city.

Okay, so, just no. There is no way that the city is going to earn $79 million a year in rent (or sales taxes or whatever) on 80 events a year at a 10,000-seat stadium — that would be $100 a ticket, which would be a somewhat hefty fee for a team or stadium operator to pay.

Presumably what the “organizers” (which seems to mean Funk and a would-be stadium developer, though the article never says outright, because that would be committing journalism) mean here is $79 million a year in economic impact, which is a completely different thing adding up all the dollars spent in a region connected with a development project. That number is still almost certainly inflated — people attending minor-league soccer matches are unlikely to spend $100 total in the local economy, and even if they do they’d likely spend it just the same if the Energy F.C. were in their old stadium, or didn’t exist at all, because there are other things to do in Oklahoma City other than watch soccer — but saying “in economic impact” would have been at least marginally less misleading than “bring over $79 million to the city.”

Anyway, here‘s some vaportecture of the proposed stadium, which will apparently be used to watch dangerously over-capacity concerts involving fireworks displays at night, and to watch invisible football teams while wearing identical red floppy hats by day. Bonus points if you can spot any diverse cross-section of cultures getting unified!

Friday roundup: Suns referendum campaign fails, Panthers owner floats roof, Inter Miami and Raiders both still need temporary homes

The stadium news does not care if I am having a busy week, it just keeps happening! And I am, as always, here to catch it in a bucket and dump it out for you:

Friday roundup: Fact-checking Suns arena impact claims, the hidden cost of hosting the NCAA Final Four, and everybody gets a soccer team!

Thanks to everyone who became a Field of Schemes supporter this week in order to get a pair of my goofy refrigerator magnets! If you want to hop on the magnet train, you can still do so now, or you can first stop and read the rest of the news of a wacky week in stadium and arena developments:

  • The Arizona Republic has been full of both articles and op-eds this week asserting that giving $168 million to the Phoenix Suns for arena renovations is a good thing (sample reasoning: “The arena is old and needs updated. The Suns are young and need direction.”), but then it also ran an excellent fact-check that concluded that claims of the arena having a significant impact on the city’s economy are “mostly false,” citing the umpteen economic studies showing exactly that (sample conclusion, from Temple economist Michael Leeds: “A baseball team has about the same impact on a community as a midsize department store”). On balance, good enough work that I hope the Republic can avoid being bought by an evil hedge fund that is trying to buy up newspapers and strip-mine them for any assets; what would really be nice would be if they can be bought by someone who can afford copy editors (“is old and needs updated”?), but I know it’s 2019 and we can’t have everything.
  • Where the Oakland Raiders are rumored to be playing the 2019 season this week: San Francisco, Santa Clara, and Oakland. These are all disappointingly old ideas — am I going to have to be the one to suggest Rio de Janeiro?
  • And speaking of me, I wrote a long essay for Deadspin this week on how changes in baseball economic structure are incentivizing owners to cut player salaries without illegally colluding to do so. This is at best tangential to the stadium business, except inasmuch as it’s about “how sports team owners make their money and what affects their profits,” so it’s good to know even if you don’t especially care about who signs Manny Machado or Bryce Harper.
  • The president of the USL wants to expand the soccer league’s two tiers to 80 teams total, which is getting awfully close to the ABA’s “bring a check and you can have a team” model.
  • The new Austin F.C. MLS team was approved to start play in 2021, and celebrated by proposing a chant to memorialize the city council vote that approved its stadium funding: “7-Fooour, 7-Fooour/It’s not the score, it was the vote/That got us all our brand new home.” I am not making this up. (If I were making this up, I would at least try to get it to rhyme.)
  • Los Angeles Angels owner Arte Moreno signed a one-year lease extension on the team’s stadium through 2020, which is disappointing in that I really thought the city should have used this leverage to demand a longer-term lease extension (what’s Moreno going to do otherwise, go play in Rio de Janeiro?). But Craig Calcaterra’s summary of the situation (sample description: this will give time to resolve “a long-term solution for what, at least from the Angels’ perspective, is a stadium problem”) is so on point and such a good model for how to report stadium controversies fairly and accurately that I’m not in the mood to complain.
  • Hosting the NCAA Final Four will cost Minnesota $10 million, because there are lots of curtains to be hung and temporary seating to be put in place, and the NCAA sure as hell isn’t going to pay for it. But Minnesota will surely earn it back in new tax revenues, because economic studies show … oh wait.
  • Some billionaire in St. Louis thinks the city should have an NBA team, and some writer for something called the St. Louis American thinks the city should try to steal the New Orleans Pelicans. Now let us never speak of this again.

Chicago USL stadium, music venues axed from Lincoln Yards plan by local alderman

Chicago Cubs owner Tom Ricketts will not be bringing a new USL soccer team to that city, after alderman Brian Hopkins issued an open email declaring his opposition to the planned Lincoln Yards redevelopment project including either a soccer stadium or a proposed series of Live Nation music venues:

“I have informed planning officials at Sterling Bay, the developer of the proposed Lincoln Yards project, that I am not in support of a major sports and entertainment arena within either of their two planned development districts now under consideration,” Hopkins wrote in an email to his constituents this morning. “I have further requested that the identified site of the proposed stadium . . . be repurposed as open and recreational park space.

“In addition, I have informed Sterling Bay that I will not support the proposed ‘entertainment district’ within the Planned Development that was intended to be co-owned by LiveNation and comprised of multiple venues with seating capacities ranging from 3,000 to 6,000. The Entertainment District will be eliminated from a revised plan, and replaced by restaurants, theaters, and smaller venues that will be scattered throughout the site. LiveNation will have no ownership interest in any of these venues.”

Developers Sterling Bay later confirmed that it would be removing the stadium and the Live Nation venues from the plan.

The project is set to get at least $800 million in tax increment financing — i.e., kickbacks of future property taxes — which has been outgoing mayor Rahm Emanuel’s favorite subsidy scheme. (Most of it is supposed to be used for “infrastructure” work, but we’ve seen before how that can easily bleed into costs that would normally be private developers’.) The big uproar over Lincoln Yards, though, has been over the soccer stadium that nobody wants, plus all those music venues run by a single corporate entity, right on the doorstep of a bunch of famed independent bars and small clubs that feared they would be driven out of business. Hopkins clearly heard those complaints, and used his power as local alderman to put the brakes on the aspects of the plan that had the most public opposition.

There’s still a long way to go to finalize revamped plans for the development project, and that’s still a hell of a lot of TIF money to be devoting to development that arguably wouldn’t do much to improve Chicago. (There would be some affordable housing, but $800 million worth?) For the purposes of this site, though, there won’t be a stadium involved, so watch your local Chicago listings — the desiccated husk of the Chicago Reader has done excellent reporting on Chicago’s TIFs — for further news of this story as it develops.