Orlando City SC latest team to evict church via eminent domain for stadium

Orlando City Soccer Club may have gotten its $20 million in public stadium money, but it hasn’t acquired the land it needs yet. So, naturally, it wants to evict a church to make way for its stadium, because that’s how things are done these days. And also naturally, now that the city can’t settle on a price for the church land (the city offered $1.5 million, Faith Deliverance Temple countered with $35 million), it plans to use its eminent domain powers to acquire it:

Jonathan Williams, son of the church’s founder, said city officials jumped the gun by ending negotiations and saying they had to settle it in court.

“If they want it, they’ll pay more for it than it’s actually worth. We used that [$35 million price] as a basis to start conversations,” Williams said. “I was shocked — I thought we were still in negotiations. There was a high ball and a low ball, so let’s work it out. They initiated the disconnect.”

Silly church founder’s son: There is no “high ball” and “low ball.” There is only  hardball.

State-funded Syracuse stadium would cost $495m, plus land and parking lots

Syracuse University has provided more details about its proposed new state-subsidized football stadium, which are:

  • Cost would be $495 million plus parking structures and land acquisition, the cost of which aren’t outlined.
  • The stadium would seat 44,000 (down from the Carrier Dome’s 49,000), with a retractable roof so it could host basketball and other indoor events while also events that need to be outdoors, like, um, professional snowball fights?
  • “Additional development of a 250-room hotel, over 160 apartments and 150,000 feet of retail space.” No word on how that would be paid for, or whether there would be penalties if it didn’t happen; the university said it would require “additional discussions.”
  • “The facility’s operating budget would pay for the extra police, fire and other public services needed.”
  • Whether the site would pay property taxes is undecided, but in any case the university wouldn’t pay any, since it would just be a tenant.

That’s clear as mud, but at least it’s something. Also noteworthy: The SU consultant who wrote the letter demanding public funds is Irwin Raij, the same guy who New York Gov. Andrew Cuomo hired two years ago to be his state stadium negotiations czar. It’s always more profitable when you can work both sides of the street.

Arena consultant: Cordish’s Vegas venue unlikely to draw 140 events a year

So the city of Las Vegas hasn’t taken my advice yet to ask an arena manager whether the Cordish Cos.’ arena revenue projections make any damn sense, but Benjamin Spillman of the Las Vegas Review-Journal did, and here’s what he found:

Guy Hobbs, an economic consultant who has worked on other major local event venue proposals, said Cordish’s expectation of attracting nearly 140 events annually is overly optimistic, meaning the project would have to balance out with income from far fewer events.

“Would have to balance out with income from far fewer events” is a bit of an optimistic way of putting it itself; what this really means is either Cordish would need to make far more money per event, or the city wouldn’t get its money back. Spillman reports that Hobbs says “he generally supports an arena but considers it unlikely that Cordish’s ‘best in class’ facility can be built without some public money,” but as to how much, nobody’s saying just yet.

Meanwhile, Spillman also reports that several local business leaders, plus three of seven city councilmembers, oppose the Cordish plan, and think the city should drop it and move on. Which may yet happen if after this latest four-month negotiating extension no one has found any magic beans to pay off the arena with, but this being Vegas, the land that can’t have too many arena proposals, we’ll see.

 

Vegas drops downtown business tax for arena, replaces it with “Dunno, we’ll think of something”

Turns out that crazy plan for Las Vegas to front the money for yet another arena, partly via a tax on downtown businesses, was too crazy even for the city — but only because downtown businesses squawked. The new plan: Still have the city put up $239 million in funding, but figure out how to make up the $52 million from lost business tax revenue later.

With a vote scheduled today, the arena project’s backers spent Tuesday scrambling to make changes to appease opponents. The changes, however, only increased the gap between the approximately $150 million Cordish is pledging and the project’s estimated cost.

“It gives us an opportunity to figure out what that gap may be and what are some of the viable solutions to fill that gap,” City Manager Betsy Fretwell said.

Ah, yes, it’s not a $52 million hole. It’s an opportunity. To fill the $52 million hole. With, one hopes, a giant wad of cement.

Regardless of who’s taxed to come up with the money, the big question remains whether the arena would ever bring in enough revenue to repay the city’s costs, after the arena operator extracted its own profits. Cordish Cos., the proposed arena developer (and possible operator, though the company could also choose to contract that out) has promised 139 events a year, but given that arena expert John Christison has estimated you typically need 200 events a year just to break even on operating costs, before even touching construction debt, that doesn’t seem very promising. It’s even less promising when you see that only 30 of those events would be concerts, with the rest scattered among family shows, conventions, WWE, arena football, rodeo, etc.

Cordish projects that all this would provide $20 million and up in net operating income, which would be just barely enough to repay the city’s $239 million nut, but which sounds awfully optimistic given how little other arenas have taken in as profit. If I were the city of Las Vegas, I’d put in a call to some arena managers to ask them if Cordish’s numbers make a damn bit of sense, but right now looking very expensive gift horses in the mouth doesn’t seem to be in their job description.

Saskatchewan taxpayers subsidize junior hockey league, thanks to profit guarantee

Followers of the Memorial Cup may have been surprised to learn — what’s that? You know, the Memorial Cup. The championship of the Canadian Hockey League. What do you mean, you’ve never heard of … okay, I’ll start again.

So in Canada, there’s a separate set of hockey leagues for players 16 to 20 years old, and the champion is decided by something called the Memorial Cup. Like the Super Bowl and the NCAA tournament, it rotates among various venues each year, and like those other events, the league places demands on cities in order to be considered as host. Including, apparently, guaranteed profits:

Taxpayers in Saskatchewan are paying nearly $700,000 to cover a profit guarantee, promised to support the Memorial Cup in Saskatoon in 2013.

The guarantee was needed to secure the tournament from the Canadian Hockey League which was assured the event would net the organization $3.5 million.

In the grand scheme of things, this isn’t too horrible: $700,000 is a pittance compared to what some locales spend on sporting events, and when Saskatchewan hosted the world junior championships in 2010, it made its profit target, so amortized over all the guarantees the province hands out, it’s not a ton of money. Still, it’s sobering to realize that even in relatively subsidy-averse Canada, even for freakin’ junior hockey, leagues are able to extract guarantees that the public will subsidize their profit if it falls short of what they were expecting. Monopoly power is a bitch.

Syracuse officials: Stadium may be on back burner, but we still love subsidies, really!

It looks like that $500 million Syracuse University football stadium (with $300 million paid for by New York taxpayers) may be on hold for the moment, as Syracuse Mayor Stephanie Miner’s public questioning of the project’s funding has led Gov. Andrew Cuomo to put off formally proposing the plan. And this has two Syracuse city councilmembers freaking out that developers might think this means their city isn’t interested in throwing money at them anymore:

“Don’t turn your back on the city of Syracuse just because we weren’t able to launch this project,” Councilor-at-Large Kathleen Joy said today in an hour-long editorial board meeting at syracuse.com / The Post-Standard.

“Take a chance on us,” Councilor-at-Large Jean Kessner said….

Conversations about the stadium may continue, Kessner said, though Joy held out less hope. Moreover, they worry that the lack of agreement among local officials about the possible deal may send a message that Syracuse isn’t ready to take on large-scale developments that could mean new jobs and more property tax payments in the city.

Remember, people: They can smell desperation.

Barça fans to vote on team funding own remodeling of Camp Nou, because Europe

European soccer remains generally outside the scope of this site, but I think I can make an exception for freakin’ F.C. Barcelona, which has announced it will conduct a major remodeling of its historic Camp Nou stadium rather than replacing it. The cost will be about $800 million, will run from 2017 through 2021 while the team still plays there, and will include added seating, new restaurants, and a new roof.

The cost will be covered entirely by Barça’s cash reserves, bank loans, and naming-rights fees, and as if that’s not enough to create culture shock for U.S. sports fans, check out this quote from team president Sandro Rosell:

“The option of building a new stadium on a new site has been rejected as the final cost could have saddled the club and its members with debt and tied the hands of future boards of directors,” added Rosell.

That’s eminently logical, and of course not at all the way we do things here, where fears of saddling teams with debt are typically used as a reason to demand public subsidies, not to scale back costs.

In other we’re-not-in-Kansas news, the Camp Nou remodeling will be voted on by Barcelona’s 222,000 members, since these fans are effectively shareholders in the team. I can’t even imagine what this system would look like if it were implemented here, since as we all know, voting on things is un-American.

Cuomo to propose $300m in public money for new Syracuse college football stadium

I really do try to steer clear of college sports on this site, because I have to draw the line somewhere, but HOLY CRAP NEW YORK STATE IS TALKING ABOUT GIVING SYRACUSE UNIVERSITY $300 MILLION TOWARD A NEW STADIUM!

[Onondaga County Executive Joanie] Mahoney and other county officials this week expressed dismay that [Mayor Stephanie] Miner would not endorse the project in time for Gov. Andrew Cuomo to include it in his upcoming state budget, which he will unveil Jan. 21. Cuomo had signaled his willingness to provide some $200 million in state money for the deal, Mahoney said. The county was prepared to provide $100 million or more.

The bulk of the Syracuse Post-Standard article linked above is about a squabble over a feasibility study that Mahoney got a taxpayer-funded nonprofit to do for the university — which Syracuse then refused to share the result of with lawmakers, because they said they were afraid then the public might get to see it. That’s pretty bad in itself, but seriously, $300 million in public subsidies? For a college football stadium? For a private university? I’m not completely sure that’s a record, but I’ll be surprised if it isn’t.

Syracuse University has been talking about replacing the Carrier Dome, which has an old-fashioned inflated fixed roof, with a new 40,000-seat stadium with a totally modern and shiny and stuff retractable roof, for a few weeks now, because, duh, shiny! I haven’t seen a price tag for the entire project mentioned, so it’s impossible to say how much of a share the state and county’s $300 million would kick in, but given that the most expensive college stadium ever cost only $450 million, even adding a retractable roof couldn’t get you much past $600-700 million. So we’re likely talking about New York state taxpayers being asked to put up around half the cost of a new stadium to benefit a private university’s sports teams. Criminy.

Vegas arena developer would get paid before city after all

I finally got around to reading the term sheet for the latest $390 million Las Vegas arena proposal, which the Las Vegas Review-Journal helpfully included with their article on Wednesday. And while the the main sales point of the plan has been that the city would be repaid its $239 million share before developer Cordish Companies got back its $151 million, it turns out that’s not entirely true.

The trick comes in the definition of “net operating income,” which is what would be used to repay the constructions costs, and which the city would indeed have first dibs on. Before that, though, Cordish would sign a 30-year lease agreement to manage the arena (or hire another company to manage it for them). In exchange, Cordish would get to extract “a competitive and market based management fee”before paying off the construction debt.

That all sounds reasonable — if it’s “market-based” it’s gotta be right, right? — except that it effectively puts Cordish first in line for arena profits. We have no idea how much the developer would get to take off the top, but if we look at the Sprint Center in Kansas City as an example, we see that it turns about a $1.8 million a year operating profit after arena manager AEG takes its cut. In Las Vegas’s case, that would be enough to pay off a little more than 10% of the city’s construction costs, after which the well would run dry.

Obviously, a lot is going to depend on how much revenue this proposed arena — which would have the advantage of being in Vegas instead of Kansas City, though the disadvantage of having to compete with the umpteen other arenas in Vegas — can bring in, and how much Cordish’s cut is. But unless it’s way more successful than the average arena and Cordish takes a cut-rate fee, things aren’t looking good for Vegas being able to get its money back.

Vegas proposes third new arena, now on brink of arena event horizon

Don’t look now, but there’s a new Las Vegas arena deal in the works! No, not the MGM/AEG one that we talked about last week. And not the $1.3 billion one with the retractable roof proposed two weeks before that by a former NBA benchwarmer. Didn’t you hear me say “new”? And by “new” I mean “more than four years old, but unexpectedly raised from the dead“:

The city of Las Vegas plans to continue working with Cordish Companies to develop a $390 million downtown sports arena, with the city paying $239 million raised in part by a special tax on downtown businesses….

According to the proposed terms, the city would fulfill its end using $187 million from bonds backed by arena revenue, nearly $52 million from a special improvement district that would assess casinos along Fremont Street and other downtown businesses based on proximity to the project and $3 million from a tourism improvement district funded through sales tax.

The good part of this deal, according to Vegas city manager Betsy Fretwell (wasn’t she in the Mayor Blank administration?), is that the city would get repaid its $187 million in bonds out of arena operating revenues before Cordish got repaid its $151 million investment. (The city would also own the arena, but as we’ve covered here before, that would mostly just serve to ensure that Cordish wouldn’t have to pay property tax.) The problem is that the money would be repaid out of operating profits, and as one stadium expert — okay, me — pointed out to the Las Vegas Review-Journal, most arenas don’t turn much of an operating profit. Which is especially going to be a concern when any new Cordish arena would have to compete for events with the new MGM arena, and all the other existing Vegas arenas, and probably offer discounts to acts in order to do so. (We’re not even getting into the notion of it hosting a major pro sports team, of which Vegas currently has none and isn’t likely to get any soon, certainly not if it wants them to — gasp— pay rent.)

Right now this doesn’t look like much of a plan: It’s being voted on by the council next week, but only in order to extend talks with Cordish another four months rather than have the negotiating window expire. If that’s approved, then everyone will reconvene on June 1 to figure out how to pay for all this, hopefully with actual revenue projections this time.