Friday roundup: Naming-rights woes, Austin update, and the World’s Largest Chest of Drawers

It’s Friday already? Seems like we were just doing this, but the pile of stories in my Instapaper queue says otherwise, so away we go:

  • The Florida state house has again passed a bill that would ban building or renovating private sports facilities on public land, which would potentially affect the Tampa Bay Rays, among others. This is kind of a dumb idea, as we discussed back in October, since there’s nothing wrong per se with putting stadiums on public land so long as the public gets a good deal for it; a far better plan would be a Seattle-style bill to require that local governments get a return on their investment in any sports lease project. But then, this bill already passed the Florida house last year and died in the senate, so probably not worth getting worked up over too much just yet.
  • Sports Authority agreed in 2011 to pay $6 million a year for 25 years for the naming rights to the Denver Broncos stadium, and now Sports Authority is bankrupt, and Metropolitan State University of Denver marketing professor Darrin Duber-Smith is saying I told you so: “My big warning was, ‘I’m not sure Sports Authority is a big enough or healthy enough company to commit that much money from their marketing budget each year.’ And I was right.” The Broncos are now looking for another company to pay $10 million a year for naming rights, and haven’t found any takers yet, hmm, I wonder why?
  • Chelsea F.C. will get to move ahead with its new-stadium plans after the town council used a compulsory purchase order — like eminent domain, surely you’ll remember it from that Kinks song — to clear an injunction that a nearby family had gotten on the grounds that the new stadium would block their sunlight. The purchase order isn’t actually seizing their home, but the land next to it, which is enough to invalidate the injunction; not that this doesn’t raise all kinds of interesting questions about the use of state power for private interests, I’m sure, but man, don’t you wish this were the only kind of stadium controversy we had to put up with in North America? League monopoly power over who gets a franchise is a bad, bad thing.
  • High Point, North Carolina is spending $35 million on a stadium to bring an indie minor-league Atlantic League baseball team to town, and City Manager Greg Demko says this will help the city’s commercial tax base recover, because “the construction of a stadium is like an anchor for the revitalization and development of a downtown.” Demko is going to be so disappointed, but at least he got mention of his city in a Bloomberg article as “home to the World’s Largest Chest of Drawers,” and you can’t buy publicity like that.
  • New Seattle mayor Jenny Durkan says that while it’s “a longshot,” it wouldn’t be impossible for Chris Hansen to build his Sodo arena while OVG renovates KeyArena at the same time. I’m going to interpret the tea leaves here as “Hey, if you want to spend your money to try to compete with another arena across town, be my guest,” but stranger things have happened, maybe?
  • The city of Austin has issued a report on eight possible sites for a stadium for a relocated Columbus Crew, and are now waiting on Crew owner Anthony Precourt to tell them which, if any, he likes. A consultant for Precourt has since ruled out a site or two, but it looks like nothing might be ready for the city council to vote on February 15 as planned; Austin MLS lobbyist Richard Suttle says the problem is “between the holidays, flu season and winter storms, it’s been slow going.” It’s not quite helping to spark women’s suffrage, but the flu still reminds us who’s boss from time to time.
  • Now that Amazon has announced its short list of cities that will get to bid on its new second headquarters, it’s time for another look at how to stop corporations from launching interstate bidding wars to be their homes, which once again leads us to David Minge’s 1999 bill for a federal excise tax on public subsidies. “Of all those offers [made to Amazon] there’s one obvious one that should have been made and it should have come from Congress,” University of Minnesota economist and former Minneapolis Federal Reserve research director Arthur Rolnick, who helped Minge concoct that bill, tells CityLab. “Now if that offer were on the table it would end it, it would end the bidding war. Then Amazon would simply base its decision on where location is best for business.” It’d work for sports leagues, too!

Friday roundup: A’s won’t give up on Laney, Isles could play “some” games at Coliseum, more!

Tons of stray news items this week, so let’s get right to them:

  • The Rhode Island state senate’s finance committee approved $44 million in spending by the state and city of Pawtucket for a new Pawtucket Red Sox stadium, which is what everyone expected, because the real opposition is in the state house. A spokesperson for House Speaker Nicholas Mattiello said that if the bill passes the Senate, “it will be assigned to the House Finance Committee and be given a public hearing,” which isn’t exactly a ringing endorsement, but then, Mattiello has been saying consistently that his constituents hate this plan.
  • Oakland A’s president Dave Kaval said that the team owners have “identified three final locations” for a new stadium, and … they’re the same three sites the team announced more than a year ago, even after Laney College officials since took themselves out of the running. “We spent a lot of time getting it to three final sites, and those are the sites that are viable,” Kaval told reporters. Props for sticking to your convictions, I guess, but there’s a time to go to a Plan B, and it’s maybe after Plan A told you, “Get offa our lawn.”
  • The city of Liverpool is set to spend £280 million on a new stadium for Everton F.C., four years after saying no to a similar plan, but Mayor Joe Anderson defends the plan as a loan that the team will repay and more. The Guardian reports that “the city council could make £7m-a-year profit from interest charged on a loan of £280m over 25 years, plus extra revenue from business rates and related developments once the stadium is up and running” — which sounds good if the profit is guaranteed just from the loan payments (the city would reportedly have first dibs on Everton team revenue), not so much if it would rely on those “related developments,” which could be stuff that would happen with or without a new stadium. As is so often the case, it all comes down to what that comma means.
  • NHL commissioner Gary Bettman toured Nassau Coliseum on Tuesday, after which New York Islanders owner Jon Ledecky said he was “confident” that “some games” would be played there while waiting for a new Belmont Park arena to be built, but that playing full seasons there would be “difficult.” So that would imply … some games in Nassau and some in Brooklyn, since the two arenas have the same owner? Some in Nassau and some at Madison Square Garden, which is set to help build the new arena? Some in Nassau and some on a frozen-over East River after that ice age that the American Museum of Natural History seems to think is imminent hits? Your guess is as good as mine.
  • A Unitarian minister writes in an op-ed for the Charlotte Observer that if the Charlotte city council is going to spend money on a new Carolina Panthers stadium, it should be required to build affordable housing, too. My theology is shaky at best, so I’m not sure what Unitarianism has to say about a right canceling out a wrong.
  • Speaking of North Carolina, the Hurricanes got a new owner this week, and in his first few hours as head of the team, he didn’t demand a new arena or threaten to move the team without one. Though that may have more to do with the team’s sweetheart lease on its current arena that last through 2024, which had led former owner Peter Karmanos to say in 2015 that “we’d have to be idiots to move from here,” so give the new guy a few more hours, at least.
  • This. You’re welcome.

London takes over Olympic Stadium and its nightmare lease with nightmare West Ham

Stadium public funding scandals are rarer in Europe than in North America, but there are a handful, and the tale of London’s Olympic Stadium is an especially scandalous one. The story so far: The government spent £429 million (or maybe £701 million) to build the stadium for the 2012 Olympics, then London Mayor Boris Johnson promised to spend £190 million to convert it to use for soccer by West Ham United, but it ended up costing £323 million. And now current London Mayor Sadiq Khan has taken over management of the stadium, in an attempt to rein in not just the soaring capital costs but also the deal that Johnson signed that forces taxpayers to fund everything from security to goalposts and corner flags. Of which deal West Ham’s owners say, sorry, no backsies:

The concession agreement is a watertight, legally binding contract signed in 2013 in good faith by West Ham United, who remain absolutely committed to its terms for the entire 99-year duration.”

Let’s see, what could make this even worse? How about that everyone involved seems to hate the Olympic Stadium as a home for soccer? Or maybe that if things continue to stand as they do currently in the English Premier League, West Ham will get relegated to the second division next year, meaning London will effectively be paying through the nose to provide a 60,000-seat stadium for a minor-league team? I sure hope London taxpayers are big fans of corner flags.

Friday roundup: Beckham sued over MLS land purchase, Browns’ flammable stadium, and more!

It’s Friday roundup time! Let’s get started:

  • A local Miami landowner is suing Miami-Dade County over its plan to sell land to David Beckham’s would-be MLS ownership group for a new stadium, arguing that the no-bid deal violates state law requiring public land to be sold to the “highest and best bidder.” Bruce Matheson, who owns land nearby the planned stadium site in the Overtown neighborhood but “spends most of his time aboard his 72-foot Argosy yacht,” according to Miami New Times, has previously blocked the use of a public park for expansion of the Miami Open tennis tournament, so he might just know what he’s doing here. Also, David Beckham is clearly cursed, so that can only help Matheson’s case.
  • In case it wasn’t clear that Louisville’s KFC Yum! Center subsidy deal was a complete disaster from last October’s report that the city was losing almost $10 million a year and the arena was in danger of going bankrupt, Louisville’s KFC Yum! Center is a complete disaster. One big reason why: sales-tax projections were based on past sales-tax growth, which included a sales-tax rate hike in 1990, which wasn’t going to happen again. Whoops! The latest plan is to have the city bail out the arena by taking on an extra $100 million in debt, which tenants the University of Louisville could pay off with less than four years’ worth of the profits they’re making on running the place, but won’t because finders keepers, losers weepers.
  • Wichita is about to spend $60 million on a new stadium for the indy-minor-league Wichita Wingnuts — slogan: If You’re Gonna Go, Then Go Nuts! — and the manager of nearby Picasso’s Pizza is excited about it: “People from all over the Wichita area love some Picasso’s,” says Efrain Ramirez. “Because we’re Picasso’s, you gotta make it look cool, it’s gotta be artistic. You gotta put your flair on it.” Well, excited about something, anyway. Spare a thought for the poor small-city reporter who has to wring a quote about economic development out of a pizzeria manager, okay?
  • Speaking of sports venues and local businesses, some bar owners near the Detroit Red Wings‘ new downtown arena are excited about it, while others are worried they’ll get “trampled” by the “big guys.” No interviews were conducted by the Detroit News with bar owners near the Red Wings’ old downtown arena, which will now close. This has been your moment in 21st-century journalism.
  • The Cleveland Browns‘ stadium is covered in the same flammable cladding that caused the deadly Grenfell Tower fire, but Cleveland’s top building official promises this poses “zero risk to the fans.” Presumably because if you’re watching a Browns game, death will come as sweet release.
  • The turf at the San Francisco 49ers stadium in Santa Clara continues to suck.
  • The Roma soccer club is owned by Americans, so they are naturally inclined to levy stadium threats. It also plays in Italy’s Serie A, which like all soccer leagues outside the U.S. works by promotion and relegation, so if the team threatened to move, Rome could just start a new team to replace it. So instead team president James Pallotta is threatening that if the ownership group doesn’t get approval to build a new stadium, they’ll sell the team to … someone who won’t demand a new stadium? You may not have thought this entirely through, James.
  • A Russian farmer has built a stadium out of straw to poke fun at the $700 million St. Petersburg is spending on a new World Cup soccer stadium. Cost of the straw stadium: $675. Be sure to click the link above for a truly bizarre Russian video for 2016 with a giant straw bear and a straw sphinx and … watermelons? Guys, I am slightly worried about whoever’s in charge of media links for ESPN.

Soccer exec: West Ham’s four-year-old stadium sucks, tear it down and build a new one

And finally this morning, former English soccer star and stadium consultant Paul Fletcher had this to say about West Ham‘s new home in London’s Olympic Stadium:

“Either we go on as we are for the next 30 or 40 years or we knock it down and start again,” Fletcher told the BBC.

“Something has to give. If you want to satisfy spectators the only way to get those spectators near that pitch is to knock it down and start again,” added the former Burnley striker turned chief executive.

Which, given all the complaints about the crappy views at the stadium, plus scenes of West Ham fans throwing coins and bottles at opposing fans and even fighting among themselves, isn’t an entirely unreasonable response from a guy who figures he could have done it better. Still, calling for a four-year-old stadium to be torn down and rebuilt has to be some kind of record, no?

(You could actually make an even better case for knocking down West Ham’s roster and starting again, but pointing that out would be cruel. So I’ll only do it in parentheses.)

People love living near stadiums, says paper devoted to saying people love living places

The New York Times real estate section chimes in on stadiums today, which is great news, because it means we can explore the bastion of weirdness that is the New York Times real estate section. First off, let’s hit the checklist: Does the article boast of a hot new neighborhood or neighborhoods that savvy buyers should be aware of? Check!

Once considered neighborhoods to avoid, property around many of Europe’s great soccer stadiums is growing more popular these days, as cities grow more expensive and teams build new facilities. Home buyers are finding bargains near stadiums and developers see opportunities to create new urban communities.

Does it do so by exclusively quoting realtors, developers, and happy residents of these areas? You bet it does: five realtors, one developer, and two residents. Does it describe the featured neighborhoods of having some nebulous trendiness that can’t be measured, only felt? Of course!

“There is a buzz about the place,” Mr. Spooner said. “People come here to have a good time.”

And most of all, does it eventually undermine its own premise with counterevidence, but bury that way at the end of the article so that readers (and the headline writer) can ignore it? You betcha! First it notes that “prices are often lower than in other neighborhoods” (which is noted as an attraction, but is also an indication that living near a stadium isn’t actually seen as that desirable), then the whole premise comes crashing down when the scene shifts to Barcelona and Rome:

Barcelonians are fanatical for Barça, but they are not necessarily eager to live near Camp Nou, the team’s stadium, said Joan Canela, of the Engel & Völkers Barcelona office.

“None of our clients demand to be near the stadium,” he said. The stadium “hurts value, because it is an area that becomes very crowded when there is a match, is complicated to park and the neighbors may have problems to access to their homes,” Mr. Canela said…

Barbara Maravalli, 42, rents a three-bedroom apartment with her husband and two children about half a mile from [Rome’s] Stadio Olimpico. “It played absolutely no role in my choice,” she said. “I wanted to be close to the center and surrounded by green areas.”

On game days there are “crazy” traffic jams in the area, Ms. Maravelli said. Her 20-minute drive to work can take an hour if she does not plan carefully. “I would rather they move the stadium, but I love this area so much that I would keep on staying here,” she said.

Add it all up, and you have: A bunch of realtors trying to sell or rent apartments around some of Europe’s big soccer stadiums say they’re a great deal; as for actual residents, some like being near stadiums, some don’t. That’s not actually a story at all, but in Times Real Estate land, it’s more than enough to warrant a headline like “Stadium Neighborhoods Are Becoming Magnets for Home Seekers,” which who knows, might even help stoke interest in those areas, as a Times R.E. mention has been known to do. It happened to Bushwickit’ll happen to you!

 

West Ham owner: Be glad we’re paying anything to rent London’s “ridiculous” Olympic stadium

Here in the U.S., we’re used to sports team owners justifying public stadium subsidies as a boon to taxpayers because they will create umpteen billion dollars in economic activity or whatnot, usually backed up by studies of dubious parentage. In the case of West Ham United owner David Gold, though, stung by criticism that his lease on London’s former Olympic stadium will cost the public so much in maintenance and operations that it could eat up any rent he’ll pay, he has a somewhat different argument:

“We built a stadium that was built by a number of very arrogant people that had no foresight for the future. They built a ridiculous stadium but we have made the best of it.

“It’s just ill-informed judgments and opinions. I get that. Sometimes a newspaper will pick out and its headline will be: ‘Taxpayer paying for the flags and the goalposts.’ What a fantastic headline. It gives everybody a misinformation. It sends out the wrong information that they believe the taxpayer is paying for everything and they get nothing in exchange.

“That’s ridiculous. The taxpayer is going to make a profit. It wouldn’t make a profit if you tore down the stadium and put it into a 25,000-seater, would it? Come on, how many people are going to watch the world championship hop, skip and jump?”

What Gold seems to be saying here is that London was dumb enough to spend £701 million (a little over $1 billion) on a stadium that would only be used for three weeks, so hey, at least West Ham is letting them earn something back on it. As lessons in sunk costs go, I still prefer this one — but apparently the kids today need all the help with this that they can get.

West Ham’s Olympic stadium lease sticks London with cost of everything from heating to corner flags

I don’t follow English Premier League finances as closely as those on this side of the pond, so I honestly couldn’t tell you whether the £2.5 million a year in rent that West Ham will pay for use of the 2012 London Olympic stadium as its home pitch is a huge sweetheart deal or not. I’m leaning yes, though, if only from this extraordinary statement put out by the London Legacy Development Corporation, the team’s new landlord:

“We were concerned that the publication of this contract and the precedent it may set for future agreements could make it harder to do this. However, we have decided not to seek leave to appeal, and have today made the contract available on our website.”

That sure sounds like, “No, don’t let it out that we gave West Ham such a great deal, now everyone will want one!”

The big giveaway here, as with many modern stadium leases, is the degree to which taxpayers will be on the hook for stadium operations: The public body will have to pay for all policing, stadium heating, lights, goalposts and even corner flags, which could easily eat up the entire £2.5 million. Nice negotiating, London Legacy Development Corporation!

D.C. zoning commission likes United stadium, just wishes it looked less like a prison

The D.C. Zoning Commission held its first hearing on D.C. United‘s new stadium being built with the help of $183 million in city money, and the commissioners didn’t sound too thrilled with the team’s bait-and-switch stadium design:

“I actually looked at it and it and I thought, this reminds me of a prison, the facade,” [commissioner Marcie] Cohen said. “I think we need to get a little bit more, maybe a little bit more friendly to the neighborhood, because if I’m looking at the facade, I wouldn’t be too happy with that view.”

What Cohen was talking about was presumably this, which, yeah, she has a point:

dc-united-pressNot to mention: Ghost balloons! Eeeagh!

The good news for United owner Erick Thohir is things like spiffing up the exterior are relatively inexpensive in the grand scheme of things, so they should be able to make the commissioners happy with a few tweaks. And if not, well, Thohir is only on the hook for half of the first $20 million in cost overruns, so it’ll be more the city’s problem than his.

Speaking of Thohir, he also owns Italian soccer giant Inter Milan, and had this to say yesterday about that team’s new-stadium campaign:

“If you look at future revenue, the stadium is very important, just look at what Juventus make with ticket sales. Both Milan clubs are working to improve the stadium, otherwise we’ll lose €20m in profit.”

Lose €20m in profit compared to what exactly? Compared to what they make now? Compared to what Juventus makes now? Compared to what they’d make in a new stadium? How does Thohir know what his profits would be in a new stadium when he doesn’t even know how much he’d have to spend on it? Do sports team owners even think before saying these things, or is it like those “You’re going to be grounded for the next six months!” threats that parents blurt out before thinking what they’re saying or how they’ll enforce it? Anyway, nice to see that while Europe may be far behind when it comes to lavishing public money on its sports teams for no good reason, America doesn’t yet have a monopoly on stupid.

F.C. Barcelona is spending $711m on stadium upgrades, and it’s probably actually not crazy

I don’t usually try to cover all of European soccer stadium news, both because there’s so much of it and because the stadium swindles that typify North American sports are largely unheard of there, for varied reasons having to do with government attitudes toward corporate subsidies, team ownership structure, and the way the leagues themselves are organized. (Real oversimplified version: It’s hard to shake down your city for stadium money by threatening to leave if your city can just start a new minor-league team and have it play its way up to the majors in a few seasons.) But I’m going to make an exception for F.C. Barcelona‘s $711 million stadium expansion plans, not just because we’re a Barça household here, but also it reveals some interesting things about how stadium finance works these days.

The renovation plan, which has been in the works a couple of years, would expand the already 100,000-seat Camp Nou by 5,000 seats, something that SB Nation latched onto as an excuse for talking about just how decadent this is. (That’s $142,243.29 per seat! Which is … a lot!) The changes to the seating bowl, though, are relatively minor (a roof will be extended over all the seats, and the lower and upper decks will get rejiggered somewhat, ostensibly for better sightlines). Much of the expense, it looks like, will go into creating this on the outer side of the stadium:

FOTO_C_-_Detall_Fa_ana-Optimized.v1457473248Aside from providing exciting new ways for Barça fans to fall to their deaths, apparently, that’s a whole lot of room for new places to sell stuff to fans. And indeed, a “new zone of restaurants” is one of the things the club has planned as a revenue generator for the redone space, as well as doubling the number of VIP seats to almost 8,000, and selling “partial” naming rights to the building, which probably means something like MetLife Stadium’s corporate sponsored entrances, though without the corporate stadium name since that wouldn’t fly well with Barça fans.

It’s all a lot like the $1 billion in upgrades that the owners of the New York Knicks and Rangers undertook to Madison Square Garden a few years back: A fabulously wealthy franchise spending a bunch of money in the hopes of making more money in the future. The parallel even goes as far as F.C. Barcelona (along with three other Spanish clubs) getting special tax breaks like MSG, something the European Union keeps threatening to rule on the legality of — though also like MSG, they get the tax breaks regardless of what they spend on stadium upgrades, so this expansion really is coming out of the team’s own pocket, even if that pocket has been previously bulged a bit with cash at public expense.

The other difference, of course, is that those Barça fans are the team’s owners — it’s that ownership structure, in fact, that is getting them (plus Real Madrid, Athletic Bilbao, and Osasuna, who despite the extra cash are mired down in the second division) the special tax treatment. And the fan-owners actually voted on the Camp Nou renovation (vs. another proposal of building a whole new stadium), so arguably you could say that this is an example of fans just wanting a snazzier place to watch the game (and buy things), and tapping the team’s deep pockets to pay for it.

So what does this — along with other new team-funded stadiums like Chelsea‘s, which recently got the ultimate in vaportecture videos, a series of renderings created by a season ticket holder who responded to a team request for design proposals — say about how stadiums should be built, renovated, and funded in North America? That if you’re popular enough, obviously, there are certain cases where spending hundreds of millions of dollars in team money on upgrades can make sense, both financially and (one hopes, if the Barça voters were smart) in terms of actual fan enjoyment. For the vast majority of teams, though, in a saner world it would be more about smaller, incremental upgrades as the fan base grows — like, for example, the expansion that newly first-division Eibar is undertaking to expand its teeny 6,000-seat stadium (better photos here).

That’s also pretty much how the U.S. stadium and arena world worked for the first half of the 20th century, before the threat of moving teams and mayors who thought their job was to throw “development incentives” at private companies and professional economic impact studies changed the world and made it necessary for Joanna Cagan and I to write a book and start this website. We might get back there again someday, maybe, but in the meantime I think I’ll be renewing the fieldofschemes.com domain name just the same.