Charles Allen, the D.C. councilmember whose district includes RFK Stadium, calls the site “a very wrong choice for an NFL stadium,” and instead would like to see housing and parks there. Mayor Muriel Bowser disagrees, so this is going to come down to a good old council fight. Too bad Marion Barry isn’t around anymore to make things interesting.
Hawaii is considering spending $350 million in public money on a new football stadium to replace Aloha Stadium because, according to state senator Glenn Wakai, “It’s kind of like driving a Datsun pickup truck that is just being run into the ground. At a certain point, time to get a new pickup truck.” Given that Aloha Stadium currently hosts nothing much at all other than University of Hawaii football, it’s more like spending $350 million to replace your pickup truck that just sits in the driveway with a new pickup truck, but far be it from me to interfere with Sen. Wakai’s attempts to bash Datsun for some reason.
Halifax is still considering whether to spend $120-140 million on a stadium for an expansion CFL team, maybe via the magic of tax increment financing; University of Calgary economist Trevor Tombe points out that a TIF isn’t magic but just “makes the subsidy less transparent, less obvious that it indeed even is a subsidy” — but then, pulling the wool over the public’s eyes is a kind of magic, no?
The Oakland Raiders have a “very real” chance of playing 2019 at the Oakland Coliseum, according to … this Bleacher Report headline, but nothing in the actual story? What the hell, Bleacher Report?
Austin residents will get to vote in November on whether the city can give public land to a pro sports team owner without a public vote, but it’ll probably be too late to affect the deal to do that for Austin F.C. owner Anthony Precourt. It’ll come in handy next time Austin is in the market for a pro sports team, I guess, though then the owner will probably just figure out a different way to ask for subsidies. “Better late than never” doesn’t work that well when it comes to democracy.
Calgary Mayor Naheed Nenshi said he’s “not sure that there’s much space for public consultation” on a redevelopment project to include a Flames arena, though he added that “it would be very interesting to hear from the public on what they think the right amount of public participation in this should be, and certainly there will be an opportunity for the public to have their voices heard but it might not happen until there’s something on the table.” It’s hard to tell whether that’s a justification or an apology — and keep in mind that Nenshi was deliberately shut out of the committee negotiating any deal — but there you are.
MLS commissioner Don Garber just got a five-year extension, and — quelle coincidence! — the league is now talking about expanding to 32 teams by 2026. Whether this is really a Ponzi-esque attempt to paper over weak financials with a constant influx of expansion fees won’t be entirely clear until the expansion finally stops and we see how the money looks then, but one thing is increasingly clear: It’s kind of crazy to throw stadium money around in hopes of landing an MLS franchise when it’s increasingly clear every reasonably large city in the U.S. is going to get one sooner or later.
Happy first Friday roundup of 2019! I could add a whole lot of thoughts on lists I’ve read and haven’t made of the best of this and that of last year, but to save time let me just stick with saying that this song is pretty damn excellent and get right to the news of the short week:
An opposing team manager has demanded that Tottenham Hotspur be required to play the rest of their season at Wembley rather than moving into their much-delayed stadium, because … teams that got to play them while they were adjusting to their new grounds would have an advantage somehow? From what I’ve been able to tell, most of home-field advantage in soccer comes from home fans booing (or whistling) at refs to intimidate them into making calls that go their team’s way, but the last time I tried reading the literature on this it quickly went deep into the weeds, so I won’t belabor the point.
“Fans at Talking Stick Resort Arena” were “surprisingly” in favor of spending public money to renovate the Phoenix Suns arena, according to Fox10 Phoenix, compared to “the online response” which was more “mixed.” This is both an impressively off-label use of “surprisingly” and an impressively lazy attempt at polling Phoenix residents — two impressively lazy attempts, even — so fine job, Fox10 Phoenix!
Jeff Bezos will be getting more public cash than any single sports venue, but at least he’ll be employing actual full-time workers, so the cost-per-job ratio won’t be as dismal as in sports deals (though it’s still probably pretty bad).
Just like we’ve seen in sports deals, here are tons of hidden costs to the Amazon agreements, from infrastructure slush funds paid for with public tax dollars to federal tax shelters set up by Donald Trump that will cover Amazon’s New York headquarters, even though they were supposed to be for impoverished areas and Long Island City is decidedly not.
As in many sports deals, Amazon’s subsidies will evade most public oversight (in New York, anyway), and were arguably unnecessary at this level given that the company, like sports teams, undoubtedly ended up locating in the market that it wanted to anyway.
Or if you want to skip to the ending: “The Amazon deal is ultimately another step in the legitimization of government by extortion, where the nation’s richest men can withhold ‘job creation’ as a condition of not having to pay taxes, or commute without a helicopter.” But go read the whole thing, it’s way more entertaining than the bullet-point summary above, or at least way more packed with pop-culture references.
In case you somehow missed it, Amazon made it official this morning that its new 50,000-person second headquarters was going to be split into two 25,000-person sites, one in the Long Island City section of New York City and one across the river from Washington, D.C., in Arlington, Virginia. (Nashville, Tennessee, will also get an “Operations Center of Excellence,” which is maybe not the name you want to give your corporate outpost if people are already worried your company is an Orwellian nightmare.)
Attached to its press release, Amazon included the full memoranda of understanding for the New York, Arlington, and Nashville deals — since my purpose in life somehow seems to have evolved into reading these damn things and figuring out what’s hidden in them, I sat down to write up an analysis of the New York deal for Gothamist. The upshot: Between the city and the state, Amazon will cash in at least $2.5 billion in checks from the public (and probably more like $3 billion — see update below) in the form of tax breaks and other goodies. With Jeff Bezos in line for about another $1 billion from Virginia and a pittance of $60 million from Nashville — hardly worth counting the bills, honestly — that’s about $4 billion that America’s richest man will be raking in for the trouble of holding a year-long bidding war before doing whatever he wanted anyway.
A few further notes on this, from our usual perspective of sports subsidies:
Damn, that is a chunk of change. Yes, an Amazon headquarters is arguably more valuable than a sports stadium — there’s no way even the busiest sports venue will employ 25,000 workers, and those it does employ only be there a few hours a day during the season of whatever sport it hosts — but even the Steinbrenners have never managed a $4 billion payday. Neither did Elon Musk. (Though Boeing did, and celebrated by laying off workers.)
Modern subsidies are really hard to keep count of. Amazon’s press release fessed up to $1.5 billion in subsidies from New York and $573 million from Virginia, but that didn’t count $200 million from each state for bonus jobs created over 25,000, nor a $300 million infrastructure fund in Arlington, nor about $1.3 billion in off-the-rack tax breaks from New York City (I included $900 million of those in my Gothamist article, the New York Post’s Nolan Hicks found another $386 million), nor an additional infrastructure slush fund that will be created in New York from payments in lieu of property taxes. I’ve been staring at this thing all day and I still don’t feel 100% confident there aren’t additional hidden costs lurking about — which is par for the course for both sports and non-sports subsidy deals.
Subsidies aren’t what determine location decisions. We’ve seen this before in sports, where team owners have used the threat of going elsewhere to shake down the cities they already want to be in for cash. But it’s especially bald-faced in this case, where other states offered as much as $8.5 billion for Amazon’s hand, only to have Bezos say, Sorry, our first love is big cities where techies want to live. At which point you have to wonder: If Amazon was going to go to NYC and D.C. anyway, why did those locales bother coughing up so much public money? As with sports venues, cities could be thinking, “These people on the other side of the table need us more than we need them” — but they’re largely not.
Anyway: New York just threw a giant wad of cash at Amazon, Arlington can comfort itself that its wad is at least a bit smaller, and all the cities that missed out don’t get the new jobs, but do get to keep their money. There’s probably a lesson in here somewhere, but given that everyone involved is steadfastly refusing to learn it, it’s hardly worth spelling it out.
Getting a late start this morning after being out last night seeing Neko Case, so let’s get to this:
MLS commissioner Don Garber is still beating the drum for two more expansion teams to get to a total of 28, and mentioned seven cities — Detroit, San Diego, Cincinnati, St. Louis, Charlotte, Las Vegas, and Phoenix — as possibilities, notwithstanding that Cincinnati was already picked for an expansion franchise earlier this year. Cut the man some slack, it’s gotta be hard to keep track of all the cities that do and don’t have MLS franchises yet. Maybe he could get someone to make him an app.
A $1.5 billion redevelopment of the parking lots around the Nassau Coliseum is seeking $100 million in New York state grants, despite concerns that building a $1.5 billion mixed-use development in what’s kind of the middle of nowhere without a major-league team playing there is kind of a crazy idea.
The Mobile BayBears are moving to Huntsville — as I’m sure you know, right? — and the city’s terrible lease on their 22-year-old stadium means the landowner could tear it down if the city doesn’t find a new team to move in. Don’t put all your development eggs in the basket of minor-league sports, kids, and if you do, for god’s sake get some grownups to write the lease.
Restaurateurs in Inglewood are hoping for a windfall once the new Los Angeles Rams and Chargers stadium opens in 2020. Somebody should really tell them that even with two teams, that’s only 20 games a year, so they’d better figure out how to seat 70,000 people all at once to make up for other 345 days a year when not much is going on there. (Okay, not 70,000 people at once when it’s Chargers games.)
Slow news week thanks to the holiday, but there were still a few items of note:
Milwaukee Bucks president Peter Feigin thinks his new publicly funded arena will help fight segregation because it’ll have a public plaza. The Chicago Tribune notes that the Bucks owners once released a strongly worded statement of support for one of their players after he was tased by Milwaukee police, so … nope, I don’t get the connection either, unless this reporter was assigned to cover Feigin and couldn’t find much else to say about his bizarro statement, so just googled “Milwaukee and race and basketball” and dumped the results into a Word file.
Ybor City, where the Tampa Bay Rays want to build their new stadium (price and funding still TBD), has been tabbed as a federal “economic opportunity zone,” meaning developers can use it as a short-term tax shelter for profits that are reinvested into the area. The program is way too complicated for me to calculate at the moment just how much U.S. taxpayers would end up paying toward a Rays stadium, but suffice to say it’s one more piece of the funding puzzle that team owner Stuart Sternberg doesn’t have to worry about himself.
The Atlanta Falcons pedestrian bridge that will now cost Atlanta residents $23 million is going to glow! And who can put a price on that, really?
Since it was a slow stadium news week, here’s a bonus article on how Nevada giving $1.4 billion to Tesla to open a battery factory there is looking to be a disaster, with the state ending up losing its entire budget surplus while new workers attracted to the area have driven up rents and increased local government’s police, fire, and schools costs, leaving residents with a higher cost of living and fewer services. One unemployed local who was forced to move into a motel room listed for the Guardian things she now considered unaffordable luxuries: “Ice cream. Bacon. A movie ticket.” It’s a fun weekend beach read!
Did I mention the Yahoo Finance article yet that compares the Amazon HQ2 chase to the competition to host the Super Bowl, and cites me saying that while Amazon will bring more jobs, “that said, there’s almost no way it’s worth the kind of money that cities are talking about”? Well, now I have, enjoy!
AL.com has recalculated the public costs of a proposed University of Alabama-Birmingham football stadium and come up with a total of $18.2 million a year — $10.7 million from a bunch of county taxes, $3.5 million from a new car rental tax surcharge, $1 million from other county funds, and $3 million from city funds — not the $15.7 million I had previously reported. UAB and a naming rights sponsor and other private contributors, meanwhile, would only put in $4 million a year, and only for the first ten years. Out of his goddamn mind, I tell you.
Norman Oder of Atlantic Yards Report filed a Freedom of Information Law request to see the competing bids for the Belmont Park site that eventually got awarded to the New York Islanders, and was shot down on the grounds that it would “impair present or imminent contract awards.” Wait, wasn’t the contract already awarded? Will it be okay to ask again once it’s too late to do anything about it?
A New Orleans Pelicans game was delayed because the arena roof leaked. No one is demanding that a new arena be built just yet that I’ve heard, but given that the current one is 19 whole years old, it’s gotta to be a matter of time, even if this one does have a fire fountain.
If you enjoy this site but were thinking, “Wouldn’t this be better as a YouTube video with lots of animated charts?”, Vox has got you covered.
The Houston city council has approved spending $3.2 million in tax dollars on a pro rugby stadium for the Houston SaberCats, who are a pro rugby team that is going to play in a pro rugby league, which councilmember Jack Christie calls “a beautiful example of public-private partnerships that we ought to look at in the future, because as far as I have heard, there’s not been one city tax dollar used for this development.” I’m done. Have a good weekend.
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.
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!
Qatar is going to build a World Cup stadium partly out of shipping containers, which would allow it to be disassembled and … turned into a bunch of smaller stadiums later, because that’s what Qatar really needs? I’m not entirely clear on the concept here, honestly, but there are some cool pictures if you like dystopian future architecture.
Dave Zirin asked me if subsidy demands like Amazon’s have learned from sports stadium shakedowns over the past couple of decades, and I said no duh.
Hamilton County may be again facing a sales-tax shortfall for paying off Cincinnati Bengals and Reds stadium debt, which means local property taxes will have to be raised to fund the difference. At least they won’t have to sell any hospitals this time.
This actually was reported a couple of weeks ago, but I missed it at the time: Tampa Bay Rays owner Stuart Sternberg says he’s willing to pay about $150 million towards a new $800 million stadium, leaving — math time! — $650 million to be paid by somebody else. This week Sternberg said the team’s contribution “can certainly go up,” but warned that that would prevent him from spending to put a winning team on the field, and, sorry, why does he need a new stadium again if it would cost $800 million but only bring in $150 million worth of benefits? This really would be cheaper all around if he’d just ask St. Petersburg to buy him a first baseman.
A Chicago developer is offering a unique perk in the all-out competition to win Amazon’s second headquarters: Amazon Stadium.
Sterling Bay’s proposal to bring as many as 50,000 Amazon headquarters workers to its Lincoln Yards development includes the potential for a sports and concert venue near the Chicago River.
The developer describes preliminary plans for “a world-class sports and entertainment stadium” in the materials obtained by the Tribune.
And look, there’s a rendering:
That is indeed a stadium, and it indeed says “Amazon” on the field, where there appears to be a soccer match going on. (The Amazon logo is going to be sideways when viewed on TV or by the vast majority of fans in the grandstand, but they can always tweak that later.) The question is: Why? Does Sterling Bay really think that Amazon would like a sports stadium as part of its corporate headquarters, for when the company is bored with dominating retail sales and streaming video and wants to monopolize sports, too? Is this part of some gambit to move the Chicago Fire out of Bridgeview, leaving the suburb with its massive stadium debt that it already can’t pay off? Is it just trying to get “Sterling Bay” associated with “stadium building” in the public mind, so that next time a stadium needs to be built, they’re the ones who get the call?