Friday roundup: Panthers’ record sale price goosed by public money, Beckham stadium delayed yet again, Rams stadium really will cost $4B-plus

Google looks to have broken all of its RSS feeds, so if I missed anything important this week, drop me an email and I’ll play catchup next week:

Friday roundup: Graceland seeks arena money, Marlins and Cards seek spring-training stadium money, guy in Raleigh seeks MLS stadium money

In no particular order, or as we call it in New York, Mets style:

Tampa Bay Times: What if Rays fund their stadium with private money like the Braves, uh, never mind

Just catching up with this Tampa Bay Times article from last Friday, which proposed a list of ways that Rays owner Stuart Sternberg could pay for building an $800 million stadium without either dipping much into his own pocket or dumping all the costs on taxpayers. As you might imagine, that doesn’t leave much else:

How about making the stadium a showcase for local food? Or using training facilities as a community wellness center? Or letting a culinary school use the ballpark’s kitchens? While we’re at it, how about a water slide?

How about a water slide! The article doesn’t actually explain how a water slide would help pay for anything, but moving on:

“You want those who use it and go there to help pay for it,” said Hillsborough County Administrator Mike Merrill, who is at the center of the Tampa-Hillsborough effort to study stadium financing options.

Getting warmer, but how exactly is “make users pay” going to work? After all, that principle has been used for everything from ticket surcharges (which mostly come out of team owners’ pockets, and so are a pretty good deal for the public) to kickbacks of taxes in a “stadium district” (which don’t and are not).

“We’re aggressively looking for private capital, private developers, to build a stadium,” [Hillsborough County Administrator Mike Merrill] said.

We’ve heard this before, too, but a private developer is only going to invest in somebody else’s stadium if they can get a cut of the stadium revenue, right? At which point Sternberg may as well just put up the money himself and repay himself with those revenue streams.

At SunTrust Park, which opened last year, the Atlanta Braves spent $400 million developing The Battery Atlanta, a multi-use destination next to the stadium with a hotel, two office buildings, 550 apartments, a theater and about 20 restaurants. Still, the public contributed $400 million toward a ballpark that cost $622 million.

Ayup. And closing libraries to help pay for it.

Tampa Mayor Bob Buckhorn recently outlined one possible scenario. The city could create what’s been loosely described as an entertainment district around the stadium. Inside the district, a surcharge on sales of food, drinks and merchandise could generate revenue that would be used to help pay off stadium construction bonds.

“Because a stadium is there,” Buckhorn said, “restaurants are going to do better, alcohol sales are going to be higher, T-shirt sales, whatever it may be. The hope is that monies generated by construction of the stadium — be it commercial, residential or retail — be used to pay some of the debt service on the stadium, so you shift the burden from the taxpayers to either tourists or to folks who are benefitting from the construction of the stadium.”

Okay, so there’s an actual idea! Not a great idea, mind you — local restaurants aren’t going to do that much better as a result of having a stadium open 81 days a year nearby, so you’re quickly going to run into problems of whether to raise the tax surcharge to pay off more of the stadium or keep it low enough so people will actually want to open more businesses nearby — but it’s something.

Variations include creating a community development district (there are lot of CDDs for suburban Hillsborough neighborhoods already) or a special district similar to what the Legislature approved this spring for the $3 billion Jeff Vinik-Cascade Investment project known as Water Street Tampa.

Those are very different models, so different that “variations” isn’t really an accurate term. CDDs are basically TIFs: Public improvements are repaid by the projected future rise in regular property tax payments, a plan that can fail in two ways — either if property values don’t actually rise that much, or if they just cannibalize development you would have gotten anyway, either on that site or elsewhere in your city. The Vinik-Cascade project is a special tax surcharge on property owners, which at least doesn’t dip into money the public would be collecting anyway, but which also presupposes a lot of property value increase just from a stadium being built nearby, which doesn’t have a great history of coming true.

“A stadium is a magnet for, arguably, development that might not otherwise occur,” Merrill said. “What you’re trying to do is assess growth, new development, within a district that benefits from a stadium.”

That’s one heck of an “arguably” there.

The problem, ultimately, is that Sternberg is trying to find ways to equitably slice up a giant piece of nothing cake: There are only two ways to pay off a stadium, and one is through the increased revenues that come in from one — which isn’t likely to pay off anything close to the full construction cost, because new stadiums are usually not good financial deals , and if it were Sternberg could finance it with something called a “bank loan” — while the other is with public subsidies. “Let’s charge all the business and property owners who’ll be riding for free on our stadium” isn’t a terrible idea — New York state is considering using it to build more subways — but given past Florida experience with baseball-related development, you might maybe want to temper your expectations a bit.

Friday roundup: Nevada gov candidate threatens Raiders’ roads, Phoenix sued over Suns arena plans, Rays stadium could seek Trump tax break

And the rest of the week’s news:

Maricopa County to let D-Backs break lease early in exchange for dropping lawsuit, here comes the next stadium shakedown

My first thought yesterday when I saw the news about an agreement between Maricopa County and the Arizona Diamondbacks and read it the way people do nowadays — look at the headline and first paragraph, then let your eyes lightly graze the rest — was “Let the Diamondbacks break their lease early just in exchange for dropping a lawsuit that the team owners were almost certain to lose? What a bunch of saps!”

Actually reading the details, though, it appears to be … “a good deal” would be overstating it massively, but certainly a reasonable decision by the county under the circumstances, albeit one that opens the door for some immediate stadium subsidy shakedown shenanigans.

The story so far: Diamondbacks owner Ken Kendrick sued the county a little over a year ago, claiming it owed him $187 million in repairs and upgrades to Chase Field. The county responded by pointing out that most of that money — which was projected costs contained in a 2013 report — was for things that the team’s lease specifically said were the team’s responsibility. Eventually a judge ordered the two sides to go to arbitration, which is where things stood until yesterday’s agreement.

Under that deal, which still needs to be approved by the full county board, Kendrick will drop his lawsuit and his $187 million upgrade demand, though he could still eventually get $20 million in county money as reimbursement for some repairs. In exchange, the team owner will get to start looking for a new home effective immediately, and will be able to leave Chase Field without penalty starting in 2022 if it’s for another stadium within the county — and leave the county altogether with just minor penalties of $5 million to $25 million.

That sounds terrible — except that the Diamondbacks’ lease was up in 2027 anyway, at which point the team could have left without penalty. So really this is just giving up five years of the team being guaranteed to stay put in exchange for the small but real risk that an arbitrator would require the county to cough up a bunch of renovation money, which at the going rate for lease extensions isn’t a terrible tradeoff.

The problem now, of course, is that Kendrick is certain to start shopping around for a new home — or, rather, shopping around for somebody else to pay him to build a new home, since he wasn’t even willing to pay to fix the “old” one that’s just 20 years old — and the Phoenix area is potentially a great place to do so, since it’s full of independent cities (and Native American reservations) that can be played off against each other. Sure, that’s going staggeringly poorly for the Arizona Coyotes, but then nobody really cares about the Coyotes — nobody visible to the naked eye, at least — whereas the Diamondbacks are fairly popular.

And then there’s the possibility that Kendrick could threaten to move the team out of Arizona entirely — something that would be incredibly stupid to actually follow through with, since it’s by far the largest TV market still available, but not necessarily stupid to threaten in order to scare some cash out of local legislators. After all, the team’s lawyers already threaten to do so once — or rather, threatened to have the league threaten to order them to — and one particular clause they insisted on putting in the new deal sure makes it sound like they’re considering that leverage option again:

An even broader “out” clause is included, which county leaders said they agreed to reluctantly.

“In the event the MLB requires the Team to leave Arizona because of the condition of the stadium, the Team may do so without penalty or other payments if all parties have acted in good faith,” the agreement reads.

Maricopa County Board Chairman Steve Chucri, R-Paradise Valley, said he does not believe the league would move the team. He said the county would sue if it did.

“It’s a risk. But it’s incredibly unlikely,” he said. “There are far worse stadiums” that the MLB hasn’t required teams to leave, he said, so yanking the Diamondbacks would be bad faith.

On the one hand: Oh, man, you seriously want to go into court to try to argue that something MLB is doing is in worse faith than typical MLB practice? Good luck with that. On the other: Enh, the most it will cost the county is $25 million in lost penalties anyway.

This is likely to be a long, ugly battle, and will be a significant test of whether stadium subsidy demands are really starting to fall on deaf ears, or just resting after a prolonged squawk. Check back here in about five years, and we should have the answer.

Friday roundup: Senators owner stalling on arena commitment, Jaguars owner wants to buy Wembley, and gondolas, forever gondolas

As late as Wednesday, I thought this was turning out to be a slow news week. Then the news made up for it in a hurry:

  • The New York Islanders owners held a question-and-answer session for residents near their planned new arena on Tuesday, and when asked about how they plan to increase Long Island Railroad service to avoid tons of auto traffic, a state development official said, “We are in very active discussions with the LIRR — meeting with them once a week — and those talks are ramping up.” Hopefully they’re involving Dr. Strange in those discussions, because they badly need to find some new topological dimensions.
  • Ottawa Mayor Jim Watson says he plans to talk to Ottawa Senators owner Eugene Melnyk about whether he actually plans to pursue the LeBreton Flats arena development he won rights to last year, after Melnyk called it “a huge project with tremendous risk” and said, “If it doesn’t look good here, it could look very, very nice somewhere else, but I’m not suggesting that right now” and “Something’s got to break somewhere and I mean a positive break.” Melnyk has made threats like this before, but you’d think now that he has an agreed sale price for the land he’d be happy; it sure sounds like he’s angling for some additional public subsidies now that he has his mitts on the land, which you can’t really blame him for, since Watson opened the door to that already. Come on, mayor, haven’t you learned yet not to get the can opener out when the cat is around?
  • Tampa Bay Rays 2020, the group started by the Rays to push for business support for a new stadium, is signing up plenty of members, but DRaysBay notes that “the real test of commitment will come when businesses are asked to make clearer financial commitments to a stadium plan.” Yeah, no duh. (The subhead here, “Business leaders line up behind stadium plan, but financing questions linger,” is also a masterpiece of understatement.)
  • MLB commissioner Rob Manfred says that the Toronto Blue Jays‘ Rogers Centre “needs an update to make it as economically viable as possible,” noting that other stadiums “have millennial areas, things like that that have been built and become popular more recently.” So, like, an Instagram parlor?
  • Here’s a story about how 25 years ago the NHL handed Norman Green the rights to move the Minnesota North Stars to any open market as consolation for putting an expansion team in Anaheim, where he’d wanted to move, and he ended up going to Dallas. Also it has Roger Staubach in the headline for some reason.
  • And here’s a story about how 50 years ago NHL expansion inadvertently kicked off the rise of arena rock, which is probably overstated but it has links to vintage Cream videos in it, if you like that sort of thing.
  • Jacksonville Jaguars owner Shahid Khan is in talks with the Football Association to buy London’s Wembley Stadium for £600 million, which is certain to raise eyebrows about the possibility of the Jags moving to London, but is probably for right now more about Fulham F.C., which Khan also owns, being about to get promoted to the Premier League and wanting a bigger place to play. Khan also said, “I think it needs investment and updating. Compared to American stadiums the video boards are something that need to be looked at. The lounges are a little bit dated.” The current Wembley Stadium was built in 2007.
  • The son of former disgraced Los Angeles Dodgers owner Frank McCourt wants to build a gondola to take fans from Union Station to Dodger Stadium to avoid traffic. “It’s not actually crazy,” Los Angeles Mayor Eric Garcetti insisted on Thursday, which, given that this is a city considering allowing Elon Musk to build a network of tunnels to whisk residents about via some unknown technology, maybe we should take that with a grain of salt.
  • San Diego State says its stadium plans could eventually be expanded to fit an NFL team, for a mere additional $750-$850 million. Most San Diegans responding to an internet poll (which means some San Diegans, some non-San Diegans, and some dogs) don’t think they’re getting an NFL team anytime soon, anyway.
  • The Port of Oakland has approved giving the Oakland A’s owners exclusive negotiating rights to develop Howard Terminal, which now gives the A’s exclusive rights to two possible stadium sites. As DRaysBay would say, financing questions linger.
  • NBA commissioner Adam Silver has toured the new Milwaukee Bucks arena and says it has “unique sight lines.” Hopefully he means that in a good way, though I’m still wondering about that “sky mezzanine level.”

How cities haven’t actually fallen out of love with funding sports stadiums

The May issue of Governing magazine has an article with the provocative headline, “How Cities Fell Out of Love With Sports Stadiums,” though it’s really mostly about why St. Louis balked at throwing money at an MLS stadium and fought back against paying for arena upgrades for the Blues after getting burned when the Rams got the most sweetheart lease deal in history and then used a lease loophole to move back to Los Angeles just 21 years later.

All that is good and fine, as is the article’s discussion of how “the economic impact reports singing the praises of sports development have largely been discredited.” But in the service of trying to make the story into “regular folks used to fall all over themselves to hand money to sports teams, but now they’ve smartened up,” writer Liz Farmer oversimplifies or just plain gets wrong a number of things about the stadium subsidy game and how it’s played, which is going to be a problem if any people in the business of actual governing take it as gospel. Let us count the ways:

“When [Rams owner Stan] Kroenke came along and had the gall to start making demands for a football team that hadn’t had a winning record since 2003, the city was — quite literally — spent. St. Louis was suffering under the same socioeconomic and fiscal pressures as Cleveland, Detroit and most other Rust Belt cities. Its population was declining rapidly, and it was stuck paying off debt for the existing stadium until 2022. Residents were increasingly skeptical when it came to investing in gaudy entertainment amenities the lower-income population couldn’t afford to use.”

St. Louis’s population has been declining since 1950 — if anything, it’s leveled off some in recent years — though its county population has soared as more people moved to the suburbs. And residents were pretty darned skeptical before, too: Way back in 2002, St. Louis citizens approved a referendum requiring that all public subsidies for sports facilities would need to go to a public vote. Unfortunately for voters, courts ruled that the target of that referendum — the Cardinals stadium deal that had just been approved prior to that — was grandfathered in, but it’s not like public resistance in St. Louis is anything new.

“The era of taxpayer-financed stadiums came about almost by accident. Seeking to limit the use of government bonds in stadium financing, the federal Tax Reform Act of 1986 included a provision that capped at 10 percent the direct stadium revenue — mostly from ticket sales and concessions — that could be used to pay for the cost of the facility. That meant that governments would have to raise broad-based taxes, such as on sales or business, to cover the rest of the cost.”

Not quite. What the 1986 tax reform law was attempting to do was to rein in cities’ use of federally tax exempt bonds for private projects — not just stadiums, but all kinds of development — by saying, “Look, only really public amenities, okay? Don’t just offer discounted bonds to anybody who asks and then stick federal taxpayers with the bill.”

Unfortunately, the way that Congress chose to address this was by defining public amenities as things that were paid for by the public — if more than 10% of the cost was paid off by private funds (or special taxes that were just private funds masquerading as public dollars to get eligibility), low-cost federal bonds were off the table. Unfortunately, what that did was to increase the leverage of sports team owners, who could now say, “Yeah, sorry, we would love to put in more money of our own, but then it would increase the financing costs, and we can’t have that, can we?”

This is by no means what started the era of taxpayer-financed stadiums, though: Team owners were already demanding new stadiums and arenas left and right, using the usual playbook of methods to do so (move threats, claims of economic benefits, etc.). The tax reform law further titled the scale toward bigger demands, but it didn’t create the demands in the first place — and while getting rid of tax-exempt bond subsidies would be a nice step, it wouldn’t put an end to stadium subsidies in the slightest.

“But Congress didn’t account for the fan loyalty and pride that — at the time — made raising local taxes more acceptable.”

Fan loyalty and pride are still on full display, but sports fans are taxpayers, too, and have been resisting handing their tax dollars over to sports team owners as much as anyone since the beginning. Just ask Frank Rashid.

“The boom was driven in part by demand from teams and fans for a more sophisticated sports experience than the drab concrete coliseums they were used to.”

If by “more sophisticated sports experience” you mean “more pulled-pork sandwiches and nicer cupholders,” sure. But plenty of sports venues have been torn down in recent years to make way for new facilities that are arguably even drabber than the ones they replaced.

“The Washington, D.C., soccer team, D.C. United, spent years negotiating with the nation’s capital over a new soccer-specific stadium. Those talks effectively shut down once the economic downturn hit in 2008, and the team spent another seven years shopping around in the surrounding counties — even going as far as Baltimore — trying to find a local government that would pay for the facility. None would bite. Ultimately, the team stayed in D.C. and is paying to build a stadium on land the city spent $150 million acquiring. The deal includes a non-relocation agreement.”

In addition to that free land, D.C. United is also getting $43 million in property tax breaks, making it the most expensive MLS soccer stadium subsidy in history. The tide is turning!

“Kiel Center Partners, the firm that owns the NHL Blues, had asked the St. Louis City Board of Aldermen for $64 million to finance upgrades to the Scottrade Center. Had the city’s voters not been distracted by the soccer stadium proposal and by a heated mayoral election, the financing might have met more resistance. Some aldermen did question whether the city’s 1994 lease with the team required it to pay for upgrades, but still the proposal narrowly passed. If it had been submitted to a popular vote, it most likely would have failed.”

Again, “if voters had been asked, they would have voted it down” is likely true of all of St. Louis’s past sports subsidy deals. (Possibly not the original Rams deal, though if they’d known that it would allow the team to move away by claiming their two-decade-old stadium was no longer “state of the art,” they might have balked at that, too.) And voters didn’t get to vote because the city council just up and decreed that they wouldn’t be allowed to, despite that 2002 referendum, so it’s tough to see how this is a sign of increased political resistance.

“So the hockey team got its way. Things like that still happen. But they don’t happen easily, and they don’t happen with broad public support. Several years ago, for instance, when the NFL’s Minnesota Vikings wanted a publicly funded stadium, the state legislature rejected the proposal. Eventually the team got its money, but with a state law capping public contributions to the $1 billion project at $498 million.”

OMG, the Vikings owners actually had to ask for stadium subsidies multiple times! And then they had to settle for a mere half-billion dollars in cash, except counting tax breaks and other hidden goodies it’s actually costing taxpayers more like $1.1 billion, so, uh.

In the end, the Governing article isn’t a terrible one, and it does touch on a lot of details of the stadium scam that Governing likely wouldn’t have been caught dead discussing 20 years ago. (Now there’s some progress.) But if the takeaway is that the general public loved sports stadium plans, but now have realized they were duped, that’s not the story at all: Actually it’s been a battle from the beginning between team owners trying to extract as much public money as possible, and taxpayers and some of their local representatives trying to push back. And while maybe a few more elected officials are pushing back harder, there’s pushback against the pushback, too. So this whole mess isn’t ending anytime soon, much as I wish it were so I could retire this blog and go back to treating sports as the purely apolitical, fun pastime that it never really was.

Blue Jays get $60m in spring-training subsidies, mayor sobs “I could not be more proud”

The Toronto Blue Jays owners have been trying to get public subsidies for renovations to their spring-training facility in Dunedin for a couple of years now, and it looks like they’ve finally hit the jackpot, with Pinellas County agreeing to kick in $41.7 million in hotel taxes to go along with $5.6 million from the city and $13.6 million from the state:

The unanimous vote by the County Commission was enough to bring Mayor Julie Ward Bujalski to tears.

“I could not be more proud,” Bujalski said Tuesday. “We have a huge quality of life here and no one thing makes our quality of life. It’s a combination of things. Spring training is part of that.”

I mean, sure! I would never have heard of Dunedin if the Jays didn’t play there in the spring, so there’s clearly some benefit to having the team in town one month out of the year. It is almost certainly not $60.9 million worth — previous studies trying to show that it would be ended up double- and sextuple-counting spring training visitors in terms of their economic impact — but it’s definitely part of a combination of things. And the county also gives hotel-tax money to things like the Clearwater aquarium and public sports complexes and the Blue Jays are going to let high school teams use their stadium some and hey, get off their case, okay? If “the government throws tax money at all kinds of things, might as well throw it at one more that benefits one of the most profitable sports leagues on the planet” isn’t a reason to be brought to tears, I don’t know what is.

Wannabe Portland MLB owners offer market-ish value to city for proposed stadium land

The investors seeking an MLB franchise for Portland, Oregon say they won’t seek additional public subsidies beyond a $150 million kickback of team income taxes that was already approved, and now they’ve offered to pay market value, kind of, for a school headquarters building that they want to make the site of a new stadium:

The Multnomah County assessor’s office estimates the school district headquarters has a market value of $105 million…

Trammell Crow, acting on behalf of the baseball group, said it would pay the school district at least $80 million — and even more if an appraisal finds its market value to be higher than $80 million.

That’s not bad! Though the school district may not want to sell even at that price, since right now its headquarters is centrally located, and the baseball group is offering to move it to a site way on the eastern edge of the city.

At least this rules out (for now) a major land subsidy as has become common among team owners promising “no public funds for construction.” The bigger question remains that $150 million state kickback of income taxes paid by team employees, which 1) was only projected to raise about half that much money when it was first proposed 15 years ago, though average MLB salaries have almost doubled since then; and 2) wouldn’t actually be all new money, as some of it would be drawn from income earned on spending that would otherwise go to other local entertainment options in the absence of a baseball team. (Some of it would be drawn from income on things like national TV rights, which would indeed be gravy.)

Still, that’s not a terrible deal for the public, all things considered. Assuming all things are being considered, anyway — Portland Diamond Project hasn’t revealed how much it would spend on a stadium, how it would pay for it, where it would get a team, or even who its owners are, though it’s been revealed that former Nike VP Craig Cheek is one of them. Score this one for now as “reply hazy, ask again later.”

Friday roundup: Spending on training facilities is a bad idea, Portland seeks MLB team, Jays game postponed after roof hit by falling ice

I can’t believe none of you wrote in to ask why I hadn’t reported on a Toronto Blue Jays game getting postponed due to falling ice puncturing a hole in the stadium roof, but I guess you’re all acclimated to waiting for the Friday roundup now for that sort of thing. But wait no longer! (Well, wait a few bullet points for that one in particular.)