Islanders owners discussing new arena in Queens or LI, all hell about to break loose

So when new New York Islanders owner Jon Ledecky answered questions last week about the team’s future — previously planned to include staying in Brooklyn but playing six games a year in a renovated Nassau Coliseum — by saying “Barclays Center is our home,” I called it “noncommittal,” on the grounds that 1) Ledecky was still pretty gripey about the flaws of the Brooklyn arena and 2) “Barclays Center is our home” could mean either “we would never leave a place with so many important memories made over the last nine months” or “it’s where we live, we have to deal with it until we figure out something better. It sounded like typical owner weasel words, a way to keep your options open without actually saying you wanted to keep your options open.

But even I didn’t expect this, just a week later:

The New York Islanders are in talks with the owners of baseball’s New York Mets about building a hockey arena adjacent to Citi Field in Queens, people with knowledge of the discussions said.

Willets Point is emerging as a persuasive alternative to the team’s current home at Brooklyn’s Barclays Center if the Islanders’s owners and arena officials can’t agree on a series of hockey-specific improvements, said the people, who asked for anonymity because the negotiations are private.

That was from Bloomberg News, but the anonymous sources were soon talking as well to Newsday (which cited “two people familiar with the situation”) and the New York Post (just “sources” — the Post doesn’t get too hung up on attribution). The Post’s article also included this tidbit:

But if that doesn’t work out, Islanders owners Jonathan Ledecky and Scott Malkin could move the team to Elmont, LI, sources said…

A state source confirmed the Islanders have made preliminary inquiries about moving the club to vacant state-owned land near Belmont Park. That is near another parcel being eyed by the Cosmos for a soccer stadium.

With all this, a clearer picture is starting to come into focus. When Ledecky and partner Scott Malkin bought the team from Charles Wang earlier this year, they inherited Wang’s lease on the Barclays Center, which he had agreed to despite the building’s problems for hockey — it was deliberately “value engineered” to be too small for the sport, in order to save on construction costs — because he was sick and tired of fighting with Nassau County officials over a new arena there. They also, however, inherited the opt-out clause that Wang had negotiated to allow the Islanders to break their lease in 2019 — and that’s the kind of leverage that you’d have to be crazy as an owner not to try to use.

So is an arena next to the Mets stadium feasible, and what would it take to build one? The parking lot to the west of Citi Field is already designated for the giant “Willets West” mall, but that’s currently held up in court because the lots are technically still city parkland. Could the Mets try to build an arena instead if the mall is nixed? Would the courts allow that more readily? Who knows?

Then there’s Willets Point proper, to the east of the Mets stadium, a melange of auto repair businesses that the city has been working to seize and evict for years to make way for a mixed housing and commercial development. Could the city agree to incorporate an arena as well? And on either site, would it provide the land for free, and leave it exempt from property taxes, which might be enough to entice the Mets and Isles owners to actually build this thing? And if they did, could it possibly be successful in a metropolitan area already glutted with arenas (Madison Square Garden, Barclays Center, the New Jersey Devils‘ Prudential Center in Newark, plus soon the redone Nassau Coliseum) and only so many concerts to go around?

Of course, Ledecky and Malkin may never have to determine if a Queens (or Elmont) arena project is feasible, if they can use the mere possibility as a hammer to get Brooklyn Nets owner Mikhail Prokhorov to redo Barclays for hockey. The Isles owners haven’t come out and said what “improvements” they want, but to make a genuinely NHL-scaled space you’d need to knock down the entire west end of the structure and build it out another 50 feet or so, which wouldn’t be cheap, and would also entail shutting the arena for an offseason or two and losing out on revenue from those dates. So to get it done would require quite a formidable threat, and “we’re going to take our puck and go to Queens” might be the kind of thing that gets the attention of their current landlords.

Either way, though, it looks like we have a war on, one that’s likely to drag out for months or years as the various combatants (Ledecky and Malkin, Prokhorov, the Wilpons, the city, maybe Elmont) jockey for position and remake alliances. That should at least help tide everyone over until the final season of Game of Thrones.

Cubs giving high-priced Wrigley fans own private bar, bathrooms

Speaking of stuff sports teams owners build because they think it’ll help them make more money, the Chicago Cubs ownership has revealed the next renovations to Wrigley Field coming down the pike:

As part of the 1060 Project, an overhaul to the stadium and the area surrounding the venerable ballpark, the Cubs revealed plans for the first of four “premier experiences” Tuesday and launched a priority list for those interested in plopping down a $500 deposit to secure their spot for the right to some exclusive amenities.

The American Airlines 1914 Club is scheduled to open for the 2018 season underneath the club box seating bowl between the home and visiting dugouts.

After the last out of the ’16 season, crews will begin tearing apart the lower bowl behind home plate to build the shell for the club, which will not provide a view of the field but will give fans with tickets in the area a place to go before and during games for upgraded food and beverage options, shelter from the elements and private restrooms. The re-done seating area will be ready for the ’17 season and construction will continue underneath.

Cubs owner Tom Ricketts is paying for this out of his own pocket, so at least there are no worries about public subsidies going to create what will effectively be an upscale private bar in a baseball stadium. And as far as the Wrigley Field experience goes, the effect should be minimal: The dugouts will be moved a little bit farther down the lines, but probably hardly anyone will notice otherwise.

Mostly, it’s a reminder of what “state-of-the-art” is all about in stadium construction: ways to sell well-off people stuff that can justify sky-high ticket prices. Cubs VP for sales and marketing Colin Faulkner told the Chicago Tribune, “They’re paying up to $350 a ticket in that area and the value that we’re providing them right now is not in line with what they expect.” Apparently what makes people who can afford $350 a ticket feel like the expense is worth it is some marble tabletops to sip their top-shelf liquor at, and not having to go the bathroom next to the hoi polloi. Strange world we live in.

MLB commissioner says he’s “committed” to Oakland, doesn’t know how to haggle

MLB commissioner Rob Manfred said a bunch of stuff about the A’s future in Oakland at the All-Star Game last night, and sounded more like a realtor trying to talk up the city as an investment property than a sports league commissioner trying to play hardball on a stadium demand:

“I am committed to Oakland as a major league site,” he told the Baseball Writers’ Association of America on Tuesday. “I think that if we were to leave Oakland, I think 10 years from now we would be more likely than not looking backwards saying we made a mistake.”…

“I think that Oakland is more likely than not to be a better market five years from now than it is today,” Manfred said. “So I certainly have not given up on Oakland.”

That’s all probably true, especially since Oakland is increasingly looking like the next Brooklyn, at least in terms of getting spillover gentrification from the super-wealthy district one bridge away. It’s a terrible way to create leverage, though — any hardball negotiating can now be met with “Yeah, well, your commissioner said you’re not leaving regardless” — and is only likely to stiffen Oakland officials’ already stiff resolve not to offer A’s owner Lew Wolff any public money to help with construction or land acquisition or anything else he might ask for.

Of course, it’s entirely possible that Wolff isn’t looking for any of that — he seems to be happy if he can just get the rights to build a stadium on the Coliseum site instead of the Raiders — and that Manfred knows it, which is why he’s saying such nice things at a time when it’s more traditional to talk about how a city is a tough market, and really needs up to step up to the plate, etc. Either that, or it’s just further evidence that Manfred is really bad at this whole blackmail thing.

Cobb County lets Braves ban vendors around new stadium, doesn’t cite “safety” this time

Another day, another article about how much Cobb County has bent over backwards to ensure that the Atlanta Braves owners can extract every last dollar from their new stadium, even at the expense of other local business operators:

The ordinance, passed in February, requires vendors who wish to operate in unincorporated areas of the county to obtain a license in order to sell or distribute retail or food items from a cart or kiosk. But a provision in the ordinance gives those in charge of “mixed-use development districts” the power to construct a plan that sets where vending activity can take place, and, according to Dana Johnson, Cobb’s community development director, those who manage such a district could decide not to designate any areas for vending as part of the plan, which has to be approved by the Cobb Board of Commissioners.

Johnson said just one area in the county qualifies under that provision — SunTrust Park, the Braves’ future home stadium, and The Battery Atlanta, a mixed-use development being built next to it.

In other words, the Braves ownership has veto power over anyone else selling anything in the entire development around their new stadium, meaning if you want to buy a bag of peanuts or a bottle of water, you’ll have to do so at Braves-approved prices.

Cobb County is currently reviewing this ordinance, along with the one against anyone other than the Braves renting out parking spaces — like that one, violators of the vending ordinance would be subject to both fines and jail time — because they and the Braves know it looks terrible, plus Cobb County Commission chair Tim Lee is in a tough re-election battle with a runoff vote coming up in two weeks. (Actually early voting has already begun.) If Lee gets re-elected, want to bet that the commission decides that the ordinances are just fine as is?

Cobb County rethinks throwing people in jail for renting bootleg parking spaces to Braves fans

After more reports of just how awful the Atlanta Braves nobody-can-rent-parking-spaces-but-us ordinance is — the Atlanta Journal Constitution revealed this week that anyone offering parking within half a mile of the Braves’ new stadium could be subject to up to 60 days in jail — Cobb County has finally decided maybe this isn’t the best way to throw a bone to the Braves owners:

That’s awfully vague, mind you, and doesn’t preclude continuing to use the ban on anyone other than the Braves renting parking spaces on game days as a stick with which to arm-twist local parking lot owners into renting their spaces to the team at cheap rates. (Can you twist arms with a stick? Enh, poetic license.) If Cobb County leaders are indeed walking this back, we should find out on , when the county will be holding their first public hearing on the proposed ordinance. That’s also the day that current county commission chair (and Braves stadium deal architect) Tim Lee and his opponent Mike Boyce face a runoff election, so that could be a very interesting 24 hours.

Public subsidies for Rangers stadium to be at least $519m, could go higher

The Dallas Morning News has provided more details of the scale of hidden subsidies for the Texas Rangers‘ new $1 billion stadium plan, to where we can finally estimate an actual public price tag for the project, which, remember, would replace a 22-year-old stadium with an even newer one so that the games can have air-conditioning. The full package of goodies now includes:

  • The city would still be providing $500 million in cash, bonded out and then repaid over time by the 0.5% sales tax surcharge, 2% hotel tax surcharge, and 5% car rental tax surcharge currently being used to pay off the Dallas Cowboys’ stadium. This much the city of Arlington revealed at the start, presenting it as a “50/50 split” of costs between the Rangers owners and the public.
  • As revealed previously, Arlington would buy the Rangers’ 48.6 acres of parking lots for nothing, then lease them back to the team in perpetuity for no money. This would have the effect of exempting the Rangers from property taxes on their parking lots, which the News estimates would save the $481,000 a year in property taxes. In present value, that’s worth about $7 million to the team owners.
  • As also revealed previously, Arlington would build a new 2,000-space parking lot on land similarly given by the team to the city and then leased back as a property-tax dodge. That would save the Rangers owners about $145,000 a year in property taxes (present value: around $2 million), plus city officials estimate building the lot will cost around $4 million, for a total of $6 million.
  • Rangers owners Ray Davis and Bob Simpson would get to use new ticket and parking tax surcharges to help fund their share of construction, which is worth about $150 million in present value, but as I’ve noted before, most of the cost of ticket and parking surcharges ultimately ends up coming out of the team owners’ pockets. So I’m inclined to dismiss this one as a public subsidy.
  • The Rangers owners are getting $100 million in cash and tax breaks for Texas Live!, an entertainment district near the stadium that was previously approved by the city, and which is supposed to break ground later this year. That’s not a subsidy for the stadium per se, in other words, but it is money that the city is giving to Davis and Simpson.
  • Once the city’s stadium bonds are paid off, the Rangers owners would get to stop paying the city their $2 million a year in rent and instead put it into a fund for future stadium improvements. The value of this will depend on when the bonds get paid off — the News notes that the Cowboys’ stadium bonds were retired ten years early, but it’ll all depend on what future tourist tax receipts look like, which is inherently unpredictable. If we use that as a best guesstimate, $20 million in rent rebates 20 years in the future would come to $6 million in present value.
  • Not discussed by the News piece is the fact that the Rangers’ share of stadium payments would actually pay off bonds being sold by the city, meaning if their own revenues (from PSL sales, naming rights revenue, etc.) fell short, the public could be on the hook for more. No way to put a price tag on this, but it’s an added risk of a blank check added to everything above.

Add it all up, and we’re at a minimum of $519 million in public subsidies for the Rangers stadium project, plus another $100 million for Texas Live!, with the possibility that the final price tag could ultimately go higher. And, more to the point, Davis and Simpson would get all the revenues from the new place, while the public “partners” would get just a thin trickle from new sales tax receipts, which even if you bend over backwards to assume the best-case scenario would only amount to $31 million over the next 40 years. That’s a vastly inequitable deal no matter how you slice it, but I guess when your baseline is “How big a check do we have to write the Rangers to be absolutely sure they won’t even think about moving to Dallas never ever?“, this is the kind of deal you get. Arlington voters, the ball’s in your court now.

Cobb County gave Braves monopoly on all game-day parking, says it’s a “safety” thing

Just when you think the Atlanta Braves stadium deal can’t get any worse — it goes and gets worse! The Atlanta Journal-Constitution’s Dan Klepal dug up the latest gift that Cobb County has awarded the Braves owners: a ban on any private entities within a half-mile of the new taxpayer-funded stadium renting out their parking spaces to Braves fans.

Commissioners in February quietly passed an ordinance that outlaws property owners within a half-mile of the stadium from charging for parking during games and other special events at the stadium…

“This irks the (heck) out of me,” said [local office building owner Fred] Beloin, who has previously tangled with the county over zoning around the stadium, and was unaware of the ordinance until told about it an Atlanta Journal-Constitution reporter. “They say they’re increasing my property value and then they do everything in their power to make sure I get no benefit out of it.”

The ordinance closes off potential revenue for dozens of businesses that own more than 10,000 private spaces — many of which could compete with the team for parking revenue.

The way that it works: The new ordinance says that you need an “accessory special event parking license” to rent out your parking spots during Braves games, and such a license “will not be issued if primary access to the accessory special event parking area is from public right-of‐way within the limited access zone.” (I.e., if you drive there on a public road, i.e., everywhere within half a mile of the stadium.) The Braves themselves are exempt from needing a license, as a “major tourist attraction.”

Klepal’s article says that “the restriction could mean fewer parking options on game days, making it less convenient or more expensive to go to a stadium with no direct MARTA access,” but it’s unlikely that this is the Braves owners’ intent. Rather, it puts private parking lot owners over a barrel as the Braves try to negotiate to rent their spaces for use during games — as I told Klepal for his story, “One good way to get leverage is to make the thing you’re negotiating for worthless to the other party. And that’s precisely what Cobb County’s ordinance tries to do.”

As for the county and team officials that put this Braves parking monopoly in place, they say they never meant to discriminate against private parking lot owners, who they said can file appeals to the county if they want to rent out their own spaces on game days. Rather, they said, it’s about … safety. Safety?

“We know that when fans come to a Braves game, no matter where they park, they associate their experience with the Braves,” Plant said. “Our concerns focused mainly on two areas — safety of the fans and the free flow of vehicles through the areas around the ballpark.

“With that in mind, we requested that the county create an ordinance covering an area around the ballpark to protect fans who are attending the game and ensure that they receive the same safety, security and convenience provided in the lots we control.”

Run that by me again? Denying private parking lot owners the right to let Braves fans park there helps provide fans with “safety, security and convenience” because, I guess, quality control? Except that there’s nothing in the ordinance talking about the quality of the parking — the only way this ensures fan safety is if you assume the Braves can provide a safer experience than local business owners, which would be dubious even if we weren’t talking about a team that regularly has people fall to their deaths at games.

FoS reader Andrew Ross points out that this may be the lamest excuse for a self-interested policy since the Philadelphia Eagles tried to ban outside food at their stadium on the grounds that someone might smuggle in an exploding hoagie. It may well end the same way that controversy did, with team officials sheepishly repealing their attempt at a revenue grab amid the public uproar, but expect a few months of lawsuits first, at the least.

Yes, Arlington would pay for more than 50% of Rangers stadium, but not because of ticket tax

So I was sitting around yesterday, waiting for NHL commissioner Gary Bettman to go on TV and announce the new Las Vegas expansion franchise, when this story from WFAA-TV in Dallas about the new $1 billion Texas Rangers stadium plans suddenly blew up all over the Twitterverse:

City of Arlington officials have touted a “50-50” private-public partnership to build a proposed $1 billion retractable roof stadium for the Texas Rangers.

A WFAA-TV investigation, however, has found taxpayers may instead pick up to 80 percent of the tab, which amounts to hundreds of millions of dollars more than initially promised by city leaders…

Tucked in the agreement is a clause called the “admissions and parking tax” that allows for a 10 percent surcharge on event tickets and up to $3 additional surcharge on parking. State law allows cities to collect and use the taxes to build their stadiums. Arlington’s agreement, however, allows the Rangers to use the admissions and parking tax revenues to help pay their half of the construction costs.

“If it really is a tax and could be used by the municipality, then in essence it’s just transferring revenue from the public sector to the private sector,” said Rick Eckstein, a Villanova University professor who studies sports stadium economics.

“There’s a sleight of hand here. There’s verbal gymnastics going on,” Eckstein added. “It’s relatively unprecedented in terms of stadiums I’ve studied over the last 20 years.”

Not to disagree too strongly with Eckstein (co-author of one of the best stadium books out there), especially since he’s right that tax money is fungible and shifting it from public to private pockets amounts to siphoning it off from the public treasury. But these particular tax surcharges are kind of special, to the point where we arguably shouldn’t consider them an additional public subsidy.

What it comes down to is the difference between existing taxes and tax surcharges, especially on items that are under the monopoly control of team owners. Think of it this way: When a sports team owner sets ticket prices, they do so with an eye toward maximizing the amount of total revenue they’ll bring in — basically, they set prices as high as the market will bear without driving fans to stay home and watch on TV. (Technically we’re talking net revenue rather than gross revenue here, but since the marginal cost of selling an additional ticket is close to zero — you might have to hire an additional tiny fraction of a hot dog vendor, but the players are all being paid to play regardless — we can ignore it for our purposes.) That means if that break point is $50, they’ll charge $50 — regardless of whether that’s $50 they get to put in their pocket or $45 in actual ticket value plus a $5 surcharge.

A similar effect is at work regarding parking, which is why most economists consider surcharges like these to come out of the owners’ pockets, even though they’re technically taxes. The owners could accomplish the same thing just by “taxing” themselves, in other words, though there are likely some tax benefits they get from paying this via the tax system rather than voluntarily out of their own pockets.

There are additional problems with the WFAA analysis, starting with the fact that the station’s reporters estimated $300 million in admissions and parking surcharges over 30 years, and added that on to the city’s existing $500 million obligation — but $300 million over 30 years doesn’t cost $300 million now, but rather more like half that in present value. (It’s like figuring a house mortgage: You count how much you need to borrow from the bank now, you don’t add up all your mortgage payments into the future.) So we’re already down to $650 million, and much of that $150 million added cost would really come out of the Rangers owners’ pockets, so really this is much ado about not all that much.

Which isn’t to say that the proposed Rangers stadium doesn’t have hidden costs: It has tons of them, from about $15 million in future rent rebates to free land and property tax breaks for parking lots to the city being on the hook for any of the Rangers’ share of bonds if team revenues fell short of covering them. Whether this gets the public share up as high as 80%, I couldn’t tell you, but it’s worth investigating. Get to it, WFAA investigative team!

San Diego put down sharp rocks to keep homeless from sleeping near All-Star Game

When San Diego city officials installed jagged rocks under a highway overpass near the Padres‘ Petco Park in April to prevent homeless people from sleeping there, many locals assumed it was an attempt to clear out homeless in advance of July’s MLB All-Star Game. City officials countered that the rocks were there at the request of local residents. The news site Voice of San Diego filed a public-records request to find out the truth, and duh, it was all about the All-Star Game:

Sherman Heights is never mentioned in dozens of emails exchanged between city staffers discussing the rock installation. Rather, the rocks were part of a larger effort to clean up the area prior to the July 12 All-Star Game and improve the flow of traffic to and from Petco Park. Early plans, emails show, called for rocks not only along Imperial Avenue, but also along two blocks of a wall lining Petco Park’s Tailgate Park as well as outside the New Central Library, all in an effort to deter camping and loitering near the ballpark during All-Star Game festivities…

John Casey, the city’s liaison with the Padres until March, took the lead on getting price quotes for the rocks. In multiple emails, he urged city staff to move the project along. “Any breakthroughs?” he wrote in a November email. “The Padres and SDPD are asking me when we can see the curbs painted red as well as the rocks at the underpass and Tailgate Park wall.”

In early January, Casey emailed City Traffic Engineer Linda Marabian and laid out a checklist of remaining work to be done before the All-Star Game.

“Back to the vision of Imperial as a Gateway to East Village,” he wrote. “The wrought iron fence has been installed on the wall at Tailgate Park and works well at discouraging loiterers. Remaining work in anticipation of the All Star game is: Rip Rap rocks under the I-5 overpass at Imperial on both sides of the street. Rip Rap rocks at the base of the Tailgate Park wall from 12th to 14th.”

The VoSD didn’t report on where the homeless went who have been displaced from their camp under the overpass. Wherever it is, one hopes that they appreciate it as one of the ancillary benefits of their city getting to host an All-Star Game.

Braves stadium deal may not be worst ever, but that’s grading on a pretty steep curve

In my latest for Vice Sports, I take a look at the ever-sadder Atlanta Braves stadium mess, and ask whether it’s the worst stadium deal ever. Fans of Betteridge’s Law, let alone regular readers of this site, will know how that turns out, but suffice to say it’s an honor for them even to be part of the conversation. Not an honor in the good sense, mind you, but there’s no such thing as bad publicity, right?

Anyway, it also features amusing observations from Victor Matheson and J.C. Bradbury, so go read it now!