Friday roundup: More MLS expansion drum beating, more wasteful non-sports subsidies, more bonkers Tottenham stadium delay stories

Getting a late start this morning after being out last night seeing Neko Case, so let’s get to this:

The Mariners have now scored more than half a billion dollars in public subsidies for one stadium

And the Seattle Mariners owners have gotten their $135 million in tax money, as the King County council voted 5-4 to give final approval to the same stadium renovation fund plan as it approved two weeks ago. The same councilmembers who objected and proposed amendments last time — including that the Mariners be required to open their books or share future naming-rights revenue with the public — did so again yesterday with the same result, albeit with some added absurdist comedy:

One notable moment was when Councilmember Pete von Reichbauer accidentally gave an affirmative vote to one such amendment. His colleague, Councilmember Reagan Dunn looked down the line at him.

“Pete,” Dunn said. “You meant to vote no.”

Von Reichbauer, flustered, quickly changed his vote.

If you’re scoring at home, the $135 million in hotel taxes that will now be handed over the Mariners owners for upgrades plus the $380 million taxpayers spent on building Safeco Field in the first place brings the total public cost for construction and upkeep to $515 million. (And significantly more if you include the discounted rent the M’s are paying on the building that they operate and control all revenues from but don’t own because who wants all the headaches of home ownership?) Or, if you prefer to look at this deal on its own, King County is paying the Mariners $5.4 million a year for a 25-year lease extension, and while there have been worse deals in recent sports lease history, those teams also had more options for relocating than the Mariners ever did, so King County had a hammer here that it never even unwrapped from its packaging.

As part of the deal approved yesterday, some hotel tax money will also go to the arts, affordable housing, and tourism. But that will be less than critics of the deal had hoped for — in particular, tourism projects will now get a piddly $8 million, which councilmember Rod Dembowski took particular umbrage to:

“$8 million scrap thrown at you, while 94-plus percent is given to one entity? That’s not right, that’s not the intent of the legislation, that is not a compromise. It is a heist. It is a fleecing. And it is not good policy.”

But anyway, at least Seattle’s wildly lucrative pro baseball team will now get some really nice toasters. And isn’t that what public spending priorities are supposed to be all about?

Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on ‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?

Tampa’s tax surcharge plan for the Rays doesn’t seem entirely thought out

Check it out, there’s an actual plan afoot to help pay for a new Tampa Bay Rays stadium in Tampa!

“[We will be] working with the landowners to create a CDD type of environment for an entertainment district. Every hot dog, beer purchased in that district will go toward the stadium so it’s not taxpayer money, it’s a fee-based structure,” said Hillsborough County Commissioner Ken Hagan, the county’s chief negotiator with the Rays.

A CDD, for those unfamiliar with this particular facet of Florida law, is a Community Development District, which effectively places a tax surcharge on a certain area in order to pay for new amenities. (CDDs for a Rays stadium were previously floated as a possibility back in the spring.) If done correctly, it shouldn’t cost taxpayers extra, since this is genuinely money the local government wouldn’t be collecting without the new tax — it should just come out of any windfall profits that property owners would otherwise make as a result of the new project.

There are, however, a couple of problems here. One is that it’s not entirely clear whether a new stadium is the kind of amenity that actually makes nearby land more valuable — and if it doesn’t, you could end up seeing property values plunging as nobody wants to buy land that comes with a whopping surcharge, or even see the CDD go into default, as has happened from time to time. So if this does end up part of a Rays stadium funding plan, it’s going to be hugely important who’s on the hook for those payments if the CDD money falls short.

Then there’s that puzzling statement by Hagan that “every hot dog, beer purchased in that district will go toward the stadium.” He also said “we are not going to raise sales taxes,” so presumably there won’t be an actual surcharge on sales of stadium-district beer, just on property taxes for stadium-district beer gardens. Which is a pretty indirect and hand-wavy way of ensuring that the stadium will in some way pay for itself, probably because without the hand waving, it’d be immediately clear that there aren’t enough windfall hot dog profits to build a near-billion-dollar stadium.

In short: There’s a still a mammoth hole in any Rays stadium budget, one that local business owners pledging to buy season tickets is not going to fill. The haggling over a site for a potential Rays stadium may have seemed like the hard part, but now that actual money has to be put on the table, this is when the game really begins.

 

Mariners aren’t even paying fair market rent for their office space, let alone a whole stadium

The Stranger newspaper in Seattle did a clever thing in its coverage of the Mariners‘ new lease extension on Safeco Field: Instead of just looking at the $135 million in public money for renovations the team will be getting, the paper calculated whether the M’s $1.5 million-a-year rent is what they should be expected to pay for office space in the city. The result:

Between club level administrative offices and suite level administrative offices, the Mariners have 35,135 square feet of office space….

Most recently, Class A office space is going for $47.06 per square foot in the downtown Seattle region. … Some pretty simple math (it’s multiplication, okay) applying that figure to the Mariners’ square-footage of office space shows that the Mariners’ rent is $153,453 below market value.

And as the Stranger’s Nathalie Graham notes, that’s just for the actual office space at the stadium — it’s “not even taking into account THE ENTIRE BASEBALL STADIUM that they occupy.” (Scare boldface all-caps in original.)

It’s nearly impossible to calculate fair market rent on a baseball stadium since the “market” consists almost entirely of sweetheart deals, but suffice to say that what looked like a bad deal for Seattle taxpayers just got even worse.

King County votes to only give Mariners almost all the stadium renovation money they asked for

This is breaking news, so there’s not a lot of details, but:

That’s less than the $185 million that the Seattle Mariners were asking for in stadium upgrade money in exchange for signing a lease extension, but way more than the proposal by councilmember Jeanne Kohl-Welles to cut it to a mere $26 million. (Kohl-Welles’ bill failed earlier today by a 5-4 vote.) The McDermott amendment mostly eliminates use of the tax revenue stream for tourism spending and pours that into affordable housing instead, but it also slices off $50 million from the M’s stadium fund, so, yay?

There’s still a vote to come on asking the voters to decide on this whole mess [UPDATE: it was voted down too]; it doesn’t seem likely that the county council would vote for a specific funding plan and then vote to let somebody else decide the specific funding plan, but who knows? Follow David Kroman above on Twitter, he has his finger on the slow, unsteady pulse of the council.

[FURTHER UPDATE: Kroman’s article on all of yesterday’s votes and how they went down is now up at Crosscut, for anyone who wants the full scoop.]

 

 

Friday roundup: Leaky fountains, cheap stadium beer, and the magic of computers

The world may be on vacation this week, but the stadium news decidedly is not:

Mariners’ $180m lease subsidy demand only has two council backers out of nine so far

It looks like the Seattle Mariners owners’ attempt to get $180 million in county tax money to buy fancier stadium toasters isn’t off to a rousing start, with county councilmembers starting to line up in opposition to the proposed lease. Opponents now include Larry Gossett (who last week asked “why in the world” governments “keep giving public tax dollars to very wealthy professional teams”), Jeanne Kohl-Welles (who said the M’s should get just $25 million and the rest of the tax money should go toward affordable housing), and Dave Upthegrove (who’s hated on this plan from the start), with Pete Von Reichbauer and Joe McDermott on the pro side; the other four members, Rod Dembowski, Kathy Lambert, Claudia Balducci, and Reagan Dunn, haven’t stated a position yet, which obviously leaves lots of swing votes, but only two of the four would be needed at this point to block the plan.

The risk here isn’t huge — the Mariners owners aren’t threatening to leave Seattle, likely in part because they know there are no other available markets remotely the same size, and would in fact be willing to sign a short-term lease extension if they can’t get their long-term one with all the cash attached. The King County council will be holding a public hearing this Wednesday on the proposed lease extension, at which point maybe we’ll have a better sense of which way the other councilmembers are leaning, likely after getting an earful from Seattle residents.

Friday roundup: Trump tariff construction cost hikes, Beckham lawsuit tossed, Elon Musk inserts himself into headlines yet again

Lots of news to report this week, and that’s even without items that I can’t read because of Tronc Troncing:

Are sports leagues trolling Arizona media by refusing to release full economic impact studies?

Emerging briefly from my travel-imposed radio silence to note that Arizona tourism officials are once again talking up how sports is a mammoth contributor to the state’s economy, to the tune of $1.3 billion over the last three years. That’s according to figures come up with by the Arizona State University’s W.P. Carey School of Business, and since they go against pretty much every other study conducted of sports economics ever — which conclude that most sports spending just displaces other spending, whether it’s by locals or tourists — I heartily pooh-poohed the latest of those studies when it came out last month, noting that a previous enthusiastic study of spring-training impact in Florida turned out not even to have been conducted by an economist.

After I wrote that, I got a very friendly under the circumstances email from one of the Arizona State economists, who assured me that the people behind the report had degrees and everything. He also indicated that the study had tried to avoid crediting sports with economic activity from visitors who would have come to Arizona anyway by asking survey respondents, “How strong a factor was the 2018 Cactus League in your decision to visit Arizona?”

This was very interesting, I told my correspondent. Where could I find the complete study, so I can see the full methodology?

Sorry, I was told. These reports were commissioned by the sports leagues (MLB, the NFL, and NCAA), and they were only releasing summaries, not the full reports.

This, needless to say, is a problem: Without seeing the methodology, there’s no way to tell if these studies truly show something unprecedented is going on in Arizona, or if every other study is correct that one-time and seasonal sports events don’t have any measurable economic benefit. So instead we just have the sports leagues picking and choosing which numbers to put in their press releases, with no way to tell how those figures were generated.

And if the notion of sports leagues deliberately trolling the media with cherry-picked stats is bad enough, one has to ask: Why the hell are Arizona media letting themselves get trolled? Pretty much every news outlet in the state has been running these stories at face value, without ever noting that there’s no way to evaluate the claims. That’s a dereliction of duty way worse than anything the leagues (who only have obligation to profit, not to truth) or the economists (who are just doing what their clients ask of them, though I suppose they could always refuse to take on projects with secrecy clauses on the grounds of academic openness) are doing.

Anyway, sports leagues are devious and secretive and news outlets are lazy and eager to suck up to the sports industry that provides them with many of their dwindling number of readers. Glad to see nothing has changed in my absence, in other words.