Friday roundup: Coyotes late with arena rent, Winnipeg move non-threats, and good old gondolas, nothing beats gondolas!

If you missed me — and a whole lot of other people you’ve likely read about here, including economist Victor Matheson and former Anaheim mayor Tom Tait — breaking down the Los Angeles Angels stadium deal in an enormous Zoom panel last night, you can still check it out on the Voice of OC’s Facebook page. I didn’t bother to carefully curate the books on the shelves behind me, as one does, so have fun checking out which novels I read 20 years ago!

And on to the news, which remains unrelentingly newsy:

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Anaheim stadium protest raises question: When is $500m in land worth only $150m?

The People’s Homeless Task Force OC, the same group suing to block the Los Angeles Angels‘ stadium land sale for violating open meetings laws, held a small (about 20 people, per the OC Register) protest in front of Anaheim city hall yesterday, with signs reading “Stadium ‘Deal’ Sucks” and “Recall The Corrupt Mayor Harry Sidhu.” (Actually “The Corrupt Recall Mayor Harry Sidhu,” but I’m assuming they just forgot the caret.) The interesting part, though, came via the canned response they got from city spokesperson Mike Lyster:

“There’s nothing like baseball to generate speculation and strong opinions, and we welcome all voices. We stand by our process and still have more public consideration ahead of us. The only way to see more money from this site is to sell it without baseball, and that was not our goal. Development under this proposal would drive much-needed revenue for our city for years to come.”

Let’s break this down:

  • Opinions are good and part of the public process! Even when they’re wrong, like yours are!
  • The $500 million estimate for the value of the Angel Stadium property is for delivering it unencumbered by a baseball stadium, so unless you want to force the Angels out really it’s only worth the $325 million that Angels owner Arte Moreno agreed to. But no, that’s not how land value works: As we discussed here last December, the fact that Moreno is seeking a less-lucrative use of the land because he wants to keep the stadium on it (as does the city of Anaheim) doesn’t make it less valuable — if the land were for sale on the open market, he’d have to outbid rival developers who didn’t give a crap about baseball who’d be willing to pay around $500 million. So really Lyster is saying here “We’re giving Arte Moreno $175 million in free land to be sure Moreno wouldn’t have to choose between paying what the land would normally be worth or finding other land to buy for a stadium somewhere else,” which sounds a lot less defensible when you put it that way.
  • Lyster also evades the issue of the $175 million in kickbacks that Moreno is getting to build affordable housing and parks, because a new park in the middle of a baseball stadium development is totally worth the same to Anaheim residents as $46 million in cash they could use to build a park (or anything else) wherever they want, right?
  • This will provide the city with revenue, and revenue is good! This is the argument for pretty much all tax and land cost breaks for development on vacant or underutilized land: Without this development we would get nothing, so it’s all free money! It’s also a variant on the Casino Night Principle, where discounts for developers aren’t really discounts because if you go looking for your heart’s desire and it’s not already in your own backyard, you never had it to begin with, hey maybe I should call this the Wizard of Oz Principle?

This should all be a lesson in stadium subsidy economics, Rule No. 1 of which is Pick any number as the amount of public money going into a project, and you can probably find someone who can find a way to justify it. That’s not a justification for throwing up your hands and declaring the impossibility of objective reality — Arte Moreno really is getting $500 million in land for $150 million in cash plus some promises to build housing and parks — but it does help explain how one person’s massive subsidy can be another’s great deal. Toronto Blue Jays exec (and later MLB official) Paul Beeston once famously said of baseball finances, “Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me,” and the same principle applies here: There are people who make big bucks to change big numbers into small ones and vice versa, so it’s always important to take a hard look at the man behind the curtain.

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Friday roundup: Drumming clowns, vaporgondolas, and the XFL rises shambling from its dusty grave

The magnets have shipped! Repeat: The magnets have shipped! If you want to get in on this, act now, or you might have to wait until I make my second trip to the post office.

This was an extra-busy news week, which felt like a bit of a return to normalcy after several months of sports team owners mostly focusing more on getting back on the field than on getting money to pay for new fields. But life can’t be put on hold forever, and by “life” I mean “grubbing for someone else’s cash,” because what is life if not that? (Answers may differ if you are not a sports team owner.)

Here’s a bunch more stuff that happened than what already made FoS this week:

  • That protest to call for the New York Yankees to pay their fair share of taxes or maybe just bail out local struggling businesses only drew about 10-15 people, according to NJ.com, but also “clowns playing a drum on stilts.” The site’s accompanying video features less than two seconds of drum-playing stilt clowns, and a whole lot of 161st Street BID director Cary Goodman talking about the plight of local businesses, and while I know Cary and he apparently paid for the clowns, I still say that this is a dereliction of journalistic duty.
  • Along those same lines, the gondola company owned by former Los Angeles Dodgers owner Frank McCourt has reportedly released new renderings of its proposed gondola to Dodger Stadium, but does NBC Los Angeles show us any of them? No, it does not. (I so yearn to see Cab-Hailing Purse Woman cast off her foam finger and hail a gondola.) We do learn that “the gondola system could move up to 5,500 people per hour in each direction, meaning more than 10,000 fans could be transported to Dodger Stadium in the two hours before the start of a game or event,” which seems to misunderstand how people arrive at baseball games, which at Dodger Stadium is mostly all at once in the third inning, and even more misunderstand how people leave baseball games, which is all at once when they’re over, at which point there would suddenly be a two-hour-long line for the gondola. McCourt’s L.A. Aerial Rapid Transit company says it will pay the project’s $125 million cost, but even if true — and you know I’m always skeptical when people ask for public-private partnerships but promise there will be no public money — that doesn’t make this much less of a crazy idea.
  • The XFL’s Los Angeles Wildcats might have to share their stadium this spring with a college football team, and, wait, didn’t the XFL fold? I swear the XFL folded. Oh, I see now that The Rock bought it, so: In the unlikely event that the XFL gets going again, its L.A. team will have to share digs with a college football team playing in the spring. Honestly having to use a football stadium more than 10 days a year just seems like efficient use of space to me, but sports leagues do get gripey about scheduling, even sports leagues that barely exist.
  • That Palm Springs arena being built by AEG now won’t be built in Palm Springs after all, but rather nearby Palm Desert, because the Agua Caliente Band of Cahuilla Indians, whose land was going to be used for the project, decided after Covid hit to “reevaluate what was going on just like most other businesses because they had so many other projects,” whatever that means. Given that the Palm Springs police and fire departments said they’d need tens of millions of dollars to provide services for the new arena, I think it’s safe to say that Palm Springs just dodged a bullet here.
  • The San Francisco 49ers are finally paying rent again to the city of Santa Clara, after initially trying to get out of it because their two exhibition games at home were canceled.
  • This Athletic article about the attempts in the 1980s and ’90s to save Tiger Stadium is paywalled and is not nearly as comprehensive as the entire chapter about the same subject in Field of Schemes, but it does have some nice quotes from Tiger Stadium Fan Club organizers Frank Rashid and Judy Davids (the latter of whom worked on a renovation plan for the stadium that would have cost a fraction of a new one, a scale model for which I once slept in the same room with when she and her husband/co-designer John put me up at their house during a FoS book tour), so by all means give it a read if you can.
  • If you’re wondering how $5.6 billion in subsidies for a new high-end residential/office/mall development in Manhattan is working out now that Covid has both residents and offices moving out of Manhattan, I reported on it for Gothamist and discovered the unsurprising answer: really not well at all.
  • The KFC Yum! Center in Louisville’s naming rights are about to expire, but KFC is talking about signing an extension, so with any luck we have many more years ahead of us to make fun of the name “KFC Yum! Center.”
  • That’s not how you spell “ESPN,” Minneapolis-St.Paul Business Journal.
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NYC to refinance Yankee Stadium bonds, give Steinbrenner more cash, still not require him to pay property taxes

And in bond refinancing news:

Fitch Ratings released a report saying the New York City Industrial Development Agency (NYCIDA) plans to issue approximately $923 million in PILOT (payment in lieu of taxes) Revenue Refunding Bonds, Series 2020, issued for the benefit of Yankee Stadium LLC. The 2020 bonds will provide significant debt service savings relative to the prior schedules, with the majority of savings related to the PILOT and debt payments in February 2022-2024.

If the words “bond refinancing news” didn’t already put you to sleep, that paragraph probably did. But there are a couple of items that make New York City and the Yankees refinancing their stadium debt to take advantage of low interest rates more interesting than when you do it for your mortgage:

  • First off, Forbes reports that while the Yankees will still be paying off their stadium debt with pretend property taxes in order to take advantage of a now-closed IRS tax loophole, they’ll now be able to pocket any excess PILOTs (payments in lieu of property taxes) that aren’t needed for debt service and use them to fund their own operating expenses — which Forbes’ Mike Ozanian notes “provides some mitigation on the pressure for a quick recovery in revenues from the coronavirus.” (Translation: Will help boost Hal Steinbrenner’s bottom line.) There’s no estimate provided for how much money will be redirected from the city to the Yankees under this new provision.
  • As you may recall, there’s a push on to make New York’s sports teams actually pay property tax, as opposed to paying pretend taxes to themselves (as the Yankees, Mets, and Brooklyn Nets do) or just having themselves declared entirely tax-exempt (the Knicks and Rangers). One snag there is that the PILOT agreements were already signed years ago, so it’s tough to undo them. But! In order to refinance the debt so that Steinbrenner can save money, the city and the Yankees are having to tear up the old PILOT agreement and sign new ones — and there is nothing stopping the city from saying, “And while we’re doing you this favor, how about you start paying some damn real taxes to the actual damn city treasury, what with New York so strapped for cash that the mayor is furloughing himself?”

Obviously if the city tried to demand more in tax payments from the Yankees than they’d be saving under the refinancing, Steinbrenner would walk away from this deal. Why that would be a problem for the city is left unstated, though — while the Forbes headline implies that New York will be saving money under this deal, it’s unclear how that will happen, since right now all the bond payments are technically on the Yankees’ dime, with the help of the $1.2 billion in public tax breaks and free land they’re getting on the back end. At the very least, you’d hope that Mayor Bill de Blasio — who just this week declared that in terms of sports tax breaks “everything should be reevaluated especially at a point when the city is going to need resources for our recovery” — would be, you know, checking to see if the city can get something in exchange for doing Steinbrenner this solid, instead of just giving the Yankees some extra cash to help pay their light bill.

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Does MLB’s postseason bubble format make any damn sense? An investigation

After much speculation, it’s official: MLB will be going to a “bubble” format for most of its postseason, isolating players and staff at a handful of locations to try to avoid any Covid outbreaks like the ones that disrupted many teams’ regular seasons. After the first round of best-of-three series takes place at teams’ regular home parks, the National League Division Series will be held at Arlington and Houston and American League Division Series will be in San Diego and Los Angeles, followed by League Championship Series in Arlington and San Diego, then a World Series in Arlington.

Going to a bubble makes sense: It’s worked well for the NBA and NHL, and does seem to be the best way to prevent outbreaks. And baseball has even thought through some of the problems of starting a bubble on the fly — players will have to start self-quarantining at their homes and hotels as early as next Tuesday, with their families joining them then in quarantine if they want to enter the bubble with them, though given that players are already not supposed to be out on the town, this pretty much comes down to “try extra-hard not to get sick right before the playoffs, guys.”

Playing in Southern California and Texas is more puzzling, though. Sure, they’re both warm-weather sites, though pretty much all of North America is relatively warm in October now thanks to climate change, except when it’s not. But they’re also both relatively high-virus states: Texas has begun to see a major second spike after its huge outbreak that began in June, and California isn’t far behind.

(That’s one-week new-case averages, but if you check 91-DIVOC you can see similar trends underway for positivity rates, so this isn’t just a matter of more people getting tested — there really is way more virus afoot in Texas and California than in states like New York and Massachusetts. And while a bubble in high-virus Florida worked okay for the NBA, it also didn’t have players traveling between cities.)

On top of that, warm weather hasn’t exactly been good for California lately, given that Los Angeles County just saw a record high temperature of 121 degrees and, oh yeah, the whole damn state is on fire. Maybe the wildfires will have died down by October, but wildfire season in Southern California usually lasts till the start of November, and thanks again to climate change is basically all year round now, so baseball could be risking a repeat of this week’s games in Seattle that had to be canceled after the Oakland A’s and Seattle Mariners played a doubleheader in a cloud of choking smoke.

The first thing that comes to mind is MLB’s longstanding tradition of rewarding team owners who’ve built or renovated stadiums with getting to host special events like the All-Star Game. The Texas Rangers‘ stadium, of course, only just opened this year, after winning close to half a billion dollars in city subsidies so they could have air-conditioning, while Dodger Stadium just got a $100 million renovation (at team expense), and in fact was in line to host the All-Star Game this summer before that got canceled. And once you’ve picked those two, the Houston Astros and San Diego Padres stadiums are relatively close to reduce travel, and also relatively new, though, man, Houston’s is 20 years old already? I guess Enron was a long time ago.

Texas has another advantage, though. MLB commissioner Rob Manfred had this to say yesterday at a sports business panel:

“I’m hopeful that [for] the World Series and the LCS we will have limited fan capacity,” Manfred said during a question-and-answer session through Hofstra’s Frank G. Zarb School of Business. Manfred’s comments were first reported by the Athletic. “I think it’s important for us to start back down [that] road. Obviously, it’ll be limited numbers, socially distanced, [with] protection provided for the fans in terms of temperature checks and the likes…

“But I do think it’s important as we look forward to 2021 to get back to the idea that live sports are safe. They’re generally outdoors, at least our games, and it’s something we can get back to.”

Whether live outdoor sports are safe for fans to attend in the middle of a pandemic outbreak is, of course, a huge open question, one that the NFL is currently attempting to answer via a giant human test subject experiment. Also, the Houston and Texas stadiums aren’t entirely outdoors — they both have retractable roofs, and in fact the roof is the entire reason for the Texas stadium existing — and while they probably still have better air circulation than a totally indoor arena, if the principle here is “it’s safe to let in fans so long as its outdoors,” shouldn’t Manfred have picked entirely outdoor stadiums? Hell, New York City has two of ’em, plus oodles of now-vacant hotel rooms.

Ah, but New York City also has bans on fans attending live sporting events, and Texas notably does not. And even at 25% capacity, selling tickets for the World Series — the only tickets that would be available for any MLB games this year — would be massively hot commodities, something that Manfred said later in his talk was at the forefront of baseball’s thoughts:

“The owners have made a massive economic investment in getting the game back on the field [in 2020] for the good of the game,” he said. “We need to be back in a situation where we can have fans in ballparks in order to sustain our business. It’s really that simple.”

So, yeah, it really is that simple: If we can sell tickets, that’s the priority, we’ll figure out the risks later.

Prioritizing money over safety also explains perhaps the biggest hole in the MLB bubble structure: The first-round games, which will be held in eight different cities, with no bubbles, right before the embubbled postseason begins. This Round of 16 was announced abruptly at the beginning of the season, and doesn’t make any more baseball sense than public health sense — three-game series in baseball have essentially random outcomes, especially now that home-field advantage maybe means nothing without fans (though maybe it still does?), so you’re subjecting regular-season division winners to virtually the same odds of making it to the next round as sub-.500 teams lucky enough to play in weak divisions. But it does mean a whole lot more TV money, enough that MLB was willing to cough up $393 million in postseason bonus money to the players’ union to make it happen.

And as Marc Normandin points out in today’s edition of his newsletter (this one un-paywalled, but please send him some money if you like it!), even before seeing whether this results in a bunch of third-place teams on hot streaks battling it out in the playoffs, Manfred is already eager to make this the new normal:

“Manfred also said the expanded, 16-team postseason is likely to remain beyond 2020, adding that “an overwhelming majority” of owners had already endorsed the concept before the pandemic.

“I think there’s a lot to commend it,” he said, “and it is one of those changes I hope will become a permanent part of our landscape.”

Normandin also points out that letting a thousand playoff teams bloom has an important side benefit for team owners who are sick of shelling out big bucks to buy the best team possible:

If the league was already full of teams aiming to win 83 games because it’s cheaper than trying to win 90 and they might get lucky and win 90, anyway, what is going to happen when the threshold for making the postseason drops? A bunch of teams looking to win 75 games and occasionally being rewarded for it because a prospect hits their stride sooner than expected, or an inexpensive, low-end free agent has a surprise epiphany and subsequent breakout? We’re going to end up in a scenario where owners know they’ll be getting increased shared revenue from an expanded postseason, and more revenue than that if their teams manage to make it there themselves. And little incentive to spend any of that increased revenue, because why try when not trying might get you to the postseason, anyway?

In other words, if you loved the marginal revenue gap that has allowed owners to pocket even more money without having to collude about it, it’s about to get that much bigger.

MLB’s bubble postseason, in short, is one part profiteering and one part just enough concern for the public to seem reasonable without getting in the way of the profiteering. Which is how baseball — and pretty much all pro sports in the U.S. — has always been run, so it should come as no surprise. But it’ll be something to keep in mind while watching the Toronto Blue Jays and San Francisco Giants battle it out for the World Series in Texas in front of 12,500 very well-heeled and well-air-conditioned fans.

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NYC Mayor de Blasio: Sure, wealthy sports owners should pay their taxes, I guess

As I mentioned in my Gothamist article last week, a group of New York city councilmembers have called on Mayor Bill de Blasio and Gov. Andrew Cuomo to start making the city’s sports teams pay property taxes on their stadiums and arenas, which none of them currently do. (The Yankees and Mets and Brooklyn Nets all pay “payments in lieu of taxes” that are really their own construction debt payments, funneled through the city as a tax dodge; the Knicks and Rangers don’t pay taxes on Madison Square Garden because somebody accidentally gave them an eternal tax break in 1982 and no one can be bothered to repeal it.) And the campaign got a boost yesterday when de Blasio sorta kinda endorsed its call for team owners to pay their fair tax share:

De Blasio, a Democrat, was asked at his daily press briefing to respond to a letter last month from nine lawmakers on the New York City Council who called for the Garden, Yankee Stadium, the Barclays Center and Citi Field to pay property taxes. The mayor said he hasn’t seen the letter and was unfamiliar with the legal specifics, but supported the concept of requiring New York’s local teams to increase their contributions.

“Let’s be clear – sports franchises have gained incredible value over the years,” de Blasio said. “They clearly have the resources. I think the history in this city and pretty much all over the country was stadium deals were not good deals for the public, by and large. Some of the more recent ones have been better, but mostly they haven’t been that good. Everything should be reevaluated especially at a point when the city is going to need resources for our recovery.”

That phrasing puts the “blah” in de Blasio, but “everything should be reevaluated” is fightin’ words compared to the usual approach to sports tax breaks, which is for elected officials to shrug their shoulders and say whatchagonnado? And the mayor also responded to a call by 161st Street Business Improvement Director Cary Goodman that the Yankees be forced to pay property taxes just as other businesses in the neighborhood do:

“We all hope and pray that next year baseball will resume in person at some point in the year and the fans will come back and the businesses will thrive, but of course the Yankees should help them through and I assure you they have the money.”

Okay, so none of this is exactly laying down the law, and de Blasio has previously called for Madison Square Garden to pay taxes before shrugging his shoulders and saying whatchagonnado? But it’s still more than we’ve seen before, and is certain to encourage both the councilmembers and Goodman and his South Bronx business owners. The latter has a rally outside Yankee Stadium coming up this Thursday at noon, plus a Change.org petition, and with that and a long enough lever you never know what can happen.

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Suit against Angels land sale for violating open-meetings laws set for trial in 2021

The sale of $500 million worth of city land to Los Angeles Angels owner Arte Moreno for $150 million may be close to being official, but it still faces a pesky lawsuit charging that the whole deal is illegal because the city council held initial talks in secret, in violation of the state’s Brown Act requiring open meetings. The suit was first filed back in March, and got a boost yesterday when a judge rejected a motion by the team to dismiss the case, and instead started court hearings.

The suit looks like it’s going to come down to what constitutes a “legislative body”: The Anaheim city council deferred negotiations to a three-member group consisting of the mayor, city manager, and city attorney, which met with Angels execs behind closed doors. The council, according to Voice of OC, later held two closed-door meetings of its own before its single public meeting to vote on the plan, which the lawsuit calls a “rubber stamp” and which, yeah, pretty much.

It would be extremely unusual for an approved stadium deal to be overturned by a lawsuit this late in the game — if nothing else, sports team owners can usually afford excellent lawyers to tell them what’s legal, and then to convince judges of the same — but certainly not impossible. The hardest part may be timing: The trial isn’t expected to begin until next year, which is also when the sale agreement is expected to close, so barring a restraining order, the horse could be out of the barn before a judge can shut the door, and that’s before you even get into the inevitable appeals.

Meanwhile, a recall campaign against Mayor Harry Sidhu looks to be gearing up again after launching back in February and then immediately being put on hold thanks to the pandemic; that would be extremely precedented, since quite a few elected officials have now had their walking papers handed to them for approving sports subsidy deals. (Number of mayors who’ve been booted for refusing to provide subsidies and then seeing a team move: zero.) It’s tough to gauge support for a protest movement based on a couple of Facebook posts — it currently has 241 Likes, which doesn’t seem like a lot in a city of 350,000 — but you gotta like its listing as “Always Open.” Unlike the stadium negotiations, amirite?

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Friday roundup: Everything old is new again

What a week! In addition to the new site design and new magnets and new sports subsidy demands rising and falling almost before you could even register them, this week featured the long-awaited debut of Defector, the independent sports (but not only sports) site launched by the former staff of Deadspin. Read it for free, subscribe if you want to post comments and, you know, help support journalism for our uncertain future. I am a charter subscriber, needless to say, and am currently trying to decide which color t-shirt to buy.

On the down side, the entire West Coast has been set aflame by the deadly mix of climate change and gender-reveal parties and looks like a post-apocalyptic movie. The year 2020 comes at you fast. Let’s get to some more news:

  • The owners of the New York Islanders are angling to downsize the Nassau Coliseum so that it doesn’t compete with their new Belmont Park arena for sports and the largest concerts, which is problematic in that they don’t actually hold the lease on the Coliseum, and already ironic in that the Coliseum was already just downsized once so as not to compete with the Islanders’ previous new arena in Brooklyn. Maybe this whole arena glut problem is something New York Gov. Andrew Cuomo might have considered before giving the Belmont project a whole bunch of land price breaks and a new train station? Meh, probably not necessary, we’re all friends here.
  • Hey look, we’re already calling the Los Angeles Angels stadium purchase a $320 million deal even though it’s really only $150 million plus a whole lot of “thanks for some building affordable housing and parks,” that was fast, Spectrum News 1.
  • Some rare actual good news from the pandemic: Somebody in Arlington was smart enough to include a clause in the Texas Rangers‘ lease on their new stadium that requires the team owners to triple their rent payments if parking and ticket tax revenue fell short of projections, which obviously they’re doing what with nobody buying tickets or parking this year. Sure, it’s still only another $4 million, which won’t go far toward paying off the city’s roughly half a billion dollars in stadium costs, but it’s better than a kick in the head. (Also, what on earth is going on in that photo of the Rangers’ stadium that D Magazine used as its illustration?)
  • The Inglewood city council approved the sale of 22 acres of public land to Los Angeles Clippers owner Steve Ballmer for $66 million, which I don’t even know how to determine whether it’s a fair deal or not anymore, but given the city mayor’s idea of appropriate oversight, I’m not super-optimistic.
  • University of Texas-Austin will have about 18,000 fans in attendance for its season-opening college football game tomorrow, but rest assured that it will be keeping everyone safe by … requiring student season ticket holders to test negative for Covid before being allowed into the game, but not requiring the same of anyone else? (Also fun: They’re supposed to all go get tested today, and get their results back tomorrow, which is not how Covid testing works right now at all.) Clearly the desire to look where the light is better is strong.
  • The Las Vegas Sun has a loooooong article about the process by which the Raiders got their new stadium in Las Vegas that pretty much comes down to “Mark Davis was the sincerest pumpkin patch of all,” but by all means go ahead and read it if you like sentences like “The first major obstacle was how to get both projects done in what most in the resort corridor would feel was a reasonable [tax increase]. That took time to overcome.”
  • Marc Normandin took a great look back at that time the owner of the San Diego Padres tried to gift the team to the city of San Diego for free and MLB said no. It’s subscriber-only, so I’ll quote my favorite section: “There is a reason Mark Cuban will never own an MLB franchise, and that reason is that he’s the kind of owner who might shake things up in a way that forces other owners to have to spend money they don’t want to. On clubhouse comforts, on minor-league players Cuban might try to increase the pay and better the living conditions of in order to produce happier, healthier future MLB players: there is no guarantee Cuban would do those things, necessarily, but his actions and spending helped shape the way the current NBA locker rooms look, so the possibility exists, and that possibility is too big of a risk for MLB’s current 30 owners to take. So, instead, they aim for safe options, like a minority owner in Cleveland becoming the majority owner in Kansas City, as he’s already proven he understands the game and how to play it.”
  • First Dave Dombrowski and Dave Stewart, now Justin Timberlake — if building 1990s star power is the way to get an MLB franchise, Nashville is a shoo-in. Though as Normandin notes, they’d probably be better off finding a minority owner from Cleveland.

Okay, I have to go pick up my computer from its trip to the computer mechanic so I can go back to typing these updates on a keyboard I can actually see the letters on. (Yet another thing that happened this week.) Try to have a good weekend, and see you all on Monday.

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Angels owner now getting $500m in stadium land for just $150m plus “benefits”

When the Los Angeles Angels stadium land deal was approved last December, it was announced that team owner Arte Moreno would be paying $325 million for Angel Stadium and the 153 acres of land that it sits on, a $175 million discount from its assessed value of $500 million because he would be insisting on continuing to play baseball on it. (Really, that was the logic, read it for yourself.) But even then, there was a catch: Moreno could be eligible for additional discounts based on how much affordable housing and other “public benefits” he would be providing.

On Friday, that additional discount was revealed, and it’s $169 million, more than half of Moreno’s announced purchase price:

Anaheim is looking to sell Angel Stadium and the roughly 150 acres around it for $150 million —  less than half of the starting price tag announced late last year when private talks began….

Taxpayers will take $123 million off the purchase price to fund at least 466 affordable housing units.

Another $46 million will be paid for by taxpayers to build a seven-acre park.

(No, I don’t get how $325 million minus $169 million equals $150 million, but what’s $6 million among friends?)

As with the initial land discount, there’s some logic to this, but not the kind that is entirely logical. Yes, the public is getting some non-cash benefits out of this, but there’s little evidence that they’re really worth what Anaheim is paying for them: That housing subsidy, for example, is $264,000 per affordable unit, which is roughly half the entire cost of construction for each apartment, not just the difference in value between a rent-regulated unit and a market-value one. As for the park, I’m having a hard time coming up with consistent per-acre cost figures in other cities, but either way, you have to take into account opportunity cost here: Anaheim is agreeing to pay to fund a new park on Arte Moreno’s property, thus boosting its value to him (people like to live near parks, I’ve heard), rather than building a park somewhere that it’s more needed, or for that matter something else that Anaheim residents might want more.

In short, Arte Moreno is now getting $500 million in public land for just $150 million, because he’s claiming that providing things that he himself wants — baseball and parks, plus affordable housing if you figure that he likely needed to build some anyway to get access to the land — are just as good as cash. No matter how you slice it, that’s a pretty sweet deal, especially when just a couple of years ago Moreno was looking at getting bupkis. What a difference a new mayor makes.

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Friday roundup: San Diego gets arena developer (and vaportecture), horses play piano, and other stories

Happy Sebtembler! Things were a little quiet for much of the summer, what with the entire world shut down and it seeming like a bad time for rich dudes to ask for hundreds of millions of dollars for their new buildings, but as Josh Harris has shown, nothing lasts forever. Except rich dudes asking for hundreds of millions of dollars for their new buildings, that will go on until the world actually ends, which is at least a few more decades away.

Anyhoo, here are some other things that happened this week in the world of stadium-grubbing:

  • San Diego Mayor Kevin Faulconer has chosen a team led by Brookfield Properties and ASM Global to build a new arena and associated development, with the arena to be paid for by building more housing units, somehow? Is housing that profitable that it can spin off hundreds of millions of dollars in extra revenue to pay for a new arena? If so, shouldn’t the city just be charging more for the right to build all this super-lucrative housing? This all sounds suspiciously reminiscent of the Los Angeles Angels land deal, except no one in San Diego politics or journalism seems interested in investigating how the money will actually work, so I’m clearly going to have to do some more digging and report back. In the meantime, jam everything but the kitchen sink into your sports venue deals, kids, it’s the best way to make sure sports reporters get bored by the financial details and wander off!
  • Let’s also not let the moment pass without commenting on San Diego’s new arena vaportecture, which mostly features … people shopping? People wearing, I guess those are San Diego Gulls t-shirts, some with the logo on the front and some on the back, depending on whether the shopper in question is walking toward or away from the camera. Do you think they coordinated that somehow? Also the Ostro Brasserie appears to be a branch of a restaurant in New Zealand, Ungar’s is a wholesaler of packaged pizza bagels, and Migdal is an Israeli insurance company. This is a really weird mall!
  • Sacramento is short on tax revenue to pay off bonds on its Kings arena and convention center, but honestly that’s just another way of saying that it spent a bunch of money that it didn’t need to and now the chickens are coming home to roost when “don’t worry, there’ll be plenty of tax money” isn’t working out so well. Would it be any better if the city had spent the same money on the arena and then received enough tax revenue to pay it off but couldn’t then use that money for other needed things? Please submit your persuasive essays in comments.
  • Big arenas are joining with smaller music venues in support of the RESTART Act, which would extend the Paycheck Protection Program to help companies pay their furloughed workers, and also provide Small Business Administration loans that would be forgivable for the amount of any losses that venues had in 2020. That doesn’t seem too terrible — music venues are indeed getting creamed by the shutdown, and will likely be among the last things to reopen — but at the same time, there are lots of funny things you can do with your books to show “losses,” so this is worth keeping at least one eye on, especially given that no one in power seems much interested in doing so.
  • I haven’t actually been able to get myself to finish reading this item about the Philadelphia 76ers arena subsidy plan, because I can’t get past its opening line: “Josh Harris is like a horse trying to play the piano… he hits every wrong note.” Is that really what a horse trying to play the piano would do, though? Wouldn’t it fall over from trying to stand on its two hind legs? Shatter the keys with its hooves? Now I can’t think of anything other than how horrifying for all concerned it would be to watch a horse trying to play the piano — pass the RESTART Act now, or we may never see such a sight again!
  • I wanna read this new book on the perils of sports fandom, and not just because I’m in it!

Have a good long weekend, everybody, if that’s still a concept that means anything, and see you back here on Tuesday refreshed and ready to go.

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