The city of West Palm Beach may have voted to take the land that the Houston Astros and Washington Nationals wanted for a spring-training site and hand it over to developers who are actually willing to pay for it, but that’s not stopping the Palm Beach County Commission, which voted yesterday to give the two teams $135 million in hotel tax money to build a new stadium complex … somewhere.
The new $135 million proposal to build another stadium calls for the county to pay for about half of the costs, with the Astros, Nationals and the state paying for the rest.
The latest version of the deal trims $5 million from construction costs in a prior proposal. But the deal would also leave the county responsible for about $17 million more in public money than once envisioned.
The hotel tax is already being used to pay off the county convention center, support local arts programs, and other ways of promoting tourism, but hey, maybe hotel tax receipts will rise by $135 million if these stadiums are built, right? And if not, they can always raise the hotel tax. Because surely that won’t do anything to cause tourists to choose to stay in a different county.
In any event, the Astros and Nationals owners now just have to drive around Florida looking for a place to spend their $135 million, which they’re promising to do within the next couple of weeks. It’s a tough life, running a pro sports franchise.
The West Palm Beach city commission voted Tuesday to pursue the other offer for land that the Houston Astros and Washington Nationals want for a spring training site, since that proposal wouldn’t require piles of public subsidies, and … you know what, while this is all very interesting, I’m more concerned with what’s going on with the image illustrating the South Florida Sun-Sentinel article on this:
Seriously, what exactly happened here? Did graphics staffer Cindy Jones-Hulfachor supply two alternate images, one with a bluish stadium site and the other in straight greyscale, and then the web production staff mistakenly used both? If so, why are both images cut off at the outside edges? It’s been a day and a half since this went up — isn’t anyone paying attention at the Sun-Sentinel to what’s actually on their site?
Anyway, Nats and Astros still want stadium subsidies, West Palm Beach is still saying no, blah blah blah. That graphic sure is strange, though.
One of the complaints that I and other subsidy critics like to levy at stadium plans is that localities seldom examine the but-for: What else could be done with the land, money, and political time and energy that might be more productive than a sports facility? Fortunately for Palm Beach County, Florida, a developer has just done this for its plan to build new spring training facilities for the Washington Nationals and Houston Astros, offering to pay the city of West Palm Beach $14 million for its land and not demand tens of millions of dollars in subsidies like the stadium project would.
This, according to the South Florida Sun-Sentinel, is a terrible roadblock:
New obstacles surface for county baseball stadium proposal
(Okay, the Sun-Sentinel is also reporting on county officials raising concerns about the cost of the spring training plan, which could reasonably be seen as an obstacle. Still, it’s a bit odd that the headline writer didn’t go with something a bit less “Oh, noes!” in the headline, like, say, “County officials wonder if there might be a better deal than baseball.”)
Palm Beach County is still trying to build a new $140 million spring-training complex to lure the Houston Astros and Washington Nationals, with the slight holdup that the county doesn’t actually have $140 million. So the teams have proposed a solution: They’ll pay $2.1 million a year rent (combined), if the county agrees to give them $3 million a year in hotel taxes, rising by 3.5% a year for 30 years wait what? How does that help?
The Palm Beach Post, which apparently first reported this, is behind a paywall, and the subsequent reports in the Houston Chronicle and Washington Post aren’t helping much. (The Chronicle says that $2.1 million a year would pay off $56 million in bonds, which it wouldn’t, and the Post links to a month-old Palm Beach Post article about something else, which is also behind the paywall anyway.) The two teams are making a formal presentation to the Palm Beach County Tourist Development Council on Thursday; hopefully we’ll get some actual information then.
Looks like the Washington Nationals finally found someone interested in throwing money at them for a new spring-training stadium, even if it’s only theoretical money at this point:
Palm Beach County is willing to play ball with two Major League Baseball teams trying to get a new spring training stadium, but public cost and tax hurdles could get in the way.
The County Commission Tuesday gave its endorsement to trying to craft a deal with the Houston Astros and Washington Nationals that could include building a $100 million stadium and training facility that would host both teams for spring training.
Palm Beach County already has a spring training stadium — Roger Dean Stadium in Jupiter, which tragically does not look like this — which is home to the Miami Marlins and St. Louis Cardinals, but county officials are hoping that adding a second stadium and two more teams will “keep baseball spring training here in Florida,” according to County Mayor Priscilla Taylor. Because, I guess, they’re trying to build a critical mass of teams so that they don’t all move to Arizona, is the theory?
Anyway, the county commission doesn’t know where a stadium would go (there are reportedly ten sites under consideration) or how that $100 million would be paid for (the state has offered $50 million in funding over 37 years, which would only pay for a small sliver of the cost). The county could kick in some hotel tax money, and … yeah, that’s about as far as they’ve got. “There are still a lot of unknowns,” county commissioner Paulette Burdick told the South Florida Sun-Sentinel. Tell me about it.
The disarray of the world financial system continues to hit the stadium world: The latest victim looks to be the Harris County-Houston Sports Authority, which could see huge hikes in its bond payments on Minute Maid Park, Reliant Stadium, and the Toyota Center thanks to the collapse of the esoteric financial instruments known as
credit default interest rate swaps. (You may recall CDSs for bringing down a little company called AIG.) Without going into all the technical details — which, frankly, I’m not sure I understand even after reading more about default swaps than is really healthy [UPDATE: Apparently I really didn't understand, as I mistook credit default swaps, which sunk AIG, for interest rate swaps, which threaten to sink the Sports Authority; everything else I wrote here is still valid, though] — the upshot is that in order to undo the bad financing, the sports authority will have to pay off its stadium debt early, with annual debt service expected to rise from $62.3 million to $83.7 million over the next two years.
That’s troublesome, because the authority only collected $79.3 million total in 2008 — and tax revenues, which depend on things like car rental and hotels that are highly dependent on a booming economy, look to be dropping. “I’m deeply concerned about the financial stability of the sports authority and all its bonded indebtedness,” former authority chair Jack Rains told Bloomberg News (which somehow managed to give Janet Jackson’s “wardrobe malfunction” equal mention in its article). “When you borrow for 30 years, you have to do prudent things, and they didn’t.”
If the shortfall comes true, the sports authority could end up having to go to the county for a bailout. And we know how well that’s worked in the past.