Friday roundup: Indiana and Missouri rack up another $390m in team subsidies, and other dog-bites-man news

Sadly, there’s another loss to report this week: Rob McQuown, who for the past decade has been one of the core tech and admin guys at Baseball Prospectus, passed away on Tuesday. I never met Rob personally, but in my days writing and editing for BP we exchanged emails a ton, and he was always a sharp and good-humored presence keeping the site running behind the scenes. (He wrote some excellent fantasy baseball coverage for a while, too.) I haven’t heard the details of his death, but I do know it was way too soon, and my sympathies go out to all his friends and family and colleagues who are mourning him this week. Here’s a lovely podcast tribute by Ben Lindbergh to Rob’s multifarious and too-often underappreciated gifts.

And now, to the news:

  • The Indianapolis City-County Council gave final signoff to $290 million in subsidies for the Indiana Pacers, which along with new and past operating subsidies brings team owner Herb Simon’s total haul to more than a billion dollars. The team’s new lease lasts until 2044, but I’d wager that Simon won’t wait that long before going back to what’s been an insanely lucrative taxpayer well.
  • The state of Missouri has reportedly approved $3 million a year for 20 years, coming to a total of $70 million, for upgrades for the St. Louis Blues, Kansas City Royals, and Kansas City Chiefs stadiums — yeah, I don’t get how that math works either, especially when this was previously reported as $70 million for the Blues plus $30 million for the K.C. teams, and has elsewhere been reported as $70 million for the Blues and $60 million for the K.C. teams, but I’m sure it was copied from a press release somewhere, and that’s what passes for fact-checking these days, right? This brings the teams’ total haul to … let’s see, the K.C. teams got $250 million previously, and the Blues owners got $67 million in city money, so let’s go with “around $400 million,” about which you can say that it’s at least cheaper than what Indiana taxpayers are on the hook for, and that is pretty much all you can say.
  • The city of Anaheim is still waiting on its now-overdue appraisal of the Los Angeles Angels‘ stadium land so it can open talks with team owner Arte Moreno on how much he should pay for development rights on the stadium parking lots. Mayor Harry Sidhu has appointed a negotiating team, though, which includes Sidhu himself, something that has drawn criticism since Angels execs donated to his election campaign. Sidhu also stated that “our theme parks, sports venues and convention center are a matter of pride, but their real purpose is to serve residents by generating revenue for public safety, parks, libraries and community centers and by helping us keep taxes and fees low,” which is not likely to help convince anyone that he understands sports economics like his predecessor did and isn’t just repeating what his funders tell him.
  • Oak View Group’s Tim Leiweke is trying to build a 10,000-seat arena in Palm Springs, and economists point out that this won’t help the local economy much because “you’re crazy if you think I’m flying to Palm Springs to see your minor league hockey team,” and Leiweke says Palm Springs is just different, okay, because so many attendees will be people who are already coming to town to play golf, gamble, or stay at local resorts. How this makes it a major economic plus when those people also see a concert when they’re in town Leiweke didn’t say, but who’re you going to believe, a bunch of people who study economics for a living or a guy who was once the youngest GM in indoor soccer?
  • A Cincinnati nonprofit is trying to raise $2 million to preserve affordable housing around F.C. Cincinnati‘s new stadium, and the Port of Greater Cincinnati Development Authority says that maybe building more market-rate housing will allow low-income residents of existing buildings to stay put. Yeah, that’s really not going to work.
  • Nobody in Miami-Dade County has studied the impact of building a new Inter Miami stadium right next to the city’s airport, and some county commissioners think that maybe that might be a thing they’d want to study.
  • Here’s a good, long R.J. Anderson article on three cities vying for MLB expansion teams (Portland, Montreal, and Raleigh) that should provide reading material for the inevitable endless wait for MLB to actually expand. (I’m also quoted in it, right before Jim Bouton.)
  • And here’s another long article that quotes me, this one by Bill Shea of The Athletic on how stadium subsidies have changed since the Great Recession (some sports economists say it’s tougher to get public money now, I say “Bah!”).

Missouri approves $41m worth of renovations for Blues arena that St. Louis just paid $67m to renovate in 2017

The state of Missouri has approved $70 million in spending over 20 years for renovations to the St. Louis Blues arena — and if you feel like this just happened a couple of years ago, you’re almost right: That was $67 million in city money, and will cover scoreboard, sound system, and seat upgrades; the state money will pay for escalators, roofing and heating, and air conditioning, because apparently that’s what was left to buy on the Blues’ gift registry.

This will be totally worth it, say public officials, because competitiveness!

“Without renovations, and without public-sector support for those renovations, we run the risk of being less competitive in pursuit of national events,” said Frank Viverito, president of the St. Louis Sports Commission, a nonprofit organization that attracts and manages sporting events.

Also because hockey is fun!

The fact that the Blues currently are making a run in the NHL postseason was mentioned by more than one state lawmaker during House debate on Wednesday, including by some who eagerly described going to hockey games.

(I’m having trouble finding documents to confirm this 100%, but the Blues owners appear not to have agreed to any sort of lease extension in exchange for the subsidies, presumably because St. Louis and Missouri official are even bigger morons than their neighbors over in Indiana.)

Since the payments are deferred a bit, the state’s $70 million in nominal subsidies is worth more like $41 million in present value, so that reduces the sting a bit. Though the legislature also tacked on approval to pay another 10 years’ worth of $3-million-a-year lease subsidies to the Kansas City Chiefs and Royals, which adds to the sting, though at least those are subsidies that were planned for all along, so it’s not really a new waste of cash, just an agreement to keep up with the commitment to an old one? Maybe it’s best just to say Who can put a price on state-of-the-art escalators? and leave it at that.

KC newspaper editors: We only have 12 years to throw more stadium money at Royals, time’s a-wasting!

It’s been over a year since we last heard any talk about a new stadium for the Kansas City Royals, at which time Royals execs pretty much responded with Hey, you know you just renovated this place for us, but if you want to talk, we’ll listen. Back then it was downtown business leaders rattling the saber; it’s the growth coalition‘s natural ally, the local newspaper editorial board:

Downtown baseball could be an incredible opportunity. Just picture it: the burgeoning city skyline atop the outfield fence. All manner of new businesses popping up to cater to crowds filling downtown streets. That spin-off effect is utterly missing in the desert island that is the taxpayer-subsidized Truman Sports Complex. Taxpayers deserve more bang for their considerable bucks.

Yeah, we get the picture, Kansas City Star editorial board: Synergy! Nightlife! Burgeoning, so very much burgeoning! It is the same picture painted by downtown sports venue advocates the nation over, and it carefully ignores the fact that past sports projects have singularly failed to create the spinoff effects that were promised. When you think about it, this makes a lot of sense — nobody in their right mind is going to open a new business just to cater to a throng of fans who sweep past once on their way in and once on their way out, 81 times a year, leaving the rest of the calendar dark — but somehow empirical evidence never seems to come into play in these sorts of dewy-eyed scenarios.

The Star does manage to acknowledge that the Royals are still tied to their existing stadium by a lease that runs through 2030 — a 25-year extension agreed to when the city gave them $250 million for renovations in 2006. But the paper’s editors managed to portray even that as a creeping deadline:

The leases for the twin stadiums expire in 2031. That’s a ways off. But make no mistake: The gravity of this decision and the steps to be taken if a downtown stadium is to happen are considerable. Decisions must be made during the next few years.

This all transparently reads as something written after those same downtown business interests — or maybe K.C. city manager Troy Schulte, who is all over this editorial — lobbied the editors to light a fire under the public that moar stadium talk needed nowwwwww! Nothing is likely to happen anytime soon, but clearly the power structure is laying the groundwork for the next round of Royals stadium-grubbing, whenever that kicks into gear; it’s worth keeping a close eye on, especially if you’re a K.C. resident still paying a 0.375% sales tax hike for the last round of sports subsidies.

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:

KC studying $450m stadium for Royals, because old one was renovated eight whole years ago

I’m sorry, what?

The city of Kansas City is funding a study of at least four potential sites for a downtown baseball stadium for the Kansas City Royals, according to documents obtained by The Star…

[Kansas City Manager Troy] Schulte said the studies started after the Downtown Council approached City Hall about the feasibility of downtown baseball. Schulte added that he agreed to help fund a study to consider whether the four sites would work so that the city could plan ahead if the idea gained momentum…

Potential obstacles for downtown baseball include parking and how to pay for it. Schulte said initial estimates for a stadium were north of $450 million. Those details, he added, have not been studied in depth.

Any stadium, if it were built, wouldn’t be built until 2030, when the Royals‘ lease runs out at Kauffman Stadium. And sure, by then the stadium will be 57 years old. But it also just got $250 million in taxpayer-funded renovations that were completed in 2009, with new seating, scoreboards, and concessions areas, and generally scores near the top of best-stadium lists. So spending “north of $450 million” to replace it, especially when the team isn’t even demanding to, seems a bit, well, demented.

This whole thing appears to be driven by the Downtown Council, a council (duh) of downtown (duh) business and real estate interests, with a few nonprofits thrown in, who undoubtedly have figured out that the city building a baseball stadium on their doorstep could be good for business, or at least speculative property values. (They’ve already floated this idea before, in fact, though this is the first time it’s gotten an actual study.) Why the city is taking this seriously is beyond me — or rather, I’m sure it’s the idea that a stadium will “revitalize the downtown core” or something, a notion that’s so laughable among economists that the most recent studies are a decade old, because nobody can get funding to do new ones when the numbers just keep showing the same thing over and over and over.

As for Royals execs, they responded exactly how you’d think someone would if you offered to tear down their newly renovated home and build a completely new one:

“We’re perfectly content where we are, we think it works well,” [Royals VP Kevin] Uhlich said. “Thirteen years from now, who knows what the situation is going to be? I can’t hold anybody back from doing what they’re doing on their side. We would listen.”

There’s also a rendering of a potential new stadium, which looks like HOK architects drew it up in Minecraft:

On top of the obvious issue of Kansas City citizens maybe being on the hook for up to $450 million in stadium money in the not-too-distant future, I’m starting to get really concerned that there’s a notion going around that once a sports team’s lease expires, of course the public has to offer a new or renovated building in order to get them to extend it. As someone who was an apartment renter for 25 years, I can tell you that this is not how things normally work in the real world; but if team owners can succeed in getting city officials and the media to consider this “standard business practice,” then this website may have to be around forever. I better start taking my vitamins.

Oh good god, now Kansas City might try to build a new downtown stadium for the Royals

Kansas City Star columnist Yale Abouhalkah takes advantage of the St. Louis Rams stadium kerfuffle (new article on this from me at Vice later this morning, btw) to rail against the idea of building a new downtown baseball stadium for the Royals. I’m not going to get into the details of his argument here, beyond noting: Apparently it’s necessary to rail against building a new downtown stadium for the Royals, because that’s a thing people are actually talking about:

The leases for the Truman Sports Complex extend into 2031, but some downtown boosters hope to start planning for a new baseball park in the next decade.

Not only do the leases for the Royals and Chiefs go another 16 years, but Jackson County voters just approved a sales tax hike nine years ago for $425 million in renovations to the two stadiums that were supposed to keep the teams happy. Though given that the Royals used a bunch of the money to buy their players iPods and pay their payroll taxes, maybe they skimped on the actual stadium upgrades a bit.
Now, this downtown stadium idea has been around for a while — since before the 2006 renovation vote, in fact — and it’s downtown development interests pushing it, not necessarily the Royals ownership. (And K.C. voters hate the idea, if that counts for anything.) Still, it’s pretty remarkable that spending hundreds of millions of dollars on a new stadium when the old one is both beloved and recently renovated at taxpayer expense is being discussed seriously, just so that baseball fans can mill around downtown a bit before getting in their cars and heading home. Old myths die hard.

Royals using tax money to pay cable bill, phone service, payroll taxes

You may recall that after the Kansas City Royals got their $250 million in public money for stadium renovations back in 2006, it turned out one of the “upgrades” they had in mind was to buy new computer gear for their players. Now Sports Radio 810 WHB is reporting that the Royals have been dipping into their taxpayer-funded stadium maintenance fund for even more dubious purchases:

The Royals have received at least $12.7 million from taxpayers that was approved by the Jackson County Sports Complex Authority as part of the RMMO provision of the team’s lease with the county and spent it on full and part time employee salaries, security, cable tv, first aid, utilities, telephones and even payroll taxes.  By using the money for payroll taxes, the team literally collected taxpayer money to pay their own taxes.

That’s almost as good as using taxpayer money to pay for lobbyists to get more taxpayer money. If Royals fans aren’t upset that their tax money is going to pay the team’s phone bill, maybe they’ll be upset that their team is behaving like the Yankees.

UPDATE: Deadspin reports that the Chiefs have been doing the same thing.

Royals to sell Kauffman naming rights, split cash with stadium’s public owners

Kansas City’s NBC affiliate is reporting that the Royals are on the cusp of a deal to sell naming rights to Kauffman Stadium, their 38-year-old ballpark that currently bears the name of the team’s founding owner. According to the report, the deal is with a bank that will pay between $3 million and $6 million a year for the next 21 years to have its name on the building, just in time to get its name in the papers during next year’s All-Star Game, which will be held in K.C.

The report also notes:

Sources say according to the lease, half of the money will go to the Royals, half will go back to the Jackson County taxpayers to pay for stadium maintenance.

That’s good news compared to most cities, where teams demand 100% of all naming-rights money as part of their stadium deals. Though given that the stadium is owned by Jackson County, and local taxpayers just spent a couple hundred million dollars to renovate the place in 2006, it’s hard to see why the Royals should be getting any money at all — especially when the public’s half of the naming rights boodle won’t come close to paying off the $8.5 million in operations costs taxpayers are on the hook for under the 2006 lease revisions.

But, hey, at least it’s something. And this way maybe the windfall will let the Royals afford to sign … um, one-third of Paul Maholm?

K.C. squabble continues over stadium reno subsidies

Kansas City Mayor Mark Funkhouser is back again with his proposal to stop paying the city’s $2 million a year subsidy towards renovations of the Royals and Chiefs stadiums. Funkhouser proposed the same thing last year, you may recall, but the city council ultimately ended up not going along with it.

This is really a squabble between the city and the county, thanks to a terribly written stadium funding contract that guarantees the teams public money, but doesn’t specify which public body will pay it (and which the city isn’t actually a signatory to). The only thing for certain: Kansas City residents will end up paying the cost somehow, whether via city taxes or county taxes. If not, the teams could break their leases and move to … well, I’m sure there’s someplace out there with newly renovated stadiums that would love to host some sports teams. Hey, there’s an idea…

K.C. risked defaulting on Royals lease in 2009

Hey, remember how Kansas City agreed to spend $425 million on stadium renovations a few years back in exchange for the Royals and Chiefs agreeing to stay in town for another 25 years? Looks like somebody should have read the fine print: Thanks to a tussle between the city and state over who’ll pay $4 million a year in ongoing upkeep and improvement costs to Kauffman Stadium and Arrowhead Stadium, the city nearly defaulted on its lease last year, to the point where Royals management had drafted a letter declaring the city in default. If that happened, the teams could leave before the 25 years were up, effectively making the entire $425 million expense worthless — except inasmuch as having nicer digs would give them less reason to want to leave. Still, it’s a worthwhile reminder that leases are only as good as their fine print — something K.C. could have learned just by looking across the state.