Friday roundup: Dolphins owner seeks Formula One tax break, Tacoma okays soccer subsidies, plus vaportecture from around the globe!

Happy coronavirus panic week! What with stadiums in Europe being closed to fans and stadium workers in the U.S. testing positive for the virus, it’s tough to think of much right now other than what song to wash your hands to for 20 seconds (this is my personal preference). But long after we’re done with our self-quarantines, the consequences of sports venue spending will live on, so to the week’s news we go:

  • Miami Dolphins owner Stephen Ross is seeking a sales-tax exemption for tickets to Formula One racing events at his stadium, saying that without it, Miami might not get a Grand Prix. The tax break is expected to cost the state between $1.5 million and $2 million per event, but Formula One officials say each race would generate an economic impact of more than $400 million, and what possible reason would they have to lie about a thing like that?
  • The Tacoma city council voted 8-1 on Monday to approve spending on a $60 million, 5,000-seat stadium for the Reign F.C. women’s pro soccer team. According to a letter of intent approved by the council, the city will provide $15 million, while the city parks agency will provide $7.5 million more, with perhaps another $20 million to come from federal tax credits for investing in low-income communities. The parks body still has to vote on the plan on Monday as well; given that Metro Parks commissioner Aaron Pointer — who is also a former Houston Astro and a brother of the Pointer Sisters — said he doesn’t see “really any benefits at all” for the city or its parks, it’s fair to say that the vote there will be more contentious than the one in the city council.
  • Brett Johnson, the developer behind a proposed $400 million development in Pawtucket centered around a pro soccer stadium, says he has lots of investors eager to parks their capital gains in his project tax-free under the Trump administration’s Opportunity Zone program, but it might take a while to work out all the details because reasons. But, he added, “My confidence is very high,” and confidence is what it’s all about, right?
  • Nashville’s Save Our Fairgrounds has filed for a court injunction to stop work on a new Nashville S.C. stadium, on the grounds that no redevelopment of the state fairgrounds can take place without a public voter referendum. This brings the total number of lawsuits against the project to … umpteen? I’m gonna go with umpteen.
  • There’s now an official lawsuit against the Anaheim city council for voting on a Los Angeles Angels stadium land sale without sufficient public meetings. The People’s Homeless Task Force is charging that holding most of the sale talks in private violated the state’s Brown Act on transparency; the city’s lawyers responded that “there could be a myriad of reasons” why the council was able to vote on the sale at a single meeting in December despite never discussing it in public before that, though they didn’t suggest any specific reasons.
  • Wondering what vaportecture looks like outside of North America? Here’s an article on Watford F.C.‘s proposed new stadium, though if you aren’t an Athletic subscriber you’ll be stuck with just the one image, though given that it’s an image of Watford fans stumbling zombie-like into the stadium out of what appears to be an open field, really what more do you need?
  • There are some new renderings of the St. Louis MLS team‘s proposed stadium, and once again they mostly feature people crossing the street, not anything having to do with watching soccer. Are the clip art images of people throwing their hands in the air for no reason temporarily out of stock or something?
  • Here are photos of a 31-year-old arena being demolished, because America.
  • The Minnesota Vikings‘ four-year-old stadium needs $21 million in new paneling on its exterior, because the old paneling was leaking. At least the stadium’s construction contractors will be footing the bill, but it’s still an important reminder that “state of the art” isn’t necessarily better than “outmoded,” especially when it comes to new and unproven designs.
  • And speaking of COVID-19, here’s an article on how travel restrictions thanks to the new coronavirus will cost the European tourism industry more than $1 billion per month, without wondering what else Europeans (and erstwhile travelers to Europe from other continents) will do with the money they’re saving on plane tickets and hotel rooms. Where’s my article on how pandemics are a boost to the hand sanitizer and canned soup industries?

Friday roundup: D-Backs, Angels hedge on new stadium plans, NJ demands 76ers repay 0.5% of tax breaks, and other foolishness

Another busy Friday where I need to squeeze in the news roundup when and where I can! (Also, yeah, New Yorkers already knew this about Mike Bloomberg, who also was responsible for this.)

Lawsuit could ask to undo Angels stadium deal for violating state transparency law

It’s no secret that the Los Angeles Angels heavily subsidized stadium land purchase deal was done largely in secret — the city didn’t even release details of the sale until ten days before its single public hearing on the matter, and even then a lot of questions were left unanswered — but now the sale is facing a potential lawsuit for violating California’s Brown Act requiring open government:

“The Council’s approval of this Agreement was a rubber stamp of the terms that had been improperly discussed, negotiated, and agreed upon outside of public view, in violation of the Brown Act (state transparency law),” reads the Jan. 19 letter filed by attorney Kelly Aviles.

Aviles letter alleges councilmembers violated the state’s transparency law because the 1953 Ralph M. Brown Act limits private discussion of any sale of public property to “price and terms of payment” for the sale of the land…

“If the Board fails or refuses to cure and correct or respond as demanded, my client will seek judicial invalidation of the challenged actions…” states Aviles’ letter.

That’s not a lawsuit yet, but it sounds like it’s going to be one unless the city council “corrects” its decision, which seems pretty durn unlikely. The success rate of these things at overturning city decisions isn’t all that great, but it’s not zero either, so it’s entirely possible that the $325 million land sale — which is probably at least a $175 million discount from what the land could have fetched on the open market — will have to be re-voted on, this time with more time for open debate. Hope springs eternal!

Why the Angels’ now-approved (maybe, kinda) stadium land sale represents at least $175m in public subsidies

So yeah, the Anaheim city council voted 4-2 late Friday night (early Saturday morning if you were watching from the East Coast like me) to approve the sale of Angel Stadium and its surrounding parking lots to Los Angeles Angels owner Arte Moreno, despite the concerns of some (well, two) on the council and many Anaheim residents that the deal was being rushed through without considering some of its very very many known unknowns. With the vote officials, the city and team will now move ahead on … well, that’s not entirely known, either.

Throughout Friday’s near-endless council hearing, Anaheim Mayor Harry Sidhu and other backers of the deal insisted that the vote to finalize the sale was not actually final in any way, because either side can still walk away from the deal before it’s consummated, which could take up to five years:

Several other agreements are expected to come forward by spring: a commitment that the team would play in Anaheim through 2050, with another 25 years of extensions; and a separate agreement that commits SRB Management to renovate the stadium or build a new one without any public financing, describes what would be developed around the stadium, and lays out details and costs of affordable housing, park space and a labor agreement.

Those community benefit costs would be subtracted from the $325 million land price, so the final cost is not yet known. Closing the sale could take until 2025, so until then the current lease remains in place.

How the value of those “community benefits” would be calculated, or what would be included (Anaheim planning director David Belmer said during the hearing that it could also include things like transit upgrades paid for by the developers) remains a mystery, something that councilmember Jose Moreno asked about to no avail on Friday. The only thing really agreed upon in the vote, according to this argument, was the baseline sale price of $325 million — everything else remains TBD.

A little more information has seeped out about how that $325 million figure was arrived at, when some iterations of the city’s appraisal came up with a value for the parcel of $500 million, and comparable properties nearby have sold for even more than that per acre. The $325 million number is the value of the land “encumbered” by a stadium and parking spaces for one, which is a good bit less than its value if you could fill it from edge to edge with any kind of development you wanted.

Think about this for a second, and this seems reasonable: If you want the Angels to remain on the land, this is a condition of the sale, and so that’s how the land should be valued. Think about it for more than a second, and it comes to a significant public subsidy being handed to Moreno:

Let’s say you’re selling, I don’t know, an ice cream truck. The value of the ice cream truck is going to depend on how much ice cream you can sell out of it, which is going to depend on the demand for ice cream, how much ice cream it can carry, etc. However, the only person who is allowed to bid for the ice cream truck is someone who lives in another state during the summer months, so would only use it to sell ice cream when it’s cold out. You can see how the value of an ice cream truck to them would be far less than to someone who would use it year-round. If you calculate the sale price based on the value to our single bidder, then, they’re getting a significant discount compared to what anyone else would pay.

Dropping the metaphor and back to reality, Arte Moreno is getting a piece of land worth $500 million or more for only $325 million because he wants to keep playing baseball on it. You can certainly make a case that that’s a reasonable deal to make to keep the team in Anaheim — many, many people at the hearing talked about how terrible it would be for the Angels to leave Anaheim — but then be honest about what you’re doing in exchange for keeping the team: selling 153 acres of public land at a massive discount. That’s still absolutely a public cost, just as much as if Moreno saw the land for sale at the market price and said, “I’ll buy that, so long as you give me a $175 million rebate check as part of the deal.”

And that’s before even accounting for the “community benefits” discount, which would be like if you (sorry, back to the metaphor) agreed to allow your ice-cream truck buyer to deduct even more from the sale price for giving out free ice cream on Tuesdays, or something, without knowing how much that free ice cream would count against the final payment. (City officials testified on several occasions that it would not be impossible for Moreno to get so many credits that the city would end up having to pay him to take the land, though they didn’t hazard any guesses as to how likely that was.)

The good news is that it’s still possible for Anaheim (or Moreno, for that matter) to walk away from the deal if the two sides can’t agree on the community benefits discounts and other yet-to-be-negotiated elements of the deal — and if so, the Angels would presumably then be locked into their current lease through 2029, since their opt-out clause would by then have expired. The less-good news, if you’re rooting for that to happen, is that the council seems dead set on moving ahead with this plan full speed ahead: Five of seven councilmembers (one missed the hearing because he was in the emergency room for unexplained reasons) are solidly behind it, meaning the two council seats up for re-election next November held by deal supporters would have to flip to anti-stadium-sale, with deal critic Denise Barnes holding her seat, to change the voting calculus.

This is all, needless to say, a big mess, and hopefully makes clear why sports team owners are increasingly turning to things like discounted land prices as a way to get subsidies for their stadium projects: If Arte Moreno had walked up to the city council and said, “I’ll keep the Angels in Anaheim, but only if you pay me $175 million to do so,” he probably would have gotten “What the hell, no way” for an answer. (Probably; elected officials writing checks like that has been known to happen.) By couching the demand in terms of a discounted land sale, however, with its necessary accompanying talk of appraisals and fair market value and encumbrances and other words that tend to make laypeople doze off, Moreno effectively muddied the waters to where at times those testifying on Friday often seemed more upset about whether the team would still be called “Los Angeles Angels” rather than “Anaheim Angels” that whether the public was leaving $175 million on the table. It’s all about misdirection.

Liveblogging Anaheim’s vote on the Los Angeles Angels stadium sale (UPDATE: it passed)

After years of negotiations, the Anaheim city council is set to debate and vote on the plan to sell the Los Angeles Angels stadium and its surrounding parking lots to team owner Arte Moreno for development in just a single hearing, held naturally enough on the afternoon of the Friday before Christmas. I’m going to start by heading over to Twitter to do the play-by-play, so meet me over there, and open up your streaming video of the hearing if you want to watch along.

Going to re-paste the Twitter thread here as we go, because this hearing is dirt-boring (sorry: spoilers!) and I need to keep myself busy:

 

 

Land sales across street show Angels stadium site could be worth double what Anaheim is asking

It’s now 32 hours until the Los Angeles Angels stadium land sale vote, and here’s what’s happening:

  • The Voice of OC’s Spencer Custodio reports that some land across the street from the stadium site sold for twice as much per acre as team owner Arte Moreno is offering the city of Anaheim: A 3.8-acre plot that became the George Apartments sold for $4.5 million an acre in 2014; 6.48 acres that’s now the Gateway Apartments sold for $3.5 million an acre in 2012; and 3.72 acres that became condos on State College Boulevard sold for $8.06 million an acre in 2005. Moreno’s $325 million offer — if not reduced further by discounts for building parks and affordable housing — comes to just $2.1 million an acre. Land appraisals are more art than science, and pricing of comparable properties is just one method of figuring out land value (and finding comparable parcels can be nearly impossible, since most other sites for sale aren’t nearly so large and also don’t have a stadium sitting in the middle of them), but as I tell Custodio in his article, these figures are “probably a red flag that you should reevaluate the numbers.”
  • Some locals like the deal, some don’t, and some just want the Angels to get more pitching.
  • A majority of the city council appears set to vote for the deal, with councilmembers Trevor O’Neil and Stephen Faessel telling the OC Register that while the city is admittedly accepting less than top market value for the land, it’s worth it to lock in the Angels for 30 years and get the land developed now; and also that, in the Register’s words, “residents they’ve heard from want the team to stay in town and folks are not concerned with the minutiae of a deal to make that happen.”
  • Maybe they’ll be more concerned once they read the Register’s editorial declaring that “the devil is in the details, and city officials need to provide more crucial details before moving forward with the plan.” Though the paper’s editorial board doesn’t actually call for a “no” vote tomorrow, just saying that they’d like to get more information.
  • The Register has an explainer on what we know about the deal and what we still don’t know, with an emphasis on “don’t know.”

That’s a big mess, frankly, and I’d say we still don’t know enough to say where the land sale plan falls on the spectrum between “not too terrible” and “total ripoff.” Which is why taking a vote tomorrow seems bizarrely rushed — if the council puts off a vote, Moreno will have to choose between opting out of his lease and having nowhere to play in 2021 (not super likely, though he could always try it as brinksmanship) or getting locked into his current lease through 2029, which would give the council plenty of time to vet the deal properly. As I told Custodio: “You’re only going to be able to sell the stadium land once. You want to get it correct.”

Two days before final vote, still nobody can say how much Anaheim would get for selling stadium land

There are just two days left before the Anaheim city council holds its only public hearing on the Los Angeles Angels stadium land sale and then votes on it, and instead of getting answers to the outstanding questions about the project, the questions are starting to pile up like cordwood:

  • The actual price paid for the stadium and surrounding land could be as little as half the announced $325 million, according to the Los Angeles Times’ Bill Shaikin, citing “two people familiar with the deal but unwilling to discuss it publicly because the Anaheim City Council has not voted to approve the documents that will determine the final price.” Shaikin didn’t specify whether this massive price drop would be because of those credits for building parks and affordable housing that were previously announced — he noted that a previous affordable-housing development in Anaheim received $100,000 in city subsidies per unit, which if Angels owner Arte Moreno built 1,500 units would come to $150 million in discounts, but that’s a lot of speculation there when we don’t know what the project will even look like yet or who will build it. (Under the deal, Moreno would be allowed to flip the stadium site to another developer if he wants.)
  • The city did release an “economic impact analysis” that projects more than $3.4 billion worth of construction costs for the project, mostly for rental apartments and office space, but without further details. Also, that’s only what a development consultant to the Angels came up with back in August, so there’s no way of knowing if it’s what Moreno or his development partners would actually build.
  • The economic impact analysis also includes a year-by-year breakdown of projected tax revenue from the project, with property tax revenues, for example, kicking in at just $498,000 starting in 2022 and then rising to over $10 million a year by 2035. Is that because construction will take that long, or because property values are projected to rise that much over the next 15 years? Is there zero property tax revenue projected for 2021 because the Angels’ stadium itself will remain tax-exempt despite the team taking possession of it, or because the stadium isn’t included in this projection, or what? And do all these numbers account for substitution, or do they assume that all this new housing and office and retail space won’t cannibalize people living in homes and renting office space and buying stuff elsewhere? The study is silent on these matters, and it’s hard to interrogate a Powerpoint.
  • Two previous Anaheim mayors, Tom Tait and Tom Daly, came out against the land sale yesterday in an op-ed in the Voice of OC, arguing that “crucial information about this real estate deal is missing, and what little has been made public appears stunningly one sided against Anaheim taxpayers.”

The Anaheim council is set to hold its hearing, and its vote, starting at 2 pm Pacific time this Friday. You should be able to watch live here, if you feel like yelling at your computer screen.

Friday roundup: Nashville and Miami stadiums still on hold, cable bubble may finally be bursting, minor-league contraction war heats up

Happy Scottish Independence Day! And now for the rest of the news:

Anaheim releases two new Angels land sale documents that still don’t provide many answers

With just ten days to go before the Anaheim city council is set to vote on a proposed $325 million land sale to Los Angeles Angels owner Arte Moreno, the city of Anaheim has finally released more than just that three-page summary of the deal. The new documents: an agreement spelling out some details of the land sale, and a summary report on some of the financing.

Unfortunately, neither document answers any of the big questions about the sale, namely whether Moreno will pay full property taxes on both the stadium and surrounding development, what kind of deduction he’ll be able to take for building parks and affordable housing, and how the $325 million sale price was arrived at in the first place. In fact, according to Alicia Robinson of the OC Register, some of that won’t even be decided on until after next week’s council vote:

Council members won’t know when they vote Dec. 20 what that remaining balance will be because the city would reduce the final bill by a yet-to-be-determined amount for benefits it has requested, including affordable housing, additional public park facilities and a workforce agreement to encourage local hiring and the like.

The deal won’t become final without all three parts, the last of which is the city receiving tract maps for development on the property, [city spokesperson Mike] Lyster said, so “it’s not like they’re being asked to vote on something today and they don’t have all the details.”

In fact, it’s exactly like that! Lyster indicated that the deal is “contingent” on the council approving a development agreement and a community benefits agreement sometime in the spring, but if so, then why exactly are they voting on the land sale part now? And also, the land sale agreement seems to indicate (section 4.3) that the sale goes into effect as soon as Moreno signs an agreement to commit to playing games in Anaheim through 2050, agrees with the city on who’ll pay for operations and maintenance of a stadium, and determines “other terms and conditions upon which the parties agree,” so is this really contingent on the spring votes or what?

The sale agreement does indicate how Moreno would make the $325 million in payments, which would come in installments over the next five years, reducing the present value of the sale to Anaheim slightly (to $281 million, by my calculations using a 5% discount rate). Still, there are still more questions than answers about this project, the biggest of which is becoming Why the rush already? It’s going to be an interesting Anaheim council hearing next week, especially if there’s time for public comments.

Anaheim to spend all of three days reviewing $325m land sale to Angels owner before final vote

There can be a weirdly recursive snake-eating-its-own-tail aspect to this site at times: Because I’m reporting here on stadium deals, mostly via other outlets’ reports on breaking news, and yet also I’m often interviewed by these same outlets as an expert on these deals, it’s not uncommon for me to report on articles that use me as a source. Such is the case today, where I talked to a reporter yesterday about the Los Angeles Angels stadium deal, and am waiting for the resulting article to go up — but thanks to some nonsense about the Earth being round and it being earlier in California than New York, I’m still waiting.

So instead, here’s the latest news that I gleaned from that conversation, and one other with a different source: The Anaheim city council has scheduled a hearing for December 17, at which it will presumably finally give the public (and its own members) a look at the full plan to sell Angel Stadium and its surrounding parking lots to Angels owner Arte Moreno for $325 million or maybe less if he takes deductions for building parks and affordable housing. Then it has scheduled a final vote for December 20 — meaning there will be all of three days to look over the plans in any detail more than the three-page marketing brochure that the city has posted on its website.

This is, and I’m pretty sure I used this word in my interview, bonkers: There’s simply no way to accurately vet a $325 million land sale with this many moving parts in just 72 hours. Plus, apparently some elements of the deal won’t be resolved until after the vote — which as we’ve seen before is a great way to set yourself up for unexpected costs.

The obvious solution is to wait: The Angels’ lease is now back in place through 2029 after a council vote in January (which the council didn’t even realize it was voting on), so there’s no reason not to take the time to actually read the damn plan, not to mention cross all the t’s in it. Instead, though, the council seems set to rush through the process, either because they don’t understand how contracts and leases work or because they do all too well and are just trying to limit time for anyone to take a look at the inner workings of this deal. Either way, it’s the direct opposite of due diligence — something else you’ll probably see me quoted elsewhere as saying, any minute now.