Friday roundup: Vegas MLB rumors, North American soccer superleague rumors, and everything just costs untold billions of dollars now, get used to it

I published two long articles yesterday — one on sports stadium and arena deals that haven’t sucked too badly, one on a particular non-sports subsidy deal that looks to be sucking pretty hard — so I wasn’t able to post anything here, despite a couple of news items that might have warranted their own FoS posts. But as the saying goes, Thursday omissions bring a shower of Friday news briefs (please don’t tell me that’s not a saying, because it is now), so let’s dig in:

Braves owners say money pit of stadium is made up for by other stuff that isn’t a money pit, if your head hurts, that’s as intended

I’ve gotten used to newspapers running headlines that contradict not only reality but the stories they themselves head, so when I saw yesterday’s Wall Street Journal headline “Atlanta Braves Owner Says County Wins Big From Development Near New Stadium,” I assumed most of it was probably wrong. And it is, undeniably: The only thing the Braves “owner” — not specifically identified, but probably actually CEO Derek Schiller, since he’s quoted directly later in the piece — says is that (in the WSJ’s words) “taxes and other income generated by the site are helping offset some of the county’s costs incurred by the Braves’ controversial $672 million suburban stadium,” which isn’t exactly the same thing. (The article also notes that the Braves are turning a tidy profit on the sale of three apartment buildings near the new stadium, which is very much not the same thing.)

The article does, however, reference a September study from September by Georgia Tech’s Enterprise Innovation Institute, done on behalf of the Cobb County Chamber of Commerce, which claims that public debt service on SunTrust Park come to $9.5 million a year, while the stadium has generated $18.9 million a year in new tax collections and “other benefits.” That really would be winning big. So is it true?

The report (and some executive summaries) can be found here. It is, just in terms of readability, horribly written — the numbers in the charts bear no obvious relation to those discussed in the accompanying text — but here’s the best I can understand it.

In terms of public costs of the new stadium:

  • Debt service on Cobb County’s $300 million stadium debt is $22.5 million a year, of which the Braves owners pay $6.1 million in rent, leaving $16.4 million a year for taxpayers to pay off.
  • $10 million a year is paid off by two Cumberland Special Service District funds (SSDs), wherein businesses “tax themselves in order to contribute to the stadium project.”
  • The county is putting in $1.2 million a year to a stadium capital maintenance fund, and spending an extra $970,000 a year on public safety and other additional operational costs of the stadium.

That would seem to come to $8.6 million in remaining annual public costs, but the report says it’s $9.5 million. (The difference may be because of added cost of things like building that damn pedestrian bridge, but it’s not clear — like I said, this thing is horribly written.) This is almost exactly what the Atlanta Journal-Constitution came up with in its own calculation, so that checks out.

(There’s still one big problem here, which is that the analysis assumes that the SSD money — which is a tax surcharge on local businesses — would only come in if the stadium were built. But we’ll come back to that in a second.)

On the benefit side:

  • $817,000 in sales taxes on ticket and concession sales to out-of-county residents
  • $905,000 in hotel and sales taxes from fans who traveled more than two hours to the game, on the assumption they came specifically for the game, stayed overnight, and spent the average that an overnight Atlanta-area visitor did on food and lodging
  • $89,000 in sales tax on Braves employee spending (no source given for this, other than the LOCI™ computer model)
  • $270,000 in taxes on taxable office property in the tax-exempt stadium, including copiers and ice-making equipment

That all leaves SunTrust Park as a $7.4 million annual loss to the county, which over 30 years would be cost taxpayers about $100 million in present value — not as bad as at first feared, but also nothing like “winning big.”

Ah, but that’s just the stadium! The big benefit of the stadium, according to the report, is actually the development that the Braves owners built next to it, plus the “halo effect” of rising property values on adjacent land. This is probably best presented in a chart from the report:

In short, the Braves’ stadium remains a money pit for taxpayers, but they’re building a whole lot of other stuff that’s not a money pit, so yay, win!

The problem here isn’t one of math, but one — really two — of logic. Yes, building a stadium at a public loss next to a mixed-use development project that’s a bigger public gain is a net public gain. But who the hell said anybody had to build the stadium? If people in Cobb County are clamoring to live and work and eat in a new fake urban district in the suburbs, by all means give it to them, but unless you think they’ll only do so if there’s a baseball team playing next door 81 times a year, don’t shackle it to a money-losing stadium.

Also, if Atlanta suburbanites were indeed hankering for more places to walk around and pretend they’re in the city without actually being in the city, there’s every indication that somebody would have given it to them somewhere — just not necessarily in Cobb County. Yesterday’s WSJ article even notes that Cobb may just be benefiting by stealing economic activity from other parts of the metro area:

“We have friends in Buckhead,” one of Atlanta’s upscale neighborhoods, said Mike Plant, chief executive of the Braves Development Corp. “We hear from them. They’re not real happy.”

So basically, what we have is that the Braves owners built a stadium that is costing taxpayers lots of money, but they also held out the carrot of an accompanying development that would steal enough revenue from neighboring areas to put the final numbers in the black — if you assume that nobody ever could have been convinced to build development there without a stadium. This is indeed an exceedingly common gambit, dating way back to the Brooklyn Netsmoney-losing-arena-plus-a-bunch-of-development plan, and dating right up to the Worcester Red Sox‘ similar minor-league stadium project. It relies on the fact that it’s nearly impossible to say if a mixed-use development would have been built “but for” the accompanying subsidies — so if you attribute all the new taxes being paid to the subsidy, any new development looks like free money.

All of this makes it very, very hard to determine exactly where the Braves stadium falls in terms of historically bad sports subsidy deals, which is precisely the point. Ancillary development projects bring in new revenues, yes, but more importantly they muddy the waters of determining who’s paying what — still nobody, including me, has a good number for how much that Nets arena is costing New Yorkers — and justify handing over public cash to a baseball team that was turning a tidy annual profit even before building new apartment buildings next to its new stadium and selling them for a 22% return on investment.

If the Braves stadium is the wave of the future, in other words, it’s less a revolution in figuring out how to absolve taxpayers of stadium costs than a revolution in how to confuse taxpayers about who’s paying for what. They’ve already succeeded in confusing the Wall Street Journal — tomorrow, the world!

[ADDENDUM: Atlanta-area sports economist J.C. Bradbury responded to this report on Twitter last month — something I missed because Twitter is but a blur passing before my eyes — and came to similar conclusions: “The report isn’t as bad as many I’ve read, but it’s estimated $18.9 mil impact isn’t correct.” He also raises questions about whether the SSD taxes are really “businesses taxing themselves” or just taxes that the county could have levied on businesses and used for other purposes, which is an excellent point that is beyond the scope of this post, because it’s long enough already, but maybe another time.]

Friday roundup: Chargers L.A. move still a disaster, Raiders still lack 2019 home, Rays still short of stadium cash

I’ve been busy getting my post-Village Voice life rolling this week — here’s my first article for Gothamist, on how to fight Amazon’s monopoly power, and I’ve also started a Twitter account for following ex-Voice news writers as we keep up our work for other outlets — but Friday mornings are sacred, for they are stadium and arena news roundup time:

Rays owner buys Rowdies, stirs speculation a dodge to get a new baseball stadium site (probably not, but maybe a dodge to spur speculation)

Tampa Bay Rays owner Stuart Sternberg is buying the Tampa Bay Rowdies USL club for … okay, nobody’s saying how much he’s spending on the team. But never mind that, because the Rowdies also have management rights to 7,500-seat Al Lang Stadium in St. Petersburg, so cue the conspiracy theories that this is really all about finding a site for a new Rays stadium:

The Rays tried a decade ago to get a new baseball stadium built there and never fully let go of the idea — which is why there was immediate speculation there was more to the Rays-Rowdies deal than just control of a soccer team.

Most pointedly, were the Rays seeking an alternative St. Petersburg stadium site to their proposed new home in Ybor City, where talks have been ongoing to bridge the funding gap in completing that $892 million deal to build a Tampa ballpark?

Rays execs immediately pooh-poohed the idea, saying they just wanted to get into the soccer business. And there’s reason to believe them, as the reason why the Rays gave up on the Al Lang Stadium site in the first place is because it’s probably too small for even a smallish MLB stadium, so it’s not really a very good option — not to mention that the Rowdies don’t actually own the stadium, just management rights to it.

Ah, but if you’re looking less for a viable stadium site option than for a sorta-viable stadium site threat, now we’re talking. Rays execs have been talking up Hillsborough County, which is the Tampa side of the bay, as more accessible to fans; but Pinellas County, which is the St. Pete side, has more tax money available to help fund a stadium, partly because Hillsborough has already spent its hotel taxes on buildings for the Buccaneers and Lightning. So even if Pinellas officials may not be eager to spend this tax money on the Rays, it’s at least an option that Sternberg and company will likely want to keep open.

All of which is to say: Sternberg probably bought the Rowdies just to buy the Rowdies, but if it helps keep alive some semblance of a bidding war between the two counties, he’ll surely be happy enough to take that as a bonus. He hasn’t done a great job of shaking loose public subsidies for his team so far — he managed to get out of his lease clause that prevented him from looking for new stadium sites in Hillsborough, but that’s only given him a site with a giant funding hole that shows no signs of going away — but where there’s competition, there’s hope. And Rays fans had better hope it comes soon, because the team is … er, actually, coming off a surprisingly resurgent season with a host of exciting young players and turning a tidy profit to boot, so what was the big deal about the stadium again?

Friday roundup: Bad MLB attendance, bad CFL loans, bad temporary Raiders relocation ideas

And in other news:

Diamondbacks made a stadium-related proposal to Phoenix, city officials won’t say what it was

This is a very weird story: The Arizona Republic reports that in June, Diamondbacks president Derrick Hall sent an email to Phoenix city manager Ed Zuercher, offering to discuss an “opportunity” for a partnership involving a stadium. And that’s all the Arizona Republic reports, as Zuercher won’t reveal what the proposal was, citing a nondisclosure agreement that Hall demanded he sign before being allowed to view the partnership proposal.

Cities refusing to release otherwise public documents because they’re involved in ongoing negotiations over them is common, but from the sound of things, these talks went nowhere, so it’s not an open issue. Normally this would make the documents in question fair game for journalists and the public via the Arizona Public Records Law — but a city spokesperson said the NDA required the document to only be “loaned” to the city to examine, then be returned to the team owners, making it not a public document.

This is, plainly, worrying as hell: If business owners of any kind can hold talks with public officials under a shroud of an NDA without it being subject to freedom of information laws, it will be a major loophole in requirements that records of governmental operations be made available to the public. This particular proposal could have been nothing important, or it could have been something that will affect the future of the Diamondbacks and public money in significant ways — the whole point is we don’t know, and have no way of knowing, thanks to this legal dodge. It’s the paperwork equivalent of hiding in hallways to evade open meetings laws, and I sincerely hope somebody challenges it.

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

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

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

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

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

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

Von Reichbauer, flustered, quickly changed his vote.

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

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

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

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

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

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

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

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

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

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

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

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

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

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