Arlington evenly split on $500m Rangers stadium subsidy, Trump meltdown could sway vote

There’s a new poll out on the Texas Rangers‘ stadium subsidy vote in Arlington, and it implies that the vote could be defeated by, of all things, Donald Trump.

Bear with me here: The polling is evenly split, with 42% of Arlington voters saying they support the plan, an equal number saying they oppose it, and 16% not sure. But there’s a significant demographic skew to the results: Democrats oppose the plan 50-31%, people of color 52-32%, women 41-36%, and young voters 48-39%. Aside from young voters, who are more likely to stay home on election day because they’re disgusted by the available options, those are exactly the voters who are more likely to show up to the polls on November 8, since they won’t be at home trying to ignore the fact that their preferred party’s nominee is this guy.

Also interestingly, the WFAA poll finds that voters overwhelmingly don’t think that the Rangers need a new stadium (57-36%) and also largely don’t believe that the Rangers would move to Dallas if Arlington didn’t build them one (51-33%). So at least 10-15% of Arlington voters think that the Rangers don’t need a new stadium and don’t have leverage to demand one, but that Arlington taxpayers should give them half a billion dollars anyway because … maybe like their mayor, they can’t think of anything else to spend it on? The poll didn’t ask, so your guess is as good as mine.

Meanwhile, WFAA has another report out on hidden public costs of a Rangers stadium, and just like their last report, it’s well-researched but inflates its numbers way more than is really warranted:

The actual cost and lost revenues to the city of Arlington may be closer to $1.675 billion over 30 years — at least three times more than the $500 million price tag that city officials have told citizens.

If you’re a regular reader here, you’ll have no doubt already noted one problem with the sentence quoted above: “$1.675 billion over 30 years” isn’t actually three times more than $500 million right now, any more than making $1.675 million in mortgage payments over the course of three decades would be three times as expensive as paying $500,000 for a house right now. (Money in the future costs less because you can invest present money now and earn interest on it to make future payments.) To compare apples to apples, economists will use present value, which depending on how you calculate interest rates would come to around $700-800 million in actual costs today.

Why is that more than the $500 million the Rangers owners are claiming this will cost taxpayers? In part because WFAA is including an anticipated $10 million a year in naming-rights fees that the team owners would keep (about $150 million in present value) and $2.5 million a year in personal seat license sales (about $37.5 million in present value). It’s legit to look at naming rights, at least, as money that Arlington is giving away to the team despite owning the stadium — PSLs are more dicey, since they’re really a function of ticket sales, which are part of the team’s usual revenue stream — but it’s more fairly looked at as an unequal share of revenues from the new stadium, not an additional cost.

For now, I’ll still stick with “more than $500 million” as the taxpayers cost, which has the advantage of being unassailably true which still being one of the largest MLB subsidy requests in history, all to replace a 22-year-old stadium because it doesn’t have air-conditioning. Which is no doubt why this vote is looking to be much closer than past stadium subsidy measures in Arlington, regardless of how much Trump continues to implode between now and election day.

Rangers owners outspending stadium opponents 264-to-1, with $500m at stake it’s chicken feed

The Dallas Morning News reports that proponents of a $500-million-plus subsidy for a new Texas Rangers stadium so they can have air-conditioning have raised 264 times as much money as opponents, largely by cashing checks from the Rangers owners:

Vote Yes! Keep the Rangers raised $617,707 and spent $564,479 in this latest campaign reporting period.  Of that amount, the Rangers donated $550,000, accounting for 89 percent of the campaign’s income in this latest reporting period. That was slightly more than the team paid this year for either closer Sam Dyson and second baseman and playoff scapegoat Rougned Odor. …

Stadium opponents Citizens for a Better Arlington reported $7,687.50 in donations and spent $2,264.04, according to the new campaign filing.

This is important not for what it says about levels of support for either side — it’s a lot easier to raise money when you can get $550,000 with one phone call — but because past experience has led to a rough rule that stadium referendums only pass when proponents outspend opponents by 100-to-1 or more. This doesn’t guarantee that Rangers owners Ray Davis and Bob Simpson will be able to buy themselves an election — and generate a 1,000% return on their campaign spending in the process — but they’ve certainly given themselves a nice head start.

Two polls on Rangers stadium plan show definitively that polls are garbage

And speaking of using math for bad purposes, a new poll of Arlington voters shows that they support the Texas Rangers‘ $500-million-plus stadium subsidy proposal by a 54-40% margin, while another poll shows that Arlington voters oppose it by a 47-39% margin. Care to guess which poll was conducted by the Vote Yes! Keep The Rangers PAC, and which by Save Our Stadium?

The two polls had a combined margin of error of 8.7%, which isn’t enough to explain a 15% swing in the results. So either polling is garbage (which it sort of is, but let’s set that aside for the moment) or something about the way the two sides asked the question inspired widely skewed results. Let’s start with the pro-stadium poll:

“Now I am going to read you some more details about the proposition, and please tell me, if the election were held today, would you vote YES, IN FAVOR or NO, AGAINST the proposition? The Rangers and the city of Arlington would contribute equally for the one billion dollar ballpark, with both paying five hundred million dollars. The city’s portion is capped at this amount with any additional costs being paid for by the Rangers. The stadium would be a state‐of‐the‐art, air conditioned ballpark with a retractable roof, comfortable seating, and real grass. There will be no new taxes and no increase in taxes to pay for the ballpark. The Arlington portion of the funding would be paid for by the existing half cent sales tax, the existing two percent hotel occupancy tax, and the existing five percent car rental tax that were used for the current Rangers ballpark and are currently being used for the Cowboys stadium. The new stadium would open in five years and keep the Rangers in Arlington until at least 2054.”

That’s a lot of information to absorb before answering, much of it skewed toward the Rangers ownership’s message (comfortable seating, no new taxes, keep the Rangers in Arlington). It’s not quite a push poll — where the goal is less to gauge public opinion than to sway it with the content of the questions (“How do you feel about my opponent beating his wife?”) — but it’s headed in that direction.

And how about the anti-stadium poll?

Proposition 1 on the November ballot is a proposition that will allow the city and the Rangers to levy taxes to pay for the new stadium. Press 1 if you plan to vote yes, press 2 if you plan to vote no, press 3 if you are undecided.

That’s less push-y, certainly, though the pro side would probably gripe that “levy taxes to pay for the new stadium” doesn’t accurately describe the plan, which would actually extend existing taxes. The anti poll excluded cellphones, though, which is increasingly unreliable in a world where so many people don’t have landlines.

In short, we have no idea how Arlington voters feel about the Rangers stadium proposal, other than “it depends on how you ask.” Me, I would have gone with “Do you think it’s worth $500 million in tax money so that Rangers fans can sit in air-conditioning?”, but nobody ever asks me.

Rangers owners say if city builds them new stadium, old one can be stores or something

And this is just bizarre:

In an letter released Sunday on WFAA/Channel 8 Inside Texas Politics, Rangers managing partner Ray Davis said the team is working with the Baltimore-based Cordish Cos. to develop retail shops along the Randol Mill Road side of Globe Life Park: “It is the Rangers’ intent to preserve the beautiful exterior facade.”

So if the Texas Rangers owners get more than half a billion dollars in public money to replace their 22-year-old stadium with a new stadium so they can have air conditioning, they’re going to keep the old, un-air-conditioned building around to use as … shops? Or part of the building? And the field could be “refitted for another purpose” somehow? Possibly as “park and festival spaces”?

This is all extremely strange, since it’s unlikely anyone cares much about the Rangers stadium’s facade, unless this is meant to win people over with a “Hey, we’re not tearing down a perfectly good 22-year-old stadium, we’re just gutting it to use it for something it wasn’t meant for instead of for baseball!” Arlington Mayor Jeff Williams also said the city could collect rent on any retail space leased out at the old stadium, which maybe could help offset construction costs, yes — but then, nobody’s saying how much it would cost to gut and redevelop the existing stadium, so who knows if there would actually be a net gain?

Supposedly there’s going to be a press conference about all this tomorrow, so we can boggle some more then. Stay tuned.

Rangers stadium heads for ballot, Arlington mayor grabs at phone of opponent videoing him

After voting unanimously to put a new Texas Rangers stadium funding measure on the November ballot in May and again last week, the Arlington city council did so a third time yesterday, which means the referendum will really truly happen now.

The stadium campaign promises to be more of a battle than it sounded at first — I haven’t seen any polls yet, but there’s an opposition group organized called Save Our Stadium (no website, only a Facebook page, because Zuckerberg owns our public commons) that recently confronted Arlington Mayor Jeff Williams over his support for the $500-million-plus public subsidy plan and his role in banning opposition comments from a Facebook page about the stadium. They then posted a video about it (shot in portrait mode, because the future will also be shot in portrait mode) that ends with the mayor getting steamed at a question about a stadium opponent being threatened with arrest, at which point he tries to grab the phone of one of his questioners, which isn’t something you see every day from a mayor:

I’ve also been sent video (no permission yet to post it, sorry) alleging to show a stadium supporter trying to smash the car window of some people handing out anti-subsidy flyers. With emotions running this high with three months to go, I’m honestly a little anxious about where this will go by November, this being Texas and all.

Arlington to lose $450m on Rangers stadium; mayor asks, “Got any better ideas?”

Remember when the city of Arlington released a crazy-ass FAQ about its plans to spend more than $500 million on a new Texas Rangers stadium, and pretended like the presence of the team was going to be worth $2.5 billion to the city when the actual tax revenues involved would be a tiny fraction of that? Dallas Morning News reporter Jeff Mozier, who’s been doing a stalwart job digging into the Rangers plan, crunched the numbers from the study and came up with a story with a hell of a headline:

Arlington could generate more tax dollars without new Texas Rangers stadium, city numbers suggest

Ouch! But also true: That $2.5 billion claim is economic activity, not actual new tax revenue — i.e., it’s the number you get if you add up all the Rangers-related money changing hands in the city over the next 40 years, regardless of whether any of it benefits the city treasury or anyone else in town besides the Rangers owners. The actual fiscal impact on the city budget is projected to be $134 million in new taxes and rent, which is obviously a lot less than $500 million. And that’s before you even take into account that most of the $134 million wouldn’t arrive for a couple of decades, while the $500 million would have to paid now — in present value, any new revenues would be closer to $50-60 million.

There are other problems with the city consultants’ projections — they included the impact of the Rangers staying in town starting immediately, for one, while the Rangers are already locked into staying put through 2023 — but given that we’re already looking at Arlington putting down at least $519 million for a return of at most $60 million, it almost doesn’t matter how much worse it gets. Asked about whether this was a worthwhile expense, Arlington Mayor Jeff Williams replied that he couldn’t think of a better use of tax dollars: “I would love for anybody to tell me something else that is there for me to get.” I’m still waiting for somebody to take up Allen Sanderson on his suggestion of throwing money out of a helicopter — if nothing else, it would make for a nice controlled study.

Rangers stadium opponents outnumber backers 2-1 at council hearing, for what that’s worth

The Arlington city council yesterday unanimously approved putting a $500-million-and-change public subsidy for a new Texas Rangers stadium on the November ballot, which should come as no surprise given that they already unanimously approved the deal once before. (They still have to approve it once more time, on August 9, because Arlington is apparently run by the Bellman from “Hunting of the Snark.”) Somewhat more interesting is the turnout at yesterday’s hearing, which according to the Dallas Morning News saw “nearly 30 people” speak, while according to the Fort Worth Star-Telegram “speakers opposed to the new stadium outnumbered supporters at least 2 to 1,” so we’re talking something like 20 opponents to 10 proponents. That’s not necessarily an indication of anything about how a vote would go, but it does indicate that there’s at least the beginnings of an organized opposition.

As for what the speakers said, here’s a sampling of the con side:

“When you have a stadium that is 22 years old and is already paid off and everybody loves it, it doesn’t make a whole lot of sense to me,” [William Busby] said.

“If you are thinking about sustainability and green environmental structures, to build a stadium like the one they propose is the epitome of waste,” [Cynthia Belisle] said. “It’s a beautiful building and it’s not right to tear it down.”

[Warren] Norred, who helps operate the anti-stadium Facebook page Save Our Stadium, drew applause when he said some speakers “talked about building a new stadium as though we don’t have one,” he said. “Twenty years ago I couldn’t have said it’s a beautiful stadium, let’s keep it. But I can say that today.”

And the pro side:

“We’ve got to keep the Rangers here in Arlington, where they belong,” said Sylvia Greene, speaking in favor of a proposed retractable-roof stadium to replace Globe Life Park. “They are critical to our economy, and the Rangers have been the building block for all the good things that have come to Arlington.”

Arlington Mayor Jeff Williams added in an interview with the Star-Telegram: “We know we needed to do something, because I did not want to get into a bidding war with multiple cities. Bidding would have started out at $600 million [the city’s portion] next year, there’s no doubt.” Not to doubt a fiscally responsible, results-driven businessman, but that’s what victims of the winner’s curse always say.

All that really matters, obviously, is how residents vote in November, which should be very interesting to watch. There haven’t been a whole lot of stadium referenda lately — mostly because team owners and elected officials alike usually try to bypass a public vote, since who knows what those crazy voters will do — with the last two I can recall being the Cleveland tax hike extension for the Indians, Browns, and Cavaliers in 2014 (which passed), and the vote to fund a new New York Islanders arena in Nassau County in 2011 (which failed). And while Texas voters have generally been friendly to stadium subsidies, this is also the first time they’ve been asked to build a stadium to replace a 22-year-old one because it lacks air-conditioning.

It should be an interesting campaign, needless to say — and an interesting test of whether the old rule that pro-stadium forces need to outspend the anti-stadium side by 100-to-1 to win still applies. Gentlemen, start your checkbooks.

Public subsidies for Rangers stadium to be at least $519m, could go higher

The Dallas Morning News has provided more details of the scale of hidden subsidies for the Texas Rangers‘ new $1 billion stadium plan, to where we can finally estimate an actual public price tag for the project, which, remember, would replace a 22-year-old stadium with an even newer one so that the games can have air-conditioning. The full package of goodies now includes:

  • The city would still be providing $500 million in cash, bonded out and then repaid over time by the 0.5% sales tax surcharge, 2% hotel tax surcharge, and 5% car rental tax surcharge currently being used to pay off the Dallas Cowboys’ stadium. This much the city of Arlington revealed at the start, presenting it as a “50/50 split” of costs between the Rangers owners and the public.
  • As revealed previously, Arlington would buy the Rangers’ 48.6 acres of parking lots for nothing, then lease them back to the team in perpetuity for no money. This would have the effect of exempting the Rangers from property taxes on their parking lots, which the News estimates would save the $481,000 a year in property taxes. In present value, that’s worth about $7 million to the team owners.
  • As also revealed previously, Arlington would build a new 2,000-space parking lot on land similarly given by the team to the city and then leased back as a property-tax dodge. That would save the Rangers owners about $145,000 a year in property taxes (present value: around $2 million), plus city officials estimate building the lot will cost around $4 million, for a total of $6 million.
  • Rangers owners Ray Davis and Bob Simpson would get to use new ticket and parking tax surcharges to help fund their share of construction, which is worth about $150 million in present value, but as I’ve noted before, most of the cost of ticket and parking surcharges ultimately ends up coming out of the team owners’ pockets. So I’m inclined to dismiss this one as a public subsidy.
  • The Rangers owners are getting $100 million in cash and tax breaks for Texas Live!, an entertainment district near the stadium that was previously approved by the city, and which is supposed to break ground later this year. That’s not a subsidy for the stadium per se, in other words, but it is money that the city is giving to Davis and Simpson.
  • Once the city’s stadium bonds are paid off, the Rangers owners would get to stop paying the city their $2 million a year in rent and instead put it into a fund for future stadium improvements. The value of this will depend on when the bonds get paid off — the News notes that the Cowboys’ stadium bonds were retired ten years early, but it’ll all depend on what future tourist tax receipts look like, which is inherently unpredictable. If we use that as a best guesstimate, $20 million in rent rebates 20 years in the future would come to $6 million in present value.
  • Not discussed by the News piece is the fact that the Rangers’ share of stadium payments would actually pay off bonds being sold by the city, meaning if their own revenues (from PSL sales, naming rights revenue, etc.) fell short, the public could be on the hook for more. No way to put a price tag on this, but it’s an added risk of a blank check added to everything above.

Add it all up, and we’re at a minimum of $519 million in public subsidies for the Rangers stadium project, plus another $100 million for Texas Live!, with the possibility that the final price tag could ultimately go higher. And, more to the point, Davis and Simpson would get all the revenues from the new place, while the public “partners” would get just a thin trickle from new sales tax receipts, which even if you bend over backwards to assume the best-case scenario would only amount to $31 million over the next 40 years. That’s a vastly inequitable deal no matter how you slice it, but I guess when your baseline is “How big a check do we have to write the Rangers to be absolutely sure they won’t even think about moving to Dallas never ever?“, this is the kind of deal you get. Arlington voters, the ball’s in your court now.

Yes, Arlington would pay for more than 50% of Rangers stadium, but not because of ticket tax

So I was sitting around yesterday, waiting for NHL commissioner Gary Bettman to go on TV and announce the new Las Vegas expansion franchise, when this story from WFAA-TV in Dallas about the new $1 billion Texas Rangers stadium plans suddenly blew up all over the Twitterverse:

City of Arlington officials have touted a “50-50” private-public partnership to build a proposed $1 billion retractable roof stadium for the Texas Rangers.

A WFAA-TV investigation, however, has found taxpayers may instead pick up to 80 percent of the tab, which amounts to hundreds of millions of dollars more than initially promised by city leaders…

Tucked in the agreement is a clause called the “admissions and parking tax” that allows for a 10 percent surcharge on event tickets and up to $3 additional surcharge on parking. State law allows cities to collect and use the taxes to build their stadiums. Arlington’s agreement, however, allows the Rangers to use the admissions and parking tax revenues to help pay their half of the construction costs.

“If it really is a tax and could be used by the municipality, then in essence it’s just transferring revenue from the public sector to the private sector,” said Rick Eckstein, a Villanova University professor who studies sports stadium economics.

“There’s a sleight of hand here. There’s verbal gymnastics going on,” Eckstein added. “It’s relatively unprecedented in terms of stadiums I’ve studied over the last 20 years.”

Not to disagree too strongly with Eckstein (co-author of one of the best stadium books out there), especially since he’s right that tax money is fungible and shifting it from public to private pockets amounts to siphoning it off from the public treasury. But these particular tax surcharges are kind of special, to the point where we arguably shouldn’t consider them an additional public subsidy.

What it comes down to is the difference between existing taxes and tax surcharges, especially on items that are under the monopoly control of team owners. Think of it this way: When a sports team owner sets ticket prices, they do so with an eye toward maximizing the amount of total revenue they’ll bring in — basically, they set prices as high as the market will bear without driving fans to stay home and watch on TV. (Technically we’re talking net revenue rather than gross revenue here, but since the marginal cost of selling an additional ticket is close to zero — you might have to hire an additional tiny fraction of a hot dog vendor, but the players are all being paid to play regardless — we can ignore it for our purposes.) That means if that break point is $50, they’ll charge $50 — regardless of whether that’s $50 they get to put in their pocket or $45 in actual ticket value plus a $5 surcharge.

A similar effect is at work regarding parking, which is why most economists consider surcharges like these to come out of the owners’ pockets, even though they’re technically taxes. The owners could accomplish the same thing just by “taxing” themselves, in other words, though there are likely some tax benefits they get from paying this via the tax system rather than voluntarily out of their own pockets.

There are additional problems with the WFAA analysis, starting with the fact that the station’s reporters estimated $300 million in admissions and parking surcharges over 30 years, and added that on to the city’s existing $500 million obligation — but $300 million over 30 years doesn’t cost $300 million now, but rather more like half that in present value. (It’s like figuring a house mortgage: You count how much you need to borrow from the bank now, you don’t add up all your mortgage payments into the future.) So we’re already down to $650 million, and much of that $150 million added cost would really come out of the Rangers owners’ pockets, so really this is much ado about not all that much.

Which isn’t to say that the proposed Rangers stadium doesn’t have hidden costs: It has tons of them, from about $15 million in future rent rebates to free land and property tax breaks for parking lots to the city being on the hook for any of the Rangers’ share of bonds if team revenues fell short of covering them. Whether this gets the public share up as high as 80%, I couldn’t tell you, but it’s worth investigating. Get to it, WFAA investigative team!