Kraft considering Revolution stadium at demolished mall site, and, yeah, that’s about it

Now that Boston’s Olympic bid is mercifully dead, New England Revolution owner Robert Kraft (he also owns some team in that other kind of football) is shopping around for a new site for a soccer stadium, and is considering the site of an abandoned shopping-mall-turned-convention-center in Dorchester:

Robert Kraft’s hunt for a new home for the New England Revolution has led him to hold talks about building a soccer stadium in Dorchester at the site of the former Bayside Expo Center, now owned by the University of Massachusetts….

UMass bought the Bayside Expo for $18.7 million in 2010, after the center went into foreclosure. The university is currently tearing down the exposition hall as part of its plan to expand the UMass Boston campus to that site.

The Bayside Expo site was earlier floated as a possible place for an Olympic Village, which could have been converted to campus space afterwards; if UMass goes for Kraft’s plan, it would presumably be in exchange for lease payments, which the school could use to fund other expansion plans.

That brings us back to how Kraft plans to pay for all this, since he’d now have lease payments to UMass (or outright land purchase payments) on top of construction costs for what could be a $200 million stadium. The last idea the team owner floated was to have Boston pay for the building and get repaid via ticket taxes, which would only work if the taxes were something on the order of $40 a ticket, so that’s not going to work. Picking a site first and then hoping for the magic funding fairy to arrive is a time-honored sports owner tradition, if only because it’s easier to hit up public officials for construction dough once there’s a plan in place, but this seems like it has a long way to go before it even hits the vaportecture stage.

Beckham seeks to hook up with Bucks owner for Miami stadium cash

Now that David Beckham’s proposed Miami MLS team finally has a site where a stadium can fit, sort of, the negotiations have entered a weird phase, with Beckham shopping around for somebody with the cash to actually build the thing. Or lend to him to build the thing. Or give to him to build the thing in exchange for a share of the team, or the stadium revenues, or something. David Beckham seeking rich partner for stadium play, is what I’m saying here.

Back in February, there was a rumor that Beckham was looking to sell a chunk of the team to Qatar Sports Investments, owners of the French soccer giants Paris Saint Germain, but those talks apparently went nowhere. Now, the Miami Herald (citing unnamed “sources familiar with the talks”) says Beckham has approached Wesley Edens, co-owner of the Milwaukee Bucks and co-chair of real estate giant the Fortress Investment Group, about being an “investor” in the stadium project, whatever exactly that means. The easiest way would still be for Beckham to just sell Edens a share of the team, though there are plenty of other options for structuring a deal where Beckham gets cash now to build and Edens gets revenue down the line.

Regardless of how this all works out, the Miami stadium is still looking like it’s mostly going to be a deal indirectly subsidized by MLS — in that the league gave Beckham an 80% off coupon for one expansion franchise as part of his contract to play in the league, and now Beckham needs to do whatever it takes to cash it in. That’s all well and good, if a bit odd, but it’s interesting to see that even with an $80 million head start, Beckham is having to shop around to find investors interested in being a part of his project. Making money by starting sports teams and building stadiums for them with your own money is hard, which is no doubt one reason why so many rich people looking to own sports teams try to skip the “with your own money” part. (The other reason being that skipping the “with your own money” part is always a nice way to make even more money, even if you could turn a profit doing it yourself. Really, there’s no downside to having other people spend money on you, except for having to live with yourself in the morning.)

Hundred-million-dollar “or” could threaten Vikings, United stadium funding

Minnesota has been through some awfully weird stadium shenanigans in its time, but this takes the cake: A one-word typo in a tax bill meant to raise money to pay off the almost-completed Vikings stadium is now endangering not just funding for that project, but for the new Minnesota United stadium, too.

How’s that work, exactly? Well, it seems as if the Minnesota state legislature, as part of a bill designating pulltab gambling money for the new Vikings stadium, intended to carve out a tax exemption for bingo halls — i.e., places where bingo is the main business, not other gambling establishments that happen to host bingo from time to time. So they wrote this into the legislation:

[A bingo hall is a place where an organization] regularly conducts bingo if that organization gets half of its revenue from bingo or no other organization conducts lawful gambling.

See the problem here? If that “or” were an “and,” only organizations that got the majority of their revenue from bingo could get the tax break. Instead, any gambling organization can get it just by “regularly conducting bingo,” so long as it’s the only gambling organization on the site. It’s a whopper of a typo, one that state budget officers say would cost the state $100 million in revenues over the next three years, “all of the revenue over the next three years from charitable gambling intended to offset [Vikings] stadium expenses.”

That’s right up there with the infamous million-dollar comma, but the fallout from the typo could be even more far-reaching: Minnesota Gov. Mark Dayton says he’ll veto the entire tax bill unless the typo is fixed, and since the tax bill also contains Minnesota United’s $54 million property tax exemption for their new stadium, now suddenly the expansion MLS franchise is caught up in this, too.

It’s extremely likely that all this will get worked out, but with the legislature already having ended its session for the year, it may not be a simple fix. (Some legislators are saying they’ll just write a letter saying “that’s not what we meant,” but state budget officials say a special session would be needed to set this right.) In any case, it’s all a great opportunity to point and laugh at Minnesota elected officials, not to mention a terrific case for why it’s important to have copy editors.

NYCFC are terrible at home, terrible home to blame

As many of you are probably aware, I’m a strong proponent of finding ways to get use out of existing sports venues instead of spending hundreds of millions of dollars to build new ones, mostly because they’re almost never worth it and so somebody (i.e., Mr. and Mrs. Q. Taxpayer) usually ends up having to foot the bill. I’m willing to admit, though, that NYCFC squeezing an MLS field into a baseball stadium may not have been the best idea of all time:

Unlike the NFL, where every field conforms to precise dimensions, a soccer pitch can vary within FIFA (and in this case, MLS) regulations. In the case of Yankee Stadium, that means a smaller field, which robs teams of their space to create — and the Stadium offers the smallest playing surface in the league. For a finesse club like NYCFC, that is the equivalent of the Yankees sending out a lineup devoid of lefty power to take advantage of the short right-field porch…

And at 110 yards by an MLS-minimum 70 yards, or a Hobbit-sized 7,700 square yards, the small field makes NYCFC easier to press and close down. The next-smallest fields are 8,250 square yards and eight are at least 9,000 square yards.

While all this is sad if you’re an NYCFC supporter and fairly entertaining if you’re not — they lost a game last year when an opposing player practically threw the ball into the goal from the sideline, which is hilarious — it’s important to note that this is no one’s fault but NYCFC’s own: They chose to place a team in New York with nowhere to play but New Yankee Stadium, and then chose to sign a bunch of finesse players with famous names who would be at a huge disadvantage playing on a small pitch. Talks about a new stadium in upper Manhattan have gone approximately nowhere, and there’s really no reason for the city to put itself out to solve a problem of the team’s own making, so NYCFC will likely just need to suck it up and rebuild its roster to play in cramped surroundings for the foreseeable future. To do otherwise would be like the Colorado Rockies demanding a pressurized dome to make up for the fact that they unexpectedly found the air thin in Denver — oh, crap, I’m giving people ideas again, aren’t I?

MN governor to United: Here’s some tax breaks, if you want more later, just ask

Turns out there indeed wasn’t much suspense around the Minnesota legislature’s vote on a full property tax exemption for Minnesota United‘s new stadium in St. Paul: The tax break was rolled into the annual tax bill and easily passed on Sunday. At least the exemption only applies to the stadium itself, not any surrounding development, but even then a Minnesota Public Radio investigation came up with numbers that imply that United’s owners will save $54 million worth of future tax payments via this stroke of the legislative pen.

The new MLS club also got a liquor license approved on the last day of the legislative session, but, interestingly, did not get an exemption from construction sales tax, a common subsidy for many development projects, sports-related and otherwise. (The MPR report gave an estimated value for this of around $3 million.) Gov. Mark Dayton, however, said that just because United isn’t getting the sales tax break now doesn’t mean that it can’t get it later:

As Dayton considers a possible special session, he said in a Monday afternoon news conference that he hoped United officials could see they received most of what they wanted at the Capitol…

While the tax break on construction materials was unapproved, Dayton said United can apply for a sales tax refund under existing state law, an avenue used to build the Saints’ year-old stadium in Lowertown. The law, shared by Coleman’s office Monday, relates to building materials for capital projects of regional significance.

“While the city sought an up-front exemption at the Legislature this session, which is easier from an administrative perspective, the lack of action simply means that contractors can move forward and a refund will be granted on the back end,” Coleman said in a statement.

Okay, sure, the state can just cut United a $3 million check after the stadium is built. But — and I can’t stress this enough — why on earth would it want to? The whole reason for considering the tax breaks in the first place was that United principal owner Bill McGuire claimed that he wouldn’t move ahead with building the stadium without them. (Whether that was true or gamesmanship, we’ll never know at this point, but let’s leave that aside for the moment.) If United starts construction now, it’s not like they can give up halfway if they don’t get their retroactive construction sales tax rebate check — they need to decide if they’re going to move forward under the current law, and if they do, giving them an extra $3 million is just a gift, not a negotiated agreement in order to get a soccer team.

Taken along with Florida’s crazy new stadium-subsidy system, this is an extremely worrisome trend: Suddenly, not only are sports team owners getting public cash because they’re driving a hard bargain, but just because, you know, they asked, and they’re nice guys who built something, so don’t they deserve not to pay taxes on it like normal people? Taken to its logical extreme, it’s probably only a matter of time before Tom Ricketts demands retroactive tax rebates on all the economic activity that Wrigley Field has brought to Chicago over the last century — oh crap, I just gave him an idea, didn’t I? Quick, somebody go distract him with pictures of baby pandas or something until this post has expired from his Twitter feed.

Orlando soccer stadium has raised $15m via the old green-card-for-investment scam

The interwebs are freaking out about this article in the New York Times by our old friend Ken Belson, which talks about how Orlando City F.C. owner Flávio Augusto da Silva is seeking overseas stadium investors in exchange for a shot at green cards, “in what may be the first deal of its kind.”

As with so much that Belson writes: No, not exactly. The federal EB-5 program offering to let foreign investors in U.S. development projects jump the line for visas has been around for 25 years (which Belson notes), and was in fact a key part of then-Brooklyn Nets owner Bruce Ratner’s finance plan for his arena project back in 2010 (which he doesn’t). The money there went to pay for infrastructure for the larger site, not the arena per se, but still it means the Orlando deal isn’t exactly a first. (EB-5 loans were also proposed for one of Las Vegas’s many arenas that never got built, at least not yet.)

EB-5 has been criticized for being ripe for abuse, with some developers allegedly using it as a scam to rake in cash without ever building anything, while others have complained that if the U.S. is really going to sell green cards to people will to pay for the privilege, it should at least get the money directly instead of giving it to private developers in the hopes that it will somehow create jobs. (The provision of the EB-5 program that da Silva is using is only available for projects in high-unemployment areas, which is certainly true for the area around the Orlando soccer stadium, though how a handful of temporary construction jobs and less temporary hot dog vendor jobs is going to do much to mitigate this is less clear.)

Anyway, this is indeed a scam, though it’s one that is by no means limited to Orlando’s soccer stadium (which is otherwise being funded entirely out of da Silva’s pocket), and one that’s more about how developers have sweet-talked the federal government into getting them access to cheap capital by bumping certain foreigners with money to the front of the immigration line. Team officials haven’t said how much they’re expecting to raise by this method (they say they have $15 million so far), but keep in mind it’s just a no-interest loan, not a grant, so while da Silva would be saving money, he’s still be on the hook for the principal. It’s worth getting upset about, in other words, but less because da Silva is applying for it than because it still exists at all.

Minnesota senate approves United soccer stadium tax break, whatever the cost

The Minnesota state senate voted 37-30 yesterday to approve a full property tax exemption for St. Paul’s proposed Minnesota United stadium, without once attempting to calculate how much this tax break will be worth to the team owners. Or at least that’s what all available evidence is showing — for starters, here’s the entire text of the stadium-related portion of the bill they voted on:

Section 14. Soccer stadium; property tax exemption; special assessment. Provides that any real or personal property acquired, owned, leased, controlled, used, or occupied by the city of St Paul for the primary purpose of providing a stadium for a Major League Soccer team is exempt from property tax. The properties are still subject to special assessments. Any real or property subject to a lease or use agreement between the city and another person for uses related to the purpose of the operation of the stadium and related parking facilities are also exempt regardless of the length of the lease or use agreement.  This property tax exemption does not apply to any real property that is leased for residential, business, or commercial development or any other purpose not necessary to the operation of the stadium. Effective upon approval by the St. Paul City Council.

Also, the Minnesota senate has only posted partial video of the hearing, but there’s no discussion there of an actual price tag on the value of the tax breaks, or any talk about the stadium at all. (Yes, I actually listened through 38 minutes of an omnibus tax bill hearing to determine this, so you don’t have to. I’ll be hitting the Advil early today.) So our best guess is still the $57 million in present value that Minnesota Public Radio estimated back in March.

Two notes on this: First off, yes, a tax break is still a public cost even if it’s on land that’s not currently paying taxes. For United’s owners, paying $57 million less in future taxes is exactly the same as getting $57 million in cash from taxpayers to help pay for a stadium. (Well, slightly different in that they’d be getting payments over time instead of all at once, but they can always just borrow $57 million from a bank and pay it off with the future tax savings — that’s precisely what “present value” means.) United owner Bill McGuire has been saying that there’s no way he can afford to build a stadium without the tax exemption, and whether you believe him or not, clearly it’s worth a significant pile of cash if he’s threatening to walk away from the stadium plan without it.

Second, it’s worth noting that this same senate voted 61-4 to approve a ban on tax breaks for a Minneapolis soccer stadium last year. The difference? Minneapolis mayor Betsy Hodges was opposed to it, while St. Paul mayor Chris Coleman is in favor of it. You can pretty much ignore most of the arguments made for or against the tax exemption on the grounds of what’s good policy or how much it’d cost whom: This comes down to “the mayor wants it, so the senate isn’t going to argue with him.” It’s possible things will be different when the state house votes — both Coleman and the senate leadership are Democrats, and the house is controlled by Republicans — but given past history, I wouldn’t hold my breath.

Minnesota senate to vote today on $54m in tax breaks for United soccer stadium

The Minnesota state senate is set to vote today on whether to give a full property tax exemption to Minnesota United‘s new stadium project, writes the St. Paul Pioneer Press:

On Tuesday, the Senate Tax Committee passed a tax-related measure, including property tax exemptions for the pro soccer team’s proposed stadium at the intersection of Interstate 94 and Snelling Avenue.

“That’s great news,” bill sponsor, Sen. Sandy Pappas, told the Pioneer Press. “We certainly expected this. The soccer stadium is very popular on both sides of the aisle, and we think that as long as we have tax bills that are moving in the Senate, we have a really good chance to be in the final bill.”

The Pioneer Press goes on to add that a related proposal to exempt the stadium from construction sales taxes is expected to be added in conference committee once both houses of the state legislature have voted, and has a lot more to say about the plan … with the notable exception of how much these tax breaks would actually cost, which seems like an important detail. For the record, the best estimate so far is that the tax breaks would cost about $57 million in present value ($54 million in property tax breaks, $3 million in construction sales tax breaks), which for a $150 million stadium would be a decent chunk of change. We’ll see if any updated numbers emerge during today’s senate vote, but I’m not holding my breath.

Miami MLS stadium deal now held up while Beckham thinks about local hiring goal

Whuh-oh, the Miami Herald is reporting that David Beckham’s proposed Miami soccer stadium has “hit a snag”:

Already months behind schedule in assembling a nine-acre site in Overtown for a 25,000-seat Major League Soccer stadium, Beckham and his partners have yet to sign off on a string of hiring goals, employee benefits and local-business perks that Miami-Dade is demanding as part of the sale…

Among the benefits sought by Miami-Dade from the Beckham group: job training for local residents; free transit passes for stadium employees; a goal of 65 percent of construction jobs going to local residents; and an agreement that Beckham’s group won’t disqualify applicants or subcontractors “based solely on a prior incarceration.”

Those are the sorts of terms that are technically referred to as “piddly,” and indeed, a source on Beckham’s side told the Herald that they just need to look over the terms more closely. Still, it’s been a while — long enough that a county attorney wrote an email to Beckham’s lawyer two weeks ago saying, “It’s been awhile” — so you have to wonder why they’re taking so long instead of sitting down to do some quality haggling. It’s still extremely likely that this stadium will happen as planned, but it’s also extremely likely that it won’t happen without at least a bit more drama, even if it’s only local doctors and business leaders arguing about whether Miamians are willing to walk for ten minutes to get to the game.

LAFC gets approval for new $250m stadium, looks like no tax money involved (fingers crossed)

The Los Angeles city council approved plans for a $250 million stadium for Los Angeles F.C. on the former L.A. Sports Arena site on Friday, and … that’s it. The documents approved by the council are just about rezoning the land to allow for a soccer stadium, with nothing about the tax incentives that LAFC’s owners had previously hinted at (and still hint at on their website). So unless there’s some other shoe yet to drop, it appears that this is like how stadium deals would work in a world without subsidies: A bunch of rich guys decide they want a team, decide on a place to build a stadium, ask for permission, and then start spending their own money.

There are also some renderings, which look about like a soccer stadium, and which if history is any guide won’t look much like the final stadium design anyway. The biggest controversy at the moment appears to be about whether the stadium will be open for the start of the 2018 season, or whether they’ll have to play a few games in one of the city’s other stadiums before moving into their own place. If that were all we had to worry about for every sports team, I could shut this site down.

160425_LAFC_Stadium-Launch_Cam-3_Final-2web.0