Owners of proposed St. Louis MLS team to ask taxpayers for $80m+ for new soccer stadium

When a new stadium for a proposed St. Louis MLS team was first proposed last winter, it had no price tag or funding plan. Now it has both, and the total price is $200 million, with taxpayers expected to pony up more than $80 million:

Voters could be asked to put $80 million in public money toward a 20,000-seat stadium, not including a potential land purchase west of Union Station. That amount could be lower depending on financial assistance from the state, Kavanaugh said.

The stadium subsidy would have to go before voters on a ballot in April, thanks to that vote back in 2002 requiring any city stadium subsidies to be approved by a referendum. The St. Louis Post-Dispatch article on this entirely fails to say how the public money would be raised (new taxes? old taxes?) or how much the land purchase would cost, so there are still a lot of unknowns here. But suffice to say that now that St. Louis residents have dodged a $477 million bullet with the Rams moving to L.A. rather than getting a new stadium in their old home, they’re still getting asked to pay for a football tab, just the less-popular version of football. Add in the Blues owners hanging around expectantly, and, well, looks like those voters back in 2002 knew what they were doing, anyway.

Beckham identifies “potential investors” for Miami stadium, still needs actual investors

Hey, what the heck has been going on with David Beckham’s proposed Miami soccer stadium? At last report in June, he was reportedly shopping around for some private investor to actually pay to build the thing; now, it turns out, he’s, uh, still working on that:

David Beckham’s representatives Thursday moved to jump-start a stalled effort to build a Miami soccer stadium by bringing potential investors to a pitch by Miami-Dade Mayor Carlos Gimenez.

The investors weren’t identified, but the sales pitch apparently involves a new set of potential financiers in a project that has been courting deep pockets since the start…

Thursday’s meeting suggests Beckham’s team has found a new group of investors to court, but it’s not known how far along in the talks they are.

Despite having released poorly Photoshopped renderings of a stadium on a nine-acre site in Overtown last winter, Beckham still needs to acquire another three acres of county land, plus city rezoning approval and the closure of a city street. And, apparently, to find somebody who thinks all this would be a good investment of their private dollars. Making money building fancy new sports stadiums without gobs of public cash to boost your profits is hard.

D.C. United tweaks stadium design again, adds more stores that may or may not exist

For those of you who can’t get enough of D.C. United stadium renderings that look pretty much just like the old stadium renderings: new D.C. United stadium renderings!

screen_shot_2016_11_16_at_11-50-48_am-582c915e32f00Tell us what’s new, Washington City Paper:

Among the changes are: a retail corridor on the east side of the stadium along First Street, which will become a two-lane road with parking on each side, 14,000 square feet of retail attached to the stadium itself, and unspecified ‘additional future retail’ toward the south on First Street, according to a memo D.C. United’s lawyers sent to the zoning commission. A building along the south side of the stadium has been “reimagined and reoriented” to include 3,000 square feet or retail space, but will maintain a “bike valet” at its corner.

A public plaza planned to the stadium’s northeast will now contain a sizable park, “landscaped and terraced to create an inviting experience.”

So basically the team responded to complaints that the stadium would be a big empty box on non-game days by adding some space for stores, and some more space for possible future stores, assuming there are stores that want to open up in what will be a big empty box on non-game days. Plus a street that turns into a pedestrian plaza during games, because those are all the rage:

screen_shot_2016_11_16_at_11-44-43_am-582c914a5ae4eWhich is all cool — attempts at more non-gameday activity is cool, even if it doesn’t always work out so well. But D.C. United planners do seem to be trying to respond to community gripes, at least, which is the least they can do for their $183 million in public subsidies.

MLS attendance figures are even more fictitious than we realized

I’ve snarked about MLS attendance figures before, based largely on televised scenes of half-empty stadiums which near-sellout official attendance figures, as well as my own experience attending Red Bull New York games while paying a tiny fraction of face value for tickets. But this Los Angeles Times report, man:

Howard Handler, the league’s chief marketing officer, said the number of comp tickets distributed has declined by an average of 20% over the last two years. It now accounts for about 9% of announced attendance, he said.

Yet even if that figure is correct, it still would mean more than 663,000 tickets included in the MLS crowd count for 2016 were given away. And even that math doesn’t always add up. Just look at Orlando City, one of five teams whose attendance was surveyed for this story. The club claimed home attendance of 532,500 this season at Camping World Stadium although the City of Orlando, which owns the facility, released figures Friday that showed the number of tickets scanned — the modern-day equivalent of a turnstile count — was 151,060 short of the team’s total, a difference of 8,886 per game.

Which, fine, whatever — if Orlando City S.C. wants to pretend a lot more folks are turning up for games than actually are (and it’s likely that many of those who do show are getting tickets for free or at discount), that’s a time-honored sports tradition. And even 10,000 fans a game is a respectable number for a sport that not all that long ago was barely a blip on the American national sports consciousness. Where it matters to the general public is when teams start making claims about the economic impact of an MLS team: If you really think you’re going to have 20,000 fans a night show up and spend money, you should be mentally replacing a large chunk of that number with ghosts. (You should probably do this for all pro sports, mind you, but especially for MLS.)

What this means for MLS’s economic viability is above my pay grade, though given that many players aren’t paid much more than the league minimum of $51,000, they’re probably doing pretty okay. It does help explain why the league is so dead-set on expanding until the cows come home, though: It’s way easier to make money selling expansion franchises for $200 million a pop than selling tickets $3 at a time to fans who may or may not exist.

Massachusetts governor on Dorchester stadium for Revolution: “Think of the children!”

Massachusetts Gov. Charlie Baker says he’d consider a proposal by New England Revolution owner Robert Kraft to build a soccer stadium in Dorchester in southern Boston, which, you know, that’s what governors say, so it’s to be expected. But then Baker went and said this:

“A facility like that could be used by kids and by UMass Boston and by the community at large,” he said. “If the rest of it could get worked out, I think it could be a plus.”

Um, what? The stadium, if built, would be on land owned by UMass-Boston, so they could certainly try to work out a deal by which their soccer team could use the stadium when the Revolution isn’t home. But “kids” and “the community at large”? Has Baker ever seen a pro soccer stadium? Unless it’s going to be surrounded by practice pitches (it won’t), no local kids are going to get to play on its field except maybe as halftime entertainment. While a Dorchester stadium wouldn’t necessarily be a terrible idea — it all depends on how much Kraft would pay for the site and who’d pay for construction, something that at last report was still being left to the magic funding fairy — building it under the pretense that it will benefit youth soccer is just daft.

Not to be left out, Boston Globe columnist Shirley Leung added: “Some may say I have never met a stadium I didn’t like. But I really like this one. What’s most exciting is the opportunity to build something different in a part of the city that could use an economic jolt. It’s not another strip mall, big-box retailer, or luxury condo tower — and that’s a good thing.” Except that at least strip malls are open 365 days a year, whereas soccer stadiums are big dark boxes 90% of the time. Maybe Dorchester should just build a strip mall with a youth soccer field in the parking lot?

Columbus Crew looking into new stadium, not saying who’d pay for it

Looks like the owners of the Columbus Crew are moving ahead with plans to replace their 17-year-old soccer stadium, hiring Barrett Sports Group LLC (who worked for Sacramento on a new arena for the Kings, among other projects) to “evaluate the potential demand for a new multipurpose soccer stadium in Columbus,” surveying fans as to what they’d like in a new stadium.

All of which is fine: If the Crew owners think they’ve outgrown their 20,000-seat stadium, then sure, look into building a bigger one. (Not they’ve completely been selling out the old place, but maybe they think more fans would turn out if the stadium had more steak bars or something.) The bigger question, obviously, is who would pay for a new or upgraded stadium, and nobody’s breathing a word about that. Or about when Barrett will complete its survey. Count on this one dragging out a bit longer — Crew execs have already been talking about this for more than three years, after all — but don’t be surprised to see stadium talk heat up in the next year or so.

D.C. council brags on Twitter about how much stadium money it threw at Nationals owners, um

Thanks to Deadspin (and a couple of Twitter followers) for pointing this one out:

Boom! Nice snappy comeback, D.C. city council social media person, noting how your local politicians gave MLB everything it asked for in stadium funding without even trying to negotiate a better deal, then kept ladling on more and more money as costs went up, eventually arriving at a figure of more than $700 million, then the largest MLB stadium subsidy in history (but since surpassed by the New York Yankees, depending on how you count federal tax breaks). Now that’s something to brag about.

Adds Deadspin:

This past weekend, the District handed over city land to D.C. United, as part of an agreement for a new soccer stadium that will see the city shell out $150 million.

The D.C. council hasn’t tweeted proudly about that one yet, either because D.C. United is in fifth place and may miss the playoffs, or because the councilfolk are just so darn humble.

D.C. United to critics of stadium design: How about a fountain? You like fountains, right?

Still on the road, but can’t fail to alert you to new stadium renderings from D.C. United that were released yesterday (on Twitter, because 2016). The last round of renderings, you’ll recall, was disparaged as looking like a prison:

dc-united-press dcunited.imrs.phpSo how do the new pictures compare?

https://twitter.com/dcunited/status/767881787670466560

That’s, um, pretty similar. There’s a big glass box sticking out of one corner for some reason, instead of the big grey box, and some kind of fountain with giant lens-flare-bedecked “D.C. UNITED” letters in the middle of it right in the path of fans trying to get to the game, but otherwise the design is largely unchanged. It’s not a bad design, but it’s a bit no-frills compared to the original one floated when United was trying to get citizens of D.C. to pay for it:

At least United is still planning on having lots of featureless ghost fans come to games. Make your own MLS attendance jokes.

L.A. seeks to use $22.5m in anti-poverty funds to help build MLS stadium (UPDATED)

When the Los Angeles city council approved a $250 million stadium plan for the Los Angeles F.C. MLS expansion team in May, I wrote that it looked like it would be entirely paid for with private money, “unless there’s some other shoe yet to drop.” And you know, sometimes I really hate being right:

Los Angeles City Hall is seeking to give a loan of up to $22.5 million to the developers of a new soccer stadium near downtown Los Angeles.

A motion submitted this week by City Councilman Curren Price asks for city approval for a U.S. Department of Housing and Urban Development (HUD) loan for the backers of the Los Angeles Football Stadium.

Now, the HUD loan isn’t for the stadium per se — it’s for the “ancillary” construction, meaning a sports museum, conference rooms, and retail, i.e., all the parts of a stadium complex that don’t specifically involve watching the game. The excuse for using a federal housing loan program to build this is that it’s “economic revitalization,” which is the usual argument for this sort of thing.

If the government were just lending the money and the team repaying it, that wouldn’t be such a big deal. But HUD Section 108 loans are repaid by a local government’s federal Community Redevelopment Block Grant funding — meaning Los Angeles is considering taking $22.5 million in anti-poverty funds and giving it to the developer of a soccer stadium, because economic development.

MynewsLA reports that the city council voted on Friday to ask HUD for the loan, so presumably this is now up to the Obama administration (or its successor) to approve or deny it. I’m not sure what discretion HUD has to reject uses of its loans for really off-label purposes, but hopefully we’re going to find out.

UPDATE: A commenter who works in finance points out some fine print in the Section 108 program: The city’s CRBG funds are only used as security on the loan, but it’s still supposed to be paid off by the private developer. This is much better for the public than a straight subsidy, obviously — LAFC’s owners would be getting the benefit of a cheap loan rate, and there’s some risk to taxpayers if they default on the loan, but it’s not just handing over $22.5 million. You can still make a good case that HUD should be looking at this project with lots of skepticism — if building a soccer stadium is an anti-poverty program, then building pretty much anything is — but at least it’s less of a cash grab it appeared at first.

Consultant reports that soccer stadium would lose around $40m, let’s go build one!

With the race officially on to see which cities can land all the expansion franchises MLS is selling for $200 million a pop, Louisville welcomes to the world a study it commissioned on building a new stadium for Louisville City F.C., which currently plays in the USL but could join MLS as easily as anyone else, I guess. Anyway, the study was conducted by our old friends Convention, Sports & Leisure, the rent-a-consultants owned by the Dallas Cowboys and New York Yankees, and as usual, their recommendation is build build build:

In January, Louisville Metro Government paid Minnesota-based firm Conventions, Sport and Leisure International $75,000 to complete the study. The result calls for a 10,000-seat soccer-specific stadium to be built, primary for use Louisville City FC, by 2020…

CSL estimates a new stadium with its recommended specifications would cost between $30 million and $50 million, and the study assumed in its scenarios the city would fund the stadium through 20-year bonds to be repaid by private and public sources.

The funny bit is that unlike its usual handwavy economic studies, CSL at least gave a shot at doing a deeper dive into the numbers in this one, acknowledging that economic impact would be blunted by both leakage (money spent on soccer doesn’t recirculate locally if it goes to out-of-town owners and players) and what it calls “displacement,” better known as the substitution effect (entertainment dollars spent on soccer instead of on something else local isn’t a net gain) — though CSL doesn’t provide any details at all of how these were taken into account in its calculations. In any case, its cost-benefit analysis for the project is actually pretty dismal:

Screen Shot 2016-08-05 at 8.34.27 AMThat’s $2.7 million in new tax revenues over 20 years, which is an absolutely horrible return on a $30-50 million expense. Yet CSL still recommends that the public fund this money pit, on the grounds that — wait for it — it’s such a money pit that you can’t possibly expect any private businessperson to fund it:

The net income from operations will not be able to fund a material amount of stadium project costs, which is typical of most soccer-specific stadiums that have been built for teams in USL, NASL and other similar leagues. Historically, the development of soccer-specific stadiums has generally involved varying degrees of public-private partnerships.

The study then goes on to list a whole bunch of different ways to pay for a stadium on the public’s dime, including tax increment financing and EB-5 green-cards-for-investment deals and the Louisville general fund, because there’s no real way to build one of these things without dipping into that. Unless you might think about asking a team owner who’d be potentially plunking down $200 million for an MLS franchise to chip in another $50 million for a stadium — or for MLS to take only $150 million for the franchise so that the rest of the cash could go to build the stadium. You know, crazy talk.

Ultimately, when you hire someone like CSL to do a stadium study, you’re not getting an evaluation of whether building one is a good idea, so much as a long list of rationalizations for why it could be defensible, if you squint right. CSL got $75,000 for putting this together, which leads me to believe that I’m in the wrong line of work: I should charging cities a few grand to provide a link to this.