Orlando mayor says soccer stadium approved two years ago won’t happen unless state kicks in $30m more

Back when the city of Orlando and Orange County approved $40 million in subsidies for Orlando City S.C. in 2013, it was supposed to be enough to cover the cost of an $85 million soccer stadium, with plans to add more bells and whistles — more luxury seating, a second “executive club,” and more advertising boards — if $30 million in additional state tax breaks came through. Now, though, with site prep for the stadium still in the early stages, Orlando Mayor Buddy Dyer is suddenly saying the state sales tax rebate is “integral” to the project, and without it … something. Something bad.

You can’t really blame Dyer, since it’s not his money that’s at stake here — I mean, it is his citizens’ money, since they’re Florida taxpayers, but it doesn’t come out of his budget — so it makes sense for him to pull out all the stops to lean on the state legislature to approve the cash. One would hope that state legislators would instead look at the facts that past state sports subsidies have only returned 30 cents on the dollar and that the Orlando project is only promising to create 60 jobs and politely decline Dyer’s demands, but this is Florida, so probably not.

MN senate votes 61-4 to tell United: No state tax breaks for you

The Minnesota state senate yesterday overwhelmingly approved a bill banning any “state funds or tax expenditures” from going toward a Minnesota United soccer stadium, voting in the measure by a 61-4 margin. And while the Minneapolis Star Tribune calls this “largely symbolic,” since United execs haven’t asked for state cash, that “tax expenditures” bit sure sounds like it would block the use of state sales tax breaks on construction materials, as the team owners have requested.

That would still leave the much larger property tax exemption that United is seeking from the city of Minneapolis, but given that Mayor Betsy Hodges has already said she’s not inclined to throw tax breaks at the team, either, United’s “say we’re building a $100 million stadium with our own money and then ask for half that amount in tax breaks” plan is getting off to a bit of a rocky start. It’s easy to forget since Minnesota recently paid a pile of money toward two high-profile stadiums for the Twins and Vikings, but it’s one of the states that’s historically been the most resistant to sports subsidies — the Twins and Vikings, in fact, each had to fight for more than a decade against massive public opposition to get their stadium cash — so MLS may end up having to decide on whether to hold up yet another expansion franchise because its stadium demands aren’t being met. Extortion is hard!

IUPUI says Indy Eleven needs $50-60m in stadium upgrades, can they get advance on their allowance?

Aw, man, I should have known that Indiana state bill to limit Indy Eleven to $20 million in public money for renovations to their current stadium would be too good to be true. The latest snag: Indiana University-Purdue University Indianapolis, which owns the stadium, says it would actually cost $50 million to $60 million to make it soccer-ready:

[IUPUI VP Tom] Morrison told lawmakers that Carroll Stadium, built in 1982, is “in desperate need of repair” and that a new, midsize stadium would fill “a gap in our community in terms of (sports) venues that size.”

Before you say anything: Yes, Indy Eleven is already playing at Carroll Stadium, and drawing well for a minor-league soccer team, so presumably fans aren’t afraid the place is going to fall down. No, Morrison didn’t say where that $50-60 million price tag came from. No, he also didn’t offer to pay for it, saying the school could only help pay for upgrades “around the edges,” and that hosting concerts probably wouldn’t bring in much money, so “I wouldn’t build a financial model around it.”

What appears to be going on here is that IUPUI has noticed that they could get a new(ish) stadium out of this deal, and so are presenting the state legislature with a wish list to see how much exactly they can get. Right now the state bill still limits state funding to $20 million, but there’s still the city of Indianapolis to hit up for cash, so keep one hand on your wallets, Hoosiers.

Minneapolis mayor to MLS team owner: You are too asking for a subsidy, quit pretending!

No sooner was I reading this column by Minneapolis Star Tribune online sports editor Michael Rand arguing that “even if you don’t like soccer, rich people or stadiums, it’s hard for a reasonable person to find much wrong with” the plan to give Minnesota United almost $50 million in tax breaks for a new soccer stadium, when this came across the digital transom:

Minneapolis Mayor Betsy Hodges doubled down Wednesday on her rejection of a plan to provide tax breaks for a new professional soccer stadium, calling the request from the team’s owner unprecedented and “extraordinary.”…

Hodges dismissed McGuire’s suggestion that the plan includes “no public subsidy whatsoever,” and said she and other city leaders have not been provided with enough information to assess the full cost of the project to taxpayers.

“If people want to debate the merits of this public subsidy, let’s do that,” she said. “But we’ve got to start with the accurate information that what they’re asking for is a public subsidy.”

That seems … pretty reasonable, actually! Hodges was elected mayor in 2013 partly on her opposition to the $1.1 billion in taxpayer costs for the spendy Vikings stadium plan, and clearly is intent on joining her colleagues in Anaheim and Calgary on the short list of mayors who actually approach stadium subsidy requests by asking whether they’re a good deal for taxpayers, and not just whether they can find enough money to shovel at team owners without making the wrong taxpayers too mad. The Minneapolis city council is split on whether to go along with her — Hodges could veto council approval, and the council could in turn override her veto with the vote of nine of its 13 members — so it’s not like the mayor is in total control of the situation, but it’s a nice starting point for negotiations, anyway.

Meanwhile, city councilmember Andrew Johnson raises the interesting question of whether tax breaks worth more than $10 million (which this would certainly be) would trigger the requirement for a city referendum on the project, as approved by voters back in 1997 during the Twins stadium battles. The state legislature could overturn that — as it did for both the Twins and the Vikings — but that would add another contentious step to the approval process. I bet I know what Minnesota United owner Bill McGuire is thinking about now: Man, this would all be so much easier if our system of tax expenditures were controlled by online sports editors.

Kevin Johnson wants to build a Sacramento soccer stadium for nonexistent team at unknown price

His city may have been rejected for now for an MLS expansion franchise, but Sacramento mayor Kevin Johnson isn’t going to let that stop him from building a new soccer stadium regardless. KJ announced yesterday that he was launching “Operation Turkey,” a plan to — sorry, what? Oh, “Operation Turnkey.” Well, that does sound better, but you decide for yourself which one is more apropos:

One of the toughest tasks on the mayor’s list might be obtaining control of the proposed stadium site, located on the eastern end of the long-vacant downtown railyards…

City officials said the sticking point involves determining who will be responsible if additional toxic pollution is discovered in the ground…

Johnson appeared Wednesday to have softened his opposition and said he imagined the stadium as a public-private partnership. He pointed out the state has already invested million for roads and bridges in the railyards, but declined to say if would support a subsidy for the project.

Cost of said stadium? Unknown! Who’ll pay for it and how? Also unknown! When Sacramento might actually get an MLS team to play in it? You guessed it! Johnson says he hopes to have all this worked out by the end of this year, which bwahahahahaha, damn, he’s a funny guy.

Minnesota United’s “privately financed” stadium could cost public almost $50m in tax subsidies

Minnesota United issued a press release about their new soccer stadium plans yesterday afternoon, and check it out:

In the proposal, the ownership group has committed to privately finance the construction of an outdoor stadium – with natural grass – that is accessible to all people and communities. The Minnesota United Major League Soccer franchise will be the first professional team in Minnesota to construct their stadium without a direct public subsidy.

Well, that is big news. It’s previously been assumed that United owner Bill McGuire would demand public money for his project, mostly because he kept being coy about it. But if he’s really going to fund it all himself, then — sorry, what’s that you say, St. Paul Pioneer Press?

The club asked lawmakers for a sales-tax exemption related to construction costs for materials and supplies, a property-tax exemption or relief, and limits on future taxes levied on the stadium and its operations.

Oh, so that’s what McGuire meant by no “direct” public subsidy. Tricky things, those press releases.

So how much are United’s owners actually asking for from the public? The sales-tax break, which is a common subsidy given to big construction projects, is estimated to be worth about $3 million. The value of the Vikings‘ full property tax exemption has been estimated at $25 million a year, so given that the United stadium would cost about 12% as much to build2, let’s guesstimate $3 million a year, or $45 million in present value.

That leaves us with limits on future stadium taxes — or as United’s own stadium memo actually puts it, “limits on future local taxes levied on the facility and operations that do not currently exist.” That could mean a couple of things: either a promise not to add new taxes (ticket taxes, say) that would hit the MLS team in the pocketbook; or a TIF to kick back an increased taxes resulting from stadium “operations that do not currently exist.” (Damn you, misplaced modifiers.) The former wouldn’t be an additional public cost, though it would mean giving up possible future revenue; the latter could mean just about anything, depending on what local taxes they mean — property taxes would already be waived, but “limits” on sales taxes could amount to a significant chunk of change.

So, we’re looking at $48 million in tax breaks that McGuire and company are asking for, at minimum, for a $120 million stadium. The United owners have certainly identified the low-hanging fruit of the subsidy world — construction sales tax breaks and property tax exemptions are indeed very common, and tough for either legislators or the public to fully understand — but that doesn’t make them any less of a taxpayer cost than if the $48 million were delivered via suitcases full of twenties. So far top public officials’ responses have been cautiously positive about the team not asking for direct cash, but cautiously pessimistic about getting any tax breaks through the legislature in the month and change left in this session, and McGuire said he wants. Expect this to get very heated very quickly, with high odds of the can eventually being kicked down the road to 2016.

Star Tribune nails trees, misses forest in Minnesota United stadium coverage

There’s a certain category of stadium-proposal news coverage that we see time and again: the “How do we solve the problem of funding a new stadium?” article. It technically falls within the constraints of journalistic standards — that is, if you consider journalism to be “reporting on the concerns of local elected officials and business leaders,” which is all too often the case — while reframing the issue not as whether a new stadium is a good idea, but how to pay for one without straining the local owner’s pocketbook.

I could go on like this, but easier to just point you to today’s Minnesota Star Tribune, which offers a perfect specimen of this article type. Let’s start with the headline:

Finding funding for proposed soccer stadium is complex

Why, yes, it is complex. Especially when you want to build one but have somebody else pay for a large chunk of it, as the article quickly makes clear is the case with Minnesota United:

Several of the county’s top officials have wondered whether a countywide sales tax now paying for the Minnesota Twins’ Target Field could also be used to help pay for a $150 million soccer stadium that the former UnitedHealth Group chief executive wants to build.

But the obstacles, according to legislators, county officials and an examination of records, are daunting. The roadblocks can be traced partly to a set of obscure, late-night hearings that occurred at the State Capitol four years ago — and which significantly decreased the likelihood of using the Target Field sales tax for a soccer stadium.

Damn those backroom deals that force the county to stop collecting sales taxes that were levied for a Twins baseball stadium once the stadium is paid off! Now you’re hamstringing county officials from taking money approved for one purpose and using it for another, which as we know is how the appropriations process is supposed to work! (Hamstringing them without getting the state legislature to change the law, that is, which the state can do, but it’s so awkward to have to ask, you know?) How are the United owners (who, incidentally, include the owners of the Twins) supposed to pay for a new soccer stadium now?

Though [county chief financial officer Dave] Lawless declined to speculate how hard it would be politically to change state law to use the ballpark money, the tax is hardly the only avenue open to McGuire. He could opt for a series of lesser public subsidies — asking that property taxes and sales taxes on construction materials be forgiven, as an example — or could simply privately finance the stadium.

Well, there’s an idea. Not an idea that is mentioned anywhere else in the article, mind you, but at least it got a mention somewhere. But then that undermines the headline: Finding funding for a new soccer stadium isn’t “complex” if it’s just a matter of writing a check, which the group that owns Minnesota United could do, given that it includes the billionaire owners of the Twins and Timberwolves (the latter of whom also bought the Star Tribune last year). It might not make financial sense for them to build a new stadium if they had to pay for the whole thing themselves, but then that would raise the question — if the article went there at all — of why build a new stadium at all, if playing in an existing one would make more business sense?

This is one of those cases where media analysis — and, really, media self-analysis — needs to go beyond whether an article is “biased” in the sense of taking sides to the more nuanced question of whether the news media, by adopting one side’s assumptions, is subtly skewing the conversation. After all, there are many other ways to cover a story like this that would be equally accurate: “Legislature’s action should protect county taxpayers from sales tax grab,” say, or if that seems too anti-stadium-funding, then “Twins sales tax surplus a likely no-go for soccer, thanks to 2011 law.” Neither of those, though, would shift the debate to be about how to find public money for a soccer stadium, not whether to do so, which is clearly what Minnesota United’s owners and their political allies want — and what sports teams are all too often able to use news coverage to accomplish.

I emailed the author of this piece, Mike Kaszuba (who’s interviewed me before on stadium topics), this morning to ask him if he didn’t think the article ended up reinforcing the idea that public money was necessary, and he said that wasn’t his intent at all: “There had been a lot of speculation here over the past few months on whether the countywide sales tax used to build the Minnesota Twins’ Target Field could be used. With this article, we wanted to point out that trying to do so would run counter to what had been recently done at the Legislature on this topic.”

I don’t doubt that that’s true; and unlike some other people I could name, I’m guessing Glen Taylor didn’t use his ownership of the Star Trib to pressure Kaszuba to write a certain way. But articles like these can end up being even more pernicious, precisely because they don’t technically color outside the lines of objective journalism: This is a well-researched article that could nonetheless end up shifting the debate in the direction of what team owners want, just because of the way it frames the problem needing to be solved. It’s something that journalists — and I count myself here as well — need to be constantly vigilant about, especially when the default position for so many newspapers seems to be that the agenda of sports business is sports business coverage’s agenda.

Scaled-back Indy Eleven deal may include city funding, opt-out clause that could make it still suck

One small and slightly worrying loophole has emerged in the Indiana state senate’s plan to give the Indy Eleven minor-league soccer team $20 million for renovations to their current stadium at IUPUI instead of the $82 million new stadium that they wanted. Per the Indianapolis Star:

The details of the renovations haven’t been ironed out, Morrison said. But Indy Eleven would have to cover expenses beyond the $20 million and whatever the city of Indianapolis contributes, if anything.

Yes, well, whether the city of Indianapolis is going to be required to kick in more money would be an important detail, now wouldn’t it? The current bill also requires Indy Eleven to sign a 20-year lease, but could contain a buyout clause if the team wants to leave early, which depending on how it’s worded could be used by the team to demand more stadium subsidies down the road, as Hoosiers should be all too familiar with. So while cutting the immediate public subsidy from $82 million to $20 million is nice and all, let’s get a look at the actual lease language before we cheer too loudly for the Indiana senate for doing the right thing.

Indiana senate may actually be getting Indy Eleven to settle for $20m in stadium renovations

The Indiana state senate yesterday overwhelmingly passed its bill to spend $20 million on renovations to IUPUI’s stadium rather than spend $82 million on a new stadium for the minor-league NASL (but MLS expansion wannabe) Indy Eleven soccer team, and holy crap, it looks like Indy Eleven’s owners are actually going to go for it:

On Thursday, the team for the first time appeared to enthusiastically back the Senate version, rather than hold out for a new stadium. In a statement applauding the bill’s passage and looking ahead to the conference committee, the team made no mention of the original $82 million proposal.

“We are thrilled that the Senate’s vote today furthers our goal to secure a proper stadium for ‘the World’s Game’ and all of its passionate supporters from across Indiana,” said Peter Wilt, president and general manager of Indy Eleven.

Now, the senate bill still needs to be reconciled with the state house bill that approved the new $82 million building, so it’s still possible that Wilt’s statement left out the silent “Mwahahaha, foolish senate humans, we will say nice things about your bill while secretly planning to get the conference committee to split the difference and give us $50 million!” But that doesn’t sound like it’s going to happen, which would mean that this entire stadium shakedown would end with Indy Eleven accepting $20 million from ticket taxes (which come largely out of team owners’ pockets, since they limit how high they can raise ticket prices before pricing themselves out of the market) for some minor renovations, and agreeing to a 20-year lease (ironcladness yet to be determined) in the process.

That still may not be the ideal scenario — $20 million is still money, and the state of Indiana probably has other needs more pressing than upgrading a university football stadium — but it’s getting way closer to a price point where you can say, “Meh, that’s not too bad a price to pay to make some soccer fans happy.” So, and I never thought I’d say this, but props to the Indiana legislature for some tough negotiating. Would be nice if local officials would apply this bargaining ability to sports franchises other than minor-league soccer teams, but hey, baby steps.

A guy in Minneapolis says MLS team owners will ask for public money, he just knows

A guy who owns land that Minnesota United wants for a new soccer stadium says he’s been told they won’t buy it yet because they’re waiting to “go through the legislature” first, which he interprets as a sign they’re going to ask for public money. Which is the whole story, really, and even if the Minneapolis Star Tribune drags it out to two full online pages, that doesn’t mean I have to.

Just file it away as a data point for future reference, for whenever United owner Bill McGuire decides it’s no longer “premature” to talk about this stuff. MLS commissioner Don Garber wants something in place by July 1 or he’s going to start threatening to yank the team, and if memory serves the Minnesota legislature wraps up its session in late May, so it shouldn’t be long now.