Charlotte taxpayers now only being asked to spend $100m on a private MLS stadium, maybe

Great news, everybody! Mecklenburg County, where Charlotte is located, is now only being asked to spend $100 million on a soccer stadium for which the nonexistent team’s owner has only offered to put up $50 million, instead of being asked to spend $113 million:

Commissioners, meeting in closed session Wednesday night, were told the county and the city would each be asked to pay $43.75 million toward a $175 million stadium. That’s down from the $50 million each that was sought in the initial proposal in early January.

The report in the Charlotte Observer leaves out $13 million in land costs that county taxpayers would cover, bringing the total to $100.5 million. It also doesn’t explain who’d pay the additional $25 million that the stadium would now be expected to build since this was first proposed, if those are real costs and not just other stuff larded in to make it look like the public portion is a smaller share of the whole nut.

Also not mentioned is what the team’s lease would be like — except that “team owners would control [the stadium] in much the way the NBA’s Charlotte Hornets do the city-owned Spectrum Center” — so it’s entirely possible that this $12.5 million cut in county spending would be offset by $12.5 million more towards future renovations, or something. The Mecklenburg county commission is expected to vote on this plan next Thursday at a private retreat, after holding just a single public forum at 3 pm next Tuesday, when surely lots of folks will be free to testify about this proposal that doesn’t appear to be even mentioned on the commission’s website.

One commissioner critical of the plan, Pat Cotham, remarked, “I’m struggling with this rushed process. Rushed deals of any sort are not good deals, because you need to have time to vet things.” Crazy talk! In America, we vote on stadium deals first, and figure out the details later, and nothing’s gone wrong yet, right?

Charlotte MLS backers asking for $113m in public cash for stadium, isn’t this where we came in?

So, let’s see, anything else been going on while we’ve all been focused on where the San Diego Chargers and Oakland Raiders were going to end up? How about Charlotte, North Carolina being asked for $113 million for a soccer stadium for a team that doesn’t exist yet?

A proposal presented to Mecklenburg County commissioners in closed session last week calls for the city and county to each spend $50 million toward a $150 million stadium in Elizabeth just outside of uptown. The local ownership group of Bruton Smith, the billionaire race track owner, and his son, Marcus, CEO of Speedway Motorsports, would spend $50 million for the stadium.

The county would also demolish Memorial Stadium and the Grady Cole Center to make room for the stadium. The county would also provide the land – assessed at $12.9 million – for the new stadium.

That’s about equally as bad as the historically awful St. Louis soccer stadium proposal that that city mercifully killed earlier this week. If this is the new baseline ask for would-be MLS owners, we could be seeing the gradual end to the days when public subsidies in that league were generally lower than in other sports. (Though if cities keep saying no to them, maybe it’ll just be an indication that no matter if lots of kids are playing soccer now, that still hasn’t translated into the public or politicians feeling like landing an MLS franchise bestows that major “major league” feeling.) Already the Charlotte Observer has raised its eyebrows at the cost, and Charlotte Magazine contributing editor Greg Lecour has urged the city and county to drive a way harder bargain. Though it’s way more likely that MLS just packs up and tries its shtick on the next city down the road. How’s that legislation to end the Economic War Among the States going?

Revolution stadium plans being ruined by greedy teachers union, says pro-stadium columnist

Speaking of death notices for MLS stadium plans, New England Revolution owner Robert Kraft’s proposed Dorchester soccer facility is also being declared “all but dead,” at least by Boston Globe columnist Shirley Leung. This, though, may be a slightly different story than in St. Louis:

The finger-pointing has begun, and if Kraft goes away, blame the Boston Teachers Union. At issue are the 2.7 acres the union owns on the site where Kraft would like to put his sports venue.

The union, I am told, is asking for a deal that Kraft, a billionaire who also owns the New England Patriots, thinks is too rich.

That’s the start of a long column that comes down to: Kraft wants the teachers union’s land, the union is driving a hard bargain, and Kraft may walk away from the site in response. The entire thing is completely unsourced, except for one reference to “according to people briefed on the matter,” and given that Leung writes that if the deal dies it would be “a shame,” that she goes out of her way to praise Kraft as “credited with saving football when he helped broker a deal with players that ended the NFL’s 136-day lockout in 2011,” and that she’s previously admitted in print that “some may say I have never met a stadium I didn’t like,” there’s a fairly high likelihood that this column was prompted by Kraft’s side griping to her about those damn union leaders refusing to come down on their land asking price. Leung writes that Kraft has “a reputation for being a tough negotiator” — if he can save a few million by getting a friendly journalist to paint his opponents as obstructionists, that’s a phone call well worth making.

St. Louis soccer stadium plan sponsor kills funding plan, ball’s in MLS’s court, uh, pitch

Looks like we can downgrade the St. Louis MLS stadium plan’s condition from critical to dead, after the sponsor of a city bill to fund $80 million of the cost said she’s withdrawing the legislation:

“That bill will not be moving forward,” Alderman Christine Ingrassia, 6th Ward, said at Tuesday’s meeting of the aldermanic Ways and Means Committee…

Ingrassia said she wanted SC STL to show a proposal that was at least “revenue neutral” on the city’s budget over time.

“It looked like to me, and in the conversations I had with people who have more expertise in the field of public financing, that they were basically just repackaging the same subsidies in different ways,” Ingrassia said. “So they were asking for way more than I feel like we could support here in the city.”

“Repackaging the same subsidies in different ways”? I’m sure I’ve never heard of anything like that before.

It’s not entirely clear what changed Ingrassia’s mind — you go and sponsor a bill to spend $80 million on a soccer stadium, then turn around and say that this is “way more” than you can support? — but it’s worth noting that after newly elected governor Eric Greitens ruled out state funding as “corporate welfare,” Ingrassia started backing away as well. Elected officials are just so susceptible to peer pressure, you know?

If the soccer stadium plan really is dead, at least in this iteration — Mayor Francis Slay held out hope of still getting a proposal on an April ballot, but time’s running out and there’s now no funding plan at all — it’s worth noting that this would be one of the largest MLS stadium subsidies in history, all for a team that doesn’t actually exist yet. Top-level pro soccer in St. Louis isn’t a bad idea — it’s not a bad idea most places, which is why the league is handing out franchises to just about anyone who asks — but providing a near-record subsidy just so that MLS can get away with charging $150 million expansion fees was a terrible one. This alone won’t change the league’s business model, but maybe if Greitens has started something and a few more prospective expansion cities push back against subsidy demands … friends, they’ll call it a movement?

New Missouri gov says no state stadium funding, no way, no how

Sorry for the radio silence of the last few days: I was traveling, and while intending to get back to the stadium grind yesterday, a red-eye flight proved to be incompatible with a regular morning posting schedule. (Though I did find time to finish up some music writing I’d been working on, if that interests you.)

Thankfully, Missouri governor-elect Eric Greitens didn’t take the holidays off, greeting us to 2017 by upping the ante on his comments that MLS stadium funding would be “welfare to millionaires” with a great big raised middle finger to plans for state tax breaks for a St. Louis soccer stadium, telling journalists on Monday: “To be very clear, I have completely ruled out state funding for stadiums.”

Greitens reiterated his description of state aid for stadiums as ”welfare for millionaires” but said he “looks forward to meeting with the leaders of the MLS project to see if there’s a way for them to bring private-sector funding to bring a soccer team to the state of Missouri.”

“We are not going to use money from the people of the state of Missouri for what I believe is corporate welfare,” Greitens said. “We’ve got far too many core priorities of government that have to be invested in.”

That’s about as clear as clear can be. Without the $40 million in state tax credits, the MLS proposal has a (wait for it) $40 million hole in its budget, one that neither the city of St. Louis (which would already be putting up $89 million of its own public cash) nor the team’s prospective owners (who would already be, uh, paying the league’s $150 million expansion fee, what do you want from them, blood?) seems eager to fill. Stadium bill sponsor Ald. Christine Ingrassia remarked following Greitens’ remarks, “I was hoping to get to the point where this proposal made sense for St. Louis, but I’m feeling that less and less,” while Mayor Francis Slay’s chief of staff said, “It will be tough to get this done without the state’s support.”

Not that this kills the St. Louis MLS plan dead: $40 million isn’t an insurmountable gap, and the team owners aren’t likely to just walk away from that $89 million in city subsidies without trying to make it work. But with only three weeks before the deadline to get a vote on the April ballot, there isn’t much time to go back to the drawing board if they’re hoping to get something approved this year. Time for everybody to watch Lewis Reed really, really closely.

Either St. Louis MLS stadium funding is in trouble, or democracy is

That proposed MLS stadium for St. Louis that may be about to lose its $40 million state tax kickback could be facing trouble for its planned city subsidies as well, as apparently nobody gave the board of aldermen time to actually discuss funding bills before putting them up for an April vote:

One measure would raise the city’s sales tax by a half percent, with the revenue going to mass transit, public safety and economic development. A second measure would direct the corresponding increase in the use tax to the new stadium…

If [St. Louis Board of Aldermen President Lewis] Reed waits until next year to make those [committee] assignments — something that he’s well within his rights to do — aldermen would have just two weeks to pass the bills if they want the measures on the April ballot.

“I received the bills an hour before they wanted me to assign them,” Reed said. “We should have gotten that information a little bit earlier to really have an opportunity to take a look at the bills, understand what they are, their total impact, and the best assignment for them.”

This could easily be a screwup by the stadium’s sponsors, or it could be intentional: Corporate subsidy advocates haven’t been above throwing bills at legislators at the last minute to avoid scrutiny (or even leaving time for legislators to read the damn things), after all. Reed steered carefully down the middle on the proposed St. Louis Rams stadium subsidy, so it’s probably unlikely he’ll use this as an excuse to throw roadblocks in the way of the MLS deal; whether he’ll use this as an excuse to ram it through with little debate, we’ll see — though the fact that he’s griping publicly about not having enough time doesn’t seem promising for stadium subsidy backers.

Gov. Nixon gets more wrong on St. Louis MLS deal in three sentences than most can in lifetime

Lame duck Missouri Gov. Jay Nixon opened his mouth about the proposed St. Louis MLS stadium on Friday at a meeting with reporters, and this poured out:

“Folks may want to anguish a little bit over all this sort of stuff, but it’s the price of doing business,” Nixon said in a meeting with Post-Dispatch reporters downtown. “And quite frankly, we’re getting in, relative to what other areas of have done, so much more cost-effectively here.”…

“If we’re going to sit around the table and complain about this little part of the deal or that little part of the deal, then the $250 million to $300 million in private money that’s going to be invested will go somewhere else,” Nixon said, “and that site will sit there looking the way it is.”

Nixon has never been known for being the most savvy sports subsidy negotiator, but that’s a whole lot of stupid packed into just three sentences. Let’s break it down:

  • “It’s the price of doing business.” This is mostly meaningless rhetoric, but to the extent it has any meaning, it’s “this is the best deal we’re going to get.” Except the $129 million in state and city spending being proposed is literally the team owners’ first ask, so there’s no way to know whether this is the price of doing business or just what a couple of wannabe MLS owners decided they can sucker the public into giving them.
  • “We’re getting in, relative to what other areas of have done, so much more cost-effectively here.” There could be a word missing here in the transcript (“of have”?), but regardless, Nixon is off his rocker here, since this would be the second-largest MLS-only stadium subsidy ever, meaning that by definition more than 20 other areas have gotten off most cost-effectively. Unless he just means “ha ha ha ha, we’re making the city foot most of the bill instead of the state,” which is true, but not exactly what most people mean by “cost-effective.”
  • “The $250 million to $300 million in private money that’s going to be invested will go somewhere else.” Of that private money, $150 million will go into the pockets of the other MLS owners as an expansion fee — and that will happen regardless of whether a team goes to St. Louis or some other city. (In fact, you could even argue that it would be better for the Missouri economy if the St. Louis-based prospective owners didn’t waste their money on an MLS team, and instead spent it on something else local.) The team would be putting about $71 million into actual construction, but since it would also be taking up a piece of land that then couldn’t be used for anything else ever, not to mention $129 million in public money that couldn’t be used for anything else, that’s not necessarily a plus even if you think the land would likely remain undeveloped for a while otherwise.

Nixon was, by all accounts, a successful litigator and popular state attorney general before becoming governor, so you’d think he might know a little bit more about haggling than he’s shown with his sports dealings. Guess there’s really no accounting for the effect of the toy department.

Missouri delays $40m soccer subsidy ruling, St. Louis team owners may grub for money elsewhere

Okay, didn’t see that coming: One day after Missouri governor-elect Eric Greitens called the local soccer team’s $129 million stadium subsidy request “nothing more than welfare for millionaires,” the team’s owners asked a state board to delay a meeting on $40 million in state tax credits for the project, saying they may look for another source of funding:

[SC STL vice chairman] Kavanaugh said the ownership group is working on contingencies in the event it can’t secure the $40 million in tax credits, but those ideas are in the early stages. He said losing out on the state contribution wouldn’t necessarily derail the group’s efforts at an MLS team.

“We are thinking of other options to fill in the potential hole,” Kavanaugh said.

(If you’re confused about the team name, by the way, that’s because it’s confusing: Kavanaugh currently owns the minor-league St. Louis F.C., but the larger group seeking an MLS team is called SC STL, which may or may not be the name that the MLS team goes by, if it ever comes into being.)

With the board meeting now delayed in 2017, it looks like Greitens will be overseeing any state share of the stadium deal after all, which explains why Kavanaugh is looking for a Plan B. If you’re hoping that it will be “ask the private investors who’d get the benefits of a stadium to cough up some more money, especially what with MLS reducing its expansion fee for its next two franchises from $200 million to $150 million,” Kavanaugh is already crying poor:

“Personally, growing up from a father who was a brick layer, I don’t come from money and any money I’ve made I’d say it has been earned,” Kavanaugh said by phone. “There’s a lot that personally speaking for myself and my partners we have given back in a number of ways and still plan on doing that in the community here.”

Kavanaugh had a brief career as a pro soccer player before co-founding a tech company with his friend David Steward, who likewise was born into wealth, so it’s true they’re not old-money millionaires. Still, he co-owns a company with $7.4 billion a year in annual revenues, so if he really needs $40 million, he has other places he can go other than the state of Missouri. Here’s guessing that he’ll end up asking the city of St. Louis instead, but there’s always hope that by “giving back to the community” Kavanaugh actually means “paying for my own stuff already.”

Missouri governor-elect calls St. Louis soccer stadium plan “welfare for millionaires”

I admittedly hadn’t noticed that Missouri elected Eric Greitens as governor until yesterday, but he’s sure on my radar now:

Missouri Gov.-elect Eric Greitens said he opposes public funding for a Major League Soccer stadium in downtown St. Louis, according to a statement released by his transition team Monday.

“This project is nothing more than welfare for millionaires,” Greitens said. “Right now, because of reckless spending by career politicians, we can’t even afford the core functions of government, let alone spend millions on soccer stadiums.

“This back-room wheeling and dealing is exactly what frustrates Missourians.”

The St. Louis MLS stadium project certainly qualifies as welfare for millionaires, involving $129 million in public cash, land, and tax credits to build a $200 million stadium. That’s not the sort of thing that governors usually say aloud, but Greitens has an unusual resumé, mixing altruism with serving in the Navy SEALs with hating on unions (he’s also the first-ever Jewish governor of Missouri), so maybe it’s not entirely unexpected.

Also, probably not entirely likely to do much, since the state Development Finance Board is set to vote on the city’s request for tax credits today, before Greitens takes office, and the rest of the stadium decision will be up to St. Louis city officials and voters. Still and all, it’s not going to help the soccer team’s ballot campaign to have the governor-elect publicly call them a bunch of rich guys with their hands out.

St. Louis mayor wants sales-tax hike to pay for MLS stadium so owner can drop $200m on expansion fee

Whole lotta news swirling around the proposed St. Louis MLS stadium (and team), as Mayor Francis Slay prepares for an April public vote on the team’s proposed $129 million subsidy:

  • While $40 million for the deal would come from state tax credits, and another $9 million from state land preparation funds, the source of the city’s $80 million in cash was unknown until now. Slay’s idea: Hike city sales taxes by half a percentage point (from 8.67% to 9.17%) and use the proceeds for a whole bunch of stuff, including light rail, job training, surveillance cameras to reduce crime — and an MLS stadium. (Technically the stadium money would come from a “use tax” on purchases of out-of-state products, but it’s essentially the same mechanism.) This is, needless to say, money that if raised could be spent on anything else — and the raising of which doesn’t come without a cost to the local economy, as the city across the state was warned a decade ago.
  • MLS commissioner Don Garber called the vote on stadium subsidies a “referendum” on whether they want an MLS stadium at all, which isn’t a take-it-or-leave-it blackmail threat at all, gosh no.
  • Prospective team owner (and former Bain Capital exec and Boston Celtics /AS Roma minority owner) Paul Edgerley continues to tout his “$400 million of private money” in the deal, which pointedly ignores that 1) half of that is for the expansion fee MLS is charging him for the team itself and 2) most of the rest would be covered by the public subsidy.
  • If Edgerley also wants to get property taxes from the blocks around the stadium kicked back to help pay his costs via a TIF — he’s not answering questions on the topic — then a previous city deal means even more tax money could be diverted to an unrelated private developer in the area.

The April vote — which, let’s be reminded, is only required because a bunch of community activists passed a law in the wake of the St. Louis Cardinals stadium subsidy 14 years ago — would come in two parts, one to raise the sales tax, and one to devote a portion of it to the stadium. No polling yet to indicate where voters stand, but as I noted to a St. Louis reporter yesterday, this is an awfully big ask for an MLS team, given that in contrast to more established sports, the response of most voters to the threat of “You’ll never get a pro soccer team if you don’t do this” is likely to be “Wait, there’s pro soccer now?”

That’s a big part of the reason why MLS subsidy demands tend to be more modest — I don’t have the full numbers, but I believe this would be the second-biggest subsidy request behind the $183 million D.C. United stadium deal. As such, this is looking more and more like a test case, not just for whether MLS can successfully demand $200 million apiece for one of its increasingly innumerable franchises, but whether the team owners can turn around and shake down a city bereft over the loss of its NFL franchise to cover a large chunk of the nut. This is going to be quite the 2017.