Portland ups Timbers tax break to $5.1m, says it’ll all work out because math and stuff

The Portland city council voted unanimously yesterday to approve the proposed $50 million expansion of the Timbers‘ stadium that will be entirely paid for by the team owners except for $2 million in ticket taxes that the city will waive. Except now it’s really $5.1 million, what?

Peregrine has agreed to pay the $50 million cost of building the expansion. In exchange, the city has agreed to forfeit its share of ticket revenues, losing out on about $5.1 million between 2018 and 2025.

As this was explained previously, the city’s contribution is just kicking back its 7% ticket tax on the 4,000 new seats. There are 17 MLS home games per season, so over seven years that’s 119 games, times 4,000 is 476,000 tickets total — meaning the Timbers would have to charge $153 a ticket for this to make any sense.

The Oregonian offers a slight clue, indicating that there was a last-minute switch in the tax break, but not explaining what it was:

The city asked the soccer team to switch from a 10-year tax exemption it had granted the club in May to a seven-year exemption so that the city could ensure the team would resume tax payments by 2026. That way, the city could secure income for large debt payments on the stadium coming due then, officials said.

Okay, but how does seven years of tax kickbacks amount to more money than ten years of tax kickbacks? Unless now the city is kicking back taxes on all tickets, not just the 4,000 new ones? (Providence Park holds 22,000 seats currently, so that math would work out, sort of, if you squint.) And how does this make sense at all:

Although the new tax break is about $3 million more in the near term, it will result in the Timbers paying higher taxes after 2025, officials said.

“The exemption is basically similar value,” Portland’s Chief Administrative Officer Tom Rinehart said. “There is more money exempted up front for Peregrine” and the revenue flow is greater in later years.

But, but, exempting more money sooner is a greater cost, because present value decreases the farther you get into the future, and AAUGH!

Anyway, this is still a relatively small amount of money, albeit relatively larger than the previously reported relatively small amount of money. The question remains: Why? What possible reason does the Portland city council have for giving the Timbers owners $5.1 million just so they can have more tickets to sell? Does any large enough business get to ask for city checks just because “economic development”? If I agree to spend $50 in Portland, will the city council reimburse me $5.10? The people demand answers, already!

County officials on Charlotte MLS stadium: If city won’t spend money, maybe we won’t either!

When last we checked in with billionaire racetrack owner Bruton Smith’s demands for $100 million in stadium subsidies and free land for a new soccer stadium in Charlotte, the county had approved its half, but the city council was balking at the deal, so everything was on hold. And now … pretty much still the same thing, actually:

In a setback for Major League Soccer in Charlotte, the Mecklenburg County commissioners pushed back a decision on spending $120 million for a new soccer stadium until August – and some commissioners don’t want to invest unless the city also contributes…

Monday, Democrat Dumont Clarke said that he also wants the city to agree to spend $43.5 million before he votes for the county to spend anything.

“Why are we budgeting for this when our key partner isn’t willing to endorse it?” Clarke said in an interview Monday. “This gives the city a deadline to see what they will do.”

Okay, technically maybe this is a change of direction, from “we’ll approve our share of the money, but nothing is going to happen until the city approves its share” to “until the city approves its share, we’re not going to approve ours either,” but the upshot is the same: no stadium for now because the rich guy who wants it is demanding that more than half the cost be paid by taxpayers, and city officials aren’t crazy about that idea. Maybe that will change after city elections this fall, maybe not. Either way, it doesn’t sound like Charlotte will be a contender in the round of MLS expansion set to be announced later this year, but since MLS expands pretty much every Tuesday, that’s probably not a big deal — and certainly not a reason to accede to demands for $100 million in cash, if anybody on the Charlotte council was thinking that.

San Diego council tries to block MLS stadium referendum by refusing to pay for it

While Cleveland sues itself in a mockery of jurisprudence to get out of public oversight of its NBA arena subsidy plan, the San Diego city council is trying to avoid a proposed public referendum on an MLS soccer stadium (as well as one for a convention center expansion) for different reasons — it wants the vote delayed a year to give more time to figure out what the heck is being voted on — and by different means — the council just up and refused to put money for staging the referendum in the city budget:

Councilwoman Barbara Bry, who chairs the council budget committee, introduced a budget resolution stripping out the $5 million election cost, saying the two measures should wait until the November 2018 general election.

“I want to see a well-crafted measure on the November 2018 ballot,” Bry said, referring to the convention center measure that would increase the hotel room tax that would also fund street improvement and homeless programs. She also prefers a delay on SoccerCity to give time for competing plans to be considered…

But Mayor Kevin Faulconer immediately vowed to veto the council’s action.The mayor has until June 13 to modify the budget as he sees fit, and the council would need six votes to override.

“A City Council majority is supporting the unprecedented step of blocking a public election by stripping funding from the budget,” Faulconer said in a statement. “This short-sighted move results in denying the public a vote and getting nothing accomplished for our city. I intend to use my veto authority to restore the special election funding, while still retaining the added funding for our police, so the City Council can take an up-or-down vote on these urgent ballot measures.”

All this is very exciting, and means exactly squat, so far as I can tell, since the council still needs to vote a week from Monday on whether to put the soccer stadium plan on the November ballot. They could change their minds by then, of course, but given that they just voted overwhelmingly against holding a vote this fall even after MLS deputy commissioner Mark Abbott warned them last week that if the vote is delayed to 2018 it could cost San Diego an expansion franchise (this round of expansion, anyway), that doesn’t seem too likely. Unless, of course, some councilmembers are just trying to induce Mayor Faulconer to haggle more. Gosh, representative democracy is fun!

Miami-Dade ready to sell land to Beckham, MLS stadium may actually get built this century

David Beckham’s interminable quest for a new Miami soccer stadium “won a crucial endorsement” this week, according to the Miami Herald, when local county commissioner Audrey Edmonson endorsed the plan to sell Beckham three acres of county-owned land for $9 million. Which really shouldn’t come as that much surprise, given that when last heard from Edmonson was bragging about having gotten Beckham to provide local residents with a whole 50 jobs, half of which will pay more than minimum wage, but I guess actually getting her formal endorsement is a hurdle of a kind, so congrats to Becks for pulling that off?

The land sale is expected to go before the county commission next Tuesday, where it will likely pass. Then the stadium deal still needs approval from the Miami city council, where it’s likely to run into strong opposition from local residents fearing a traffic nightmare stemming from Beckham’s decision not to build any parking garages (likely because he has no land on which to put them): “I think it’s terrible for the neighborhood,” nearby resident Amanda Hand told the Herald. “You either have zero people or 25,000 people. It isn’t like a standard commercial use.”

Either way, unless you count selling him some county land as a steal, Beckham’s plan would be remarkably subsidy-free — he’d even pay property taxes on the land he acquired — largely because he got shot down every time he proposed a deal that would have gotten him any special benefits. He still needs to figure out where to get the money to pay for actually building the thing — he’s slowly added a few other private investors, but nobody’s saying how much money they’d put up or what they’d want in return — but that’s his problem. Here’s hoping he works it out soon, and is able to open a new chapter in Miami’s glorious history of supporting pro soccer … oh.

MN United finally gets $57m in tax breaks, one year after misplaced “or” almost scuttled them

Almost exactly one year after Minnesota United had a property-tax break for its new St. Paul stadium vetoed by Gov. Mark Dayton because somebody accidentally wrote “or” instead of “and” in an unrelated part of the bill about paying off the Vikings stadium with bingo-hall proceeds, the team finally got its money Tuesday night, when Dayton signed the bill after the state legislature re-passed it. Now that the team has its $57 million in tax kickbacks, construction is now expected to begin in the next month or two, with the stadium scheduled to open in time for the 2019 season, because soccer stadiums are relatively simple and so don’t take three years to build like, say, NFL stadiums. Still, that’s a year later than it would have opened if some state official had been more careful with their conjunctions (or, I suppose, if United had been willing to build a stadium and pay taxes on it, instead of only being willing to do one or the other).

In unrelated news, the New York Times decided yesterday to get rid of all of its copy editors. The future is truly a wondrous place.

 

Cincy soccer team exec: We’ve never asked for subsidies before, so give us $100m as thanks

The owners of the USL’s F.C. Cincinnati are listening to Alexi Lalas and moving ahead with plans for building a new stadium as they prepare to apply for an MLS expansion franchise, and blah blah blah, here are some places they may want to build it, where’s the bit about who’ll pay for it? Here we go:

[FC Cincinnati President Jeff] Berding said FC Cincinnati is committed to spending $250 million of its own money — $150 million for MLS franchise fees and $100 million toward the stadium. Berding wouldn’t say how much public money the club wants, but he did say FC Cincinnati’s contribution would cover more than half of what’s needed to build a stadium. So it figures it could be asking for less than $100 million in public aid.

That’s a little on the vague side, but it does sound like “almost $100 million” is probably in the ballpark. Though as usual, until a funding plan is actually revealed, there’s no way to tell whether that’ll be almost $100 million total, or almost $100 million in direct construction subsidies, plus tax breaks and operating subsidies and what have you.

And either way, that’s a significant chunk of public change for a team that may or may not win an expansion franchise regardless of whether it gets a stadium built. (Or, looked at another way given MLS’s relentless expansion frenzy, might get a franchise eventually even if it played in a hole in the ground. Not that they play in a hole in the ground currently — F.C. Cincinnati currently plays at University of Cincinnati’s Nippert Stadium, where they outdraw several MLS franchises, either a sign that they have the kind of fan base that can support a new building, or that they don’t need a new building, because the old one is plenty popular already.) A new group called No More Stadium Taxes has been formed to oppose the plan, as well as plans to spend public money on expanding Cincinnati’s arena, with attorney Tim Mara, a veteran of the Bengals stadium subsidy battles, on board.

The best part of this whole story, though, is Berding’s explanation of why team owner Carl Lindner III, son of the late billionaire Reds owner Carl Lindner Jr., deserves public funds to help build his private soccer stadium:

Berding also suggested public investment would be a payback to the Lindner family for its largesse over the years.

“Carl Lindner and his family have brought thousands of jobs to the city for decades and never asked for help,” Berding said.

I suppose that’s technically true of Lindner’s ownership of the Reds, since while he owned the team when Great American Ball Park opened in 2003, the bill that authorized it was passed in 1996, when Marge Schott still had possession of the team. (I’m not going to check into whether Lindner’s multiple Cincinnati-area businesses ever asked for tax breaks or the like, though that’d be a fun exercise for both readers and Cincinnati journalists.) But still, “We’ve always run our business with our own money, how about throwing $100 million our way in appreciation of us never asking for help before” seems a little off somehow — but I guess when you’re a billionaire asking for public funds, you need some kind of excuse, even if it’s just “My family has never screwed you over — yet.”

Beckham unveils new Miami stadium design, promises to create a whole 25 living-wage jobs

David Beckham’s gang of stadium negotiators descended yet again on Miami yesterday, to present the latest iteration of his long-delayed MLS stadium plans. He’d gotten raked over the coals of late by a local neighborhood group for proposing a plan that includes no parking, so how’d he do this time?

That’s less crazy than the last rendering, in that it doesn’t have sidewalks sloppily pasted over parked cars, though it still seems to rely on cantilevering some of the seating over the surrounding streets via support beams with all the structural integrity of a toothpick sculpture. But we’ll leave it to the engineers to figure that out — what about that whole parking issue?

“We’re going to be encouraging the use of Metromover, Metrorail, water taxis, ride-sharing,” said Spencer Crowley, a lawyer and lobbyist representing Miami Beckham United in its talks with Miami-Dade to buy a parcel needed for its nine-acre stadium site near the Miami River. “We view this as a paradigm shift for the county as to how people get to large events.”

Sure — when life serves you no-parking lemons, might as well make alternate-transit-ade. And it might even work, though proposing that your fans won’t need to park their cars anywhere because they can take “water taxis” is a bit out-there. (Beckham’s stadium czar Tim Leiweke also promised a “dinner-cruise boat to deliver fans to the Miami River a few blocks away.”)

And speaking of out-there, dear lord, this:

As part of the deal, the Beckham group promised to create 50 permanent jobs at the stadium. Half would be required to pay Miami-Dade’s living wage of about $15 an hour.

That’s right, 50 new jobs! And 25 of them would pay at least $15 an hour! And local Overtown residents should be grateful, said Audrey Edmonson, the Miami-Dade commissioner for the neighborhood:

“I heard some groans when it came to 50 jobs,” Edmonson said. “Guaranteeing 50 permanent jobs, that is a lot of jobs when it comes down to a stadium. … Believe me, I had a difficult time getting that out of them.”

She tried, people. Life is hard.

SDSU drops out of San Diego MLS plan, would rather use stadium land itself

How’s that whole plan going to build a San Diego soccer stadium on the site of the Chargers‘ old stadium that would double as San Diego State University’s football stadium, using no public money except for, oh yeah, about $240 million in public money? Not well at all, if the SDSU part was important to anybody:

San Diego State made their position clear Tuesday afternoon, releasing a statement that announced that they will no longer engage in discussions with FS Investors, whose plans are to build an MLS stadium that would be shared by the SDSU football team…

“While SDSU’s current campus footprint of 238 acres is sufficient to support the University’s aspirations in the short term, we have long-articulated the need for more space for the advancement of the University over the next 50 years. The Mission Valley opportunity is a once-in-a-generation chance for SDSU to expand its research, tech transfer, collaboration space and other future needs, as we continue to ascend toward becoming a top 50 public research institution.

Translated: That’s a nice piece of property you’ve got there, and we’d way rather have it for ourselves rather than having to share with a soccer team. Which, maybe that’s a better use of land, maybe it’s not — we’d need to see, and hopefully the San Diego city council will demand to see, some kind of cost-benefit analysis to determine what’s the best use of the site. This doesn’t necessarily kill the soccer plan by any means, but it’s certainly not going to help the push for a public referendum in favor of it this fall when voters ask, “So this will give SDSU’s football team a place to play, too, right?” and canvassers have to reply, “Um, have we mentioned that soccer is growing in popularity among well-off millennials?”

That all-privately-funded Portland Timbers stadium expansion is actually demanding a $2m tax break

Aw, man! I was afraid that Portland Timbers plan to spend $50 million of their owners’ own money to expand their stadium, asking for no public money at all, was too good to be true — and turns out it is, as the team’s owners want a ten-year exemption from ticket taxes on the new seats, just because:

Commissioner Nick Fish, Wheeler and Golub all noted that the proposal asks the city to waive taxes on tickets that would not otherwise exist without the Timbers spending $50 million on an expansion.

“It seems reasonable to ask for an exemption on taxes that would not already be generated,” Fish said.

Yeah, no, that’s not a reasonable thing to ask for at all: It’d be like me buying a new car and asking to be exempted from gas taxes for any additional miles I drove as a result, or me getting an advanced degree and asking to be exempted from income taxes for any additional salary I earned. Investing in property is a perfectly normal business practice, and paying taxes on the increased revenue you get is a part of doing business, and something you have to factor into your revenue calculations — asking to have taxes kicked back to you is a subsidy, pure and simple, regardless of whether you dress it up in “these are taxes we wouldn’t be paying if only we weren’t earning more money.”

To make matters worse, the Oregonian reports that the city pays for maintenance and insurance on the building, and those costs will go up some once there’s a bigger building to maintain and insure. “We will see an increase in our costs,” Portland spectator facilities and development manager Susan Hartnett told the paper. “Obviously, with the expansion, it will go up. As will the repair costs, with more square footage.”

It’s still not a huge subsidy — about $2 million over the course of the decade for the tax break, plus whatever the increased maintenance and insurance costs tack on — so the deal still looks pretty good for Portland, assuming Portland taxpayers have any interest in the Timbers having a bigger stadium. (Better access to tickets for otherwise sold-out games, I guess?) But it’s an important reminder that sports team owners — and development tycoons in general — see themselves as very different from you and me: Whereas our taxes are the price we pay for having the benefits of a democratic government, their taxes are a gift they’re giving to the public, and which they can ask to have rescinded at any time if they want to use the money for something else. Nice work if you can get it.

St. Pete approves stadium expansion for MLS bid using actual private money, maybe

Voters in St. Petersburg overwhelmingly approved Tampa Bay Rowdies owner Bill Edwards’ ballot initiative for an $80 million expansion of Al Lang Stadium on Tuesday, moving ahead plans for a potential MLS expansion bid. Edwards has promised to fund both the expansion to 18,000 seats and the $150 million expansion fee, so really there was nothing for voters to worry abou—

The referendum, which won approval with 87 percent of the vote, will allow city officials to begin negotiating a 25-year lease with Tampa Bay Rowdies owner Bill Edwards.

Noooooooooooooooooo!

Okay, it’s not so bad: There’s no guarantee that Edwards will try to get concessions on the back end — free rent, the city paying maintenance and operations costs, some kind of upgrades slush fund — on the back end, or that the council would approve such a lease if he did. But it’s important to remember that subsidies are increasingly being hidden in lease deals, in part precisely because they’re negotiated out of the public eye, so, you know, keep your public eye on this.

Anyway, add Tampa Bay to the list of metro areas fighting for an MLS franchise, and at least they did it without pouring tons of up-front cash into it like some other cities have been asked to do. That’s something, at least, and a valuable reminder that the sports industry can survive just fine without subsidies, if the level of public interest in the sport is low enough that subsidies are hard to come by. Apparently the Care Bears got it backwards!