Seattle arena developers find loopholes to evade coronavirus construction ban

The increasingly worldwide suspension of nearly everything has finally started to hit stadium and arena construction: New York’s order on Friday banning “non-essential” construction put a halt to work on the Islanders‘ Belmont Park arena, and Austin’s “stay at home” order has shut down activity on Austin F.C.‘s new stadium. It’s reasonable to expect that more construction bans will follow in coming days and weeks, especially since the U.S. curve is decidedly not flattening yet.

Each of these rulings comes with exceptions, though — for example, New York Gov. Andrew Cuomo’s order exempts “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters,” something that has drawn criticism given that tons of housing construction in New York City is now required to include a percentage of affordable units (or “affordable” units, since the formulas used mean that some apartments require tenants to earn $120,000 a year to qualify). And the renovations of the Seattle Center Arena (formerly KeyArena, and still widely known by that name despite Key Bank’s naming rights deal having expired years ago) for the city’s new NHL team have apparently found such a loophole:

The only exceptions are construction related to essential activities like health care, transportation, energy, defense and critical manufacturing; construction “to further a public purpose related to a public entity,” including publicly financed low-income housing; and emergency repairs.

KeyArena construction is exempt under the last two carve-outs, Leiweke said. The arena is a public facility, and time is short to reattach the arena’s 44-million-pound roof to its permanent support posts. The roof has been held up by temporary posts since late last year.

I am not an engineer by any stretch of the imagination, but it’s hard to see how leaving the roof sitting atop temporary posts for a few extra weeks qualifies as an emergency. (If the temporary posts are really so rickety that they’re on the verge of collapse any day now, that seems maybe not entirely safe regardless?) A spokesperson for NHL Seattle called it a “delicate and precise undertaking” involving an “intricate compression system,” but neither of those phrases actually says that delaying the work would make it any more “delicate” or “intricate” or what have you.

And as for the arena being a “public facility,” yes, it’s owned by the city of Seattle, but it’s being renovated and will be operated by the private developers Oak View Group, who are even making payments in lieu of property taxes on it because it’s so clearly a private project using public property. It’s a “public property,” in other words, but not really a “public purpose,” but then we’ve already seen how far governments are willing to bend the definition of public purpose when it suits them.

What all this means is that Seattle’s NHL team will likely be able to launch in its new home in 2021, while the Islanders’ new arena is now even less likely to be ready by then. This is not a huge deal in the long run — teams can easily enough move a few games to alternate sites while construction is completed, especially in a world where moving teams temporarily to whole different cities is being seriously considered — but it’s worth noting if you’re an Islanders or Seattle NHL or Austin F.C. fan, if any of those exist in large numbers. (Just kidding about the Islanders. Mostly.)

Friday roundup: If you’re watching TV sports in empty stadiums by summer, count yourself lucky

Michael Sorkin, who died yesterday of COVID-19, was a prolific architecture critic (and architect) and observer of the politics of public space, and so not a little influential in the development of my own writing. I’m sure I read some of Sorkin’s architecture criticism in the Village Voice, but he first came on my radar with his 1992 anthology “Variations on a Theme Park,” a terrific collection of essays discussing the ways that architects, urban planners, and major corporations were redesigning the world we live in to become a simulacrum of what people think they want from their environment, but packaged in a way to better make them safely saleable commodities. (I wish I’d gotten a chance to ask him what he thought of the Atlanta Braves‘ new stadium, with its prefab walkable urban neighborhood with no real city attached to it.) In his “Variations on a Theme Park” essay on Disneyland and Disney World, he laid out the history of imagineered cities starting with the earliest World’s Fairs, up to the present day with Disney’s pioneering of “copyrighted urban environments” where photos cannot even be taken and published without prior approval of the Mouse — a restriction he got around by running as an illustration a photo of some clouds, and labeling it, “The sky above Disney World.”

I really hope this isn’t the beginning of a weekly feature on great people we’ve lost to this pandemic, though it seems pretty inevitable at this point. For now, on with the other stadium and arena news, though if you’re looking for a break from incessant coronavirus coverage, you won’t find it here:

State board gathers in small, enclosed space to approve St. Louis MLS subsidies

Hey, it’s actual stadium subsidy news! The world may be padlocking its doors as we speak, but the Missouri Development Finance Board did find time to approve $5.7 million worth of tax credits for the expansion St. Louis MLS team‘s new stadium.

The vote was unanimous, with board chair Marie Carmichael saying afterwards, “I feel a lot better about this project. It is certainly more doable.” (The team’s initial request, for $30 million in tax credits, was rejected last December after it was determined that the state was plumb out of tax credits after its next $5.7 million.) Though at least one board member noted the, uh, problematic timing of all this:

Although he voted in favor of the project, board treasurer John Mehner raised concerns about approving the project at a time when the world is focused on battling the coronavirus.

“I’m worried about the optics … and whether this is the exact right time to take action,” said Mehner, who suggested waiting for up to two months to take up action on the tax credits.

There’s also the question of whether the sports world will ever be the same as it was just a couple of weeks ago: Leagues are already looking at returning to play games in empty venues, possibly much smaller ones that could effectively be used as TV studios; this could be the new normal for a long while if predictions are accurate that we’re likely to be on a “roller coaster” of reopenings and reclosings as the virus waxes and wanes over the next year or two.

And then there’s the question of how sports leagues survive the economic hit of canceling most of all of their seasons — while some leagues are sitting on deep reserves of cash, that’s not true for smaller leagues like MLS (and certainly not for minor-league sports). Will the league’s strategy of continued growth underwritten by continued expansion still be viable in a world battered by a months- or years-long economic crash? We’ve seen leagues before that have gone on hiatus because of what seemed like a momentary crisis and then never returned; I’m not especially expecting that for MLS, but there could still be major repercussions for its business model.

In the meantime, I guess take comfort in the fact that at least some business as usual is still going on, even if you can’t go to work or school or the weed store. Sure, it’s the business as usual of tax money being handed over to private enterprise to underwrite their profits, but we’ve gotta cling to whatever normalcy we have now, right?

Friday roundup: Dolphins owner seeks Formula One tax break, Tacoma okays soccer subsidies, plus vaportecture from around the globe!

Happy coronavirus panic week! What with stadiums in Europe being closed to fans and stadium workers in the U.S. testing positive for the virus, it’s tough to think of much right now other than what song to wash your hands to for 20 seconds (this is my personal preference). But long after we’re done with our self-quarantines, the consequences of sports venue spending will live on, so to the week’s news we go:

  • Miami Dolphins owner Stephen Ross is seeking a sales-tax exemption for tickets to Formula One racing events at his stadium, saying that without it, Miami might not get a Grand Prix. The tax break is expected to cost the state between $1.5 million and $2 million per event, but Formula One officials say each race would generate an economic impact of more than $400 million, and what possible reason would they have to lie about a thing like that?
  • The Tacoma city council voted 8-1 on Monday to approve spending on a $60 million, 5,000-seat stadium for the Reign F.C. women’s pro soccer team. According to a letter of intent approved by the council, the city will provide $15 million, while the city parks agency will provide $7.5 million more, with perhaps another $20 million to come from federal tax credits for investing in low-income communities. The parks body still has to vote on the plan on Monday as well; given that Metro Parks commissioner Aaron Pointer — who is also a former Houston Astro and a brother of the Pointer Sisters — said he doesn’t see “really any benefits at all” for the city or its parks, it’s fair to say that the vote there will be more contentious than the one in the city council.
  • Brett Johnson, the developer behind a proposed $400 million development in Pawtucket centered around a pro soccer stadium, says he has lots of investors eager to parks their capital gains in his project tax-free under the Trump administration’s Opportunity Zone program, but it might take a while to work out all the details because reasons. But, he added, “My confidence is very high,” and confidence is what it’s all about, right?
  • Nashville’s Save Our Fairgrounds has filed for a court injunction to stop work on a new Nashville S.C. stadium, on the grounds that no redevelopment of the state fairgrounds can take place without a public voter referendum. This brings the total number of lawsuits against the project to … umpteen? I’m gonna go with umpteen.
  • There’s now an official lawsuit against the Anaheim city council for voting on a Los Angeles Angels stadium land sale without sufficient public meetings. The People’s Homeless Task Force is charging that holding most of the sale talks in private violated the state’s Brown Act on transparency; the city’s lawyers responded that “there could be a myriad of reasons” why the council was able to vote on the sale at a single meeting in December despite never discussing it in public before that, though they didn’t suggest any specific reasons.
  • Wondering what vaportecture looks like outside of North America? Here’s an article on Watford F.C.‘s proposed new stadium, though if you aren’t an Athletic subscriber you’ll be stuck with just the one image, though given that it’s an image of Watford fans stumbling zombie-like into the stadium out of what appears to be an open field, really what more do you need?
  • There are some new renderings of the St. Louis MLS team‘s proposed stadium, and once again they mostly feature people crossing the street, not anything having to do with watching soccer. Are the clip art images of people throwing their hands in the air for no reason temporarily out of stock or something?
  • Here are photos of a 31-year-old arena being demolished, because America.
  • The Minnesota Vikings‘ four-year-old stadium needs $21 million in new paneling on its exterior, because the old paneling was leaking. At least the stadium’s construction contractors will be footing the bill, but it’s still an important reminder that “state of the art” isn’t necessarily better than “outmoded,” especially when it comes to new and unproven designs.
  • And speaking of COVID-19, here’s an article on how travel restrictions thanks to the new coronavirus will cost the European tourism industry more than $1 billion per month, without wondering what else Europeans (and erstwhile travelers to Europe from other continents) will do with the money they’re saving on plane tickets and hotel rooms. Where’s my article on how pandemics are a boost to the hand sanitizer and canned soup industries?

NYC F.C. Bronx stadium plans get muddier, could face long public approval process

The Urban Land Institute, a nonprofit that has consulted on other sports venue deals in the past, yesterday issued a report for Bronx Community Board 4 on the prospect of a new soccer stadium for NYC F.C. on the current site of city-owned parking garages being used by the New York Yankees, the soccer team’s part-owner. And while there’s nothing definitive in the report — both the city and NYC F.C. continue to say that no deal is in place, or imminent — it does make the case for ways in which a soccer stadium could be more beneficial to the surrounding neighborhood than the baseball stadium that was opened atop a former public park in 2009:

  • A new soccer stadium “could be the touchstone for enhanced community programming, the catalyst for improved pedestrian connections and walkable experiences, and the foundation upon which other community improvements may be built,” writes ULI. This seems to be a reference to the fact that a soccer stadium would require the neighborhood to be rezoned by the city — as confirmed in an article yesterday in the Commercial Observer — which ULI thinks could be an opportunity to add trees and more walkable sidewalks to the surrounding blocks, which could maybe happen, though the city doesn’t exactly have a long and glorious history of rezoning low-income neighborhoods in ways that benefit current residents.
  • The report further suggests that any soccer stadium plans take care (somehow) to meet the needs of local small business owners, noting that while Yankees-related retail outlets have opened around the baseball stadium, “these stores largely remain closed on the other 280+ days of the year when the Yankees are not playing. These closed storefronts leave the streetscape in a state of perceived desolation and interrupt what could otherwise be an active retail corridor.”

That Commercial Observer piece, meanwhile, sheds light (of a sort) on one important piece of the soccer stadium financial puzzle, which is how exactly NYC F.C. and its developer partners, Maddd Equities, would obtain the parking garage properties — and 153rd Street itself, which would be closed to make way for the stadium — from the city. While the New York Times reported last month that Maddd would pay $54 million for the land, the Commercial Observer cites the city Economic Development Corporation as saying that “the city will continue to own the land on which the garages and parking lots were developed, and the stadium development team will buy out the remainder of the 99-year leases for the garages” from the Bronx Parking Development Corporation, the nonprofit that was set up by the city to run parking for the Yankees and has since stiffed taxpayers and bondholders alike on expected payments. If the city continues to own the land, that would raise the possibility of Maddd getting to subsidize its proposed mixed-use development alongside the stadium by getting an exemption from property taxes — though it could also be asked to pay payments in lieu of taxes (PILOTs), though those have their own inglorious local history as well.

Reading tea leaves furiously, the mere fact of CB4 engaging ULI to find out what it can ask of a new soccer stadium indicates that the community board is eager to be more demanding than it was in 2005 when the Yankees came knocking for approval of their new home. (Though it’s worth noting that CB4 voted to oppose that plan, and the city summarily ignored them.) If the stadium becomes wrapped up in a larger rezoning effort, that would drag out the approval process by a year or more at minimum, especially in a climate where New York City neighborhoods and local officials are increasingly pushing back against rezonings that are seen as giveaways to developers, sometimes killing them outright. More on this story as it develops, but it looks like NYC F.C. fans should probably get used to attending home games at farflung sites for a while longer — while that’s no fun, nobody held a gun to MLS’s head and forced them to approve an expansion team without a guarantee of a stadium to play in, either.

St. Louis passes two bills to give MLS team tax breaks worth mumble-mumble-something

The St. Louis Board of Aldermen passed two bills on Friday granting full exemptions from property taxes and sales taxes on construction materials to a new St. Louis MLS stadium, and here’s how various news outlets described the public cost:

St. Louis Post-Dispatch:

One bill will provide 25 years of property tax abatement on the value of the new construction, saving the owners about $34.5 million.

The other measure allows a sales tax exemption for materials used to construct the 22,500-seat stadium and related facilities. An estimate on what that’s worth has not been released yet.

KSDK;TV:

The approvals pave the way for subsidies, including partial tax abatement, sales tax exemption on construction materials, amusement tax abatement and special taxing districts that would impose a 1% sales tax. The taxing districts will require additional legislation.

KMOV-TV:

The ownership group for the stadium will cover most of the cost of the more than $200 million facility, but is asking for some city incentives to cover the cost of some infrastructure improvements.

That’s some pretty bad reporting! The Post-Dispatch wins by default for at least attempting to give some numbers, though it might have at least attempted a guesstimate on the cost of the construction sales tax break: The St. Louis city sales tax rate is 4.23%, so if costs are split anything like roughly evenly between labor and materials on a $200 million stadium, we’re looking at a few million dollars’ worth of cost here. Also that $34.5 million in property tax savings over 25 years is more like $19 million in present value, and nobody is mentioning the $57.4 million over 30 years in ticket-tax rebates that were already approved by the city (present value around $29 million), making for a total public subsidy of around $60 million.

But then, the reporting can’t even agree on the total cost of the stadium: KMOV says it’s “more than $200 million,” KSDK says $461 million, while the Post-Dispatch says $350 million to $400 million. The highest number appears to be from a December report by the city’s Land Clearance for Redevelopment Authority, which may be higher because it includes the cost of not just the stadium but an entire mixed-use district, or because it includes things like interest costs over time and not the present value of the cost (you don’t calculate the price of a house you just bought by adding up all your future mortgage payments over time), or something else entirely — nothing appears to have been reported in detail or to be available online, though I did find a helpful page on how to apply for your own tax breaks from the city of St. Louis.

If your eyes are starting to glaze over from all these numbers, that’s kind of the point: $34.5 million in tax breaks on a $461 million project sounds like a lot less than $60 million in subsidies for a $200 million one, so it’s in the team’s (and the city’s interest) not to be too specific about who’s paying how much for what. It’s why Judith Grant Long had to spend ten years compiling data on actual stadium costs (see it in animated GIF form here), because reporting on it is so all over the place.

Anyway, we can say for sure that St. Louis taxpayers are going to kick in something for a private soccer stadium, and that it’s less than most of the cost, but more than nothing. If that’s unsatisfying to you, try calling up Long and seeing if she’s up for updating her study — it just may take a decade for you to get an answer.

Friday roundup: More Carolina Panthers stadium demands, D-Backs explain Vancouver move threat, and giant soccer robots

Good morning, and thank you for taking a break from your coronavirus panic reading to patronize Field of Schemes. Please wash your hands for 20 seconds with soap and water, and we can begin:

Nashville mayor agrees to revised MLS stadium deal that costs taxpayers the same $75m as before

Great news, everybody! Nashville Mayor John Cooper and the owners of Nashville S.C. have settled their dispute over the team’s stadium deal, and according to the Tennessean:

To accommodate the mayor’s demands, the team will pay $54 million more in potential expenses — which includes $19 million in infrastructure and $35 million for stadium debt payments the city was previously on the hook for if sales and ticket revenues came up short.

Wow, that’s great! Cooper’s refusal to issue demolition permits enabled him to extract $54 million in concessions from team owner John Ingram, and … hey, wait, that $54 million figure sounds kind of familiar:

  • In the spirit of cooperation, the Team offered to pay an additional $19 Million to Metro for infrastructure in the immediate vicinity of the stadium.” This is real money — assuming the team (sorry, the Team) isn’t playing games and reclassifying tortilla chip fryers as “infrastructure” or something — but not exactly a huge concession given that the current deal doesn’t specify who’s responsible for infrastructure overruns, so it comes down to How about we split the costs, where we pay $19 million (sorry, $19 Million) and you pay whatever’s left over?
  • If ticket and sales tax revenues fell short of their $35 million projections, Ingram would cover any shortfall instead of making the city do it. This is worth something to the city, but almost certainly not anywhere near $35 million — how much depends on what you think the likelihood is of the taxes falling short, and by how much.
  • Ingram would also cover $85 million in stadium construction cost overruns, which is nice and all, but it was always going to be on the hook for stadium overruns, so this isn’t a savings to the public at all.

That’s from a week ago Tuesday, when Cooper rejected the offer as insufficient. The difference now appears to be that the legendary Parcel 8C, a two-acre plot between the stadium site and the racetrack next door, will be subject to a “general statement of principles” agreed to by the team that it will allow for an open plaza, like Cooper (and NASCAR) wanted.

Nowhere in the celebratory coverage, meanwhile, is it mentioned that Nashville will still be putting up $25 million in cash and around $50 million in kicked-back sales taxes, plus free land. That was the case in the original deal, and that was the case in this deal — the only difference is that Ingram has agreed to cover more of the added cost increase from overruns or revenue shortfalls. So while Cooper has successfully kept the deal from getting any worse, he hasn’t made it any better — unless you count a two-acre public plaza as a major get.

Twitter, predictably, responded with all the insight and nuance necessary for analyzing the deal’s complexity:

You think maybe I should borrow The Straight Dope’s tagline, now that they’re no longer using it?

St. Louis prepares to increase MLS stadium tax kickbacks to $60m

Ever since the state of Missouri informed the owners of the as-yet-unnamed St. Louis MLS expansion team that it couldn’t give them the $30 million in tax credits they wanted, there’s been a scramble to figure out how to fill that hole. And now the city of St. Louis appears to be stepping up to the, uh, penalty spot, with a package of tax breaks and dedicated tax streams that could be worth $55 million over 25 years:

The two measures, providing partial property tax abatement for the project and outlining other tax incentives, were endorsed, 7-0, by the Housing, Urban Development and Zoning Committee…

The bills, which now move to the full Board of Aldermen, call for 25 years of property tax abatement on the value of new construction. That’s expected to save the ownership about $34.5 million.

Also planned is a sales tax exemption for building materials used for the project; an estimate has yet to be released for that.

The legislation, sponsored by Aldermanic President Lewis Reed, also calls for two separate one-cent sales taxes on food, drinks, tickets and other items sold at the stadium. They would be levied by new community improvement and transportation development districts.

In addition, ownership attorney Bill Kuehling told the committee that “we are counting on” revenues from a third one-cent sales tax that would be authorized by the city’s Port Authority.

Okay, let’s run through these. The full property tax abatement had been previously announced, but without a price tag; $34.5 million over 25 years is a decent chunk of change, and worth maybe $19 million in present value (a bit less if it’s backloaded as property value rises over time, a bit more if the stadium is expected to fall in value as it ages). A sales tax exemption on building materials is a common subsidy to hand out, and typically isn’t a huge value, but it could be a few million dollars. A sales tax surcharge on in-stadium purchases was previously announced, too, and probably mostly ends up coming out of team owners’ pockets (since they have to lower prices slightly to account for the increased end price); if some of these additional taxes cover the area surrounding the stadium, though, it would effectively be taxing the team’s neighbors to finance the stadium project.

Put it all together, and we’re probably looking at around $30 million in city tax subsidies, which added to the $29 million worth of ticket tax kickbacks the team owners would be getting gets us to around $60 million of public cost, before even accounting for whatever the state manages to scrounge up in tax credits. (They’ve suggested $5.7 million as a more doable figure.) That’s not an insane amount of money compared to some stadium subsidies, but $60 million is still $60 million, and about the same as what some other cities have been throwing at stadiums to lure MLS expansion franchises. Except that St. Louis has already been awarded an MLS team to start play in 2022, and it would be really messy for the league to try to undo that, so is this really the time for the city of St. Louis to start bailing out the team owners for their shortfall in state subsidies? (Answer: It’s always time for that, apparently.)

Nashville soccer stadium fight turns out to be all about a 2-acre public plaza

We’re getting more clarity in the Nashville S.C. soccer stadium standoff, thanks to Mayor John Cooper writing an op-ed in the Tennessean and giving interviews about his stance. And the upshot appears to be that the sticking point is really less the $50 million in public subsidies or preservation of the existing fairgrounds or whatnot, but rather whether a tiny plot of land will be available to NASCAR as an entrance plaza to the neighboring racetrack:

I’m hopeful that the 2.4 acres between the soccer stadium and the speedway (“Parcel 8c”) can be redesigned to create a public plaza worthy of the two great sports in neighboring 30,000-seat venues. A multi-functional plaza would address the operational needs of multiple fairgrounds uses, create open space on a campus home to Fair Park and Browns Creek Greenway, and shape a unified and beautiful fairgrounds for generations.

And:

“You’re gonna have to have loading, you’re gonna have to have pickup, drop off, you’re gonna have to have ADA compliancy. Having that space between the two stadiums, it can’t be just for one or for the other, it has to function for both parties,” Mayor Cooper said.

I previously called this a strange hill to die on, and it’s really awfully strange, for both sides: Nashville SC owner John Ingram has likewise said the deal is off if Parcel 8C isn’t included. Maybe it’s all brinksmanship, maybe NASCAR is just feeling butthurt its needs are coming behind that of the demon soccer, maybe Parcel 8C secretly sits atop a hidden vein of gold ore, who knows? As I’ve noted many times before, Ingram is totally within his rights to hold up this project if he wants, and there are certainly plenty of worthy questions about it. But if the only outcome ends up being a debate over whether to create a 300-foot-square plot of concrete, that’s going to be awfully anticlimactic.