One of the most confusing parts of calculating stadium subsidy costs is accounting for the present value of future expenses: It’s how F.C. Cincinnati‘s $213 million in taxpayer largesse is really more like $81 million once you factor in that a lot of the spending doesn’t need to take place for decades.
(Note, by the way, that this isn’t directly about inflation: Even if inflation were zero, a dollar spent 30 years from now would still be less of a cost than a dollar spent now, simply because you can put a fraction of a dollar in the bank now and end up with a dollar in three decades.)
Anyway, all of this is to say that when the Columbus Dispatch reports that the public cost of the new Columbus Crew stadium has risen from $115 million to $140 million, it’s important to determine whether this requires an asterisk, if some of that cost is in the future. My previous calculation of the present-value public cost was $88 million; the new total is, per the Dispatch:
- $28 million in cash payments from the city of Columbus, plus $12 million to build a new public sports park.
- A county contribution of $2.5 million a year for 30 years, which comes to $45 million in present value.
- A state contribution of $20 million.
- $25 million in property taxes that will be diverted to the stadium.
- ???????? for purchasing the stadium land, which is supposed to be figured out by August 15, though that deadline could be extended.
The Dispatch actually seems to have done a good job of accounting for present value, but unless I’m missing something, they’ve done a less good job on addition: $40 million + $45 million + $20 million + $25 million = $130 million, not $140 million. Which isn’t to say the public cost won’t reach $140 million — the public land costs could easily drive it that high — but it seems like the current price tag should be “$130 million plus land,” so that’s what I’m going with.
The Crew, meanwhile, would according to the Dispatch “market, control and have the rights to all revenue from the new stadium,” including naming rights, paying just $10 a year in rent. You might think that with the public putting up about half the cost of the building, they should get something like half the revenues — but if so you clearly haven’t read the subtitle of the book that launched this website. Silly you!
The Columbus Crew‘s new downtown stadium, which is getting $90 million or so in cash grants and tax breaks to replace the Crew’s 20-year-old non-downtown stadium, now won’t open until at the earliest July 2021, instead of at the start of the 2021 season, because reasons. (“Some paperwork needs to be finished,” according to the Columbus Dispatch.) Which is maybe interesting to diehard MLS fans, but far more interesting to me is what team president Tim Bezbatchenko said about the new stadium’s impact when it finally does open:
″[The stadium is] going to change the trajectory of this club forever,” Bezbatchenko said. “There’s going to be so many ancillary positive consequences to this that you can’t even approximate and can’t guess about in terms of the culture change that the fans are going to go through.”
That is a lot of buzzy words; let’s attempt to unpack them:
- Change the trajectory of this club forever: This sounds like a vague promise that the Crew will stop losing quite so many games once they get a new stadium, which is questionable in any sport, but doubly so in one with a single-entity ownership model where team owners don’t get to plow profits directly back into improving the club.
- So many ancillary positive consequences to this that you can’t even approximate: “Ancillary” means “subordinate” or “supplementary,” so here Bezbatchenko is presumably talking about things outside of actually playing and watching soccer. Or not talking about them, as the case may be, since he says he can’t even begin to guess about them! Though there will be very many of them, of that he is sure!
- The culture change that the fans are going to go through: “Culture change” is one of those terms that business management types love to throw around, and here is presumably a reference to the shift to a more urban location. How exactly that would significantly change things from the “drive to game, watch game, drive home” model isn’t entirely clear — Columbus is famously the largest American city without a rail transit system — but again, clearly it’ll be yuge!
All of these would have been outstanding followup questions for the Dispatch, or really for any other reporters interested in reporting and not just taking stenography. It really can’t be overstated how much the functioning of anything like a democratic system depends on robust media outlets to shed light on what’s going on. In the absence of that, we just get a whole lot of press releases, and I guess comment sections of people complaining about the press releases, which is okay but not precisely the same thing. So if you have a local (or even non-local) media outlet that is doing a decent job, please send them some money, because just imagine what it would be like if news coverage got even worse than it is already.
The Franklin County Board of Commissioners toppled the final domino for a new Columbus Crew stadium today, voting unanimously to hand over $45 million in public funds over the next 30 years — that’s about $23 million in present value — to pay for … stuff. Not stadium stuff, because everyone involved has agreed that public money shan’t be used for actual stadium construction, but all kinds of other stuff that the developers want, because that’s totally cool.
This is one of the more difficult stadium deals to evaluate in recent memory, in part because there are so many different funding streams and so many super-vague things they’re being spend on (“infrastructure,” “public improvements”), and in part because all this money is just getting dumped into a New Community Authority with a broad mandate to spend on … stuff. (“The Deposit shall be paid to the NCA to be used by the NCA, as determined by the NCA in cooperation with Franklin County, to fund or assist in funding any qualifying community facilities.”) Almost certainly, by the time anyone knows where the money is going, it will be far too late to do anything about it — I mean, after today’s vote it’s already too late to do anything about it.
This is a very good thing if you’re Crew and Cleveland Browns owner Jimmy Haslam or someone who thinks spending more than $88 million — the county Memorandum of Understanding notes that the stadium will be exempt from property taxes, too, so that’s an added cost — to move the local MLS team across town and stay there for … okay, the county’s MOU says the team will have a 30-year lease, but it’s still to be “mutually agreed upon by the parties,” so no clue if it’ll have an out clause or what. It’s a bad thing if you don’t think this particular pig in a poke is worth that as-yet-unspecified sum, or if you’re just a fan of local governments figuring out what they’re buying before promising to provide the money. At least Crew fans will get to enjoy MLS’s crappy new playoff system while waiting to find out how long Haslam waits to threaten to leave again!
A funding plan for a new $230 million downtown stadium for the Columbus Crew began to come into focus this week, though admittedly not very much focus. The plan as constituted involves cash from new team owner (and Cleveland Browns) owner Jimmy Haslam, money from the city, money from the county, and money from the state, which Columbus Business First helpfully lays out as follows:
- $50 million from the city, for “land acquisition, infrastructure and public improvements,” plus turning the old stadium into a “community sports park” (which would also serve as a training ground for the Crew).
- $45 million from the county, paid out over 30 years, for “infrastructure and public improvements” around the new stadium.
- $15 million from the state, also for infrastructure and public improvements.
This is hazy enough, given that “infrastructure” traditionally can mean lots of things, from stuff that the government does for pretty much anyone (say, extending sewer lines) to things that more normally would be on the developer’s tab (say, building parking garages).
But it gets even more confusing from there, because Haslam and his partners would only put up $150 million of the $230 million cost, with the rest coming from a new state authority (in Ohio amusingly dubbed an NCA, for “New Community Authority”) that would collect the county and state money. Which doesn’t add up to $80 million, you will notice. Plus, the NCA would have to backfill any property taxes due from the surrounding private development, which is in a Community Revitalization Area and so eligible for 100% tax abatements.
That is an opaque fiscal soup, one that makes it nearly impossible to come up with a dollar figure for how much of a subsidy the Crew owners would be getting from taxpayers. Which is to the Crew owners’ benefit, no doubt, but it’s the kind of thing that hopefully we’ll get more clarity on before any governmental votes on — whoops, looks like the Columbus city council and Ohio state house already voted to approve their share of the money. Well, maybe we’ll learn more about where the money will be coming from and what it will be spent on before the Ohio state senate [UPDATE: too late!] and Franklin County board of commissioners vote, anyway. Or they can always vote first and ask questions later, that always works out great!
So very very much more stadium and arena news from this week:
- There’s a little money left over in Hamilton County’s sales-tax pool after paying off bonds on the Cincinnati Reds and Bengals stadiums, so county property owners will get an $8 million property tax reduction this year. That’s a mere fraction of what county officials promised when they passed the sales-tax hike 20 years ago, but at least this year they won’t have to sell any hospitals.
- The XFL says it will restart play in 2020 with teams in eight cities, but the only interesting one (unless you’re a devotee of spring football, in which case more power to you) is Dallas, where the football team will apparently play in the Texas Rangers‘ old stadium, which will remain standing right next to the Texas Rangers’ new stadium, as well as the Dallas Cowboys‘ stadium. (Apparently football fans don’t care about air conditioning.)
- Franklin County, Ohio, says it plans to build a new Columbus Crew arena … somewhere, costing … something, with the county putting up $50 million in cash — part of which would go toward turning the old Crew stadium into a “public sports complex” — plus land and infrastructure worth … something. But Franklin County commissioner Marilyn Brown told the Columbus Dispatch that “it will have mixed-use included, so it’s an economic-development deal that will include apartments, retail along with it. So it will have enormous economic-development benefit,” so it’s all good, because who can put a price tag on enormous?
- NHL commissioner Gary Bettman says he’s “disappointed” that Ottawa Senators owner Eugene Melnyk is backing out of a downtown arena deal, and offered to provide league help in cutting a new deal. Hands up anyone who thinks that means “Leaning on Melnyk to pay for the arena he said he would” and not “Leaning on Ottawa to bail Melnyk out with public dollars”?
- Plans for a Portland baseball stadium surrounded by affordable housing may have hit a snag, as two city commissioners say the land targeted for the stadium isn’t zoned for affordable housing. Or for a stadium, unless it can prove it has enough transportation first. These are the kinds of details you’d normally want to resolve before announcing a stadium plan, but then, so would making sure you’re using Euclidean geometry.
You know who the real turkeys are this week? Nah, my heart isn’t in making Thanksgiving puns, just read the news, folks:
- Three of seven Hillsborough County commissioners have promised that a new sales tax for transportation projects won’t mean diverting money from the existing transportation project to, say, a Tampa Bay Rays stadium, which the mathematically inclined will notice isn’t actually a majority of the county board. It’s still not super likely that the county will try to raid transportation funds to pay for a stadium, unless maybe it’s for transportation costs related to one, and there’s still several hundred million dollars in construction costs unaccounted for, but anyway it’s worth keeping at least half an eye on as we head toward the team’s December 31 lease opt-out deadline.
- A paid consultant working on a new downtown arena for Saskatoon says it could have a “catalytic effect,” because of course he does, really, Global News, you ran an entire article that’s just interviewing one guy employed on the project? For this you want me to disable my ad blocker?
- Forbes’ Mike Ozanian reports that “a person with knowledge of the deal to keep Major League Soccer’s Columbus Crew in that city” says the new owners will pay $150 million for the franchise and spend $150 million toward a new downtown stadium, while “the public would foot the other $100 million.” Nobody else seems to be reporting on this, so maybe we should wait to be sure that Ozanian didn’t get his plus and minus signs mixed up again.
- The Atlantic’s Rick Paulas suggests that we end stadium extortion by forcing pro sports leagues to massively expand and then institute promotion and relegation, which would sort of work, if there were an easy way to accomplish this through antitrust legislation, which you’d think if Congress could manage that they could manage the much more straightforward measure of taxing sports subsidies out of existence, but who knows, maybe a “market-based” solution would go over better in these times, sure, what the hell. “Of course, cities could also elect leadership that will defend them against bad deals,” notes Paulas, which isn’t a bad idea either.
- Anaheim has signed a lease extension to keep the Ducks in town through 2048, involving the city selling the team 16 acres of land for $10 million — which if the stymied Angels deal is any guide would probably be a small discount, though Anaheim officials claim it’s market value — but the city will get a cut of arena profits after the first $6 million a year instead of the first $12 million, a threshold that’s never been hit. There are a lot of (small) moving pieces here, but I’m willing to say this is probably not too bad a deal, especially compared to some of the much, much worse lease extensions that cities have agreed to. Next is to to see about getting Angels owner Arte Moreno to accept the same logic, now that newly elected mayor Harry Sidhu is vowing to change “the hostile political environment in Anaheim” and “keep the Angels in Anaheim where they belong,” okay, Anaheim residents are probably going to have to settle for just a good Ducks deal.
- Atlanta Falcons COO Greg Beadles tells NPR it’s not team owner greed that causes stadium food prices to be so high, it’s just that after teams force concessions companies to bid as high as possible for stadium contracts, the only way they can make money is to charge through the nose for food! Anyway, NPR gets busy talking to fans at a Falcons game about whether they’re happy the team lowered its food prices, and they’re happy about it, so no time to fact-check whether team execs’ statements make any damn sense. Free refills on soda, woohoo!
I posted the week-ending news roundup late on Friday, but still not apparently late enough for the stadium news cycle, which promptly exploded in the afternoon, starting with the news that Cleveland Browns owner Jimmy Haslam was finalizing a deal to buy the Columbus Crew from owner Anthony Precourt so that it can stay in Columbus in a new stadium and Precourt can get an expansion team to move to Austin, Texas.
A bit of a recap for anyone new to this story: The Crew owners have been griping about wanting a new stadium to replace their current one (which was built all the way back in 1999) since they were the old Crew owners back in 2013; Precourt upped the ante last year by saying if Columbus wouldn’t build him a new stadium, he’d move the team to Austin. Precourt subsequently got Austin to approve a stadium deal there that included a $100 million tax break, but meanwhile Columbus sued under the “Art Modell Law” passed after the Browns moved to Baltimore to force Precourt to offer the team to local buyers first, and a fan group called Save the Crew issued proposals for a new downtown stadium in Columbus, to be paid for … somehow.
That takes us up to Friday, when it was revealed that Haslam — plus some local investors — had negotiated with Precourt and MLS to instead buy the Crew and have them stay put; Precourt will still get an expansion franchise in Austin, and everybody is happy. At least, maybe everybody is happy? There are still a bunch of unanswered questions here, like:
- Who’s paying what to whom for what here? MLS is a “single-entity” structure, meaning that the league owns the actual teams, and the team “owners” only control operating rights. The Columbus Dispatch reports that the deal likely involves “the local investors purchasing the Columbus MLS rights from the league and current Crew operator Precourt Sports Ventures transferring its equity interest in the league to an Austin franchise, presumably an expansion team” — presumably this means Haslam and friends are paying something close to the $150 million expansion fee price that the league won’t be getting from Precourt. Unless maybe Precourt is paying the difference? This is all rich dudes shuffling money around themselves, so whatever, but it’d still be interesting to know.
- What happens with the other cities looking for expansion teams? MLS already had a long list of cities angling to get the next two expansion franchises set to be announced, but it appears that Precourt and Austin have jumped the line. Media outlets in Sacramento, thought to be one of the expansion frontrunners, are already wringing their hands over the prospect of now only having one expansion slot to compete for. Assuming MLS doesn’t decide to keep both of next year’s expansion slots and make Austin its 29th team, or throw David Beckham back under the bus, or really anything, because MLS can decide whatever it wants here. (My bet would be on making the remaining cities compete for one slot, but if multiple cities come up with viable ownership groups and lucrative stadium subsidies, announce, “We changed our mind — everybody gets bees!”
- Who’s going to pay for this new Columbus stadium, anyway? The Columbus Dispatch reports that there’s no deadline for a new Crew stadium to be in place, and that the team will continue to play in its old stadium until then, which would seem to reduce Haslam’s leverage if he wants to get public cash to help with his stadium plans. But it’s always possible Haslam has already been working things out along these lines with Columbus officials — news reporting on all this is fairly lousy so far, as to be expected when news drops on a Friday afternoon.
So what’s the upshot here? That MLS was more scared of moving the Crew to Austin than we’d been led to believe, either because of the Modell Law or because they didn’t want to be seen pissing off an established fan group or just because they saw the opportunity to get another NFL owner on board, and they just love those guys. Regardless, that Columbus will apparently get to keep its MLS team without having to pony up huge subsidies for a stadium for an expansion team has got to be seen as at least tentatively good news, and a sign that public mobilization can impact the battles of elephants. There are still many, many more shoes to drop, however, so glass-half-empty advocates, keep hope alive that this will still suck for someone! Anything is possible in the topsy-turvy world of MLS!
Oh hey, guess what? In its haste to approve a $100 million tax exemption for a new stadium for the soon-to-be-erstwhile Columbus Crew, the Austin city council neglected to consult Travis County, which would also be giving up a cut of taxes under the proposed deal. And Travis County commissioners are having none of it, threatening to sue to force the MLS team to pay taxes on its stadium if necessary:
On Tuesday, Travis County commissioners unanimously voted to “authorize the county attorney to preserve the county’s right to challenge the tax-exempt status of the stadium company’s use of city property.”
They also voted to “pursue negotiations with the city and other local taxing entities on expectations for preserving taxable value in the redevelopment of publicly owned real estate.”
The city’s proposed agreement with Crew owner Anthony Precourt doesn’t actually say that the land would be tax-free — it just says the city would own the land and stadium and lease it to Precourt, which usually works as a get-out-of-property-taxes-free dodge. Usually, but not always: A New Jersey court ruled in 2014 that Red Bull New York had to pay property taxes on its team-run, city-owned stadium in Harrison, on the grounds that a pro soccer stadium isn’t an “essential public purpose.” (The Red Bulls and Harrison later settled out of court on a deal where the team basically makes payments in lieu of property taxes.)
In Austin’s case, the tax-exempt status is up to the Travis Central Appraisal District, which is a county-run (I think — this information is not included among the CAD’s many, many frequently asked questions) agency that is in charge of appraisals. If the appraisal district grants an exemption, the county can, and it looks like probably will, appeal the ruling.
So what happens now, with a giant tax bill for Precourt on the line? The Austin American-Statesman asked Mayor Steve Adler, who replied, “I don’t know that, but I do know that the agreement says the team is responsible for any such taxes, not the city.” Ducking out of the way and letting your partner take the bullets — a time-honored tradition, but not one I expect Precourt is likely to appreciate. Can’t wait to hear what he’ll have to say about all this once he’s done admiring his new logo!
Well, that was anticlimactic: After several weeks in which the Austin city council put off a decision on providing more than $100 million in property tax breaks for a new soccer stadium to lure the Columbus Crew to town, with four members in favor, four opposed, and three swing votes, yesterday the swing votes all swung toward “yes” and the measure passed 7-4. The Crew will now relocate to Texas at some point in the next year or two or three, unless the lease talks that were authorized yesterday collapse (unlikely at this stage), or Columbus wins its Modell Law suit to block the team from moving (who knows), or Crew owner Anthony Precourt changes his mind for some reason (also unlikely given how happy his press statement sounded after the vote, but also who knows).
The council also voted on 19 amendments to the stadium bill: I can’t find full coverage of what passed and what didn’t — it’s not helping that there’s no WiFi on this train even though there was supposed to be, clearly they need to tear down the train system and build a new one — but the Austin American-Statesman does report that the one to double the team’s rent to just under $1 million a year was defeated after Mayor Steve Adler warned that this was “the best deal of its kind in the country” and warned that asking for any concessions could kill it. I would beg to differ — Orlando S.C.‘s stadium deal was a fair bit better, for one. The Austin deal isn’t horrible as these things go, but that doesn’t make it reasonable either, but rather in that broad swath of “at least we didn’t get screwed over as bad as some other cities” that makes up most stadium deals. But then, soccer fans are used to celebrating pyrrhic victories.
Greetings from my undisclosed location! I have time for an abbreviated news roundup this week:
- Colorado Springs may use tax increment financing to build a new stadium for its Switchbacks USL team (if you think that’s an odd name, just look at what the city’s minor-league baseball team is going to be called), and the mayor previously campaigned saying he’d require a public vote on any stadium funding, but now says nah, not gonna happen.
- The Columbus Crew fan group Save the Crew released renderings of a downtown soccer stadium it’s proposing, which would have some sort of translucent roof supported by full-stadium-width beams and 30-foot-wide stairways and an enormous video board taking up one corner and you know, these are renderings by a fan group, so I really won’t make fun of them. Much.
- St. Petersburg has started mapping out plans for the Tropicana Field site when and if the Rays move to a new stadium, with talk of a mixed-use project called the Gas Plant District, which the Tampa Bay Times notes “harkens to the African-American neighborhood the city bulldozed decades ago to build the then-Florida Suncoast Dome.” That’s maybe not the tribute the African-American former residents would prefer? (Also not the proper use of “harken“; the Times means “hark back to.”)
- The New York Times’ Michael Powell notes what we all knew already, which is that LeBron James is gone from Cleveland but the Cavaliers‘ publicly funded arena renovations are still going forward. Though he does add: “City and county leaders plan to use a portion of the tax on Cavaliers playoff tickets to help pay off the arena bonds. That looks like a dodgy bet right now as the Cavaliers, shorn of James, may not even make the playoffs.” Whoops! The Cavs are apparently offering to loan the city and county the money if there’s any shortfall; Powell doesn’t say if they’ll charge interest.
- Anthony Precourt’s lawyer says some of the Austin MLS stadium amendments proposed by the city council contain “poison pills,” though he’s also pushing for a final vote to be taken today instead of being postponed to next week so councilmembers can read over all the proposals, so that’s exactly what you’d expect him to say. I’ll likely be offline when the vote does or doesn’t happen today, so somebody please update in comments, thanks!