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.

Rich dudes demand $129m in tax money for St. Louis MLS stadium, because teams are expensive, yo

Hey, so it turns out the prospective owners of a prospective St. Louis MLS team don’t really want taxpayers to give them $80 million toward a new stadium! No, they really want $129 million in money toward a new stadium, when you count $40 million in state tax credits, plus $9 million in state money to prepare the land. (Plus $15 million in city money to buy the land, which would “presumably” come out of the city’s $80 million, according to the St. Louis Post-Dispatch, which isn’t really all that reassuring.)

The best part of the Post-Dispatch article, though, is this:

The application, prepared by the city’s Land Clearance for Redevelopment Authority, puts the total estimated cost of the stadium and acquiring a team at $405 million. SC STL, led by former Bain Capital executive and majority investor Paul Edgerley, St. Louis FC founder Jim Kavanaugh, and former Anheuser-Busch president Dave Peacock, would provide $280 million, including the $200 million team expansion fee.

That’s right: The official explanation of why a bunch of rich guys — Bain Capital you may remember as the private equity firm that made Mitt Romney wealthy at the expense of a whole lot of other people — need $129 million in public money to build a $205 million stadium is “Well, we’re already spending $200 million to buy a team! You want us to do that and build a stadium too? What are we, made of mon — er, let me rephrase that…”

St. Louis voters are scheduled to go to the polls in the spring to decide on this deal. One hopes that they’ll be able to cast their votes based on whether this is a sucktastic proposal and not whether they like soccer, but sadly it doesn’t look like “What the hell is this, go back to the drawing board and negotiate a deal where we aren’t giving a bunch of billionaires $129 million for no damn reason other than that they just spent a lot of money on their new toy” will actually be on the ballot.

MN gov: Who said Vikings could have exclusive soccer rights to stadium? (whistles, averts eyes)

Minnesota United, which starts play in the MLS next year, is building a new stadium in St. Paul, with the help of state tax breaks. The team’s owners would like to use U.S. Bank Stadium, the new home of the Vikings that got about half a billion dollars in state funds and is owned by the state so that it can get hundreds of millions more in property tax breaks, for a few friendly matches (that’s soccer for “exhibition games”) against international teams. Vikings owner Zygi Wilf, whose own application for an MLS franchise was rejected in favor of Minnesota United’s (which was backed by, among others, the owner of the Twins), is now threatening to sue, saying they have exclusive rights to have an MLS team play home games at the stadium, and exhibition games count as home games, so nyah.

All this pissing match between two sports gorillas (er, sorry for that image) has left Minnesota Gov. Mark Dayton in the rare position of being able to attack one local sports baron in the defense of another, and he took full advantage on Wednesday:

Gov. Mark Dayton called the Vikings’ opposition to possible Major League Soccer games at U.S. Bank Stadium “sour grapes” because the team’s owners lost an expansion franchise to a rival group led by former UnitedHealth Group CEO Bill McGuire…

“This is not the Vikings’ stadium,” he added. “This is the people of Minnesota’s stadium. It’s run by the stadium authority for the people’s benefit which means generating opportunities for Minnesotans to come together and support the various opportunities they enjoy.”

You go, Mark! Maybe everyone will forget that the whole reason the Vikings have that stadium — and the lease clause about soccer rights — is because you spent years campaigning for it.

 

Owners of proposed St. Louis MLS team to ask taxpayers for $80m+ for new soccer stadium

When a new stadium for a proposed St. Louis MLS team was first proposed last winter, it had no price tag or funding plan. Now it has both, and the total price is $200 million, with taxpayers expected to pony up more than $80 million:

Voters could be asked to put $80 million in public money toward a 20,000-seat stadium, not including a potential land purchase west of Union Station. That amount could be lower depending on financial assistance from the state, Kavanaugh said.

The stadium subsidy would have to go before voters on a ballot in April, thanks to that vote back in 2002 requiring any city stadium subsidies to be approved by a referendum. The St. Louis Post-Dispatch article on this entirely fails to say how the public money would be raised (new taxes? old taxes?) or how much the land purchase would cost, so there are still a lot of unknowns here. But suffice to say that now that St. Louis residents have dodged a $477 million bullet with the Rams moving to L.A. rather than getting a new stadium in their old home, they’re still getting asked to pay for a football tab, just the less-popular version of football. Add in the Blues owners hanging around expectantly, and, well, looks like those voters back in 2002 knew what they were doing, anyway.

Beckham identifies “potential investors” for Miami stadium, still needs actual investors

Hey, what the heck has been going on with David Beckham’s proposed Miami soccer stadium? At last report in June, he was reportedly shopping around for some private investor to actually pay to build the thing; now, it turns out, he’s, uh, still working on that:

David Beckham’s representatives Thursday moved to jump-start a stalled effort to build a Miami soccer stadium by bringing potential investors to a pitch by Miami-Dade Mayor Carlos Gimenez.

The investors weren’t identified, but the sales pitch apparently involves a new set of potential financiers in a project that has been courting deep pockets since the start…

Thursday’s meeting suggests Beckham’s team has found a new group of investors to court, but it’s not known how far along in the talks they are.

Despite having released poorly Photoshopped renderings of a stadium on a nine-acre site in Overtown last winter, Beckham still needs to acquire another three acres of county land, plus city rezoning approval and the closure of a city street. And, apparently, to find somebody who thinks all this would be a good investment of their private dollars. Making money building fancy new sports stadiums without gobs of public cash to boost your profits is hard.

D.C. United tweaks stadium design again, adds more stores that may or may not exist

For those of you who can’t get enough of D.C. United stadium renderings that look pretty much just like the old stadium renderings: new D.C. United stadium renderings!

screen_shot_2016_11_16_at_11-50-48_am-582c915e32f00Tell us what’s new, Washington City Paper:

Among the changes are: a retail corridor on the east side of the stadium along First Street, which will become a two-lane road with parking on each side, 14,000 square feet of retail attached to the stadium itself, and unspecified ‘additional future retail’ toward the south on First Street, according to a memo D.C. United’s lawyers sent to the zoning commission. A building along the south side of the stadium has been “reimagined and reoriented” to include 3,000 square feet or retail space, but will maintain a “bike valet” at its corner.

A public plaza planned to the stadium’s northeast will now contain a sizable park, “landscaped and terraced to create an inviting experience.”

So basically the team responded to complaints that the stadium would be a big empty box on non-game days by adding some space for stores, and some more space for possible future stores, assuming there are stores that want to open up in what will be a big empty box on non-game days. Plus a street that turns into a pedestrian plaza during games, because those are all the rage:

screen_shot_2016_11_16_at_11-44-43_am-582c914a5ae4eWhich is all cool — attempts at more non-gameday activity is cool, even if it doesn’t always work out so well. But D.C. United planners do seem to be trying to respond to community gripes, at least, which is the least they can do for their $183 million in public subsidies.

MLS attendance figures are even more fictitious than we realized

I’ve snarked about MLS attendance figures before, based largely on televised scenes of half-empty stadiums which near-sellout official attendance figures, as well as my own experience attending Red Bull New York games while paying a tiny fraction of face value for tickets. But this Los Angeles Times report, man:

Howard Handler, the league’s chief marketing officer, said the number of comp tickets distributed has declined by an average of 20% over the last two years. It now accounts for about 9% of announced attendance, he said.

Yet even if that figure is correct, it still would mean more than 663,000 tickets included in the MLS crowd count for 2016 were given away. And even that math doesn’t always add up. Just look at Orlando City, one of five teams whose attendance was surveyed for this story. The club claimed home attendance of 532,500 this season at Camping World Stadium although the City of Orlando, which owns the facility, released figures Friday that showed the number of tickets scanned — the modern-day equivalent of a turnstile count — was 151,060 short of the team’s total, a difference of 8,886 per game.

Which, fine, whatever — if Orlando City S.C. wants to pretend a lot more folks are turning up for games than actually are (and it’s likely that many of those who do show are getting tickets for free or at discount), that’s a time-honored sports tradition. And even 10,000 fans a game is a respectable number for a sport that not all that long ago was barely a blip on the American national sports consciousness. Where it matters to the general public is when teams start making claims about the economic impact of an MLS team: If you really think you’re going to have 20,000 fans a night show up and spend money, you should be mentally replacing a large chunk of that number with ghosts. (You should probably do this for all pro sports, mind you, but especially for MLS.)

What this means for MLS’s economic viability is above my pay grade, though given that many players aren’t paid much more than the league minimum of $51,000, they’re probably doing pretty okay. It does help explain why the league is so dead-set on expanding until the cows come home, though: It’s way easier to make money selling expansion franchises for $200 million a pop than selling tickets $3 at a time to fans who may or may not exist.