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!

Detroit’s “renaissance” has enriched its billionaire sports owners while rest of city suffers

If you want a depressing read about the impact of Dan Gilbert, the billionaire Quicken Loans baron, Cleveland Cavaliers owner, and would-be Detroit MLS owner, on his hometown of Detroit, there’s a great one by Shikha Dalmia in The Week. Among the highlights:

  • Gilbert is pushing for the state legislature to approve a super-TIF bill that would kick back property, sales, and income taxes from environmentally contaminated “brownfields” sites to help pay for the project. It would only apply to projects costing over $500 million in cities of more than 600,000, so the only eligible developer is Gilbert, who is proposing a giant project on the former site of the Hudson’s department store in downtown Detroit.
  • Gilbert got $50 million in tax breaks to move his Quicken headquarters from the suburbs to Detroit.
  • He and his partner, Pistons owner Tom Gores, are seeking $300 million in cash and land in exchange for building a new soccer complex on a half-finished jail site (and a new jail elsewhere).
  • Detroit is about to open a new $187.3 million light rail system that will link “Detroit’s downtown, dubbed Gilbertville because it houses the Quicken office and other buildings where Gilbert’s employees live, with the midtown area, where the entertainment district [built by Gilbert’s fellow sports billionaire, the late Tigers and Red Wings owner Mike Ilitch] is. Never mind that Detroit’s jobless and carless residents would have much more use for bus lines transporting them to jobs outside the city.”

Okay, maybe it’s a high price to pay, but at least Detroit is finally undergoing a long-awaited renaissance as a result, right? Well, actually:

The whole argument for pouring taxpayer dollars into this area is that its growth will spill over to the rest of the city, opening up jobs and business opportunities for all Detroiters. But research by Michigan State University’s Laura Reese and Wayne State University’s Gary Sands published earlier this year suggests that on virtually every metric, life outside the targeted zone is worse than it was even in 2010, when the alleged renaissance began.

Detroit’s overall population actually declined by 2.6 percent between 2010 and 2014. The unemployment rate among Detroiters increased by 2.4 percentage points between 2010 and 2013. This may have been because of the bankruptcy-induced layoffs of city employees, but Sands maintains that the trends don’t seem to have changed much in 2015. “About half of the neighborhoods in the periphery saw employment and payroll declines,” he notes. What’s more, although the overall number of Detroit businesses remained unchanged between 2014 and 2015, 13 of the more peripheral city zipcodes saw a decline.

In other words, far from the city core leading a comeback, it is at best siphoning — and at worst destroying — business and employment in the rest of Detroit, perhaps because smaller enterprises are having trouble competing with powerful billionaires who can dip into taxpayer pockets and divert other public resources toward their grand designs.

The whole thing is a terrific read, if you like to be depressed about how our cities are increasingly being run as engines for boosting the profits of their richest citizens. But you almost certainly do, since you read this website, so by all means go check it out.

Timbers plan $50m privately funded stadium expansion, not outraging anyone at all

The Portland Timbers owners are planning to spend $50 million of their own money on a 4,000-seat expansion of their 21,000-seat stadium:

…and that’s it, really. In a normal world, this would be an everyday occurrence: Team decides it can make more money with a bigger stadium, team spends the money to build it as an investment, team (hopefully) comes out ahead. It’s how sports worked in the pre-subsidy days of the 19th and early 20th centuries, it’s largely how sports works in Europe, and it’s only worthy of note here because the North American sports business model has become so based on getting public money for these things. It’s like a little taste of a happier world where I could retire this website and write about something else. (Not that I don’t write about other things too, but you know.)

As for the expansion itself, it’ll be a little freaky looking, with a vertically stacked stand that is supposed to recall the Globe Theater somehow filling in the gap in a more traditional sweeping, curved grandstand. Which is also fine: Piecemeal, jury-rigged stadium designs are also common in international soccer (in part because of that practice of expanding them only when the money is there), and the result should end up resembling Buenos Aires’ Boca JuniorsLa Bombanera. There’s really nothing at all to complain about here, so happy Friday!

 

Dan Gilbert says Detroit MLS stadium will create umpty-bajillion dollars in economic impact

In “economic impact reports are ridiculous, but some are more ridiculous than others” news, Cleveland Cavaliers owner Dan Gilbert says that if Detroit gives him $300 million in city funding plus free land so he can build a soccer-stadium-plus-other-stuff complex on the proposed site of a new jail, it will create $2.4 billion in economic impact, because sure, why the hell not?

I can’t find the actual study anywhere — it’s not anywhere on the website of Rock Ventures, Gilbert’s real estate umbrella firm, or on the site of Mark Rosentraub’s University of Michigan Center for Sport & Policy, which conducted it — but I’m sure I can guess where it came up with that crazy-high impact figure: Gilbert says he’ll spend $1 billion on construction of the soccer stadium and surrounding development, so add in a smidge more for money spent at actual soccer games and apply a standard multiplier effect, and you can certainly get to $2.4 billion. (I’ve asked Rosentraub and Rock Ventures for a copy of the study, and will report back here if I get a look at it.)

Wayne County executive Warren Evans immediately called the study “irrelevant” and said it “does nothing to sway my thinking,” but not because of anything about the numbers — rather, Evans is just concerned that building a soccer stadium will delay getting a jail built. (Gilbert says he’ll build a jail complex elsewhere if he gets the stadium land and money.) It doesn’t sound like this plan is going anywhere fast, but if so, it’s less because of the actual economics underlying it than because Major League Soccer is still less popular than jails, which seems to be the trending message these days.

St. Louis voters approve sales-tax hike, reject giving it to an MLS stadium

St. Louis voters went to the polls yesterday and narrowly defeated a proposal to spend $60 million in city tax money on a new soccer stadium for a proposed MLS expansion team. The stadium proposal failed by a 53-47% margin, while an accompanying ballot measure to raise city sales and use taxes by 0.5% and use some of the proceeds to expand the city’s light rail system passed by a 60-40% vote.

Local news coverage hasn’t provided much in the way of exit interviews with voters about why they cast their ballots the way they did, though the St. Louis Post-Dispatch did include this outstanding photo caption on an image of a woman in a soccer jersey peering out from between her fingers:

Lauren Rapp of The Hill watches vote returns creep in at Union Station during a watch party for the Major League Soccer stadium funding on Tuesday, April 4, 2017. “It’s been a rough night,” said Rapp. “And then (Stephen) Piscotty gets hit in the head.”

The failure of the stadium-subsidy vote puts MLS commissioner Don Garber in an interesting position: He’s previously raved about soccer fandom in St. Louis — and did so again last night after the vote, in a statement saying that the city would be “a tremendous market” for MLS but that the vote outcome was “clearly a significant setback” for the city’s expansion bid. Does the league now turn up its nose at St. Louis and say, “Fine, if you don’t want to throw $60 million at us, we’ll go find some other city that will”? Or does it try to find another way to make a go of it there, either by team owners digging deeper and funding the $60 million on their own, much as Orlando S.C.‘s owners did with their stadium, or by the league lowering its $150 million expansion fee request — either of which would risk the league’s standing in future “the subsidy way or the highway” demands?

If I had to guess, I’d predict Garber will take door #1 for this round of expansion, and figuring he can always circle back to St. Louis next time and see if the appetite for stadium funding has improved any, since it’s clear that MLS is going to keep expanding until such time as it runs out of rich guys willing to blow $150 million on expansion fees. In the meantime, the vote makes one thing clear: MLS fandom may be on the rise, but not enough for fan frenzy about obtaining a team to tip the balance against taxpayer distaste for giving public dollars to the rich dudes who’d own it. There isn’t a whole lot of extortion leverage in being an 80-pound gorilla.

As St. Louis votes on MLS, reasonable people disagree if “no economic benefits” is a bad thing

Tomorrow is the public vote in St. Louis on whether to spend $60 million in city money on a soccer stadium for a new MLS team, and everybody has a hot take:

  • A sports economist and Forbes “contributor” (aka guy who lets Forbes publish his writing for free in exchange for the publicity) says this is a good deal because $60 million isn’t that much, and it’d just be stadium taxes getting kicked back to the team (plus other taxes, but those are on out-of-state purchases so just pretend St. Louis was never getting them, okay?), plus “unprecedented” community benefits! And who can put a price on the “community/psychic/civic value” of civic pride? (Bruce Johnson, actually, and it wasn’t all that much.) Also, soccer is hot.
  • The St. Louis Business Journal notes that there’s no evidence that any of the above benefits actually exist. #micdrop

Team owner Paul Edgerley predicts that the balloting will be close, so vote early and vote often!