San Diego pulls large number out of butt, calls it SoccerCity economic impact

So last week this happened:

SoccerCity could deliver an annual $2.8 billion economic boost to the region at full buildout of the Qualcomm Stadium site, according to projections released Thursday by the San Diego Regional Economic Development Corp.

I’m not going to go to the trouble of showing you all the EDC’s calculations, because it’s easy enough for you all to join me in hollering, “NO IT WON’T!” Adding up all the future wages paid at a complex and calling that an “economic boost to the region” only makes sense if all of those jobs would only exist in the region with the complex, and nobody believes that.

This proposal started out really promising, with a soccer stadium and housing and light industry all for no public money, but between the possible $240 million infrastructure and land cleanup cost and this overblown economic impact study, it’s starting to look less like the exception than the rule. Not that it would necessarily be a disaster for San Diego, but it requires a hard, hard look before it goes before voters for approval.

Orlando SC stadium neighbors hope for economic boost, prepare to be sadly disappointed

Good article with misleading headline alert! From the Orlando Sentinel:

Parramore residents hope stadium will help kick-start community

They do? Will it?

Soccer faithfuls won’t change Parramore’s fortunes by themselves, [Florida State University professor Tim Chapin] said.

“That sounds like a lot of economic activity, but it’s a tiny drop in a very large pond in terms of the economy,” he said. “There will be a few winners in this, but it’s not a rising tide that lifts all boats.”

A quote from Charles Frizzell, owner of a new sports bar across the street, in instructive: “I don’t know if we would have chosen this location, if it wasn’t for the soccer stadium.” Which, if the biggest impact you’re going to have is that people choosing to open sports bars will move over a few blocks to be closer to the stadium, that’s exceedingly meh impact. Plus, opening a sports bar and keeping a sports bar open are two different things: Reporter Jeff Weiner notes that similar hopes were raised by the opening of the Magic‘s Amway Center in 2010, but then mostly dashed:

Draft Global Beer Lounge, despite taxpayer subsidies, fell into debt before closing at the Church Street Parking Garage, which has since been torn down, while Parramore mainstay Johnson’s Diner also failed after moving into the CityView building.

Commissioner Regina Hill, a Parramore native who represents the neighborhood on the City Council, credits a job at the old Amway Arena, which opened in 1989 and was demolished in 2011, with offering her hope as a young woman.

“It was $7-an-hour, part-time, but it gave me the ability to get off that couch and start to feel valuable,” she said.

Now there’s a headline: “Sports facilities bring hope to low-income communities with minimum-wage part-time jobs to get them off the sofa.” Accuracy is so seldom clickbaity.

San Diego MLS stadium with “no public money” pledge could demand $240m in infrastructure cash

One of the key attributes of the plan to build an MLS stadium on the site of the San Diego Chargers‘ old stadium was that it would not only require no public money, but also the developers would pay “fair market value” for the 80 acres of land involved. So how much would that be? How about maybe … $10,000?

The sale price would be linked to the fair market value, yet to be determined, but it would have to take into account the cost of demolishing Qualcomm, estimated at perhaps $15 million, and other environmental issues and other problems, such as flooding and habitat preservation. Also taken into consideration would be the potential of setting aside room for an NFL stadium, and other “extraordinary costs.”

If these conditions reduce “the fair market value…(to) a negative number,” the initiative says, then FS would be required to pay the city $10,000 as a one-time lease payment.

In effect, then, the soccer developers are asking the city to pay for the cost of prepping the land for new development, which could eat up the entire $240 million market value of the parcel. If that sounds crazy to you, that’s exactly the word one real estate expert uses to describe the proposal:

“If I was the city, I’d say this is crazy,” [real estate development consultant Gary] London said this week. “The city is selling the property as if it was distressed property (under the FS initiative).

“This is not distressed property,” he said. “This is almost an empty piece of land, with the exception of one stadium, that is practically flat. This is in the center of San Diego and is probably the most valuable land asset, public or private, in the city of San Diego right now.”

And then there’s this:

Greg Shannon, chairman of Sedona Development and current chairman of the local chapter of the Urban Land Institute, said a private landowner would “never sell” land the way the FS initiative proposes.

“From what I can tell, it’s a huge giveaway from the city to the developers,” Shannon said. “They’re saying there’s no taxpayer subsidy. That’s a huge taxpayer subsidy.”

One hopes that this is just a butt-covering clause to indicate what happens on the off chance that infrastructure costs get out of control, and not something the team actually anticipates. Even so, though, this is a potentially whopping hidden public cost that the developers really should have mentioned when they first announced their plan, though I guess then people might not have been quite as excited about it. We’ll see how excited voters are if and when this thing goes up as a ballot initiative later this year.

MN legislature: Sorry for delay in $54m MLS stadium tax break, here’s $3m more to make it up

Last May, it looked like the Minnesota United stadium in St. Paul had the full go-ahead, after the state legislature approved a property tax exemption worth an estimated $54 million for the project. But, as it turned out, there was a snag: Whoever wrote the omnibus tax bill it was attached to accidentally put in an “or” instead of an “and” in a description of tax breaks for bingo halls — a typo that would have cost the state $100 million in tax revenue — and so the governor refused to sign it, leaving the MLS team’s tax break in limbo.

There’s nothing stopping the legislature from re-passing the bill this year, of course, so that’s exactly what they’re doing. And as an apology to the team for taking so long, they’re sweetening the deal with an additional $3 million tax break on construction materials as well:

Minnesota United team owners have said the tax exemptions are essential to moving forward with a $150 million stadium in St. Paul, though they’ve also said that they were confident the Legislature would come through. They have denied that the lack of exemptions was a hold-up for starting stadium construction.

That … what? Whoever at the St. Paul Pioneer Press was responsible for editing that paragraph really needs to have done a better job, since saying that tax exemptions are “essential” to moving forward and also not “a hold-up” to moving forward are, well, contradictory. Admittedly, it’s the kind of contradiction that team owners like to put forward — We’re going to build this either way, don’t worry, but if you don’t give us money we can’t build this — but there’s really no need for newspapers to be their enablers, now is there?

Zoning commission approves D.C. United stadium design on grounds it could suck worse

D.C. United‘s new $300 million stadium, which will get $183 million in land acquisition costs and tax breaks from district taxpayers, finally got final approval yesterday from the D.C. Zoning Commission, after design tweaks to make it look less like a prison. And just listen to how excited zoning commission members are about the project coming to fruition!

“The responses on environmental issues and traffic issues have been adequate to make it passable, but I’m still extremely disappointed,” member Peter May said. “It just kind of barely makes it. It’s been a disappointment all the way through, so I hope it turns out better than I fear it will.”

The stadium probably won’t be a disaster of terrible traffic and empty streets on non-game days, at least not any more than all stadiums are. At least the zoning commission pushed back on some things, and got some small concessions, which is more than cities where cities where projects get final approval without anyone even discussing what the transportation plan will be. Yeah, it’s a low bar, but that’s about where we’re at with democracy these days.

St. Louis council approves $127m for Blues, MLS venues, voters can still block the latter

St. Louis lawmakers took major steps last week toward throwing $127 million at upgrades for the Blues‘ hockey arena and construction of an MLS soccer stadium, though the latter will depend on the results of an April voter referendum:

  • The board of aldermen voted on Friday to approve $67 million in subsidies for Blues arena renovations. (It will add up to $105 million over time, but it’s worth $67 million in present value. And while it would mix sales taxes, ticket taxes, and other revenues, all those are all diversion of existing taxes, not new ones the team owners are agreeing to pay, so as discussed earlier, it’s all money that the city would otherwise be able to spend on other things if not being siphoned off for the Blues owners.) Alderman Steve Conway defended the subsidy as necessary to keep drawing NCAA events (“If we don’t make improvements, what comes into general revenue diminishes over time”), though he didn’t appear to provide numbers showing that any added revenue is worth the expense; Alderman Antonio French retorted, “We do not have $105 million to give to anybody. And we’re about to give money to some of the richest people in town because they want a new scoreboard.”
  • Circuit court judge Michael Mullen approved putting $60 million in funding for a new MLS stadium on the April ballot, despite the board of aldermen having approved it too late for the deadline after the initial bill was withdrawn and revised. There will actually be two votes: one to raise sales taxes by 0.5% to expand St. Louis’s light rail system, which would automatically cause use taxes on out-of-state purchases to rise by the same amount; the other would approve taking those use taxes and pouring them into paying off $60 million worth of stadium costs. If either fails to get a majority, the stadium subsidy wouldn’t happen.

The soccer stadium vote will be, unless I’m mistaken, the first time that St. Louis voters will actually be going to the polls under the law approved by a 2002 referendum requiring a public vote on any sports subsidies. (The Cardinals stadium had already been approved then, and the Rams stadium never happened.) The only poll on the subject that I can find is just of Democratic primary voters (though St. Louis is pretty overwhelmingly Democratic); it found respondents opposed to soccer subsidies by a 61-22 margin, so I think it’s fair to say the proposal faces an uphill battle. There’s still two months of campaign spending left, though, so open up those Jamba Juice (and Bain Capital) coffers, Paul Edgerley!

Gilbert to Detroit: Give me $300m and free MLS stadium land, and abracadabra, get a new jail!

I’ve seen a lot of convoluted stadium subsidy proposals over the year, but I’ve got to admit that “give me at least $300 million plus free land so I can build a pro soccer stadium and I’ll build the city a new jail” is a new one. Deadspin explains:

The plot of land [where Dan] Gilbert wants to build the new arena is on Gratiot Avenue in downtown Detroit. Wayne County was in the process of building a jail on the site until 2013 when officials announced that project, estimated to cost $220 million, was likely going to run far over budget (closer to $391 million). So it sat unfinished for more than three years. The county is issuing a request for proposals to finish the jail on Friday, after which it will decide what to do with the site.

But ahead of that deadline has arrived a proposal from Gilbert-owned Rock Ventures LLC. The group announced yesterday that it had made an offer to build Wayne County a new “consolidated criminal justice complex” at a different site, about one and a half miles away, the Detroit Free Press reported. In return, Gilbert’s company would get $300 million from the county, the rights to the Gratiot Avenue jail site, and what’s described as a “credit to be paid to the company for the savings a new consolidated criminal justice complex would provide.”

How much Gilbert’s soccer stadium would cost isn’t clear — it’s being described as a “$1 billion commercial development,” but obviously much of that wouldn’t be the soccer part. But whatever Gilbert would be spending on whatever, he’s looking to get paid $300 million plus land plus that undefined “credit” in exchange for building a new jail on a different site, something he says is worth $420 million, which is even more than the city’s over-budget stalled jail would cost.

Many, many questions, in other words, most of which Gilbert no doubt hopes that Detroit’s journalists will be too busy to really put their minds to unraveling. After all, it’s the central secret of magic!

St. Louis committee approves more than $100m in subsidies for Blues, MLS, but who’s counting?

The St. Louis Board of Aldermen’s Ways and Means Committee approved bills this week to funnel public money into both renovations of the St. Louis Blues arena and a new MLS stadium. How much money? As is so often the case, that’s a complicated question:

  • In the Blues’ case, the original plan was to demand $67.5 million from the city, mostly in the form of kicked-back sales taxes. (It would add up to $112 million over time, but the present value would only be $67.5 million.) The committee amended the bill to include $55 million in ticket tax revenue — in place of some of the sales tax money, I think, maybe? — but that cash flow wouldn’t start arriving until 2034 since it’s currently being spent elsewhere. And since it’s not a new tax surcharge but just money that otherwise the city could start collecting for other uses in 2034, I’m not going to go through the trouble of firing up Excel to figure out the present value of that, because it’s a subsidy either way. (The Blues owners are still also demanding an additional $70.5 million from the state of Missouri, though given the new governor’s feelings about such things, that may not go so well.)
  • For the proposed St. Louis MLS team, the original plan was for the city to provide $80 million from mumble-mumble-hey-look-over-there, but that bill was withdrawn by its sponsor last month. In its place now is legislation to provide $60 million in city money, mostly from redirected property taxes, but also including a ticket tax surcharge (really payments in lieu of a ticket tax, for reasons not worth going into here) that would provide $7.5 million to $12 million over the next 30 years, and … okay, now I will fire up Excel, and that’s worth: somewhere between $4 million and $7 million now, so not really a big concession on a $60 million get.

The MLS stadium plan, if approved, would go before city voters in an April referendum. The hockey deal for some reason everyone thinks doesn’t require a public vote, though that’s not what the law passed in 2002 says. Hey, Jeanette Mott Oxford, if you’re reading this, any plans to file suit to intervene in this one?

Every concentration of humans on earth now bidding to build MLS stadiums

Nashville is looking to build a new MLS stadium, and Indianapolis is looking to build a new MLS stadium, and San Diego is looking to get a new MLS stadium, and Detroit is considering providing free land for an MLS stadium, and St. Louis is still looking to build an MLS stadium after rejecting it once, and a guy in Charlotte is still looking to have an MLS stadium built for him, and Tampa is looking to get an MLS franchise but already has a stadium.

These are mostly terrible ideas, notes the Guardian, at least where they involve public money. And if the newspaper slightly overstates the case that there’s growing pushback on MLS subsidies (truth is, they’ve never been an especially easy sell as sports subsidies go, mostly because MLS isn’t as popular yet as the Big Four sports), it does contain a classic defense of them from Peter Wilt, the Chicago Fire founder who now heads later headed the Indy Eleven NASL team and wannabe expansion franchise:

“It is about image and plays into making a city cool to live in, a good experience for young professionals, and reducing the brain drain on a community. Things like that are sometimes not taken into account. If Oakland loses the A’s and the Raiders, which is a possibility, then no one will hear about Oakland in any positive terms for the foreseeable future.”

Things like that actually are taken into account in economic studies of teams and stadiums, which overwhelmingly find that if sports teams make cities “cool,” it doesn’t show up in things like per-capita income or jobs or economic activity or tax receipts. Plus you’d then have to explain how a city like Portland, for example, which until recently had only basketball as a major-league sport and famously turned down a domed stadium in the 1960s that would have brought an NFL team, nonetheless became one of the hippest cities in America. (It has MLS now, but the hipness predated that.)

Anyway, with MLS set to announce four more expansion franchises in the next year or so, the league can probably count on some cities stepping up to throw money at new stadiums, so long as they’re not too picky about which ones. (Cincinnati, Raleigh/Durham, Sacramento, and San Antonio are also in the mix.) Bulk-mailing extortion notes is kind of a strange business model, but hey, whatever works.

Charlotte’s $100m MLS subsidy wins county approval, but city kills it

One day ahead of a scheduled Charlotte city council vote on $43.75 million in subsidies to billionaire racetrack owner Bruton Smith for a proposed $175 million MLS stadium, Mecklenburg County approved kicking in its own $43.75 million plus $13 million in free land — only to have the city immediately cancel its own vote, apparently because stadium supporters had determined the proposal wouldn’t pass:

City Council’s cancellation after the county vote on the $175 million stadium threw the deal into limbo. A council majority had been expected to oppose the deal. A “no” decision by the city would have killed the deal.

Mayor Jennifer Roberts said in a statement that “while this (proposal) is very promising, it is clear that we are not prepared to move forward at this time on the current soccer proposal.”

Since the mayor, you’ll recall, had said she didn’t have time to have her staff testify before a council hearing on the stadium plan, the only council hearing was scheduled for today before the vote, and that’s canceled now as well, so we can’t really say what councilmembers’ objections were (one announced she didn’t approve of “the location in addition to the other things,” which doesn’t really help), or whether they could be swayed by a revamped deal. County manager Dena Diorio said yesterday that “we don’t have a city partnership right now, so I need to go back and talk to the team ownership to see what they want to do at this point in time.” All those who think the answer is “reach for their wallets and pull out a spare $43.75-million bill,” raise your hands!