Lease clause could let Philadelphia Union threaten to move, make Chester stadium deal more awful than it is already

The Delaware County Daily Times ran a long article yesterday on the impact of the Philadelphia Union‘s taxpayer-funded stadium on the city of Chester, which begins like this:

As you approach Talen Energy Stadium, past the pristine views clear across the Delaware River, the scent hits you first, the mingling of roast coffee beans and grilled burgers from storefront vents. Above them rises four stories of apartments, accented by red brick and wrought iron balconies. The patio for dining and resident recreation hums with life, as boats idle near the pier and oblige excited children with honking horns.

It’s a great, evocative opening — and it’s all misdirection, because it doesn’t exist. This, it turns out, is just the image that was painted by the team’s owners in order to get $87 million in public money for its stadium project. Now, writes the Delco Times,”it reads like a fever dream, where the imaginary deluge of funds — was it a $400 million or $500 million renaissance? — seemed to jump weekly.”

That Chester is a cautionary tale against believing “if you build it, they will come” rhetoric (and yet another reason to hate Jerry Blevins’ least-favorite movie) isn’t anything new — the Philadelphia Inquirer wrote about this four years ago, and Bloomberg News two years before that. But what is new, to me anyway, in this article is the news that Chester’s terrible stadium deal includes a terrible lease clause that allows the Union to threaten to leave town starting this year by paying just a $10 million exit clause:

If after 10 years, the Union’s attendance lags in the bottom 25 percent of MLS for two consecutive years (which it has, the Union ranked 19th out of 22 teams last year), the club can choose to relocate, paying Delco a stipend of $10 million to exit the lease. In a climate where a prominent owner like Columbus Crew’s Anthony Precourt is strong-arming his way toward Austin, clubs have the leverage and precedent to leave, which would leave the stadium a white elephant even more marooned.

Union CFO Dave Debusschere (no, not that one, he’s dead) insists that the team has no intention of moving — which may well be true, but come on, people, you know that giving sports teams an exit clause is just handing them a gun and inviting them to rob you. This is probably not the most opportune time for the Union to demand stadium upgrades, what with the local paper reporting on how the stadium has been a disaster all around; but using exit clauses to pry loose publicly funded renovations is certainly a time-honored tradition, so you absolutely don’t want to leave the door open to it. It’s too late for Chester, but city lawyers writing future leases, bookmark this post, okay?

Add Philadelphia to the list of MLS stadiums surrounded by vacant lots

David Beckham’s proposed Miami MLS expansion franchise not only faces opposition to its stadium plans, but also an uncertain soccer fan base in South Florida, with mixed opinions on whether a team would be a success — hold on, we interrupt this speculation by talking heads to see how an actual MLS stadium has worked out in another city:

In announcing $47 million in state funding for the project in 2008, Gov. Ed Rendell went so far as to say it would “change the face of Chester forever,” the axis for development that would include housing, a convention center, office and retail space, and a riverside promenade on the city’s historic waterfront.

Today, with the Philadelphia Union in their fifth season, PPL Park, in the shadow of the Commodore Barry Bridge, remains an island among vacant land and dilapidated buildings.

This is a problem, the Philadelphia Inquirer notes, because “more than 18,000 fans pack PPL Park during games — and most immediately leave town when the games are over.” This is a common problem for the smaller cities that have built MLS stadium in recent years — see also Harrison, N.J. — and though Chester Mayor John Linder says he hopes that someone will build restaurants or something that will encourage fans to stick around after the game, it’s tough to see anyone wanting to open major retail businesses just to get the foot traffic from a league that only plays 17 home games a year.

Miami, obviously, isn’t Chester, and has plenty of restaurants. But it’s a worthy reminder that even MLS teams that sell lots of tickets may not necessarily bring an economic windfall for their cities.

Philadelphia Union gripes city that gave it $77m for stadium is imposing “unfriendly business environment”

When last we left the Philadelphia Union, the MLS team’s owners had gotten $77 million in state, county, and city money to help build a $122 million stadium in the city of Chester, and then the local economic benefits inexplicably failed to show up, and the mayor of Chester threatened to start levying city parking taxes to make up for the city’s losses on operating the building. Now, almost two years later, team CEO Nick Sakiewicz is griping that the city has inflicted an “unfriendly business environment” on it by imposing new taxes and allowing independent parking lots that have cut into the team’s parking take, and if the city doesn’t start acting more chummy, he might not build all the additional development the team had promised near the stadium:

“The talk about a hotel down there, the talk about retail, the talk about other programming around the stadium, there is no talk about that because the environment that this city administration has put in place has made it such that there are so many other opportunities in South Jersey and Wilmington and other parts of Pennsylvania where building those projects is a lot less complicated.”

I’m pretty sure this is a new twist on the old move threat: Build us a new stadium, and then don’t tax us or allow anyone to compete with us, or else we’ll move our hotel to Delaware. Oh, like the Adorable Autarch wouldn’t charge parking taxes.

New soccer stadium somehow fails to rain riches on Philly suburb

Hey, remember how a new soccer stadium in Chester, Pennsylvania was doing wonders for the local economy, according to a newspaper article that cited a single local union carpenter as its main source? How’s that working out two years later?

Four years ago, former social-sciences professor John Linder questioned why promoters wanted to “bring soccer to a basketball town.” As mayor since January, he’s been trying to make the $122 million PPL Park, financed mostly with county and state funds, generate enough money to meet the city’s costs.

[Linder] may levy parking and amusement fees on mostly out-of-town fans. He also wants Major League Soccer’s Philadelphia Union to make a $500,000 payment in lieu of taxes that it missed in 2010. The team says it’s negotiating the fee.

“What they’re paying us doesn’t cover our expenses,” Linder said in a telephone interview. “I have a mandate to my citizens that we persevere to get the best bang for our buck.” …

In Chester, 15 miles (24 kilometers) south of Philadelphia, public funds covered about 71 percent of the cost of the stadium for the Union, which is in ninth place in the league’s 10-team Eastern Conference. Related residential projects and a convention center haven’t been built, leaving the city of 34,000 in a program for distressed communities that it entered in 1995. Chester’s poverty rate is almost triple the state average.

There isn’t actually much in the way of economic impact details in this piece — maybe Bloomberg couldn’t find any carpenters to lend their expertise — but the overall picture is certainly less rosy. The best part, meanwhile, is that Union CEO Nick Sakiewicz says he hasn’t paid the back PILOTs he owes the city because nobody sent him a bill.

In related low-income-suburbs-who-thought-it-was-a-good-idea-to-build-soccer-stadiums news, meanwhile, residents of Bridgeview, Illinois, are really steamed about the $200 million in debt their town has racked up, in part by building a new stadium for the Chicago Fire. Best part of this article:

Mayor Steven Landek, who is also an appointed state senator running for election this fall, at first offered to meet privately in the homes of the handful of residents who complained.

But resident Julie Padilla told Landek that her husband was so angry he wouldn’t let Landek in their house, and then she and two other residents asked Landek to hold a public forum. Landek said he would, although no date has been set.

Philly soccer team debuts new stadium amid dusk-to-dawn curfew

The Philadelphia Union opened their new stadium in Chester yesterday, and by most accounts a fun time was had by all.

As for what Chester itself is getting for its $77 million in public funding (split between the state and county), opening day didn’t provide much positive evidence:

Obert Burchell runs a small Jamaican jerk chicken restaurant on Route 291, not far from the new soccer stadium. On Sunday his place was empty. He says business has been dropping for two weeks.

“Very dramatically man,” says Burchell. “All we do here is play cards. Food on the stove — nobody come in to buy.”

Of course, it doesn’t help that half the city is under a 9-p.m.-to-6-a.m. curfew after a series of shootings earlier this month. A curfew that, despite what many residents believe, Chester’s mayor insists has nothing at all to do with making visitors to the new soccer stadium feel safe.

Philly MLS stadium to be named for electric company

The home of the new Philadelphia Union MLS team starting play in 2011 this spring will be named for Pennsylvania Power and Light, in a deal worth a reported $20 million over 10 years. If you’re wondering why an electric utility needs to buy a giant billboard, it probably has something to do with the fact that Pennsylvania just deregulated its electricity markets starting January 1. Now, on top of 30% rate hikes, PPL customers get to help foot the bill for their electricity company’s soccer-stadium ad campaign to convince people that name recognition is more important than those 30% rate hikes.

Of course, the Pennsylvania legislators who voted for electricity deregulation couldn’t have seen this coming, because it’s not like anything like this has ever happened before.

When budget crisis hits, cut supermarkets, not stadiums

With the Pennsylvania state budget headed into the crapper, the impoverished Philadelphia suburb of Chester is still getting its $115 million soccer stadium, it looks like — just not the supermarket that was supposed to come with it:

Up to $4 million was earmarked for the store last year, at the insistence of state Rep. Thaddeus Kirkland.

“That was part of the deal,” said Johnna Pro, spokeswoman for state House Appropriations Committee Chairman Dwight Evans. “The supermarket [funding] was part of the whole soccer-stadium deal.”

But Gov. Rendell decides what money is dispersed from the capital budget, and his office has been noncommittal.

“There are more projects listed in the capital budget than can possibly be funded,” Rendell spokesman Chuck Ardo said yesterday, as legislators remained locked in a budget stalemate.

Not that giving public money to retail outlets is usually that good an idea, either — it typically just shuffles spending around from one store to another — but you could make a case that Delaware County could really use some better ones than they have currently.

Chester stadium finance still up in the air?

They’ve already broken ground for the soccer stadium in Chester, PA, but in this economy, a lot of development projects are ending up just holes in the ground. So it drew attention – okay, attention from the Seattle Post-Intelligencer, for some reason – when Nick Sakiewicz, owner of the as-yet-unnamed Philadelphia expansion MLS team that would play there, said Thursday, “We’re not even sure the stadium is going to be built. If the [financial] markets tank next month, then we won’t build this thing. We’ll be out $15 million and everyone goes home.”

Friday, Sakiewicz hurriedly backed away from those comments, telling the Delaware County Daily Times, “The market’s fine. We feel that we’re in pretty good shape. Every day’s a new day, but today we feel pretty good about it.” So expect the stadium to go forward, so long as we’re not headed into a Second Great Depression or anything. Oh, wait.