Friday roundup: How Kansas City evicted a team for rent non-payment and ended up costing itself $1m, and other stories

Posted on October 18, 2019 by Neil deMause

This week’s recommended reading: Girl to City, Amy Rigby’s just-published memoir of the two decades that took her from newly arrived art student in 1970s New York to divorced single mom and creator of the acclaimed debut album Diary of a Mod Housewife. (Disclosure, I guess: I edited an early version of one chapter for the Village Voice last year.) I picked up my copy last week at the launch of Rigby’s fall book tour, and whether you love her music or her long-running blog (guilty as charged on both counts) or enjoy tales of CBGB-era proto-gentrifying New York or coming-of-age-stories about women balancing self-doubt and determination or just a perfectly turned punchline, I highly recommend it: Like her best songs, it made me laugh and cry and think, often at the same time, and that’s all I can ask for in great art.

But first, read this news roundup post, because man, is there a lot of news to be rounded up:

Three days after evicting the indie minor-league baseball Kansas City T-Bones from their stadium for nonpayment of rent, the city of Kansas City, Kansas welcomed new owners of the team with a new lease that will provide $1 million in tax money to help pay for $1.5 million in stadium upgrades. If this doesn’t quite feel like tough negotiating to you, does it make you feel better that the new team president is promising to bring shuffleboard, pickleball, sand volleyball, and bocce ball to the stadium as well? Can anyone truly put a price on getting to watch professional (?) pickleball?
Most of the $30 million the Los Angeles Angels have spent on stadium “maintenance” over the last seven years actually went to building a new scoreboard, which has sports economist Roger Noll worried that the team is skimping on actual upkeep of the building as it negotiates a new lease. Also, the long-hidden appraisal of the Angel Stadium parking lots that team owner Arte Moreno wants development rights to has reportedly been leaked, but not to anyone who’s actually made it public, which isn’t really my idea of what “leaked” means.
Still nobody is quite sure how much money St. Louis taxpayers will have to put up for a new MLS stadium, or for cost overruns that the city has promised to cover, or even where the stadium will be built. These are maybe things St. Louis might have wanted to work out before approving the funding plan, but it did land the city an MLS expansion franchise, and not everybody gets those. Not quite yet, anyway.
The New York Islanders‘ new arena will reportedly include “smart jerseys” for sale that can change what player and number they feature, which seems not to have anything to do with the new arena per se? Regardless, I’m sure the Cincinnati Bengals will be demanding that county taxpayers pay for some soon enough.
MLB TV ratings are up even though attendance is down, and MLS per-game attendance is down while TV ratings are up. One might be tempted to conclude that something is going on here other than MLB being a dying sport while MLS is the choice of a new generation, but far be it from me to ruin a good meme.
Were you wanting an article whose headline reports that “new stadium buzzing is getting louder” for the Tampa Bay Rays when the only actual news in it is about a Rays stadium lobbying group shutting down? Florida Politics has got you covered!
MLB is exploring ways to let investment funds buy minority shares in baseball teams, which I don’t fully understand the consequences of beyond “more potential buyers means you can charge more for shares,” but I’m going to go out on a limb and say that investment funds aren’t the best employers for workers and other living things.
The XFL’s Dallas Renegades have released a schematic of how their football field in the Texas Rangers‘ old baseball stadium, and yeah, that seems about right.
The Columbus Dispatch editorial board says it’s fine with the city’s soccer stadium costs having doubled — because who can put a price on keeping the Crew in town? — but just wishes someone in city government had mentioned it rather than forcing the paper’s reporters to go dig up secret documents, which was a lot of work, man.
The New York Liberty are relocating to Brooklyn after two years in exile in Westchester after the team’s former owners, Madison Square Garden, moved the WNBA franchise there to make room for more lucrative concerts and such. This isn’t a huge surprise given that the Liberty’s new owner is also the new owner of the Brooklyn Nets and the arena, but as someone who will now be able to get to games via a 20-minute subway ride, I applaud corporate machinations finally working in my favor for once.
With the Oakland A’s looking at building a waterfront stadium because fans dig waterfront stadiums, the Washington Post has investigated whether it’s really such a good idea to be building waterfront stadiums when sea level is projected to rise by several feet in coming decades thanks to the climate crisis. My favorite bit is where a University of Miami geologist does say that Miami is “not a long-term option” — not Miami’s stadium, mind you, but Miami itself, which should be a sobering notion for anyone concerned about the future, which of course is where we’re going to spend the rest of our lives.
And speaking of Miami, please enjoy this moment in the Miami city commission’s continuing debates over Inter Miami‘s new stadium in which a city commissioner said to Miami’s mayor, “Let me call you Lord Mayor, so you get even happier!” I’m truly going to miss Florida when it’s gone.

Friday roundup: More on MLB attendance decline, plus stadium rumors and the reports of rumors

Posted on October 4, 2019 by Neil deMause

In case you missed it, I revisited the question of MLB’s attendance decline for Deadspin this week, by way of picking apart a New York Times article on the topic that got a couple of things right and a whole bunch of things less right. The upshot is that team owners don’t really need lots of fans to show up, but they sure would like them to, but only if they can accomplish this without cannibalizing the luxury seat sales that are their bread and butter these days — all of which makes all the “Whither baseball?” handwringing even less justifiable. Lesson: Don’t try to measure the demand curve just by looking at product sales. (Okay, maybe that’s only the lesson I take from it, but it’s one lesson.)

Meanwhile, news!

Some St. Louis business owners have had their leases terminated, and think it’s because their buildings are being sold to make way for a new MLS stadium. The stadium site (and the team’s name) remain mysteries according to the team’s official website, so their guess is as good as yours or mine or anybody’s.
San Francisco Giants execs are considering moving their fences in because their team hit better on the road than at home, and has anyone told them that if they move the fences in, it has to be for both teams? Doing otherwise has been illegal ever since Bill Veeck tried it.
Hamilton Bulldogs owner Michael Andlauer has pledged $30 million toward a new arena, which sounds better before you notice that the total construction cost is projected at $126 million. Andlauer says he’d take over maintenance costs on the arena, whereas the city pays maintenance on the existing one, but he didn’t say how much money that would be or if there would be a different share of arena revenues or anything, so it’s hard to draw any firm conclusions on this one.
Anaheim city spokesperson Mike Lyster says that the appraisal of the city-owned land around the Los Angeles Angels‘ stadium that team owner Arte Moreno wants development rights to, which the city council voted last fall to release to the public as soon as it was ready, will be “share[d] with the community at the right time,” but right now “any release would be premature and potentially impact negotiations.” How does three and a half hours before the vote sound to you?
Oakland A’s fans like Oakland Coliseum because it’s so unattractive that it’s cheap to go to. This actually says a lot about the role of new stadiums in team marketing and income (and enthusiasm) gaps between different kinds of fans and a lot of other things, even if it just sounds like a rehashed Yogiism.
Cleveland is spending more to renovate the Cavaliers‘ arena than it spent to build it in the first place, reports the great Cleveland journalist Roldo Bartimole, while it and other local sports venues stiff the Cleveland school district on property taxes.
Palm Springs is getting an AHL expansion franchise in 2021, and Oak View Group is building a $250 million arena for it to play in, and yes, you read that right, a quarter-billion-dollar minor-league hockey arena. Costs will be shared between OVG and the Agua Caliente tribe whose land it sits on, and OVG head Tim Leiweke says it will create “thousands” of construction jobs and 500 permanent jobs, which isn’t actually all that great for $250 million in expense, but who can put a price on minor-league hockey?
Here’s an interview with Tiger Stadium Fan Club stalwarts Bill Dow and Dave Mesrey on the 20th anniversary of the closing of that Detroit ballpark, which I haven’t listened to all of yet because ew podcasts, but Bill and Dave are both great so if you like obtaining information through your ears, give it a spin.
The Associated Press has noticed that some cities pay a lot for sports stadiums, and others don’t. Now all they need is an explanation of why, and they can write a book!

Final St. Louis soccer stadium deal is better than previous one, but not so much as to be worth getting excited about

Posted on August 26, 2019 by Neil deMause

The St. Louis Post-Dispatch business section ran a long article on Sunday about how the city got a much better deal on its MLS stadium after voters rejected the original plan in 2017. Most of the article’s evidence is that local elected officials who expressed qualms about the earlier plan seem fine with this one — though it’s worth noting that the quote in the headline, “Clearly a better deal,” appears nowhere in the actual article — but it also includes this chart:

That’s not exactly apples-to-apples, so let’s unpack it a bit:

The original plan would have taken about $60 million from a 0.5% sales tax hike on out-of-state purchases and poured it into soccer stadium funding. Voters approved the sales tax hike, but rejected using it for a stadium.
$40 million in state tax credits had already been killed by Missouri’s then-governor three months before the stadium vote.

As for the new plan, it includes:

$30 million in state tax credits (okayed by Missouri’s now-governor).
A sales-tax surcharge on in-stadium purchases (which probably mostly comes out of the team owners’ pockets like a ticket tax)
An abatement of the city’s 5% ticket tax, with half the money going to the team directly and the other half going into a “stadium upkeep fund.” The Post-Dispatch estimates each half as worth $28.7 million over 30 years, which is a total of $57.4 million over 30 years, which in present value comes to around $29 million, probably less if ticket prices (and taxes) rise significantly over the next three decades and make the tax more backloaded.

Also, in both cases the stadium will be exempt from property tax, which still no one knows how much of a savings that’s worth to the team owners.

So is that really better? For the city, absolutely, as it’s managed to cut its costs from $60 million to less than half that. For St. Louis taxpayers overall, maybe not so much, as the revival of the state subsidy makes up for most of the difference in city subsidies. It’s way better than the very original plan that would have stuck taxpayers with a $100 million bill, yes, but that’s not what voters rejected in April 2017, as the state tax credits were dead at the time.

In any case, yes, it appears that voters did get a marginally better deal by rejecting the 2017 plan — yay, democracy! — but the emphasis is strongly on marginal: Mostly, the city and team regrouped to fob off half the public costs on the state, while converting the other half from a sales-tax subsidy to a ticket-tax kickback. So long as local pols and media outlets are willing to celebrate victories like these, sports team owners probably won’t mind too much failing to stick the public with outright defeats.

Friday roundup: News outlets everywhere get pretty much everything wrong

Posted on August 23, 2019 by Neil deMause

On a tight deadline this week, so let’s get straight to the news:

MLS indeed awarded St. Louis an MLS franchise this week as had been hinted, to begin play in 2022. “St. Louis has always been and will continue to be one of the great historic soccer cities throughout the United States,” said MLS commissioner Don Garber, failing to note that this soccer tradition didn’t help when St. Louis voters rejected giving sales-tax money to the team for a new stadium in 2017, but once the city and state went ahead and approved about the same $60 million in public funding in 2018, it was all good.
Here’s an article about how Mesa, Arizona is “saving $22 million” by paying off $45 million in spring-training stadium debt early instead of continuing to make payments through 2032. Which, no, that’s not how borrowing money works: Yes, Mesa now gets to avoid interest payments, but it also no longer has $45 million sitting around, meaning it either needs to cut back on spending or take out new debt to pay for stuff that that $45 million would have paid for, which will result in, yep, more interest payments. Choosing when to pay off bonds isn’t a funding issue, it’s a bookkeeping one; I’m not sure why so many journalists can’t understand this, but it’s probably millennials’ fault somehow.
And here’s an article about how Nassau County’s executive wrote an op-ed for another site calling the New York Islanders arena deal “a hat trick for Nassau County.” Remember, kids: If you study hard and eat your spinach and grow up to be an elected official, not only to you get to write in the newspaper about how great your decisions are, but other people will write articles about how your decisions are great because you wrote an op-ed saying they are!
On the other hand, if you try to bill a company $50,000 for negotiating a stadium naming-rights fee with the public authority you’re in charge of, you might get in trouble and have to resign! Politics is only fun and games until somebody gets an eye put out!
The Kansas City T-Bones indy league baseball team is getting evicted for nonpayment of rent on its stadium, and I, for one, hope it will involve a tractor parked on home plate.
“Should the White Sox leave Chicago?” asks Chicago Magazine, apparently because the White Sox aren’t drawing as well as the Cubs, though they are drawing better than eight other MLB teams despite heading for their seventh consecutive losing record. Maybe they could move to Charlotte or Las Vegas, suggests the article, noting in a coup de grace, “The Chicago Public Library holds twice as many books about the Cubs (274) as the Sox (131).” I’m sold — Charlotte may have barely one-third the TV households as Chicago, but I bet the CharlSox would dominate the public library, and that’s priceless.

Friday roundup: Saints’ $300m subsidy moves ahead, St. Louis MLS announcement on tap, Richmond council votes no on democracy

Posted on August 16, 2019 by Neil deMause

Sometimes I feel lucky to cover a topic with so many constant absurdities, and then this happens, and I realize that constant absurdities are just the new normal. Anyway, I did get to edit this this week, which is an excellent look at how this week’s absurdity is having potentially catastrophic impacts on people’s lives, so go read it!

But not before you read these:

The Louisiana State Bond Commission has approved selling $450 million worth of state bonds to fund renovations to the Superdome, in exchange for the New Orleans Saints signing a 15-year lease extension. As covered back in May, Saints owner Gayle Benson would cover one-third of the bond cost, leaving Louisiana to pay off $300 million, bringing the Saints’ five-decide subsidy total to a cool $1.442 billion. In exchange, the Saints will sign a 15-year lease extension — with another 15-year option, but there’s no way they’re going to extend their lease again without more subsidies the way this gravy train is rolling — which comes to state taxpayers ponying up $20 million a year for the presence of an NFL team, which is a hell of a lot of money, though not as much as Indiana pays the Pacers, because Indiana.
The St. Louis Post-Dispatch reported this week that St. Louis will be announced next Tuesday as the next MLS expansion city, bringing the number of teams in the league to a cool 154. (I think it’s actually 28, but honestly the number changes so fast it’s hard to keep track.) Deadspin read the announcement that there would be no public subsidies for the as-yet-unnamed team’s stadium and excitedly reported that the deal “might not completely fleece the city”; sadly, it will actually involve about $60 million in public subsidies, but since about half of that is coming from the state, not the city, that Deadspin headline is still technically correct, right?
The Richmond city council has voted 5-3 against allowing a referendum on the city’s proposed new $350 million city-subsidized arena on the November ballot, because voting is for elected officials, not regular folks. Though regular folks do still get to vote on electing elected officials, something that referendum sponsor Reva Trammell clearly had in mind when she said following the no-voting vote: “I hope the citizens hold their feet to the fire. Every damn one of them that voted against it.”
Two-plus years after the arrival of the Hartford Yard Goats in exchange for $63 million in public stadium cash — plus a couple million dollars every year in operating losses — the Hartford Courant has noticed that stadium jobs are usually part-time and poorly paid. Not included in the article: any analysis of how many full-time jobs could have been created by spending $63 million on just about anything else.
New Arizona Coyotes owner Alex Meruelo said he intends to keep the NHL team in Arizona, but that keeping it in Glendale is a “difficult situation,” at which point a Glendale spokesperson said that city officials would meet with Meruelo “to see how we can help him achieve his goals of success.” Which is all fine and due diligence and all, but given that helping Meruelo “achieve his goals” is likely to mean paying him money to play in Glendale like the city used to do, it’s not exactly promising; if nothing else, Glendale officials would do well to remember that Meruelo currently has exactly zero better arena options elsewhere in the state, so he’s not exactly negotiating from a position of strength.
Joe Tsai, who was already set to buy the Brooklyn Nets from Mikhail Prokhorov, has officially exercised his option to purchase the team, plus the Barclays Center arena to boot, for a reported $3.5 billion. Given that the arena is currently losing about $21 million a year, this seems like an awful lot of money even if the team does employ whatever’s left of Kevin Durant. Since Tsai already owns the New York Liberty, though, maybe it at least means that WNBA franchise will finally return to the city from its exile in the suburbs.

Friday roundup: IRS hands sports owners another tax break, A’s accused of skimping on Coliseum land price, Rays could decide this summer on … something

Posted on May 3, 2019 by Neil deMause

Happy Friday! Here is a fatberg of stadium and arena news to clog up your weekend:

San Jose Mercury News columnist Daniel Borenstein says the Oakland A’s owners could be getting a discount of between $15 million and $65 million on their purchase of half the Oakland Coliseum site from Alameda County, which is hard to tell without opening up the site to other bids, which Alameda County didn’t do. You could also look at comparable land sale prices and try to guess, which shows that the A’s owners’ offer is maybe closer to fair value; it’s not a tremendous subsidy either way, but still oh go ahead, just write us a check for whatever you think is fair is probably not the best way to sell off public assets, yeah.
St. Petersburg Mayor Rick Kriseman says he expects to hear by this summer from Tampa Bay Rays owner Stuart Sternberg whether Sternberg will seek to build a stadium in St. Pete or across the bay in Tampa. Of course, Sternberg already announced once that he was picking Tampa and then gave up when nobody in Tampa wanted to pay for his $900 million stadium, so what an announcement this summer would exactly mean, other than who Sternberg will next go to hat in hand, remains unclear.
Fred Lindecke, who helped get an ordinance passed in St. Louis in 2002 that requires a voter referendum before spending public sports venues, would like to remind you that the soccer stadium deal approved last December still has to clear that hurdle, not that anybody is talking about it. Since the soccer subsidies would all be tax kickbacks and discounted land, not straight-up cash, I suspect this could be headed for another lawsuit.
Cory Booker and James Lankford have reintroduced their bill to block the use of federal tax-exempt bonds for sports venues, but only Booker got in the headline because Lankford isn’t running for president. (Okay, also it’s from a New Jersey news site, and Booker is from New Jersey.) Meanwhile, the IRS just handed sports team owners an exemption from an obscure provision of the Trump tax law that would have forced them to pay taxes on player trades; now teams can freely trade their employees like chattel without having to worry about taxes that all other business owners have to, thank god that’s resolved.
Golden State Warriors star Kevin Durant, for some reason, revealed that “Seattle is having a meeting to try to bring back the Sonics,” but turns out it’s just Chris Hansen meeting with a bunch of his partners and allies from his failed Sodo arena plan, not anyone from city government at all, so everybody please calm down.
The rival soccer team that lost out to David Beckham’s Inter Miami for the Lockhart Stadium site in Fort Lauderdale is now suing to block Beckham’s plans for a temporary stadium and permanent practice facility there, because this is David Beckham so of course they are.
Publicly owned Wayne State University is helping to build a $25 million arena for the Detroit Pistons‘ minor-league affiliate, and Henderson, Nevada could pay half the cost of a $22 million Las Vegas Golden Knights practice facility, and clearly cities will just hand out money if you put “SPORTZ” on the name of your project, even if it will draw pretty much zero new tourists or spending or anything. Which, yeah, I know is the entire premise of this site, but sometimes the craziness of it all just leaps up and smacks you in the face, you know?
The Philadelphia Union owners have hired architects to develop a “master plan” for development around their stadium in Chester, because they promised the city development and there hasn’t been any development and maybe drawing a picture of some development will make it appear, couldn’t hurt, right?
Wannabe Halifax CFL owner Anthony LeBlanc insisted that “we are moving things along, yeah” on getting federal land to build a stadium on, while showing no actual evidence that things are moving along. “The only direction that council has ever given on this is ‘dear staff, please analyze the business case when it comes,’” countered Halifax regional councillor Sam Austin. “Everything else is media swirl.”
Never mind that bill that could have repealed the Austin F.C. stadium’s property tax break, because its sponsor has grandfathered in the stadium and any other property tax breaks that were already approved.
Hamilton, Ontario, could be putting its arena up for sale, if you’re in the market for an arena in Hamilton, Ontario.
And finally, here’s an article by the Sacramento Bee’s Tony Bizjak on how an MLS franchise would be great for Sacramento because MLS offers cheap tickets and a diverse crowd who like public transportation and MILLENNIALS!!!, plus also maybe it could help incubate the next Google, somehow! And will it cost anything or have any other negative impacts? Yes, including $33 million in public subsidies, but Tony Bizjak doesn’t worry about such trivialities. MILLENNIALS, people!!!

St. Louis MLS owners unveil square-roofed stadium (actual contents may differ from images on box)

Posted on April 22, 2019 by Neil deMause

The wannabe St. Louis MLS team owners have released some renderings of their wannabe stadium:

So, that square roof is cool and all, but I’m not sure it works in terms of geometry, given that soccer pitches are longer than they are wide. It looks from that image like the seats at the ends are more stacked vertically than the ones on the sidelines, which could be one way of getting around that; let’s see another angle:

We’re looking from one end in the above image, so maybe. Still, it’s also possible this is some form of forced perspective, or the designers just decided to fudge the shape of an actual soccer field to get a cooler image, and the actual roof — if there ever is an actual roof — will be more rectangular. Which is actually what appears to be going on in this GIF:

Team co-owner Carolyn Kindle Betz did call the renderings “conceptual,” so I’m going to take that to mean “it won’t actually look like this, we just wanted something to distract you with.”

Which is fine, but can’t we get any renderings with the more usual fantastical stadium elements, like weird lighting effects and people cheering at nothing in particular? Please?

Ahhhh, much better. Judging from the keeper sprawled on the ground, it looks like somebody (the red team?) has just scored, which isn’t too surprising given that the black team has utterly failed to track back to play any defense.

The stadium — which you will recall is set to get something on the order of $60 million in public subsidies — is supposed to seat 22,000, with room to expand (maybe they can put temporary seating in those gaps in the corners, though the landscaping is going to get in the way), which will make MLS commissioner Don “really our stadiums should hold 27,000 people even though the league average attendance is only 20,000 and that’s with teams papering the house” Garber happy. And since making Garber happy enough to give St. Louis owners a franchise — sorry, sell St. Louis owners a franchise, for an expansion fee of at least $200 million and maybe more — really that’s how we should be looking at all of these pretty pictures: They’re profile pics, nothing more, nothing less.

MLS is adding St. Louis and Sacramento franchises (maybe), demanding bigger stadiums (possibly)

Posted on April 19, 2019 by Neil deMause

Eleven months after announcing its expansion to 28 teams, Major League Soccer has decided to expand to 30 teams with new franchises in St. Louis and Sacramento … okay, has decided to invite prospective owners in St. Louis and Sacramento to apply for franchises … okay, let’s let the Associated Press try to explain it:

St. Louis and Sacramento, California, have been invited to submit formal bids for franchises as Major League Soccer’s Board of Governors formally unveiled plans Thursday to expand to 30 teams.

Commissioner Don Garber made the announcement at the board’s meeting in Los Angeles, pointing to expansion as one of the key drivers of the league’s growth in North America in recent years.

“We continue to believe that there are many, many cities across the country that could support an MLS team, with a great stadium and a great fanbase and great local ownership that will invest in the sport in their community,” he told reporters following the meeting.

So that’s really just “St. Louis and Sacramento are front-runners for the next two MLS franchises, which we’re planning to award sometime this year.” Which is exactly what Garber said last month. So this is not actually news at all, just confirmation that those two cities will get teams if all their t’s are crossed — which mostly means having stadium deals in place. Both cities have given preliminary approval for new stadiums, with St. Louis promising about $60 million in subsidies and Sacramento about $33 million; these would not be the worst deals in sports history or even MLS history, but still, you know what Everett Dirksen may or may not have said about money adding up

In completely unrelated news but not really, F.C. Arizona, a team that currently plays at a high school field in Mesa in the fourth-tier National Premier Soccer League, has announced plans to build a 10,900-seat stadium at an unspecified location in the Phoenix area, saying they’ll pay for the unspecified costs with their own unspecified private money. That’s an awful lot of seats for a team in what’s essentially a semi-pro league — not all players are paid — so you have to figure this is an attempt to get on the radar of either MLS or the second-and-third-tier USL to get a franchise. U.S. soccer may not have promotion and relegation where teams can move up to higher leagues just by winning games, but it does have a clear path by which owners can buy their way into higher leagues, and it’s clearly leading to a land rush for owners hoping to find an angle by which to enter into the major-sports ownership club without shelling out a billion for a big-four league expansion team.

If you consider MLS a major sports league on par with the big four, that is, which remains an open question. Garber also took time out to say that Minnesota United‘s new stadium is too small, asserting, “I wish the stadium wasn’t 19,000 and that it was 27,000 because I think at some point we are going to be thinking of how do we make the stadium bigger. I think we are going to be dealing with that in a number of different markets.” This is the same week that the New York Red Bulls announced that they’d begin tarping over some seats in the upper deck because they couldn’t sell them; team GM Marc de Grandpre recently remarked, “If we were to build the stadium today…we’d have built the stadium with a flexible capacity system,” meaning a way to reduce capacity from its current 25,000 seats, not increase it. Clearly there are still some bugs to be worked out of the MLS business model — those $150 million expansion fees from St. Louis and Sacramento, or whoever steps in if St. Louis or Sacramento falter, should help buy some time to figure them out.

MLS commissioner doubles down on giving teams to whichever cities cough up stadiums

Posted on March 13, 2019 by Neil deMause

MLS commissioner Don Garber has issued his latest missive on the league’s never-ending campaign to create an endless carpet of soccer teams across the United States (and an endless carpet of expansion fees), and it has several points:

St. Louis and Sacramento are the frontrunners to become the league’s 28th team, with a verdict to be handed down by the end of this year. And the price of admission is clear: While a stadium subsidy package got preliminary approval from St. Louis in December, “It would really help their bid if they had stadium naming rights and a jersey sponsor in place,” Garber told the St. Louis Post-Dispatch. “So there is a specific level of financial corporate support.”
Other cities, of which the commissioner specifically named Charlotte, Las Vegas, and Phoenix, will have to await the next round of expansion, which league officials have previously indicated could be completed by 2026.
Detroit is apparently out of the running for now, with Garber saying, “I’ve been in regular conversations with them. And we still struggle with their stadium plan. … We think that in order for us to be successful in that city, we need a soccer-specific stadium. And the options that we’re presented with today are only at Ford Field.”

This is all in keeping with MLS’s long-established business model: Keep handing out new teams every year or two, at a pace geared to ensure a steady flow of expansion fees while still keeping enough cities interested that the league can levy demands — namely, for new publicly subsidized soccer-only stadiums — in exchange for granting franchises. (Lucrative naming rights deals, apparently, will be the new tiebreaker.) At least, except when it’s presented with owners it craves enough to be worth waiving that rule, which was the case with NYC F.C. and Atlanta United but not with Detroit for some reason.

If anything, the main advance made by Garber is that he pretty much just straight-up admits the game he’s playing now:

Garber called the competition good for the league.

“Life is good when you have options,” he said. “I believe that there are many cities in our country today that can support an MLS team. We’ve got to get this last one over the finish line and then sit down and figure out what happens to those cities that were not part of the 28 that we set out to finalize a couple of years ago.”

“Life is good when you have options.” That one really needs to go alongside Jerry Reinsdorf’s “A savvy negotiator creates leverage” in the sports shakedown Hall of Fame.

St. Louis officials overwhelmingly approve MLS deal marginally less onerous than one voters hated last year

Posted on December 3, 2018 by Neil deMause

The St. Louis Board of Aldermen voted 26-2 on Friday to give preliminary approval to tax breaks and free land for a new MLS soccer stadium, with final approval to come when and if the city actually lands a team. Which means it’s a perfect time for me to help throw some cold water on the board’s enthusiasm, via column by St. Louis Post-Dispatch columnist Tony Messenger (which he spoke to me for before the vote, but which ran this morning).

My only actual quote should be pretty uncontroversial:

“The latest plan is arguably less onerous for the public than lots of other stadium projects out there — and certainly better than the previous soccer proposal for St. Louis,” deMause says. “But that’s damning with faint praise, because the median in stadium deals is ‘pretty awful.’”

Most stadium deals are terrible, and this one is better than most! But it’s not the best, either, which Messenger notes by pointing to my recent Deadspin article on stadium deals that don’t suck, citing in particular the Orlando S.C. deal where the team owner paid for construction, land, and property taxes like a normal land developer. St. Louis mayoral chief of staff Stephen Conway retorts that Orlando’s situation is an “outlier,” which is true, but when you’re giving your own plan five stars out of five, by definition you’re saying it’s as good as any outliers. (What would an Orlando-style plan get, six out of five stars?)

Anyway, to recap and update what the prospective St. Louis MLS owners will get as part of the tax and land break package, with some numbers via city documents helpfully provided by Messenger:

A 3% sales tax surcharge on goods sold at the stadium. The present value of future taxes is estimated by the city at $21.3 million, but since the higher sales taxes which arguably would just force the team to charge lower face-value prices, it’s not fair to consider this entirely a city cost.
An exemption from half of city ticket taxes, with the other half funneled into a stadium upgrade fund. Project supporters say that all the other St. Louis sports teams get an exemption on this, so the soccer team should too; still, that makes it less “not a subsidy” than “a subsidy, but one that the city hands out like candy.” The city analysis estimates the value of this exemption at $11.6 million in present value.
An exemption of sales taxes on construction materials, which is estimated to cost the city $1 million in present value while saving the developers $4-5 million; no explanation is given in city documents how this bookkeeping magic occurs (the city sales tax rate is about equal to the state’s), so just roll with it.
Free state highway department land and an exemption on property taxes for it. This is the big unknown, since the city apparently threw up its hands and said, “Well, we’re not getting any money from the land now, so may as well give it away for free,” which is not how assets work. (Not that it’s stopped far bigger developers from trying the same argument.) Here’s a vacant lot in the same general vicinity selling for a little under $23 a square foot; if you figure at minimum about 500,000 square feet for a soccer stadium, then you’re looking at $10 million in forgone land value, plus whatever the city would be giving up in forgone future property taxes.
The state has already approved $30 million in tax credits, though since it doesn’t appear to be a rebate of any specific taxes, this is probably better thought of as “cash.” (Really, all tax rebates are better thought of as cash, since there’s no functional distinction between the two.)

Add it all up, and we’re looking at maybe $60 million in public subsidies, whereas the previous soccer stadium plan that was rejected by voters in 2017 would have provided … $60 million in city subsidies, plus $40 million from the state. So, yeah, this would be somewhat better, but not all that dramatically so. Probably the most honest way to present this to the public would be “We want a soccer team, and at least this way we’d get one at a mild discount over what some other cities are spending,” but maybe that’s just what “FIVE STARS!!!!!” translates into in the politician-to-English dictionary.

Field of Schemes

sports stadium news and analysis

Category Archives: St. Louis MLS team