Category Archives: NBA

Court gives go-ahead to Cleveland arena referendum, will now take place sometime or other

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The lawsuit over whether the city of Cleveland could reject legally gathered petition signatures to overturn its $70 million Cavaliers arena upgrade subsidy deal — on the basis that the deal was “an already executed and binding contract” — was resolved on Thursday by the Ohio Supreme Court, which ruled “Ha ha ha, yeah, that’s a good one.” Cleveland now has to put the issue up for a public vote, which is problematic since the city has now stalled so long with this legal battle that it may have missed the deadline for a November vote:

The deadline for filing issues with the Cuyahoga County Board of Elections for the Nov. 7 ballot passed on Wednesday, according to the board’s election calendar.

But a lawyer for the Cleveland taxpayers who sued to force the city to move on the issue said it’s now up to the city to make it happen.

“This is now administrative details. They should be able to do this quickly,” attorney Subodh Chandra said. If the city drags its feet, he may take them back to court, Chandra said.

And in the best quote of this whole sad saga:

“Someone just needs to call the Board of Elections and say, ‘How quickly can we restore the rule of law in Cleveland?’,” Chandra said.

What happens once the vote is scheduled remains unclear — Greater Cleveland Congregations, the coalition that is behind the petition effort, seems mostly out for a “community benefits agreement” to add some sweeteners for local community groups, not to scuttle the entire subsidy deal. But even if Cavs owner Dan Gilbert negotiates and a CBA comes to pass, if GCC switches sides to endorse the deal, does that mean Cleveland voters will follow suit? This is all shaping up to be a big-ass mess, but I guess you can’t get $70 million in public money to build a giant glass wall without a few bumps along the way.

Seattle study showing SoDo arena fiscal winner actually doesn’t show that, says study author

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I’ve had this study of the projected economic impact of the two competing Seattle arena proposals bookmarked for a couple of weeks now, waiting for a chance to dig into it to see what it actually says. Since I’m on the road now, I’m especially glad that the Seattle Times’ Geoff Baker has gone and done it for me, with the upshot of: Even the economists who conducted the study say it doesn’t really declare either plan the winner.

Chris Hansen and his Sodo arena group paid $16,000 for the “Seattle Arena Public Finance Analysis” study by UW Evans School of Public Policy and Governance professor Justin Marlowe and three graduate students. Sodo arena backers trumpeted the 3-to-1 advantage.

But a review by The Seattle Times found a high potential for fluctuation in the study — including use of raw property and sales-tax data without deeper “opportunity cost” context, an approach two sports economists say favors the Sodo group’s proposal…

Up to now, though, the study’s claimed 3-to-1 advantage for the Sodo site — a gap Marlowe pegs at $68 million — has garnered the most attention.

“I get why everyone is focused on that number,” Marlowe said. “But again, the second part is the really important part. What if what’s on the table changes? Then you get different numbers.”

In short: The “opportunity cost” bit is that the study assumes nothing else would be built on the Sodo site without an arena, and if something were, that would generate tax revenue that would make redoing KeyArena look better by comparison. Also, the study didn’t account for payments in lieu of property taxes that the Key developers would be responsible for on the value of their improvements to the property — which could be as much as $657,000 a year (present value in the neighborhood of $10 million), or could be less, nobody really knows.

In short: Who the hell knows? This is one problem with economic projections: They’re inherently guesswork, and sometimes the error bars overlap to such a point that there’s no clear winner. This is actually kind of a good sign — it means that having a bidding process for a new/renovated arena has both developers upping their packages to be in the same range — but it also doesn’t make the decision any easier. It may come down to which site city officials decide is the best location from a planning standpoint for an arena, since the cost will be roughly the same; or to which site has the most politically connected people pulling for it, which would be disappointing but typical, and really not the worst thing since at least neither plan is much worse than the other. (Though it’s still entirely possible they’d both be mild money losers for the city — which would also be disappointing but typical.)

Clippers’ Inglewood arena plans face MSG suit, could require taking homes by eminent domain

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The Inglewood city council, after voting last month to enter into an “exclusive negotiating agreement” with Los Angeles Clippers owner Steve Ballmer for a new arena, voted again on Friday to do the same thing, after getting a claim filed against it by the owners of Madison Square Garden on Wednesday for — you know what, let’s take this one step at a time:

  • Since February, there’s been talk that Ballmer wanted to build his own arena in Inglewood, possibly adjacent to the Los Angeles Rams’ (and Chargers‘) new stadium, so that he (and maybe Rams owner Stan Kroenke) could create his own entertainment district to compete with AEG’s L.A. Live next to the Clippers’ (and Lakers‘) current home at the Staples Center.
  • Inglewood councilmembers voted in June to approve that three-year negotiating agreement, which has no funding or operating details beyond “We wanna build an arena, let’s figure this out.”
  • Last Wednesday, MSG — which owns the Forum arena, formerly the home of the Lakers and now used mostly for concerts, and which is owned by James Dolan of New York Knicks and terrible singing fame — filed that claim for damages against Inglewood, claiming city officials asked them to give up their lease on parking lots across the street from the new football stadium site in April by telling them it was for a new “business-technology park.” Which, you’d think Dolan and his lawyers could have read the newspapers back in February to see this coming, but okay. MSG’s lawyers said if the city didn’t cancel the deal with Ballmer, they’d file suit.
  • Inglewood doubled down on Friday by voting unanimously to reauthorize the agreement with Ballmer, to meet any concerns that the June vote had taken place without public notice (one of the charges in MSG’s claim).
  • Friday’s vote was attended by 40 Inglewood residents protesting that the city was considering using eminent domain to force them off of their privately owned land to make way for the arena, or otherwise displace them by helping to gentrify their neighborhood.
  • Inglewood Mayor James Butts said no one was being displaced, that the arena would be built entirely on public land.
  • An MSG press spokesperson fired off an email to the Los Angeles Times saying that the land Ballmer is seeking contains hundreds of homes, apartments, and businesses, and “there is no question that residents would need to be displaced within this area.”

So, what the hell? The agreement itself includes this color-coded map by owner type:

The white parcels are the privately-owned bits of land, so, yeah, I’d say there should be some concern about eminent domain being used. In fact, I’d go so far as to say it’d be impossible to build an arena, let alone a surrounding entertainment district, without obtaining some private land.

Here’s what it looks like on Google Maps:

This is shaping up to be a big-ass mess, and that’s before we’ve even gotten into the question of who’s going to pay for it. Ballmer and Butts are going to need all of those three years, I’m guessing.

FC Cincy mulling Kentucky tax kickbacks to pay its entire stadium cost, and other week’s news

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All the news that wasn’t fit to print this week:

  • FC Cincinnati now wants the Port Authority of Greater Cincinnati to own its stadium since Hamilton County doesn’t want to. (Does “own” mean “pay for”? Reply hazy, ask again later.) Or maybe Newport, Kentucky, since, according to team president and former city council members Jeff Berding, that would allow the team to recoup its entire $100 million through tax increment financing kickbacks of property taxes paid on the property. How would it generate a whole $100 million in TIFs? Reply hazy, ask again later.
  • Would-be Seattle arena builder Chris Hansen hired University of Washington public finance professor Justin Marlowe in May to compare the economic impact of his Sodo arena proposal to that of the KeyArena renovation plan, and he has issued his report, which says that the Sodo plan would create three times as much tax revenue for Seattle ($103 million over 35 years vs. $34 million for Key). On the other hand, the Key plan would include some kind of sharing of arena revenues, though that wouldn’t kick in until the Key developers got their share, and, yeah, basically it’s a muddle. On the whole, it seems to give the edge to Hansen’s plan, if only because that arena would pay property taxes, but I’d need to sit and break down the math to say exactly by how much, and I’ve been waiting for time to do that all week, so clearly it’s not happening. Reader exercise!
  • Oakland A’s executive VP Billy Beane promised that once the team gets a new stadium, it will stop trading all its decent players once they start to get expensive: “There’s only one way to open a stadium successfully, and that’s with a good, young team. … Really what’s been missing the last 20 years is keeping these players. We need to change that narrative by creating a good team and ultimately committing to keep them around so that when people buy a ticket, they know that the team is going to be around for a few years.” Which could make sense if a new stadium draws enough fans that having a winning team boosts revenues enough to pay for player salaries, though we’ve heard this song and dance before elsewhere.
  • The Nashville Sounds‘ new stadium was supposed to cost taxpayers $37 million, but it ended up costing $91 million.
  • What does $74 million in public subsidies buy Minnesota Timberwolves fans and staff? New seats, new restrooms, new locker rooms, an ice floor that doesn’t leak, two new loading docks, and a big glass wall, because everybody’s gotta have one of those.
  • The athletes’ village from the 2016 Rio Olympics is now a wasteland of unsold condos, because everything the Olympics touches turns to trash.
  • A homeless camp has arisen on the site of the planned Las Vegas Raiders stadium. Make your own metaphors.

Suns owner: We want to stay put in renovated NBA-only arena, or else … something

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Phoenix Suns owner Robert Sarver said a whole bunch of stuff yesterday to AZcentral:

Suns owner Robert Sarver told azcentral sports Wednesday that it’s “highly unlikely” the Suns will pursue a joint basketball/hockey arena with the Arizona Coyotes…

Sarver said his focus is on an upgrade of Talking Stick Resort Arena.

“This facility was built for basketball,” he said…

Sarver said building a new arena would have “maybe made more sense” four or five years ago when the cost estimate was $450 million to $500 million. The costs now, Sarver said, are “significantly higher.” Thus his focus on upgrading Talking Stick, which soon will be the second-oldest arena in the NBA.

“I think it’s the most economically viable alternative for the city and us,” he said. “I like downtown Phoenix. That’s my first preference. I think the NBA is more of an urban game. That’s our demographic.”

Sarver added that he’d like to say in downtown Phoenix but that, “if we can’t, we’ll explore other options.”

During the news conference Sarver said the Suns “have no choice” but to either modernize Talking Stick Resort Arena or build a new arena.

“Our arena is becoming outdated,” he said. “… We have to have an NBA-quality facility. I know that. The city of Phoenix knows that. Hopefully in the next couple of years we can start construction on something.”

Let’s unpack that: Sarver doesn’t want to build a new arena with the Arizona Coyotes because it’d be too expensive, and also he wants to stay in downtown Phoenix, but if he can’t upgrade his current arena there he’ll have to build a new one elsewhere because they “have no choice.”

That’s a big ball of contradictions, unless you take it as all tactical: Sarver is putting all his cards on a renovation of his current Phoenix arena, and wants to use moving elsewhere as a threat, not an actual option. You’d think he’d at least consider sharing digs with the Coyotes as a way to cut down on competition for concerts and things with another arena, but maybe he doesn’t want to have to partner with a franchise that can’t draw flies, or figures maybe the Coyotes will leave town and he can have a monopoly on the winter sports market, either of which is a reasonable enough gambit.

Sarver still isn’t saying much about how to pay for an arena remodel, just restating the “this place is almost 30 years old, time to send it to the Carrousel” mantra he’s been holding to for the last three years. Either he’s working behind the scenes on a funding plan, or he’s hoping state legislators will do it for him — again, either way, an understandable strategy. But eventually he’s going to have to actually say something concrete, at which point you have to hope Phoenix city officials will say: You said you have no choice but to build an upgraded facility and that you want to stay in Phoenix, so what are you going to do if we don’t give you money for it, hold your breath and turn blue?

Seattle mayoral candidates all like hoops, mostly favor Hansen arena plan over Key remodel

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KCPQ-TV in Seattle has polled this fall’s umpteen mayoral candidates on where they stand on a new arena, and if you don’t want to bother with clicking through, the survey says: They all want the Sonics to return (and, presumably, are against kicking puppies) and almost all prefer Chris Hansen’s Sodo arena plan to Oak View’s KeyArena remodel, including early frontrunner Mike McGinn (who, if he sounds familiar, it’s because he was already mayor of Seattle once from 2009-2013). Though the other reported frontrunner, Jenny Durkan, had only this to say:

I grew up a Sonics fan and I’m still a Sonics fan. I want an NBA team back in Seattle. I am for whatever proposal gets the Sonics here the fastest.

Of course, this could all be moot by then if current mayor Ed Murray and the city council finalize an arena deal before November, which may or may not happen. At least the city of Seattle is hiring some professional help to negotiate its memorandum of understanding with Oak View, which is always a good idea, as those sports developer lawyers will eat you for lunch otherwise.

Las Vegas Raiders to have fans park in Idaho, and other Friday stadium news

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I’ve been busy this morning working on further research into Jeffrey Loria’s Miami Marlins windfall for an article set to run at Vice Sports on Monday, so rather than let the day slip away entirely, let’s do another round of news briefs:

Detroit officials fight to block arena lawsuit withdrawal, say they want to be sued, dammit

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The tale of the Detroit city clerk candidate and former school board member who sued the city over spending money on a new Red Wings and Pistons arena without a public vote and then asked for the case to be dismissed when threatened with financial sanctions has gotten even weirder, with the city of Detroit now demanding that the federal judge in the case allow them to continue to be sued:

Calling it a “cynical attempt” to put the project at risk, the defendants argue in a Wednesday filing in U.S. District Court that the plaintiffs haven’t met the standard for a voluntary dismissal and the request should not be granted.

[D. Etta Wilcoxon and Robert Davis] filed a motion Saturday to drop the suit without prejudice. Davis said the plaintiffs instead were focused on a separate case they filed against Detroit’s school district and its board that he said will ultimately decide whether voters should have a say in the bonds being used for modifications to the arena.

But any litigation, no matter how frivolous, threatens to interfere with the timely funding of the project and creates the “very real possibility” that the Pistons could cancel their planned move from Auburn Hills to Detroit, attorneys for the defendants argued in a court filing Wednesday.

The excuse here is an upcoming NBA owners meeting next Tuesday at which the Pistons‘ move to the new downtown arena is expected to be on the agenda; not having the lawsuits resolved by then would create “havoc,” say the city’s lawyers. Instead of having the suit withdrawn, they want it dismissed — which presumably wouldn’t stop Wilcoxon and Davis from proceeding with their separate suit against the school board, but maybe the NBA doesn’t care so much about that. Or maybe the city lawyers just want to retain the option of financial sanctions against the plaintiffs, to scare them out of suing at all? Let’s not worry about that right now, and just enjoy the spectacle of a city insisting on its right to be sued, because that doesn’t happen every week.

Lawsuit-loving former school board member drops one Red Wings arena suit, files another

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The lawsuit against using city tax money to fund $300 million toward a new Detroit Red Wings and Pistons arena has been dropped, after a federal judge refused to issue an injunction against the spending. Also, hasn’t been dropped, because the plaintiffs are going ahead with another suit, this one against the school board?

[Activist Robert] Davis said another federal lawsuit he and [City Clerk candidate D. Etta] Wilcoxon filed Tuesday against the Detroit Public Schools Community District seeks to force a vote on the public funding.

“There is no decision on the merits,” Davis said of the lawsuit’s dismissal. “All of these issues are going to be determined in the DPS case.”

What seems to have happened is that the Detroit Development Authority filed a motion on Friday seeking sanctions against the plaintiffs for filing a frivolous lawsuit, so they decided to go after a different public agency instead. It’s not immediately clear how suing the school district would force a public vote, since they’re not the ones spending the money, but hey, I am not a lawyer, so it’s possible this is just a legal maneuver that allows the case to move forward. Though it’s also possible this is just grandstanding by a city clerk candidate and a guy who loves lawsuits so much he sued his union for back pay after they fired him when he was convicted of embezzlement. If I choose not to cover this story much going forward, you’ll understand why, right?

Bucks unveil tarpaulins covering new arena construction, and other Friday must-see news

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And away we go with another weekly round of micro-news that shouldn’t be allowed to slip through the cracks: