Seattle council rejects closing street for SoDo arena by single vote, madness ensues

The Seattle city council met last night to vote on approving the final piece of Chris Hansen’s SoDo arena plan that was initially okayed by the council way back in 2012, and — whoa, didn’t see that coming:

Stunned gasps emerged from a crowd at Seattle City Hall on Monday as Councilmember M. Lorena González cast a decisive vote that could effectively torpedo a proposed Sodo District arena.

In a 5-4 decision, the Seattle City Council voted against giving up part of Occidental Avenue South to entrepreneur Chris Hansen for his arena. Though a Memorandum of Understanding between Hansen, the city and King County runs through November 2017, odds of a new deal being struck by then seem remote.

What the heck happened? Lobbying from the Port of Seattle, certainly — the councilmembers who voted to keep the street open all name-checked port workers in their speeches, including Kshama Sawant declaring, “I do want to help bring back the Sonics, but I cannot do that on the basis of undermining our working waterfront and good-paying unionized industrial jobs.’’ (She also called the Port a “cesspool of corruption” but said she was voting out of solidarity with Port workers who are “trying to stand up against these forces of gentrification.” Now I really need to hear this speech.) But with five women on the council voting no while all four men voted yes, there may have been something else at work as well: The Seattle Times’ Geoff Baker cited one source (unnamed, take with grain of salt — Geoff, try to ID your sources better in the future, please) as saying “the three female council members who were undecided had become increasingly put off in recent days by the personal attacks [councilmember Sally] Bagshaw was taking from male sports fans on social media and certain talk-show hosts on Sports Radio KJR.”

Regardless of whether it was insider lobbying, obnoxious talk-radio hosts, or both, the Hansen plan is now, if not dead, floating listlessly in limbo, with no way to clear space for the arena that had its funding approved four years ago. Bagshaw says she hopes the city will now conduct a cost-benefit analysis of renovating Key Arena instead; Hansen released a statement saying, “We now need to take a little time to step back and evaluate our options.” There will likely be renewed talk of a new arena in the suburbs, though the leading candidate there, in Tukwila, still lacks anyone to actually pay for it.

In any case, if this is indeed the end of the SoDo arena saga, it’s a darn weird one. It certainly didn’t help Hansen’s case that he was no closer to getting an NBA team than when he started this whole quixotic battle years ago — “If you let me build an arena I’ll bring the Sonics back someday maybe I can’t say when” was never the best rallying cry — but still, you can count the number of sports venue projects that got right up to the finish line before being voted down by a single vote on … actually, this is the first I can think of. Whoever’s writing reality’s plot twists, you need to make them more believable, even if it is sweeps month.

NBA commissioner: No Seattle expansion team in immediate future

Seattle isn’t getting an NBA expansion team anytime soon, you guys:

“Whether or not the arena in Seattle is shovel ready is not a factor that we are considering in terms of whether or not we expand at this point,’’ Silver told The Seattle Times during the Associated Press Sports Editors commissioners meetings in Manhattan…

“We’re going through a collective-bargaining cycle right now, it’s no secret,’’ Silver said. “So, certainly, it’s not something that we would be thinking about as we’re focusing on ensuring that we’re going to have labor peace for the foreseeable future.

“I think that after we complete the extension of our collective-bargaining agreement, I think that would be the natural time, at least, for owners to consider whether or not they would like to expand. … Right now, we are not hearing it coming from within the league. We are hearing from some groups outside the league. But from within the league, there’s no strong push to expand at the moment.’’

Since Chris Hansen’s MOU for a new Seattle arena expires in November 2017, this means in the next year and a half we’re either going to see: 1) a big push by Hansen to try to get another team to relocate (your guess is as good as mine who he’d target, since there aren’t a ton of ready candidates looking to move), 2) a big push by Hansen to get the MOU extended, or 3) both of the above. Getting a team was always going to be the hardest part of Hansen’s Sonics 2.0 plan — yes, even harder than figuring out how to make his arena turn a profit — and it looks like that road isn’t getting any easier anytime soon.

Phoenix mayor explains grooviness of using taxes for Suns-Coyotes arena: It’s cheaper than two arenas!

Phoenix mayor Greg Stanton made his pitch for a new publicly funded arena for the Suns and Coyotes yesterday, and he didn’t provide much more specifics than when he leaked it the day before: He will use tax money, but he won’t raise taxes to pay for it, and he’s for it because he thinks it will bring more spending to downtown Phoenix.

“I as mayor will do everything I can to pursue a course that makes a new facility home to the Suns, the (Phoenix) Mercury and the Coyotes,” Stanton said, noting the WNBA franchise as well. “Building two new sports arenas in our region simply doesn’t make fiscal or common sense.”

He’s right there, as far as it goes: One arena is definitely cheaper than two, albeit a lot more expensive than zero. So does building one new sports arena make fiscal or common sense for Phoenix?

Stanton’s funding plan, based on what little he’s revealed about it, would be a bit of a Rube Goldberg scheme, avoiding new taxes by siphoning every last bit of value out of existing ones. Currently, Phoenix levies hotel and car rental taxes and uses the proceeds to pay off a bunch of past construction projects, including the Suns’ existing arena (opened in 1992), a Sheraton hotel, and other buildings. (Note: This is separate from the county hotel and car rental taxes that pay off the Arizona Cardinals stadium and which were partly ruled unconstitutional in 2014.) The current arena will be paid off in 2022, however, and the hotel plus a downtown biotech building are in the process of being sold off, which would free up those tax revenues to be used for something else.

Great, free money, right? Not exactly. First off, the “something else” could be pretty much anything — in the most extreme example, the city could just cancel the hotel and car rental taxes once the existing arena is paid off, and either leave taxes low as an inducement to visitors or levy new ones to fund other needs. And on top of that, selling the Sheraton to get out from under its debt load isn’t without a cost: The buyer is effectively getting the building for free by paying off $300 million in remaining debt, and the city will lose any future profits it would be getting from the hotel. (The Sheraton currently loses money, but that’s partly because any revenue it brings in goes right back out to help pay off its construction debt.)

In short, then, Stanton is saying that the city’s decision in 1990 to build a new arena for the Suns is an open-ended commitment to keep on building new arenas for the Suns into eternity, while selling off any city assets necessary to make that possible. That’s a legitimate political position, I suppose, but you can see why he chose not to frame it that way. Or to put a price tag on it. Because people are cranky enough about it already.

Phoenix mayor to announce again just how groovy a new Suns-Coyotes arena would be

If there was any doubt about Phoenix Mayor Greg Stanton really wanting to build a new arena for the Suns and Coyotes after the last time he said his city needed one to keep its teams (and also, weirdly, to get the Harlem Globetrotters to appear), it should be dispelled once Stanton gives a speech today about doing just that:

According to sources who have reviewed the mayor’s planned remarks, Stanton will outline his vision for building a new taxpayer-funded arena during his fifth State of the City speech. The mayor is scheduled to speak before a crowd of hundreds of business and political leaders at the Sheraton Grand Phoenix hotel in downtown about noon.

Stanton will use his most visible stage of the year to make it clear that he prefers the arena be a joint-use facility shared by the National Basketball Association and National Hockey League teams, those sources said.

The Arizona Republic’s sources didn’t specify how Stanton would begin to pay for this, though they did indicate that the mayor would promise not to raise taxes to do it. Using existing taxes, such as the hotel and car rental tax that is currently paying off the Suns’ current arena, is another story — as, presumably, would be asking for state sales tax kickbacks to pay for arena construction.

As to whether this will be Coyotes CEO Anthony LeBlanc’s promised arena announcement to come by the end of the month, that’s anybody’s guess, though it sure sounds like he’s still trying to see who’ll provide the most lucrative bid:

At the same event, LeBlanc told The Republic that the deal would have to allow for equally shared revenues, in which each team would keep the revenue they generated and that both franchises would share non-event revenues, such as naming rights and advertising. The Suns currently have control over revenue at Talking Stick Arena.

“The Coyotes have had multiple conversations with the city of Phoenix and we continue to have detailed discussions,” LeBlanc said in an earlier statement. “However, as we’ve consistently stated, we also continue to have discussions with other Valley locations. It would be premature at this point to indicate a selection has been finalized.”

LeBlanc also trotted out the standard talking points from the new-arena playbook to practice them on the assembled pols:

The trick for the Coyotes, of course, is to come up with an arena plan that isn’t just lucrative, but is more lucrative than the deal in Glendale where they were getting a mostly free arena plus more than $6 million a year in operating subsidies to boot. It’s possible, just maybe, if taxpayers handle the construction costs and there are enough new revenues to split with the Suns, that it could work out to the Coyotes’ benefit. But you can see why they’re busily playing three different sites off against each other to get the best deal — when “we need a new arena and for somebody to cover all our operating losses because nobody comes to our games because we’re a hockey team in the freaking desert” is the agenda, you need all the leverage you can get.

So I wouldn’t expect a Coyotes announcement in the next two weeks, really, not when there’s still more hardball to be played. Talking about it incessantly to get people all excited about where an arena will go instead of why the Phoenix area should be building its third arena in 25 years, though? That’ll definitely happen.

Warriors’ departure for SF wouldn’t doom Oakland arena, but it wouldn’t help, either

Good piece in yesterday’s San Francisco Chronicle by Rachel Swan looking at what the Golden State Warriors‘ (eventual) departure for a new arena in San Francisco would mean for Oakland. It’s especially welcome because it doesn’t waste time on any alleged costs to the overall Oakland economy — Oracle Arena may provide less spinoff spending than any other arena in the nation, given that virtually 100% of fans see nothing more of Oakland than the walk from the parking lot or the BART — and instead examines a new SF venue’s impact on possible arena glut:

“[Oracle Arena] will not only lose the team, it will also lose some events to the Warriors’ new [Chase Center] in San Francisco,” [Stanford economist Roger] Noll said. “It’s not going to be the Cow Palace, but it’s not going to be the venue of choice, either.”…

For the last few years the venue has turned a small profit for the authority, [Oakland-Alameda County Coliseum Authority head Scott] McKibben said. … He’s optimistic that the arena will reap more money for Oakland and Alameda County once the Warriors leave. Without the team, the Coliseum Authority will collect all the proceeds from luxury suites, signage on the building, sponsorships and ticket sales. And it won’t have to block off 40 to 60 days a year for basketball, he added…

The big challenge, [Long Island University economist Geoffrey] Propheter said, will be steering those headliners away from the Warriors’ new home.

This is the arena management story in a nutshell: Sports teams generally aren’t big money-makers, and you can actually do better just booking concerts if a team leaves — Swan cites Seattle’s Key Arena as an example here. On the other hand, Key Arena is a cautionary tale as well, because if Chris Hansen’s SoDo arena ever opens, Key is going to have a hard time filling its calendar, and Oracle Arena could face a similar fate, which will cost Oakland taxpayers since they own the place.

The Bay Area is way bigger than Seattle, of course, and it can probably support two arenas. (The Cow Palace is probably doomed, but it’s been that way for a while.) There are only so many concerts, though, and once all those are booked, any additional arenas become surplus — and we’ve seen what happens then.

Bucks lease revealed, doesn’t make arena deal worse than it was already

The state-run Wisconsin Center District and the Milwaukee Bucks have finally agreed on a lease for the team’s new $500 million arena that’s getting $450 million in public subsidies, and hey, look, it’s not entirely awful! The big questions, as you’ll remember, were “Who’ll pay for operating and maintenance costs?” and “Can the Bucks break the lease before the 30-year term is up?” and at least initially appears that the answers are “the Bucks owners” and “no”:

  • The Bucks owners will need to deposit a minimum of $60 million over 30 years in a capital reserve fund to pay for maintenance, and the team must pay for all maintenance, repair, and upgrade costs. (One report says this also includes operating costs; others are silent on the matter.)
  • The lease includes penalties for breaking the lease that start at $553 million in the first year and gradually decline to a bit more than $200 million by the end.
  • The team will actually pay rent! Not much rent — starting at $1 million a year, rising to about double that by the end — but so many teams pay no rent or negative rent, this qualifies as worth one cheer, anyway.

None of this makes the public arena cost a good deal, mind you. But at least the lease doesn’t look to have made it any worse.

Seattle ducked considering Key Arena reno option because rewriting is too damn hard

For anyone interested in the nitty-gritty of how the Seattle city council ended up issuing an environmental impact statement that said Key Arena couldn’t be renovated to modern NBA/NHL standards while it had another report in hand saying that it could, a report this morning by the Seattle Times’ Geoff Baker has all the nitty that your gritty could ever need:

Six weeks before the city of Seattle’s release last May of an environmental study on the proposed Sodo District arena, the woman preparing it received a telephone call.

The man phoning URS Corp. Vice President Katy Chaney was Ryan Sickman, a project manager with AECOM preparing a different report for the City Council on Key­Arena’s future. Public records released to The Seattle Times indicate Sickman and Chaney discussed how their reports differed on whether KeyArena could be modified for NBA and NHL use without demolishing its unique roof…

“Let me know if you have suggestions on whether to, and how to, revise either the EIS text or the response so that we don’t appear inconsistent between the two documents,’’ [Chaney] emailed Sickman on March 25, 2015.

Sickman two weeks later suggested a 221-word revision stating: “There are now studies in front of the city that show how the KeyArena could be reconfigured and redesigned within the building’s existing structure to accommodate both NBA and NHL franchises based upon the now accepted Sacramento Kings design model for NBA seating distribution.’’…

After the suggested changes bounced around privately between Seattle city staffers and politicians, the AECOM report’s scheduled early May rollout was postponed.

Nick Licata, who was on the council at the time, previously said, “There’s a lot of ways of not holding back information but not amplifying it. I wouldn’t say [the AECOM report] was purposely held back, but I don’t think there was much attention given to it.” That sounds about right from this latest timeline: Right as the council was about to issue a report finally moving ahead with Chris Hansen’s proposed SoDo project, the possibility of renovating Key was raised, and everybody more or less went, Oh, jeez, we can’t handle going back and looking at more options. Let’s just pretend we never saw it.

Baker also provides some detail on what happened in that “bounced around” period, drawn from city emails, particularly those of then-city policy analyst Sara Belz:

AECOM project lead [David] Stone by then was still tweaking his own delayed report and asked Belz on May 15 about mentioning the EIS — given extensive media coverage of its release and continued NHL possibilities in Seattle.

Belz took three days to reply, saying she’d checked with colleagues and “we don’t think you need to devote space in your report to the EIS or NHL stuff. Our thought is just that it might create confusion regarding the scope of your contract and analysis.’’

Again, this is way short of “coverup,” but still certainly doing their best to pretend that the two reports didn’t say dramatically different things, because nobody likes to do rewrites. The interesting bit now will be to see whether there are any repercussions, either for the city officials involved or for the SoDo project itself, especially with the council set to give final approval and opponents turning up the heat to try to block it. If last year was seen as too late to make changes based on new options, it seems impossible that the council would pursue it this year, but stranger things have happened. I think.

Mark Cuban wants to build NBA arena 20 stories in air, proves he’s still Mark Cuban

Oh hey, did I forget to post a link to the story where Dallas Mavericks owner/all-around crazy guy Mark Cuban said he wants to build an arena suspended 20 stories in the air? Here’s a link to that. And here’s what Cuban said about his crazy idea:

“My dream — and this is like the long, long, long, long shot — is to build an arena 20 stories up in the air, where every seat has a view of downtown, whether it’s north, south, east or west,” Cuban said.

Asked how he came up with this vision, Cuban laughed and said, “That’s what I do.”..

“Imagine being 20 stories up, taking a page from ballparks like Pittsburgh and other places that have amazing views,” Cuban said. “That’s ‘a vision.’ It’s not necessarily a slam dunk. But that’s part of the thinking process.”

Also part of the thinking process is usually thinking, and what Cuban’s idea makes me think of is the way that concert and event promoters hate arenas where the floor isn’t at ground level (Madison Square Garden being the classic example), because then you have to move amplifiers and stage props and circus elephants by elevator. Also, that the view one generally wants in a basketball arena is of basketball, not what’s outside the arena. Also that what gives Pittsburgh’s baseball stadium such great views isn’t its height (it’s one of the shortest MLB stadiums) but the fact that it’s across the river from downtown Pittsburgh. Maybe Cuban should move the Mavericks to a more scenic city like Pittsburgh? Or better, move downtown Pittsburgh to Dallas?

Cuban added that he’d need to start building a new arena in about the year 2023, because his lease at American Airlines Arena expires in 2030, and obviously no one has ever heard of such a thing as renewing a lease.

D.C. proposes RFK site for new Wizards, Capitals arena, lo, these are the end times

In case you thought it was just Cleveland elected officials who are swallowing whole the line that 20-year-old sports venues are living on borrowed time, no, no, it so is not:

D.C. officials plan to unveil an array of possibilities for the future of the RFK Stadium property Monday night, among them a new 65,000-seat Redskins stadium and a basketball and hockey venue capable of replacing Verizon Center…

Officials also said for the first time that they are considering the 190-acre riverfront property as a possible location for a 20,000-seat arena equipped to serve the Washington Wizards and Capitals.

That’s right: The Verizon Center, opened all the way back in 1997 — dear lord, Seinfeld was still on the air then! — and which has been held up by arenas-as-urban-catalyst believers everywhere as an example of a sports venue that revitalized its surrounding neighborhood, is now marked for death, if not immediately, then certainly by 2027 when the Capitals‘ and Wizards‘ lease runs out. Not that the revitalization was necessarily all it was cracked up to be — much of D.C. has gentrified with or without neighboring arenas, and lots of residents and business owners near the Verizon Center didn’t benefit from any increased economic activity anyway because they were then priced out of the area — but forget about all that now regardless, because it’s now maybe time to put a new arena in some other part of town.

This is the very early stages of the planning process for the RFK site, obviously, and presumably someone just threw in a Wizards/Capitals arena because they figured owner Ted Leonsis would be asking for a new one sometime soon, so why not make it an option? The answer “Because he just built a new one, and he owns it, so he’s not going to move out of town and abandon it and the booming D.C. market just because his lease with himself runs out” apparently never occurred to, you know, I just can’t even. Finish this post yourself, I have to go have a lie down.

Cavs owner wants $70m in upgrades to just-upgraded arena, county official says “arenas get old fast”

Want to see a public official carrying water for the private sports owner trying to shake his agency down for money? Cuyahoga County Executive Armond Budish has you covered:

Budish has been discussing with the Cleveland Cavaliers how to pay for half of a $140 million project to expand the [Quicken Loans Arena]’s footprint and build a new glass exterior since taking office in January 2015.

The arena, which cost $140 million to build, opened in 1994.

“It is one of the oldest arenas in the league, which is hard for some of us to believe because it seems like it was just built,”  Budish said in an interview with cleveland.com. “But the useful life of arenas is not considered to be all that long.”

Nice use of the passive voice there, Armond! The useful life of arenas “is not considered” to be long by sports team owners, much in the same way that the useful life of Maseratis is not considered to be long by people who can afford to buy a new one every year. (Or in this case, to have someone else buy them a new one every year.) As sports economist Rod Fort told me 15 years ago when I asked him the expected shelf life of a new stadium or arena, “I don’t see anything wrong, from an owner’s perspective, with the idea of a new stadium every year.”

And neither, it’s increasingly clear, do sports team owners. And elected officials are largely buying it. Though given that the previous Cuyahoga County executive inadvertently spread a rumor that LeBron James was worth $500 million to the local economy, the bar is pretty low for that office.

Anyway, we already knew that Cavaliers owner Dan Gilbert wanted more arena upgrade money on top of the arena upgrade money he just got in 2014, but now we have a price tag on it: $70 million. At least until the next upgrade request, which at this rate should come around 2018.