Nothing doing on Seattle arena until 2016, at least

In case you were wondering what’s up with Chris Hansen’s Seattle arena plans, the Seattle Times’ Geoff Baker had an article yesterday confirming that nothing is happening anytime soon. In short:

  • The final environmental impact study isn’t due until February, then there will be appeals, then the city council will need to vote on it. By the time all this is done, it will likely be 2016.
  • Not that that matters much, because Hansen won’t start building until he has a team, and he doesn’t have one. Conceivably the Milwaukee Bucks might become available if they can’t get their arena demands met in Wisconsin, but as Baker notes, “that’s theoretical.” An NHL team is more likely, but the current arena deal requires basketball, and neither Hansen nor Seattle Mayor Ed Murray seems excited about changing it to be hockey-first.

In other words, same as it ever was. But bookmark this for the next time sportswriters speculate about any number of teams relocating to Seattle.

Brooklyn Nets’ “affordable” apartments will cost up to $3500 a month

Those who recall the original Brooklyn Nets arena slogan of “Jobs, Housing, and Hoops!” may have been wondering when the “housing” part will enter the equation, what with development still halted on the modular housing tower whose builder quit saying it was financially unfeasible. Down the block from the arena, though, there’s another building going up, and New York City Mayor Bill de Blasio was excited to announce yesterday that it will be all affordable units:

“There are very few phrases I like better than 100% affordable housing, so this program is off to a good start.”

As Crain’s New York reports, though, “affordable” doesn’t actually mean so much affordable:

The 298 apartments at 535 Carlton will be available to tenants from five different income tiers: half for tenants who earn up to 165% of the area median income for a family of four, which is $83,900 a year; 15% for tenants earning up to 145% of the AMI; 5% for those earning up to 100%; 25% for those earning up to 60%; and 5% for those earning up to 40%. More than half the tenants in the new building will pay rent of about $3,500 a month for a two-bedroom apartment.

Yes, it’s still housing, and yes, there’s some benefit to getting more apartments of any kind in a borough that’s facing rising demand. (Though there’s also a growing amount of evidence that new upscale development tends to drive even more increased demand than it helps to quench.) But it still means that the overall project is getting something on the order of $2 billion in cash and land and tax breaks to build a private sports arena and an unknown number of apartments that will mostly be way more expensive than most locals can afford. But at least you can’t put a price on giving Brooklynites the chance to watch … er, professional basketball?

 

Warriors redesign arena to stop jokes that it looks like a toilet seat

Renderings! The people have spoken, and the Golden State Warriors have listened, redesigning their planned San Francisco arena to look less like a toilet seat:

The San Francisco Chronicle’s Matier and Ross say it now looks more like a Sony Discman, which is both true and also a more pleasant image for your $1 billion arena. (It’s about time for portable CD players to be retro now, right?)

The whole thing doesn’t look too bad, though unless I’m mistaken it includes a whole bunch of mid-sized buildings that don’t actually exist now, in order to make the arena look less hulking by comparison. And, as always, don’t expect that any of it will actually look like this when it’s built, assuming it gets built — though I think we can safely predict that whatever it ends up looking like, it will definitively not be a toilet seat.

Phoenix’s convention center subsidies may limit ability to provide Suns arena subsidies

Arizona Republic columnist Robert Robb has weighed in on Phoenix’s big investment for both a massive convention center expansion and a city-owned (that’s right, city-owned) hotel, following a Republic story that the 1,000-room Sheraton has lost $28 million since 2008. Noting that Phoenix city officials had assured that the city-owned hotel “would pay for its operations and servicing the debt to build it. No sweat,” Robb reports that the hotel’s ongoing losses, paid back from the city’s Sports Facilities Taxes, may now affect the city’s ability to refurbish or expand the Suns’ basketball arena.

The big Sheraton has been a fiscal disaster — last year’s occupancy rate came to an impressive 51.2% — because the convention center has genuinely flopped. Consultants from Ernst & Young and later HVS had forecast that the hotel would be humming along at 69% occupancy, based on the assumption that the bigger convention center would draw 375,000 convention delegates a year. Last year, the center actually saw 118,332. Oops.

Bucks owners now don’t know where to put arena, let alone how to pay for it

So apparently all that talk about how the Milwaukee Bucks owners were interested in buying the Milwaukee Journal Sentinel’s building as the site of a new arena and the Journal Sentinel owners were “willing to listen” didn’t actually mean they’d be able to agree on anything. Bucks co-owner Marc Lasry now says that talks have “gotten more complicated” (the Milwaukee Business Journal’s Rich Kirchen claims this is because of “possible environmental contamination” at the JS site) and “I think it’s going to force us to sort of go to Plan B,” which would be, um, somewhere. The JS speculates that the Bucks owners may not now be able to settle on a site by the end of the month as they’d planned, which isn’t that much speculation, really, since 2015 is only three weeks away.

Meanwhile, on the arguably more important issue of where to get the money to build this mythical arena, the co-chairs of the community group Common Ground’s Fair Play committee had an op-ed in the Journal Sentinel yesterday that began like this:

The Nov. 24 Journal Sentinel article about the possibility of funding a new Milwaukee Bucks arena with money from players’ income taxes seems almost oblivious to the fact that the tax already exists.

An excellent point, if I do say so myself. The Fair Play chairs go on to discuss how punching a $10 million a year hole in the state budget would either force the state to raise taxes or cut services (because math!), but you can probably figure out the rest from here. With the Republican who control the governorship and both houses of the state legislature the ones in favor of the “jock tax” kickbacks, budget math may not matter as much as ballot math, but it never hurts to point it out.

AEG reportedly looking to buy two-year-old $1B Nets arena for $500m, wants Isles out

The New York Post is reporting that the arena-management giant AEG (still owned by Philip Anschutz, contrary to what he suggested two years ago) may be looking to buy the Brooklyn Nets‘ arena, according to those ever-popular “sources.” Also, that he doesn’t want to pay what arena majority owner/Nets minority owner Bruce Ratner of Forest City Ratner wants to get for the building:

AEG is said to be willing to spend up to $500 million on the 19,000-seat concert and sports arena, or slightly more than 12 times Barclays’ roughly $40 million in expected 2014 operating profits, sources said.

However, Forest City, which last month forecast that profit number would soar 63 percent to $65 million in 2016, is said to be seeking a lot more than $500 million.

Those projections sound awfully optimistic, given that the Barclays Center only took in $30 million in its first year of operations, barely enough to pay off its $29 million a year in construction debt. AEG would undoubtedly love to have its own concert facility in New York City — though given that right now the company gets to play the Brooklyn arena and Madison Square Garden off against each other when bidding for events, it can’t be too unhappy with the status quo, either. Though maybe with the Islanders due to arrive next fall, they might be worried about not having enough open dates at both arenas to keep the bidding wars going, maybe?

And speaking of the Islanders, buried way at the bottom of the Post article is this:

AEG believes Yormark is paying too much to keep the arena booked, sources said. It was Yormark who guaranteed $50 million a year to the New York Islanders once they move to Barclays next season.

“AEG sees the Islanders deal as too risky,” the source said.

After roughly five years, Barclays can get out of the Islanders contract, sources said.

This is the first I can recall hearing about a $50 million revenue guarantee for the Islanders — the highest number I’d seen previously was $10 million in annual payments from the arena to the team, while the arena kept most hockey revenues — and definitely the first I’ve heard about the Islanders having a five-year out clause. (And the first Islander fans have heard of it, too, apparently.) That would make the decision to move the Islanders to Brooklyn make a bit more sense — if there’s an out clause, both Ratner and Isles owner Charles Wang get to effectively conduct a trial run in Brooklyn. And if it turns out no one wants to go see hockey in a basketball arena 20 miles from their traditional home base, the Islanders can conceivably move back to a renovated Nassau Coliseum, currently set to be downsized to 13,000 seats (but at least 13,000 seats placed properly for hockey) by … Bruce Ratner.

All of this is a hell of a lot of speculation based solely on a report based on unnamed sources in a newspaper that doesn’t have a great track record with its “exclusives.” Take it all with a grain of salt for now, though if you want to jump to conclusions of the “almost brand-new arena can’t even sell for more than half what it cost to build” variety, don’t let me stop you.

An NBA commissioner walks into a Milwaukee bar, says “Why the long face?”

NBA commissioner Adam Silver went to Milwaukee yesterday, and ate custard! Okay, no, he didn’t. (Or maybe he did, but that wasn’t the headline.) What he did do was meet with the owners of the Bucks, city and county officials, and local business leaders about a new arena, and emerge with this statement:

“Feel very confident that these guys are gonna get it done. I think it’s absolutely doable. We’ve seen an enormous amount of positive energy in this community,” Silver said.

That may be the most noncommittal non-statement in the history of sports commissionerships, but really, it doesn’t matter what Silver said, because all commissioners have to do to heat up arena talk is to get on a plane.

My favorite bit about this Fox6 report on the head of a sports league endorsing the notion of getting new sports venues built with public money is that with Silver, Mayor Tom Barrett, and Milwaukee County Executive Chris Abele all speaking mostly in platitudes, they had to turn to someone else to go into more detail about the arena plan:

Rich Kirchen with the Milwaukee Business Journal tells FOX6 News that preferred site is the location spanning the UW-Milwaukee Panthers Arena and the Journal Communications building.

“The Bucks like that site. It’s pretty centrally located,” Kirchen said…

One potential idea is a so-called “jock tax” — setting aside the taxes NBA players already pay the state  and using them specifically for building the new arena. That could cover a $150 million loan from the state.

“It’s the one thing that has not been ruled out by Gov. Walker or the Republicans in the State Legislature. And they’re the ones who would ultimately give sort of, the high-level approval on something like that,” Kirchen said.

That’s right, not only is Rich Kirchen warning Milwaukee Business Journal readers about the “culture of caution” that prevents cities from throwing money at sports deals, but he’s actually being interviewed by other Milwaukee journalists as an expert on the Bucks arena plan. I hope that he next returns the favor and next writes a column interviewing the Fox6 reporters about what they learned about the Bucks arena plan from their interviews with stadium experts, until eventually all of the Milwaukee media crashes from a stack overflow.

(And yes, I’m aware of the irony of criticizing a journalist for being interviewed as a stadium expert when I get interviewed on this basis all the time. In my defense, I’d point out two things: 1) I wrote a book, at least; 2) I’d hope that no reporters are lazy enough to ask me to explain the state of arena talks instead of, you know, actually doing the reporting themselves.)

Billionaire Bucks owner says if state offers him $150m, he’ll take it as his due

Breaking news about the Milwaukee Bucks arena plan from the Milwaukee Journal Sentinel’s Don Walker, who as we know, never breaks news unless it needs to be broken!

Bucks co-owner Wes Edens open to idea of ‘jock tax’ to help build arena

Wes Edens, a co-owner of the Milwaukee Bucks, says the idea of a jock tax to help finance the construction of a new, multipurpose arena in downtown Milwaukee is a good starting point for coming up with a workable plan.

“I think that how we actually pay for it and what the form of the financing is and kind of all the technical nuances at some point will be very important,” Edens said in an interview with the Journal Sentinel. “To me it’s less important today than just the notion that, let’s just agree what’s on the table with the benefit of the team being in town. Once we have done that, we’ve got a really useful place to start the dialogue.”

Okay, so let’s take a closer look at what we’ve learned here. First off, the co-owner of the Bucks would be “open” to the idea of having the state of Wisconsin take all the income taxes that his employees pay and sending them directly to him. This is truly remarkable, as most billionaires when offered $150 million decline, saying, “No, no, I have plenty of money already.”

Second, Edens didn’t even actually say much specific about the jock tax, beyond generally endorsing the argument behind the Bucks getting to collect all of their employees’ state income taxes while lobbing an oblique move threat (“If the Milwaukee Bucks are forced to leave town because they don’t have an arena, those taxes are leaving with them”). His statement above makes clear that he’s not going to endorse any particular method of giving him $150 million, just that he thinks he deserves it, because of all the revenue that his team generates for the state. And as for those studies by economists showing that income tax receipts don’t change one bit whether teams are playing in town or not, hey, how many jobs have they created?

Business prof says Kings arena could bring MLS team, TV station gets all excited

What the what, CBS Sacramento?

Economists: Downtown Sacramento Kings Arena Could Pave Way For MLS Franchise

That … doesn’t even make any sense? Certainly Sacramento is vying for an MLS expansion franchise, along with everyone else on the planet, and maybe having successfully thrown a whole lot of money at the Kings would help convince the soccer league that they could have money thrown their way, too. But from an economic perspective, what does one have to do with the other? What kind of economists are these, anyway?

Sacramento State economics professor and Wells Fargo wealth adviser Sanjay Varshney says if that arena wasn’t under construction, there’s no way anyone would be talking about the possibility of an MLS stadium coming to the railyards.

“The fact that Sacramento succeeded in keeping the Kings here and are putting in a new arena will be a factor in whether or not we actually get soccer now,” he said.

So, first of all, that’s not economists, plural, it’s one economist. (No one else is cited by name in the CBS Sacramento story.) And second, it’s arguably not even one economist, because while Varshney does have a master’s in economics, he’s actually he’s a finance professor at Sacramento State’s business school, who recently stepped down as dean to work as an investment advisor for Wells Fargo’s wealthy clients.

Not that this makes Varshney unqualified to speculate wildly about how MLS will pick which cities to expand to, any more than any of the rest of us are. But hanging an entire story on this, and spinning it as something “economists” predict, is a low point even for TV news.

Back in the real world, meanwhile, MLS officials heard pitches from would-be owners in Sacramento, Minneapolis and Las Vegas for the last expansion team of the passel being handed out by the league this decade. A decision could be made by the league Board of Governors meeting on December 6, or not.

Wisconsin reveals that giving Bucks owners $150m in income tax rebates would make Bucks owners $150m richer

This just in! (Well, in on Friday afternoon, but nobody pays attention to the interwebs then.) Rich Kirchen has breaking news that according to Wisconsin state assembly leader Robin Vos, redirecting income taxes paid by Milwaukee Bucks players and employees could provide up to $10 million a year in funding toward the Bucks arena project, providing enough money to pay off $150 million in arena costs!

This is the first we’ve heard from Kirchen on the “jock tax” since July, when he reported that redirecting income taxes paid by Bucks players and employees could provide up to $10 million a year in arena funding. But then it was Gov. Scott Walker saying it, not Vos, so, you know, news.

So long as Kitchen is rehashing old stories, I think I’ll just quote what I said back in July about the jock tax idea:

This is revenue that Wisconsin is currently collecting, so it’s hardly free money. (Yes, it’s money that the state won’t collect if the Bucks move elsewhere, but then sports fans would just spend their entertainment dollars on something else, and employees of that something else would make more money and pay more income taxes, and so on, and so on.) So it’s really just a way of totaling up all the money that the state could credit to the Bucks, then rebating them by writing them a check equal to that amount. Except the players would still be paying the taxes, while the team owners would be getting the check. Nice work if you can get it.

Kirchen also says that an extra $150 million would more than provide the $100 million in public funding expected to be needed for the project — but given that the current price tag is from $400-500 million and the current budget goes $100 million from the Bucks, $100 million from former Bucks owner Herb Kohl, and $100 million from Mystery Investor #1 (possibly via a naming rights deal), the gap may actually be a fair bit more than that. But yes, the Wisconsin Legislative Fiscal Bureau has confirmed that if the state sends the Bucks owners a check for all the state income taxes that their employees are paying, then the Bucks owners will have a bunch more money. It’s magic!