Seattle arena developers find loopholes to evade coronavirus construction ban

The increasingly worldwide suspension of nearly everything has finally started to hit stadium and arena construction: New York’s order on Friday banning “non-essential” construction put a halt to work on the Islanders‘ Belmont Park arena, and Austin’s “stay at home” order has shut down activity on Austin F.C.‘s new stadium. It’s reasonable to expect that more construction bans will follow in coming days and weeks, especially since the U.S. curve is decidedly not flattening yet.

Each of these rulings comes with exceptions, though — for example, New York Gov. Andrew Cuomo’s order exempts “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters,” something that has drawn criticism given that tons of housing construction in New York City is now required to include a percentage of affordable units (or “affordable” units, since the formulas used mean that some apartments require tenants to earn $120,000 a year to qualify). And the renovations of the Seattle Center Arena (formerly KeyArena, and still widely known by that name despite Key Bank’s naming rights deal having expired years ago) for the city’s new NHL team have apparently found such a loophole:

The only exceptions are construction related to essential activities like health care, transportation, energy, defense and critical manufacturing; construction “to further a public purpose related to a public entity,” including publicly financed low-income housing; and emergency repairs.

KeyArena construction is exempt under the last two carve-outs, Leiweke said. The arena is a public facility, and time is short to reattach the arena’s 44-million-pound roof to its permanent support posts. The roof has been held up by temporary posts since late last year.

I am not an engineer by any stretch of the imagination, but it’s hard to see how leaving the roof sitting atop temporary posts for a few extra weeks qualifies as an emergency. (If the temporary posts are really so rickety that they’re on the verge of collapse any day now, that seems maybe not entirely safe regardless?) A spokesperson for NHL Seattle called it a “delicate and precise undertaking” involving an “intricate compression system,” but neither of those phrases actually says that delaying the work would make it any more “delicate” or “intricate” or what have you.

And as for the arena being a “public facility,” yes, it’s owned by the city of Seattle, but it’s being renovated and will be operated by the private developers Oak View Group, who are even making payments in lieu of property taxes on it because it’s so clearly a private project using public property. It’s a “public property,” in other words, but not really a “public purpose,” but then we’ve already seen how far governments are willing to bend the definition of public purpose when it suits them.

What all this means is that Seattle’s NHL team will likely be able to launch in its new home in 2021, while the Islanders’ new arena is now even less likely to be ready by then. This is not a huge deal in the long run — teams can easily enough move a few games to alternate sites while construction is completed, especially in a world where moving teams temporarily to whole different cities is being seriously considered — but it’s worth noting if you’re an Islanders or Seattle NHL or Austin F.C. fan, if any of those exist in large numbers. (Just kidding about the Islanders. Mostly.)

Friday roundup: If you’re watching TV sports in empty stadiums by summer, count yourself lucky

Michael Sorkin, who died yesterday of COVID-19, was a prolific architecture critic (and architect) and observer of the politics of public space, and so not a little influential in the development of my own writing. I’m sure I read some of Sorkin’s architecture criticism in the Village Voice, but he first came on my radar with his 1992 anthology “Variations on a Theme Park,” a terrific collection of essays discussing the ways that architects, urban planners, and major corporations were redesigning the world we live in to become a simulacrum of what people think they want from their environment, but packaged in a way to better make them safely saleable commodities. (I wish I’d gotten a chance to ask him what he thought of the Atlanta Braves‘ new stadium, with its prefab walkable urban neighborhood with no real city attached to it.) In his “Variations on a Theme Park” essay on Disneyland and Disney World, he laid out the history of imagineered cities starting with the earliest World’s Fairs, up to the present day with Disney’s pioneering of “copyrighted urban environments” where photos cannot even be taken and published without prior approval of the Mouse — a restriction he got around by running as an illustration a photo of some clouds, and labeling it, “The sky above Disney World.”

I really hope this isn’t the beginning of a weekly feature on great people we’ve lost to this pandemic, though it seems pretty inevitable at this point. For now, on with the other stadium and arena news, though if you’re looking for a break from incessant coronavirus coverage, you won’t find it here:

Ballmer buys Forum for 1600% markup to get MSG to stop opposing Clippers arena

Just three weeks after it was first reported that Los Angeles Clippers owner Steve Ballmer was considering buying the Forum from Madison Square Garden to clear away MSG’s legal objections to a new Clippers arena, Ballmer has pulled the trigger, paying $400 million in cash to buy the 53-year-old arena:

The deal is expected to close during the 2020 second quarter. The new ownership group has no plans to tear down the Forum, which was added to the National Register of Historic Places in 2014, and will keep it operating as a concert venue.

If $400 million sounds like an awful lot to pay for a half-century-old (albeit recently renovated) arena with no sports tenants, that’s because it is: MSG bought the Forum in 2012 for just $23.5 million, though they later spent another $100 million on renovations to convert it into a concert-only space. There are no public figures that I can find on how much money the Forum makes — it’s by far the busiest concert venue in the L.A. area, but as we’ve seen before, busy doesn’t always mean profitable — but it seems inconceivable that it’s really worth $400 million, especially in a world where it will soon face competition from a new arena two miles away. (Not to mention a world where no one knows when people will be allowed to go to concerts again.)

File this one, then, under “multibillionaire spends whatever he wants to get his new toy, because he can.” This is nothing new — Ballmer way overpaid to get the Clippers in the first place — and not necessarily a bad thing, unless you really care how the insanely rich decide how to shuffle their money around between them. But it is a reminder that when development deals are decided less by public oversight than by whether there’s some other billionaire willing to foot the legal bills to block them, it’s always possible for sports team owners to simply buy off the opposition.

 

Friday roundup: Zombie apocalypse in full effect, go and get a late pass

So as you all undoubtedly know by now, everything is shut down. The NBA is shut down for at least 30 days, the NHL is shut down indefinitely, MLB has canceled the first two weeks of the season, MLS is on hold for a month, this summer’s Euro 2020 tournament may be moved to 2021 so maybe the Champions League and Europa League can finish up in June and July, the XFL is shut down maybe for good, and even the Little League is on hold until April 6. And all those dates are just minimum wild-ass guesses: New York Mayor Bill de Blasio, a calming voice of reassurance as ever, said yesterday that this “could easily be a six-month crisis” — and even if you dismiss him as just a guy who gets his every stray thought printed in the newspaper because he’s an elected official, as I wrote yesterday for FAIR, it’s still very much true that nobody really knows how long this will last, or how to decide (or who will decide) that the curve has been effectively flattened and life can go back to normal(ish) now.

So instead of dwelling on that, let’s dwell instead on another aspect of plagueworld that overlaps somewhat with the mission of this site: the economic impacts of shutting stuff down. I’m sure somebody out there is thinking, “But Neil, you always say that economists say it doesn’t matter much to the economy whether one sporting event or another is played, because people will just spend their money on something else like going out to eat or to a bowling alley instead. So why won’t the substitution effect save us now?”

I am, as I have to take pains to remind journalist quoting me from time to time, not an economist, but I think I can explain this one well enough: There’s a huge difference between one sports team or league shutting down and everything shutting down. Once everyone has completed their panic-shopping therapy and stocked up on a lifetime supply of toilet paper, they’re mostly not going to be looking for other things to spend money on — they’re going to sit at home and watch the Netflix subscriptions that they already paid for. And meanwhile a bunch of them are going to be out of work, and still more will be out of work once restaurants and barber shops and the like have to close for lack of business, and that will mean even less business, and soon enough the entire economy has shut down in a cycle of fear.

I was lucky to get a first-hand example of this in high school, when my U.S. History teacher had each of her classes play a game where each student was one player in late-19th-century frontier society, either a farmer or a railroad company owner or a banker or I forget what else. This made for lots of fun experience with the consequences of unregulated capitalism — I remember one friend of mine contracted to make a loan to another friend, and set the interest rate but not the term of the loan, and our teacher refused to step in and rule on when it had to be paid back because a contract is a contract — but in another class some friends of mine were in, it got even more severe: There was only one banker, and he refused to loan anyone any money at less than usurious rates, and the entire class plunged into an economic depression.

Anyway, there are lots of reasons this is going to be really bad in many, many ways, even if all these closures aren’t too late to avoid the old people being left to die in ERs that has reportedly been taking place in Lombardy. (I do not make a very good voice of calm, either, sorry.) But eventually this crisis will be over, and it’s still worth thinking about what the world will look like when we come out the other side. After all, with no sports to watch we’ve got plenty of time on our hands.

Not that everything being shut down has brought sports subsidy demands to a halt, because some things are just too big to fail:

Friday roundup: Dolphins owner seeks Formula One tax break, Tacoma okays soccer subsidies, plus vaportecture from around the globe!

Happy coronavirus panic week! What with stadiums in Europe being closed to fans and stadium workers in the U.S. testing positive for the virus, it’s tough to think of much right now other than what song to wash your hands to for 20 seconds (this is my personal preference). But long after we’re done with our self-quarantines, the consequences of sports venue spending will live on, so to the week’s news we go:

  • Miami Dolphins owner Stephen Ross is seeking a sales-tax exemption for tickets to Formula One racing events at his stadium, saying that without it, Miami might not get a Grand Prix. The tax break is expected to cost the state between $1.5 million and $2 million per event, but Formula One officials say each race would generate an economic impact of more than $400 million, and what possible reason would they have to lie about a thing like that?
  • The Tacoma city council voted 8-1 on Monday to approve spending on a $60 million, 5,000-seat stadium for the Reign F.C. women’s pro soccer team. According to a letter of intent approved by the council, the city will provide $15 million, while the city parks agency will provide $7.5 million more, with perhaps another $20 million to come from federal tax credits for investing in low-income communities. The parks body still has to vote on the plan on Monday as well; given that Metro Parks commissioner Aaron Pointer — who is also a former Houston Astro and a brother of the Pointer Sisters — said he doesn’t see “really any benefits at all” for the city or its parks, it’s fair to say that the vote there will be more contentious than the one in the city council.
  • Brett Johnson, the developer behind a proposed $400 million development in Pawtucket centered around a pro soccer stadium, says he has lots of investors eager to parks their capital gains in his project tax-free under the Trump administration’s Opportunity Zone program, but it might take a while to work out all the details because reasons. But, he added, “My confidence is very high,” and confidence is what it’s all about, right?
  • Nashville’s Save Our Fairgrounds has filed for a court injunction to stop work on a new Nashville S.C. stadium, on the grounds that no redevelopment of the state fairgrounds can take place without a public voter referendum. This brings the total number of lawsuits against the project to … umpteen? I’m gonna go with umpteen.
  • There’s now an official lawsuit against the Anaheim city council for voting on a Los Angeles Angels stadium land sale without sufficient public meetings. The People’s Homeless Task Force is charging that holding most of the sale talks in private violated the state’s Brown Act on transparency; the city’s lawyers responded that “there could be a myriad of reasons” why the council was able to vote on the sale at a single meeting in December despite never discussing it in public before that, though they didn’t suggest any specific reasons.
  • Wondering what vaportecture looks like outside of North America? Here’s an article on Watford F.C.‘s proposed new stadium, though if you aren’t an Athletic subscriber you’ll be stuck with just the one image, though given that it’s an image of Watford fans stumbling zombie-like into the stadium out of what appears to be an open field, really what more do you need?
  • There are some new renderings of the St. Louis MLS team‘s proposed stadium, and once again they mostly feature people crossing the street, not anything having to do with watching soccer. Are the clip art images of people throwing their hands in the air for no reason temporarily out of stock or something?
  • Here are photos of a 31-year-old arena being demolished, because America.
  • The Minnesota Vikings‘ four-year-old stadium needs $21 million in new paneling on its exterior, because the old paneling was leaking. At least the stadium’s construction contractors will be footing the bill, but it’s still an important reminder that “state of the art” isn’t necessarily better than “outmoded,” especially when it comes to new and unproven designs.
  • And speaking of COVID-19, here’s an article on how travel restrictions thanks to the new coronavirus will cost the European tourism industry more than $1 billion per month, without wondering what else Europeans (and erstwhile travelers to Europe from other continents) will do with the money they’re saving on plane tickets and hotel rooms. Where’s my article on how pandemics are a boost to the hand sanitizer and canned soup industries?

Clippers owner may buy Forum to get MSG to quit suing him over new arena

Los Angeles Clippers owner Steve Ballmer, in the midst of a legal and political battle with Madison Square Garden over his plans for a new arena in Inglewood, has reportedly come up with a new plan to eliminate his most deep-pocketed opponent: Buy the L.A. Forum from MSG, giving the arena company no reason to keep fighting his arena plans.

ESPN’s Kevin Arnovitz cites this news only to “league sources,” and neither Ballmer nor MSG would comment, so it’s hard to say for sure how serious these talks are. (The Los Angeles Times had a similar story this weekend, citing “a person familiar with the talks who is not authorized to speak publicly.”) But it’s certainly a clever way to clear away opposition: Even if Ballmer had to pay a premium for the Forum, that still might be cheaper than continuing to do battle with MSG in court, especially when you consider that he’d then have future revenues from the Forum, assuming there still were any once his new arena opened.

There would still be the matter of lawsuits by local residents over such things as whether it’s legal to sell public land to Ballmer for an arena when state law requires that governments first seek developers who’ll build affordable housing to ease the state’s insane housing crunch, but without MSG around to foot the legal bills, Ballmer would have a much easier time of it. The bajillionaire would still be paying almost all of the cost of the arena, so this isn’t so much a subsidy issue — but it is a “who can afford to participate in the democratic and legal process” issue, and a worthy reminder about that thing about the grass and the elephants.

Friday roundup: D-Backs, Angels hedge on new stadium plans, NJ demands 76ers repay 0.5% of tax breaks, and other foolishness

Another busy Friday where I need to squeeze in the news roundup when and where I can! (Also, yeah, New Yorkers already knew this about Mike Bloomberg, who also was responsible for this.)

Miami stadium sites are “future Atlantis” thanks to climate change, teams to deal with this by ditching plastic cups

As you may have noticed, I’m slightly interested in the massive human-created changes to Earth’s climate that are going to make many major cities uninhabitable soon via increased heat or sea level rise or both, so this CNBC article on sports venues at risk from climate change promised to check all of my boxes:

  • Florida International University climate professor Henry Briceno predicts that the Miami Heat arena will flood with only two feet of sea level rise (expected as soon as 2060), while the Dolphins‘ stadium will flood at a three-foot rise. As for the site of David Beckham’s new Inter Miami stadium, Briceno remarked, “I don’t know if those guys know that they are building in the future Atlantis.”
  • The San Diego Padres‘ stadium flooded in 2017, and the Quad Cities River Bandits stadium was made inaccessible thanks to flooding last year, and while both of those were because of torrential rains and not sea-level rise, more and more severe storms are expected to be a consequence of a warmed planet as well.
  • Disappointingly, the article doesn’t talk much about what will happen to sports teams once the cities they play in are largely uninhabitable as a result of climate change — Phoenix isn’t going to be underwater ever, but it could be too hot to live in as soon as 2050.

And the article then pivots to what sports teams are doing to help combat climate change — including a long set of quotes from Allen Hershkowitz, the staff environmentalist the New York Yankees hired after he helped MLB come up with programs to claim “green” status and then called commissioner Bud Selig “the most influential environmental advocate in the history of sports” — though only one specific initiative is mentioned: The Dolphins are replacing disposable plastic cups with (presumably reusable) aluminum ones. That sounds great, but while plastics are indeed a pollution nightmare, in terms of carbon footprint they’re not all that much better for the planet than alternatives (reusability is more important than what cups are made of). And there’s no mention of what the carbon footprint was of these teams’ repeated building and upgrading of new stadiums, which is kind of a big omission when nearly a quarter of the world’s carbon emissions are related to construction.

The best way to keep sports from drowning themselves, really, would be for teams to play in whatever stadiums they already have and for fans to stay out of their cars and instead stay home and watch on the internet listen on the radio. Or maybe just play fewer games. Somebody ask Hershkowitz about that, maybe?

Cuomo’s Penn Station expansion plan could cement MSG’s $550m-and-counting tax break in place for eternity

With New York Gov. Andrew Cuomo again proposing an expansion of Manhattan’s Penn Station — this one with an estimated $8 billion price tag, to be funded mostly by ¯_(ツ)_/¯ — Gothamist asked me to look into the state of the eternal tax exemption for Madison Square Garden, the arena that sits atop the train station, which the state accidentally put into place in 1982. The answer: The tax break has now cost New York City a total of $550 million and could hit $1 billion by 2030, legislation to repeal it keeps going nowhere, and Cuomo’s Penn funding plan could write it into tax law forever.

Cuomo’s Penn Station expansion plan (which is at least the sixth iteration of an expansion plan since one was first floated by then-Senator Pat Moynihan in the early ’90s) proposes another massive tax kickback, siphoning off untold billions of future property-tax dollars — technically payments in lieu of property taxes, or PILOTs—from an undisclosed area around the train station to pay for expansion of the transit complex. It’s the same mechanism that was used to partially subsidize Hudson Yards, accounting for just over $1 billion of the city’s $5.6 billion total tab.

The governor’s Powerpoint presentation on his plans includes a diagram on page 51 showing a “development district” that would include Penn Station and several blocks around it. Cuomo’s office referred questions to the state Empire State Development corporation, which indicated that this would be both the size of the new project and the size of the PILOT diversion district, though “the exact boundaries and parcels have yet to be finalized.”

If Madison Square Garden does end up within the area carved out to pay PILOTs, notes Kaehny, that could have the effect of cementing MSG’s tax break in place — or at least limiting the amount of future taxes Dolan and his successors pay, and ensuring that the proceeds go to the governor’s redevelopment project, not to city coffers.

There are a lot of question marks here, to be sure — it’s not even certain whether Cuomo’s PILOT district will be approved by the city council, or if the expansion will ever get off the ground at all — but Kaehny isn’t wrong to worry. Though the way things are going in Albany, even getting a thin sliver of tax payments that immediately get dumped into building a new auxiliary-station-plus-upscale-mall might be preferable to just letting the tax break ride forever.

And speaking of letting the tax break ride forever, here’s what an MSG spokesperson said when asked why that was really necessary:

“We appreciate that people have their opinions about our location, but the truth is that Madison Square Garden’s tax abatement pales in comparison to the billions in public benefits received by the other New York sports venues.”

All the other kids’ parents let them get away with even more! Someday I really want to see the industrial-strength vats of chutzpah that PR professionals bulk-order to keep under their desks.

Friday roundup: Phoenix to maybe get soccer stadium/robot factory, Raiders roof is delayed, Def Leppard and Hamilton face off over who’s old and smelly

Happy Friday! I have no meta-commentary to add this week, but hopefully when you have Def Leppard getting into a flamewar with Canadian elected officials over arena smells, you need no prelude:

  • The Salt River Pima-Maricopa reservation, long rumored as the possible site of a Phoenix Rising F.C. soccer stadium, has released an image of a proposed “$4 billion sports, technology and entertainment district” that indeed seems to show a soccer stadium, though honestly it looks a little small just from the rendering. There’s also an amazing image of people testing out robots and what looks like robot dogs, which surely will be the growth industry of the rest of the century, because I bet robot dogs don’t have an enormous carbon footprint or anything.
  • The Las Vegas Raiders are now projecting $478 million in personal seat license sales for their new stadium, up from an initial projection of $250 million. (All this money will go to defray Raiders owner Mark Davis’s costs, not the state of Nevada’s, because why would revenues from a publicly funded stadium go to the public? That’s crazy talk!) Unfortunately, the stadium might not be ready on time thanks to its roof behind months behind schedule, which could cause damage to the already-built parts of the stadium if it rains, but all those Raiders fans in Vegas (or people in Vegas anticipating selling their seats to out-of-towners who’ve come to see their home teams on road trips) will surely be patient after shelling out as much as $75,000 for PSLs.
  • Charlotte is still up for giving Carolina Panthers owner David Tepper $110 million to renovate his NFL stadium to make it more amenable to hosting an MLS franchise, but may want Tepper to agree to a lease extension first. Given that the last time Charlotte gave the Panthers money for stadium upgrades it was $87.5 million for a six-year extension, the city could maybe keep the team in town through 2027 this way. At this point, it might have been cheaper for the city just to buy the Panthers outright, thus guaranteeing the team stays in town while not only avoiding all these continual renovation fees but also getting to collect all that NFL revenue for itself. (Ha ha ha, just kidding, the NFL outlawed that years ago, no doubt partly to avoid anyone from trying exactly this scenario.)
  • The Atlanta Braves‘ stadium got a new name thanks to a bank merger, and the bank got lots of free publicity when news outlets wrote about the new name, but hell if I’m going to participate in that, so google it if you really must know.
  • A Virginia state delegate wants to reboot Virginia Beach’s failed arena plans by setting up a state-run authority to attempt to build a new arena somewhere in the Hampton Roads region, which includes both Virginia Beach and Norfolk. “The hardest part is the financing mechanism behind it,” said Norfolk interim economic development director Jared Chalk, which, yeah, no kidding.
  • Denver is helping build a new rodeo arena, and as a Denverite subhead notes, “The city says it won’t reveal how much taxpayers could be on the hook for because that would be bad for taxpayers.”
  • Kalamazoo is maybe building a $110 million arena to host concerts and something called “rocket football,” which I’m not even going to google because it would almost certainly be a disappointment compared to what I’m imagining.
  • Anaheim is considering rebating $180 million (maybe, I’m going by what one councilmember said) in future tax revenues to hotel developers so that Los Angeles Angels and Anaheim Ducks players will stay in them? Don’t the Angels and Ducks players own houses locally? What is even happening?
  • And finally, what you’ve all been waiting for: A video from last summer has surfaced showing Def Leppard lead singer Joe Elliott complaining that Hamilton, Ontario’s arena is “old” and “stinks like a 10,000 asses stink,” to which Hamilton councillor Jason Farr replied that Def Leppard is “also old and stinks.” Clearly one of them needs to be torn down and entirely replaced! It worked for Foreigner!