Category: Cleveland Cavaliers

Friday roundup: Terrible economic impact studies, terrible renderings, but one smart mayor, at least

access_time personNeil deMause

It’s been a long year of waiting, but the moment we’ve been looking ahead to is finally within sight, and only one thing seems to be on everyone’s minds: What songs are we going to request that Yo La Tengo perform for pledges tomorrow afternoon on the WFMU fundraising marathon? I already requested “Better Things” the year after Hurricane Sandy, but I’m hoping I can find something equally appropriate for 2021.

Here’s some stadium and arena news to tide you over while you wait:

  • Economic impact studies of sports venues are usually pretty terrible, given that they generally start out by measuring “impact” (i.e., all money spent in or around a stadium or arena whether it benefits anyone but the team owner) and ignore spending that’s just shifted from one part of town to another, and so on. But the projection that a new $228 million arena in Augusta will generate more than $600 million in economic impact by adding up “$436 million in new spending” plus “$208 million in new sales taxes” breaks new ground in bonkers: Doesn’t the Augusta Downtown Development Authority know that sales taxes are already part of “spending”? Plus, is the sales tax rate in Augusta really 48%? The full “market analysis” is here, but it doesn’t provide details on its methodology and the $208 million sales-tax figure doesn’t seem to appear anywhere in it, so we’ll just have to trust that the Augusta Chronicle’s fact-checking department was on the job and, oh dear. Maybe the “applause editor” does some fact-checking in her spare time?
  • Also in economic-impact-study news, various studies have projected anywhere from $200 million to $600 million in impact from a new arena in Palm Desert, but Mayor Kathleen Kelly says, “Sports arenas are pretty notorious for over-promising and under-delivering positive economic impacts for the surrounding community. So, I do have to look at the proposal with some skepticism.” She adds an arena could draw off spending from area restaurants to arena concessions, and take up hotel rooms that otherwise could be occupied by longer-term visitors — hey, somebody’s been reading this site, or maybe just the mountains of data showing that arenas haven’t had a large measurable impact in the past! Warms my heart, it does.
  • The Florida House Ways & Means Committee voted 16-1 yesterday to repeal the state’s program that allows sports team owners to request up to $2 million a year apiece in sales-tax money to repay their private stadium and arena construction or renovation costs, and, yes, this was just proposed a couple of years ago, but maybe one of these days it’ll actually pass. Especially given that it’s a program that has allowed team owners to demand public money for venues they’ve already built, making the economic impact of the subsidies an easy-to-calculate zero.
  • Detroit’s Joe Louis Arena is gone, but you can still park in its parking garage, which is about to become “much more than just a place to park in the morning” as it is converted to a “mobility hub” that is … a place to park in the morning and buy coffee.  It’s all privately funded, at least, so far.
  • If you want to read an article about sad Sacramento soccer boosters appealing for a billionaire to come and bring $500 million for an expansion fee and a new stadium after the old billionaire backed out, here you go! Features Sacramento mayor and former Kings water-carrier Darrell Steinberg saying of the plan that ended up leaving the city cutting services to pay down arena debt, “We didn’t give up on the Kings and we’re not giving up on Major League Soccer.” Adds Steinberg: “What we need is a plug-and-a-play from an investor to then help us finish the last piece of this.” In related news, I only need $6 billion as the last piece of the puzzle for building my space elevator, please apply within.
  • Not to be topped, News 4 Nashville has a “first look inside Nashville’s new soccer stadium,” which is actually someone clicking around on computer renderings of the place, complete with a visible cursor. We had that already back in November, and with creepy shambling Sims!
  • And if you want to read an article about Cleveland Cavaliers owner and Quicken Loans magnate Dan Gilbert and his gajillions of dollars in public subsidies that starts out describing how he “was raised by a pair of Century 21 real estate agents” and “went to Michigan State University—where he was arrested for running a sports gambling operation,” Defector has gotcha.

Friday roundup: Raleigh MLS project funding, Islanders’ train station costs, Flames arena talks are all ???

access_time personNeil deMause

Happy Friday! If you’ve been wondering if Scott McCaughey’s excellent new album of songs written while in a hospital room recovering from a stroke can drown out the sound of poorly timed jackhammering by the gas company right outside your window, I’m here to report: Not nearly well enough!

Typing really loud so you can hear me over the din:

  • Raleigh residents are concerned that a development project centered on a new soccer stadium could price them out of living in the city. Also, there isn’t actually enough Wake County tax money available to pay for the project’s proposed $390 million public cost. And Raleigh doesn’t have an MLS team, or the promise of one. Other than that, this is going swimmingly.
  • Newsday has contradicted Long Island Business News’s report that New York state will pay “most” of the cost of a new $300 million train station for an Islanders arena at Belmont Park, saying that the actual cost is only $100 million and developers will pay most of it. Unnamed source fight!
  • Calgary city councillor Jeff Davison, who is spearheading behind-closed-doors talks with the Flames owners over a new arena, says, “We do not have a deal today, and when we will have one and if we will have one is totally up in the air. But what we can tell the public today is that discussions are productive but they’re not complete. We can’t give an exact date as to when we’ll be back with any information [but] I’m confident if we do bring a plan back, that the public will support it.” Pretty sure that translates as “Still talking, ask again later.”
  • Noah Pransky has been on a writing tear about the Tampa Bay Rays mess this week, including a review of an article he wrote in July 2009 predicting much of what has since come to pass and an analysis of how hotel-tax money that Tampa officials say can’t be spent for things like policing or libraries really can, because they could be used to free up general-fund money that’s currently spent on tourism-related expenses. “Where’s the study on best uses for that new money?” writes Pransky at Florida Politics. “How about just a best-use conversation, held out in the sunshine?” Crazy talk!
  • Speaking of tax money that could be spent on other things, Cuyahoga County is considering a 1% hotel tax hike to free up $4.6 million a year to spend on its convention center and sports venues, which in present value comes to about $70 million. (The Cleveland Plain Dealer article on this is entirely about how the bed tax hike would affect the hotel industry, because of course it is.)
  • “Could an NFL Stadium [for the Buffalo Bills] be Built on an Abandoned Coke Plant Property?” asks Erie News Now, boldly toying with Betteridge’s Law.
  • Worcester will break ground next Thursday on its new heavily subsidized Triple-A Red Sox stadium set to open at the beginning of the 2021 season, which, uh, isn’t a lot of time. They’d better hope that the climate crisis means a less stormy winter construction season in New England, which, uh, isn’t likely.

Cuyahoga County to spend extra $40m on arena repairs after Cavaliers blew through first $22m in record time

access_time personNeil deMause

It’s Wednesday, so it must be time for Cuyahoga County to spend more money on the Cavaliers‘ arena:

Cuyahoga County Council is considering whether to issue $40 million in bonds to reimburse the Cleveland Cavaliers for repairs the county is required to cover under the team’s lease agreement on Rocket Mortgage FieldHouse.

Also under consideration is a measure that would re-finance $40 million of the $60 million in bonds sold by the county in 2015 as an advance on revenues from the county’s so-called sin tax, which was extended 20 years by a 2014 vote.

That’s a lot of words, but careful readers will zero in on the two numbers: $40 million and $40 million, which added together come to $80 million. It’s not really $80 million in new spending — one set of bonds would be new, the other merely refinanced — but it is a significant chunk of change for an arena that has already gotten a whole lot of chunks in recent years.

The reason for the new spending proposals, as explained in a not very clear article at Cleveland.com, is that the county agreed to cover “major capital repairs” in the team’s lease, and Cavs owner Dan Gilbert (who is reportedly doing better after his recent stroke) has already blown through $22 million in county tax funds while also fronting $40 million of his own money, for such things as “the replacement of the heating and cooling system, retractable seating, sports lights, ADA-compliant restrooms, and other things.” Some of that sounds a bit dodgy as required maintenance — is that replacing worn-out retractable seating and sports lights, or upgrading them? and WTF are “sports lights,” anyway? — but if the lease says the county has to pay for them, there’s not much the county can do about that, hence the rush to pass another $40 million bond issue.

The main problem here is that the county appears to have either seriously overestimated how fast tax revenues would come in, or seriously underestimated how much capital expenses the arena would rack up so quickly. Given that the county previously said it would be using taxes on Cavs playoff tickets to help pay off its existing arena upgrade bonds, and the Cavs currently just finished year one of an umpteen-year rebuild following the departure of LeBron James, I’m putting my money on … you know, probably both.

Friday roundup: NYCFC turf woes, Quebec’s NHL snub, and why people who live near stadiums can’t have nice things

access_time personNeil deMause

And in less vaportectury news:

  • NYC F.C. is having turf problems again, as large chunks of the temporary sod covering New Yankee Stadium’s dirt infield were peeling up at their home match last Saturday. There’s still been no announced progress on the latest stadium plan proposed last summer (which wasn’t even proposed by the team, but by a private developer), and I honestly won’t be surprised if there never is, though Yankees president Randy Levine did say recently that he “hopes” to have a soccer stadium announcement this year sometime, so there’s that.
  • Deadspin ran a long article on why Quebec City keeps getting snubbed for an NHL franchise, and the short answer appears to be: It’s a small city, the Canadian dollar is weak, Gary Bettman loves trying to expand hockey into unlikely U.S. markets, and Montreal Canadiens owner Geoff Molson hates prospective Quebec Nordiques owner Pierre Karl Péladeau, for reasons having to do with everything from arena competition to Anglophone-Francophone beef. Say it with me now: Building arenas on spec is a no good, very bad idea.
  • The Cleveland Cavaliers arena has an even more terrible new name than the two terrible names that preceded it. “I know that sometimes [with] change, you get a little resistance and people say, ‘Why are they changing it?’ and ‘How’s that name going to work?'” team owner Dan Gilbert told NBA.com. The answers, if you were wondering, are “Dan Gilbert is trying to promote a different one of his allegedly fraudulent loan service programs” and “nobody’s going to even remember the new name, and will probably just call it ‘the arena’ or something.”
  • Inglewood residents are afraid that the new Los Angeles Rams stadium will price them out of their neighborhood; the good news for them is that all economic evidence is that the stadium probably won’t do much to accelerate gentrification, while the bad news is that gentrification is probably coming for them stadium or not. The it-could-be-worse news is that Inglewood residents are still better off than Cincinnati residents who, after F.C. Cincinnati‘s owners promised no one would be displaced for their new stadium, went around buying up buildings around the new stadium and forcing residents to relocate, because that’s not technically “for” the new stadium, right?
  • Worcester still hasn’t gotten around to buying up all the property for the Triple-A Red Sox‘ new stadium set to open in 2021, and with construction set to begin in July, this could be setting the stage for the city to either have to overpay for the land or have to engage in a protracted eminent domain proceeding that could delay the stadium’s opening. It’s probably too soon to be anticipating another minor-league baseball road team, but who am I kidding, it’s never too soon to look forward to that.

Friday roundup: Delayed votes, poorly considered tributes, and a no-LeBron loan offer

access_time personNeil deMause

Greetings from my undisclosed location! I have time for an abbreviated news roundup this week:

LeBron James was not the centerpiece of the Cleveland economy stop it stop it please god stop it

access_time personNeil deMause

Eeaaaaaaaaaaaaaaaaaaaaaaugh, nooooooooooo, not another article about how much LeBron James is worth to the Cleveland economy!

When James played for Miami, there was a downward trend in the number of restaurants in Cleveland that coincided with an upward trend around the stadium in Miami. Likewise, when James returned to the Cavs, restaurants near Cleveland’s Quicken Loans Arena spiked while the number restaurants within a mile of the American Airlines Arena started to slide, according to the Harvard study.

That’s from a CNBC article headlined “How LeBron’s move west could tip parts of Cleveland’s economy south,” though it’s mostly full of economists saying anything from “we’ll see” (Case Western Reserve’s Jack Kleinhenz) to “people who stop going to Cavs games will just go to Indians games instead” (Smith College’s Andy Zimbalist) to “we saw more tourist restaurant spending the year LeBron came back, but that could easily be a coincidence” (city tourist bureau spokesperson Emily Lauer). The headline is already a giveaway to the problem with the story’s premise, as is the above quote: Of course less money is spent in and around the Cavs’ arena when fewer people go to Cavs games, but that doesn’t mean people stop eating or going out at night — it just means that they find other things to do than going to see NBA basketball.

At least CNBC managed to avoid repeating the urban legend that LeBron is worth $500 million a year to Cleveland’s economy, which hopefully we put a stake in back in 2015. But still, even putting a reporter on such a story reveals that some CNBC editor thinks “let’s look at how Pro Sports City will fare economically without Pro Sports Star” is an assignment worth making, which, no, it really isn’t, and the economists you spoke to ended up telling you as much. And you didn’t even call Geoffrey Propheter, who did the definitive study on NBA arenas and their economic impact! I bet he has lots of ideas for better ways that CNBC reporters could be spending their research time — give him a ring, he’s in the book.

With LeBron gone, who will come see Cleveland’s new glass wall?

access_time personNeil deMause

LeBron James is a Laker, which means the Cleveland Cavaliers will be really, really, laughably bad next season, and probably for many seasons to come. Which means Cavs fans won’t have much reason to come out and see the team’s new glass wall.

Bloomberg News, for one, is worried about the effect on the new ticket tax that’s helping pay for the arena’s renovations:

The departure of the team’s biggest draw could pose risks if attendance drops, given that a tax on ticket sales is used to help pay off the debt.

Risks to who would that be exactly, Bloomberg doesn’t say. But given that the ticket taxes would be collected by the city to help repay $140 million in public debt on the stadium upgrades, it sure looks like taxpayers will be on the hook for repaying it if there’s any shortfall, much like happened in Cincinnati with the Bengals stadium when sales tax receipts fell short, with dire consequences.

But hey, maybe with the Cavs’ future in the toilet, Clevelanders will instead spend more money on concerts — substitution effect, right? Except that the Cavs’ arena already just had a record-setting year for concerts, so expecting much improvement in that department is probably ambitious. Maybe they can sell the glass wall on eBay.

Friday roundup: Trump rescued stadium tax break, Sacramento MLS group needs more cash, more!

access_time personNeil deMause

Happy interval between Hanukkah and Christmas! If anyone is out there reading this and not getting on a plane from somewhere to somewhere else — or is reading this while waiting for a plane from somewhere to somewhere else — enjoy your lightning-round news of the week:

  • San Diego Union-Tribune columnist Kevin Acee, who never met a stadium or arena deal he didn’t love to bits, says that several people are interested in building a new arena in San Diego, including the owners of the Padres and new Brooklyn Nets minority owner Joe Tsai. Acee adds, “Several people insisted in recent weeks the Nets will remain in Brooklyn long-term and there are no plans to ever move the team to San Diego,” which, given the relative size of the markets, is possibly the least surprising sentence ever written in the English language. Also, Acee includes zero attributed quotes in his story, and says nothing about how such an arena would be paid for, so take it with a large grain of salt for the moment.
  • Donald Trump made retaining the tax-exempt bond subsidy for sports stadiums in the tax bill “a priority,” according to one GOP aide. So when he tweeted in October, “Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!”, either he didn’t mean anyone to take him seriously just because he was the president of the United States speaking out on a matter of public policy, or more likely he just forgot to check with his funders before clicking Tweet.
  • “The Miami Open tennis tournament won permission to move to the Miami Dolphins’ stadium, with the kickoff planned in 2019,” reports the Associated Press, which seems to be slightly confused about how a tennis match starts.
  • After the NBA used the promise of an All-Star Game for Cleveland in 2020 or 2021 if it approved publicly funded arena renovations for the Cavaliers, and the city approved $70 million worth, the league gave those games to Chicago and Indianapolis. Not that there’s really that much value in hosting an NBA All-Star Game, but still, HA ha, suckers.
  • Apparently the reason why Sacramento didn’t get an MLS expansion team along with Nashville this week is the league is worried the city’s ownership group doesn’t have enough cash for a $150 million expansion fee and a $250 million stadium. All they need is to find someone with deep pockets who thinks the best thing to do with their money is to invest it in a U.S. soccer franchise that will start off $400 million in the hole, and, well, good thing that P.T. Barnum movie is opening this week, that’s all I can say.
  • There’s a “Plan B” stadium proposal for the Pawtucket Red Sox, where instead of helping to fund the stadium directly, the state would instead give the city all income and sales taxes collected at the stadium and let the city use the money on construction costs. Rhode Island state senate president Dominick Ruggerio says he doesn’t “see that as being a viable alternative,” and plans to submit his own stadium-financing bill, which probably won’t pass the state house. This could go on for a while, until somebody remembers where they stored the money generating machine.
  • The Arena Football League is now down to four teams, in part because the Cleveland Gladiators had to suspend operations for the next two seasons thanks to renovations to the Cavaliers’ arena. This was reported in the Albany Times-Union, which has to care because Albany is supposed to be getting an AFL expansion team this year, and man, do I feel sorry for whoever got stuck with being the Times-Union beat reporter on this team, because this is looking like a sad year ahead for them.
  • Deadspin’s Drew Magary weighed in this week on arena and stadium subsidies and concluded that “Arenas Are Important And Football Stadiums Are Not,” according to his headline, but really he meant “if you’re going to waste money on something, at least arenas can be used more days of the year,” which, fair enough. Or as Magary puts it as only he can: “We are entering an age of horrific corruption, and so I have accepted the fact that living in a fraud-free America is a hilarious pipe dream. All I can do is hope for the least of all corruptions, and pray that a bare scrap of public good accidentally comes out of it. If you are some ambitious dickbag city councilman looking to make his name for himself, an arena should be your priority when it comes to getting worked over.”
  • NHL commissioner Gary Bettman spoke out again about the Calgary Flames arena situation, calling it “very frustrating” and saying that “they’ll hang out and hang on as long as they can and we’ll just have to deal with those things as they come up,” but insisting that “yes, Quebec City has a building, but nobody’s moving right now, we’re not expanding East.” Which either means the Flames owners really don’t want to threaten to move right now (or ever), since making overt move threats is usually Bettman’s job, or it means even Bettman is sick of trying to pretend that the Flames have a viable threat to go anywhere.

Cavs owner waits two whole months after getting arena money to dream about even newer arena

access_time personNeil deMause

It’s been almost two whole months since Cleveland Cavaliers owner Dan Gilbert got approval of $70 million in taxpayer money to renovate his arena, just three years after getting his last batch of public arena money, so what’s a guy to do now? How about drop hints that he’d like to tear it down and build a whole new arena when his lease expires in 2034:

The Cleveland.com headline on this — “Did Cavaliers owner Dan Gilbert hint at a new arena for 2034?” — is fairly hilarious, given that he obviously hinted at it, though a Gilbert spokesperson insisted he didn’t hint at it, and we’re apparently in an age where you need to give important people the benefit of the doubt even when they’re obviously lying about things right in front of your face, so okay.

If you’re wondering about what that “Inverted Bowl” thing is, it’s the design firm Rossetti’s claim to attempted fame, which from the firm’s renderings appears to be “get rid of the upper deck and replace it with a wall of overhanging balconies and claim that this makes the upper deck ‘the best seats in the house.'” On the one hand, this is just reinventing cantilevering, which does indeed create better upper-deck seats, albeit cantilevering that doesn’t create an overhang over any of the lower deck, pretty much eliminating any significant benefit you’d get from it; on the other, with only a handful of rows of seating in each balcony, it’s going to be really tough to create as many seats in an “inverted bowl” arena as in a standard bowl. (This isn’t helped by the fact that the closer you get a ring of seats to the game action, the fewer seats you can fit in each row — try cutting a strip of paper and play around with it if you can’t picture why.)

Plus those top balconies are going to need to have a crazy rake so that the fans in the back rows can see the game over the heads of the fans in front of them … but you know what, Rossetti put together a really nice video, with talk about the “digital age” and animations of their staffers’ actual brains for some reason, so go watch it and repeat to yourself it’s just a show, you should really just relax.

Rams to charge record PSL price, Cavs arena subsidy moves ahead, and other news of the week

access_time personNeil deMause

It’s Friday again, so let’s go spanning the world:

  • The Los Angeles Rams are considering charging a top personal seat license price of as much as $225,000, just for the right to then buy season tickets for $350-400 per game. This seems like a bit of a reach when the payoff is just that you get to watch Rams games, but I guess Stan Kroenke needs to try to recoup his $2 billion in stadium costs somehow — and at least if it all goes south, he’ll be the one on the hook, not taxpayers.
  • Some Canadian bank bought the naming rights to the Toronto Maple Leafs arena away from some Canadian airline. Is this going to buy it valuable market exposure and name recognition that will justify the $40 million a year expense? Not on this blog!
  • The LED lights at the Atlanta Falcons‘ new stadium make football look all weird.
  • Shreveport Mayor Ollie Tyler says spending $30 million on an arena for a minor-league basketball team is a great idea that only “naysayers” don’t appreciate. “I think sometimes we don’t believe in ourselves and some of our urban areas we don’t believe that we are able to make things happen,” she says. If Mayor Tyler needs a reelection campaign theme song, I have a suggestion.
  • “The Federal Aviation Administration has determined that the Oakland Raiders‘ proposed stadium in Las Vegas would not be a hazard to aircraft.” Huzzah!
  • Would-be St. Louis MLS owner Paul Edgerley says he’s still ready to pay $150 million for a franchise, and $100 million toward a stadium, as soon as someone comes up with the other $60 million in construction costs. Noted.
  • Cleveland Cavaliers owner Dan Gilbert has officially reinstated his plan to do $140 million of renovation work to the team’s arena, with Cuyahoga County paying for half the cost. ”This is corporate welfare at its worst,” said Steve Holecko of the Cuyahoga County Progressive Caucus, after his erstwhile coalition partners the Greater Cleveland Congregations withdrew petitions against the arena subsidy after getting a promise of two mental health crisis centers from the county. Holecko’s group doesn’t plan to mount another ballot challenge on their own, though, so construction work is set to begin later this month.
  • Mikhail Prokhorov is ready to sell the Brooklyn Nets, but will hold onto the Barclays Center, after renegotiating the team’s lease so that it will pay less rent to the arena. This … does not seem like the smartest way of going about things, but maybe Prokhorov is figuring he’ll give up future rent revenue in exchange for a higher sale price now on the team? Or maybe he’s just not very smart.