Friday roundup: Warriors rail stop turns pricey, West End stadium undead again, Montreal mayor meets with would-be Expos owners

Superbrief mode today:

  • Expanding light-rail service to the Golden State Warriors‘ new arena is now expected to cost at least $62 million, which is a lot for Muni Metro, though not for some other transit systems. The Warriors owners are kicking in $19 million, but the rest will be funded by tax money from the arena district, which may or may not be enough to cover the entire nut. Tim Redmond saw this coming.
  • F.C. Cincinnati owners are officially pivoting back to the West End stadium site that it had declared dead last month after not getting offered enough property-tax breaks on the land. How come? Team CEO Jeff Berding said of the other two options, Oakley is “not as close to the urban core as desired,” and the team couldn’t secure land in Newport, Kentucky. Sounds like the West End has the club over somewhat of a barrel, which it should be able to use to ensure the team pays full property taxes, at least, though some residents may be more concerned about keeping out a stadium entirely over fears it will further gentrify their neighborhood.
  • The mayor of Montreal is meeting today with an ownership group that wants to bring a new Expos MLB team back to town. “We don’t need a cent from the city of Montreal, but we need a little help,” prospective co-owner Stephen Bronfman said earlier this week; your guess is as good as mine what that actually means.
  • Minnesota taxpayers have spent $1.4 billion on new or renovated sports venues over the past 20 years, if anyone is counting.
  • The Pawtucket Red Sox‘ stadium demands continue to be stalled, if anyone is keeping track.
  • “A deputy in one of Russia’s 2018 FIFA World Cup host cities has claimed that a latest inspection by the world’s footballing body has neglected a missing column at a newly built stadium.” You’ve just got to read the whole Moscow Times article now, don’t you?


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

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

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

Today in sports teams sell ad rights for lots and lots of money:

The [Atlanta] Falcons organization has sold corporate sponsorships at Mercedes-Benz Stadium totaling more than $900 million in contractually obligated long-term revenue, SportsBusiness Journal reports in this week’s edition.

That’s $900 million over several decades, so not really worth $900 million toward today’s construction costs. Still, it should go a long way toward helping pay off the Falcons$1.6 billion stadium, especially when the team is already getting tax money worth nearly $700 million.

Also today in sports teams sell ad rights for lots and lots of money:

The Minnesota Timberwolves and Lynx named five new “founding partners” on Monday who will help pay for the $130 million renovation of Target Center now underway…

In exchange for its sponsorship, each founding partner will receive a customized package with the two teams. Each package will offer a yet-to-be disclosed “physical presence” inside the arena, plus outdoor and indoor digital signage and category exclusivity.

That Minneapolis Star Tribune article doesn’t mention it, but the Target Center renovation also got $48 million in public funds.

These are only two data points, obviously, but they do help explain why team owners are so eager to build new facilities despite tons of evidence that they don’t bring in all that much more money in actual arena revenues. New sports venues aren’t just new sports venues — they’re also new billboards, and corporations are more willing to throw money at slapping their names on a fresh canvas than on one that’s been written on already a bunch of times, even if it’s dubious whether there’s any real business value.

Plus, of course, it’s way easier to ask for public money for new (or renovated) buildings than it is to just ask for straight taxpayer handouts because you want to boost your profits. When future alien anthropologists try to puzzle out why we spent so much of our time building and then tearing down places to watch mass sporting spectacles, it’ll be fun to see how many tries it takes before they arrive at “it was the best way to separate people from their wallets.”

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Timberwolves agree to extend lease seven years in exchange for $48m in arena renovation subsidies

Last year’s announced plan to renovate the Minnesota Timberwolves‘ Target Center, which was already renovated once in 2004, has finally been finalized (the city council will vote on it two weeks from today), and it actually doesn’t look quite as bad as it did originally: The total cost is now down to $97 million (from an initial $150 million estimate), the team and city will roughly split the costs, and the T-Wolves have agreed to extend their lease from 2025 to 2032 as part of the deal. So on the bright side, you can say the city is spending about $7 million for each year of new lease, which is, um, better than it could be?

On the less bright side, the Timberwolves owners managed to extract this deal despite having more than a decade to run on their existing lease, simply by tagging along on the Vikings stadium deal and saying, “Hey, what about us?” So this doesn’t actually guarantee that Minneapolis won’t be asked to put in more money to the Target Center before 2032 — or, heck, to build a whole new arena. It’ll be more than 40 years old by then, after all, and arenas are required to be sent to the carousel after 30.

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MN sports teams hate idea of taxing sports gear to pay for stadium, duh

Predictably, the Minnesota Vikings aren’t too happy with state representative Ann Lenczewski’s proposal to pay for the shortfall in stadium funds by taxing sports memorabilia sales, since that would mean they’d be paying the bills, not taxpayers. And that’s not what they agreed to at all:

“This legislation fundamentally changes the agreement the Vikings negotiated with the state of Minnesota,” said Lester Bagley, the Vikings vice president of public affairs and stadium development, after a hearing on the bill in the House Taxes Committee.

The team put in an additional $50 million in the final stages of negotiation on the bill for the National Football League stadium, Bagley said, and “that commitment was in exchange for an assurance that there would be no further impacts on stadium revenues, including taxes on stadium revenues.”

And other Minnesota sports teams are even less happy with the plan, if possible:

Representatives of the Timberwolves, the Wild and the Twins testified against the bill, which one said essentially would require the teams to subsidize a competitor. A spokeswoman for state retailers spoke against the bill as well.

Still, it seems at least possible that some kind of memorabilia tax will be seriously considered by the legislature — the head of the Minnesota Sports Facilities Authority says it’s a good idea, and really, the state doesn’t have a lot of other options. And even if the Vikings are upset, would they really walk away from $1.1 billion worth of subsidies just for fear of losing a bit of money on memorabilia taxes?

Which is both the strength and the weakness of the proposal, by the way: It’s not actually expected to raise much money. Estimates are that the memorabilia tax would generate $6.8 million in its first year, while the funding gap from e-pulltabs is more like $50 million a year. So while this could help, it wouldn’t be a solution by any means. But at least it’s nice to see the legislature considering trying to make this deal better for the public, rather than just promoting compulsive gambling.

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Renovating Target Center will now cost only $100m, maybe

Hey, here’s something new: a sports construction project where the price is actually going down. The planned renovation of the Minnesota Timberwolves‘ Target Center, originally estimated at $150 million when it was approved as part of the Vikings stadium package last spring, is now expected to cost only $100 million, according to Minneapolis city officials. (Mayor R.T. Rybak last week called the initial figure a “very general, quick thing” and the new estimate “a pretty good working number.”) For this, the city is expecting to build a new glass atrium, ad boards, new concourses, and — here, just look at the website.

In exchange, taxpayers are getting … well, nothing that I can tell, except to “restore [the arena’s] competitiveness,” though given that the Target Center is one of the rare arenas that draws more than 200 events a year, it’s hard to see how much more competitive it could be. And the Timberwolves’ lease wasn’t up until 2025 regardless, and the team didn’t sign an extension in exchange for these latest improvements.

This will now be the third public expense on an arena that was built with private dollars back in 1990 (and done poorly, by at least one account), bailed out with public money in 1995, and renovated once already in 2004; I’d like to say it’ll be the last, but lord knows what will be needed to keep a building “competitive” in 2020. Holographic players, maybe.

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Vikings plan to include get-out-of-vote-free card for Target Center reno

As if the Minnesota Vikings stadium plan weren’t complicated enough, now it appears that the state legislature will be voting on two bills as part of the proposal: One to help fund the stadium with electronic pulltab gambling revenues, which would also include a provision authorizing the city of Minneapolis to use existing taxes to renovate the Timberwolves‘ Target Center; the other to exempt Target Center spending from the $10 million cap on city sports stadium spending without a referendum that Minneapolis voters approved back in 1998.

Asked whether renovation of the Target Center is part of the stadium bill, lead author Sen. Julie Rosen helpfully explained, “It is, but it isn’t.”

While the Minneapolis Star Tribune seems fixated on this two-bills thing, the real news here is that the state plans to override the Minneapolis sports spending cap, at least for the Target Center portion. (State officials have already said that they don’t consider the city’s $339 million in Vikings spending to violate the cap, because it’ll be laundered through the state before the Vikings end up with it.) The Twins got a similar exemption from public referendum as part of their own stadium deal, but Gov. Mark Dayton had earlier indicated that the legislature wouldn’t do the same for the Vikings. For the T-Wolves, though, apparently that’s okay.

The big battleground here is shaping up to be the Minneapolis city council, where a majority of members say they won’t approve any of this mess without a public vote, which would almost certainly be overwhelmingly opposed to the deal. Expect major, major arm-twisting in the days ahead — this will be the test of whether the city councilmembers are actually taking a stand for the principle of allowing voters to vote on what the city charter says they get to vote on, or are just holding out for a better payoff.

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St. Paul mayor: Everybody gets a new stadium!

St. Paul Mayor Chris Coleman entered the Minnesota Vikings stadium debate with a bang yesterday, issuing a complex plan to use local sales tax hikes and a statewide liquor tax to: build a Vikings stadium in Minneapolis, move the Timberwolves and Lynx to St. Paul’s XCel Center (which would receive $75 million in upgrades for the current tenants, the Wild), redevelop the Target Center, and build a new stadium for the minor-league baseball St. Paul Saints

…and the Vikings and the Wolves owners already hate the idea, and that’s before even getting into the problems getting approval for all those tax hikes. But at least Coleman got his name in the paper.

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Minneapolis unveils $990 million Vikings-Wolves stadium-arena construction-renovation plan

And the Minneapolis plan for a Minnesota Vikings stadium is in. The highlights:

  • An $895 million domed football stadium on the site of the Metrodome (and, according to Reuters, “incorporat[ing] parts of the existing Metrodome”), plus a $95 million renovation of the nearby Target Center.
  • The state of Minnesota would contribute one-third, or $300 million, as a bill in the legislature has already proposed.
  • The city would kick in $195 million (22%), to be collected from a ticket tax, parking fees, restaurant and liquor taxes, a new 0.15% city sales tax, and the extension of taxes currently being used to pay off the city’s convention center.
  • The Vikings would pay $400 million (40%) of the stadium cost.

Clearly this plan faces a ton of hurdles: The state bill has to be passed by the legislature before it goes home on Monday. The city money would need a voter referendum for approval. And did I mention that Vikings execs hate the idea?

Lester Bagley, a Vikings’ vice president, said the Vikings appreciated the proposal but that a $400 million contribution was too much. He also noted that playing in the University of Minnesota’s TCF Bank Stadium for three years while the new field was built would cost the Vikings $40 million in lost revenue.

“$440 million for the site does not work, and it’s not something we can support,” Bagley said. “Three parties need to negotiate a deal, and this does not accomplish that.”

Still, it’s got people talking about where to build a stadium, not whether to build one, and the Vikings owners have to be happy about that. If you’re in the Twin Cities and want to join the conversation, veteran MinnPost stadium reporter Jay Weiner is interviewing Minnesota stadium czar Ted Mondale next Monday night; tickets are $15. Hey, if 60 million people show up, maybe they can use the proceeds to build a stadium!

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Minneapolis seeks $150m Target Center renovation

In yet another sign that sports stadiums and arenas are the gifts that keep on costing money, Minneapolis Mayor R.T. Rybak is looking for $150 million in state money to renovate the Timberwolves‘ Target Center, which was built in 1990 and just renovated in 2004. The improvements this time around would include two large glass atriums, a new restaurant, and a complete remodeling of the inside to “make the building more attractive to traveling concerts and shows,” according to the Associated Press.

As for what’s in it for Minnesota to attract more traveling concerts and shows, that’s not so clear: The Target Center is managed by AEG, and while a quick scan of the operating agreement makes it look like the city gets a cut of revenues, it’s going to be tough to generate enough new money to pay off $150 million in renovations. I’m sure Rybak will cite increased economic activity outside the arena as a justification, but as we’ve seen time and time again, much of that would only be cannibalized from elsewhere in town, or at least elsewhere in the state — it’s not like a ton of people are going to be driving in from North Dakota to see the latest Limp Bizkit tour.

In any event, it doesn’t look like the Target Center reno plans are going anywhere for the moment: Rybak didn’t even include them in this year’s legislative funding requests. Still, elected officials seem eager to include the arena with the Vikings stadium and a new St. Paul Saints stadium on the state’s agenda sooner than later: “I think there will be an effort to at least throw out the idea of a solution for all of these facilities,” Minneapolis City Council President Barbara Johnson told the Minneapolis Star Tribune. “A broader solution has to be found.” Be afraid, be very afraid.

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