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

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.

Hansen proposes to redo KeyArena as concert venue with own money, Seattle mayor says “meh”

I had a long article published at Deadspin on Wednesday, in which I examined the ongoing negotiations between the city of Seattle and various would-be arena builders or renovators, and determined that whatever the outcome, all things considered this could be better than a poke in the eye with a sharp stick:

In coming weeks, the city council is set to decide between two plans for new or refurbished arenas, both of which would involve some public money, but in either case far, far less than the 75 percent that is typical of modern sports facility deals. Whatever happens, Seattle is not going to get royally hosed, and as things go these days, that’s a not insignificant accomplishment.

The current frontrunner, as I discuss in the article, is almost certainly Oak View Group’s proposal to renovate KeyArena in exchange for $40 million in tax breaks (and $50 million in historic preservation credits), which is slated to have a formal MOU submitted by the mayor next week. That would leave Chris Hansen’s plan to build a new arena in the Sodo district (for $70 million or so in tax breaks) out in the cold.

And Hansen apparently sees the writing on the wall, and doesn’t like it, because yesterday he dropped a bombshell announcement: If his new arena is approved, he’ll spend $90 million of his own money to convert KeyArena into two theaters, one indoor, one outdoor:

There are some obvious questions here, like: Is $90 million really enough to do this kind of major retrofit? And, are there enough concerts to go around in the Seattle area to fill both a new arena and a pair of smaller theater spaces? And, who’d be collecting the revenue from these new theaters, and who would pay for maintenance and operations on them? You get the idea.

Still, if you’re running a bidding war for the right to be Seattle’s arena proprietors — which is very much what Seattle should be doing, to get the best deal possible — it’s something you absolutely have to at least look at, if only so you can go back to OVG and say, “Okay, now top this.” Seattle Mayor Ed Murray, though, seems less than enthused, as his development office issued a statement saying, in effect, “too little, too late”:

If the SODO Arena Group was interested in redeveloping KeyArena, they should have submitted their proposal during the RFP process, which would have shown a willingness to work with the City on this project. They did not submit a proposal and continue to show no interest in working in partnership with the City.

This is not how I would play it, needless to say, even if taking a look at Hansen’s latest plan might delay putting the finishing touches on that OVG MOU. And it certainly seems to validate complaints by Hansen’s backers that Murray is trying to grease the skids for the OVG deal, less for reasons of hard cold economics than just because it’s politically easier to get it passed before the mayor leaves office in disgrace at the end of the year. Hopefully the Seattle city council will at least vet all the plans on the table before signing off on anything — at this point it’s likely a decision between one problematic-but-not-awful plan and another, but that still doesn’t mean you shouldn’t stop to consider if one arena proposal is more equal than the other.

Houston has needed new dams for decades, built stadiums instead

I may have noted to The Nation’s Dave Zirin last week that building tons of sports venues and giving the surplus ones to megachurch operators who balked at opening them up to disaster victims was an inefficient way for Houston to get hurricane shelters, but I didn’t suggest that Houston’s flood damage could be directly linked to its stadium spending spree or anything. Washington Post sports columnist Kevin Blackistone, though, has no such qualms:

Two Januarys ago, the City of Houston, after a delay of at least seven years, finally started a critical long-term project. It was patchwork on two dams constructed during the post-World War II era to protect the city from catastrophic flood and deemed by the U.S. Army Corps of Engineers to have fallen into as dangerous state of disrepair as possible. The cost: $72 million in federal funds.

Two decades ago, Houston found itself without a professional football team for the first time in seemingly forever. There was no holdup. There was no skimping.

Okay, so it’s not like Houston had a simple choice between fixing dams and building stadiums, and decided, “Stadiums it is, on the double!” But as Blackistone points out, there’s been no shortage of editorials and the like pointing out that aging dams needed to be shored up — or else “floodwaters could submerge downtown, west and south Houston and the Texas Medical Center,” in the words of one Houston Chronicle editorial last year — but the city’s response has been to wait for federal money to pay for the work. Meanwhile, Houston area taxpayers have spent around $1.4 billion on new buildings for the Astros, Texans, and Rockets in recent years (per the numbers in Judith Grant Long’s book with the really long name). As the kids today say, that’s not a good look.

Detroit Free Press credits Red Wings arena for fixing blight that Red Wings owner created

The Detroit Red Wings and Pistons are about to open their new Little Caesars Arena (named after the Red Wings’ owners’ pizza company, which is actually a longstanding sports tradition), and the Detroit Free Press could not be more excited! On Thursday, reporters Frank Witsil, JC Reindl, and John Gallagher teamed up for a report on how the publicly subsidized arena and surrounding development promises to “breathe life into a part of Detroit that has long been considered a dead zone”; today, Gallagher is back by his lonesome to call the arena an “exciting new venue” for hockey and an “exciting new venue” for concerts, as well as a “major new attraction to the rapidly revitalizing greater downtown” and “a monument to Detroit’s sports and entertainment history.” Total number of citations across the two articles of studies of how past sports-based city “revitalizations” have gone, or even what the impact was or wasn’t from Detroit’s construction of nearby stadiums for the Tigers and Lions: zero.

All of which is pretty much par for the sports-media course, except for that, as the Detroit Metro Times pointed out after Thursday’s piece, calling the arena district a “dead zone” conveniently ignores what made it dead in the first place:

Well, of course the area was blighted. The Ilitches spent 15 years quietly buying up properties in the area. What interest did they have in developing any of them when (a) they knew they intended to flatten them for a new arena and (b) any investment in them would only cause land values to rise? Chris Ilitch said as much to The Detroit News.

In other words, Olympia is the main cause of the area’s deterioration. You don’t need to be an expert on Detroit development to know that. Even the uninitiated could pick up on the unintended irony when Chris Ilitch reportedly said, “It’s no coincidence that these areas to the north of I-75 are some of the most blighted areas of our city core.”

Metro Times goes on to note that a lot of the unblight that the Ilitch family is getting credit for doesn’t actually have a timetable for construction yet — or in their words, “mostly exists in the fevered imagination of Olympia executives — another example of information not appearing in this article.

The Freep opinion page did demur on one thing, at least: The arena’s official opening will take place next Tuesday, with the first of a series of concerts by confederate-flag-waving, Colin Kaepernick–hating rap-rocker Kid Rock, which editorial page editor Stephen Henderson calls “a sturdy middle finger to Detroiters,” who are 83% African American — though the greater metro area is 70% white, so maybe it’s just a beckoning hand to suburbanites, huh? (Editor’s note: Not all white Michigan suburbanites are fans of racist symbols of slave states. I know a couple.)

The Ilitches have responded with a statement that “Kid Rock has been a consistent supporter of Detroit, and the marketplace has responded accordingly to his appearances. Performing artists’ viewpoints in no way represent an endorsement of those viewpoints by Olympia Entertainment.” So there.

Friday roundup: Everybody still has lots of dumb stadium ideas, sun keeps rising in east

And aside from the Cleveland Cavaliers arena subsidy returning from the dead, Mrs. Lincoln, here’s how some of the rest of the week in stadium and arena news went:

  • Chicago is looking at closing some streets to accommodate DePaul University’s new city-subsidized basketball arena, because of course they are.
  • The new arena for the Detroit Red Wings and Pistons will have a Kid Rock-themed restaurant, because of course it will.
  • San Diego mayor Kevin Falconer wants to build a professional lacrosse stadium, even though the owners of the city’s newly created lacrosse franchise say they don’t need one, because of course he does.
  • Rhode Island state senate president Dominick Ruggerio says he hopes the state legislature will vote on $38 million in public funding for a new Pawtucket Red Sox stadium in November, despite not believing the team has a viable threat to move to Worcester if it doesn’t get what it wants, because “You know what, we’ll get criticized for anything.” And you know, he’s got a point: No matter what elected officials do, there’s somebody somewhere who won’t like it, so might as well do whatever they want, right?
  • The Las Vegas Raiders’ stadium construction could be delayed because nobody realized until now that they needed Army Corps of Engineers approval to remove a flood culvert. (The Raiders have agreed to pay the $1 million cost, at least.)
  • Dave Zirin at The Nation has examined how Joel Osteen’s dithering over whether to let Hurricane Harvey evacuees into his megachurch has its roots in the Houston subsidy deal that turned the Rockets‘ old arena into the church in the first place, and I put in a cameo to note that while littering the landscape with redundant current and former sports venues is one way to create a lot of hurricane shelters, it’s probably not a very cost-effective one.
  • Wells Fargo released a report that “real stadium construction spending” on new sports facilities has “climbed 80 percent over the past five years” to $10 billion per … something. And are they counting money committed, or actual construction money spent, and does this count both private and public funds? I guess we should cut Wells Fargo some slack, they have a lot on their minds these days.

Cavs subsidy foes scrap petitions, say “never mind, if we get crisis centers it’s all good”

In an unfathomable series of plot twists yesterday in the Cleveland Cavaliers $70 million glass-wall subsidy saga, this happened:

  • Cleveland city council president Kevin Kelley called for an investigation into primary subsidy foes Greater Cleveland Congregations, on the grounds that GCC … got funding from outside the city, I guess? Which wouldn’t be illegal or anything, but would be bad, because damn meddling out-of-towners?
  • Cavs owner Dan Gilbert tweeted that contrary to what a county lawyer had threatened, “I will never move the Cleveland Cavaliers out of Cleveland. Period. And that’s unconditional.”
  • Four of the five GCC members who’d filed the petitions for a public referendum on the Cavs subsidy deal — which is what had led Gilbert to pull out of the plan — wrote to Cleveland City Council Clerk Pat Britt that they were withdrawing the petitions. In exchange, Cuyahoga County — not Gilbert — had promised to build two mental health and substance abuse crisis centers that the GCC had been seeking.
  • Cavs CEO Len Komoroski declared that the arena renovation deal was back on the table, and that “we are very encouraged by this new development related to the private-public partnership plan to transform The Q for the long term.”

As the Cleveland Scene makes clear in its analysis of the crazy day, what happened here is that the county responded to Gilbert calling an end to the arena renovation plan by contacting GCC and asking if there was anything they could do to get the referendum campaign withdrawn. GCC’s price, it turned out, was the two crisis centers, which will cost the county an estimated $10 million to build, and $2.8 million a year combined to run. Once the county agreed to that — though it doesn’t appear that there’s actually anything more than a handshake agreement — GCC agreed to scrap the entire petition drive.

Of course, GCC was actually part of a broader coalition that had put together the referendum campaign — though GCC had been the ones to file it, so they could withdraw it unilaterally. And as the Scene makes clear, those coalition partners are now pissed:

GCC had been vilified as scheming extortionists by the pro-deal side and will now be vilified as sell-outs by their opposition allies. Members of other opposition groups, like the SEIU and the Cuyahoga County Progressive Caucus, are dismayed, if not furious. Some feel betrayed, sold out.

One activist told Scene that they spent hours collecting signatures for the referendum in order to “kill the deal, not help GCC make a deal.” The county’s commitment to investigating the costs of crisis centers — itself a tiny fraction of what GCC initially hoped to attain — is in any event considered to be vastly less important than the victory for democracy that has been short-circuited.

(Cutting a deal with your opponents without even telling your coalition partners, incidentally, is what really should be known in the community-benefits game as a “Bertha Lewis move.”)

If this is how the Cleveland arena battle ends, and it could well be, it’s a truly incredible result — and one that drives home my longstanding worry about “community benefits agreements”: It makes it relatively easy for a team owner (or, in this case, a local government) to neutralize public concern over a subsidy deal by buying off whatever community groups are spearheading opposition. (For the Brooklyn Nets, it was even simpler: Fund the creation of your own friendly community groups, then cut a deal with them.) It’s nice that GCC extracted something from the county that will actually benefit Cleveland citizens more than arena renovations, I suppose, which wouldn’t have happened without the referendum drive. On the other hand, yeah, democracy sounded like a nice idea for a minute there.

County lawyer thinks it’s his job to threaten that Cavaliers could move without arena upgrades

I wondered aloud yesterday what Cleveland Cavaliers owner Dan Gilbert would do now that his dream of a $70 million taxpayer subsidy for a big glass wall was dead, and while Gilbert still hasn’t responded publicly, the county’s lawyer took to the airwaves yesterday to threaten that the team might move out of town as a result:

“I think it has put a big question mark on the future of the Cavs in Cleveland,” [Quicken Loans Arena deal negotiator Fred] Nance told WKYC by phone on Tuesday. “Because while the deal would have extended [the Cavs] lease and we wouldn’t have had to deal with this until 2034, it’s not clear what’s going to happen in 2027 and owners don’t wait until December 30 of the last year of their lease — they start making those plans years ahead of time.

“We have significantly diminished our ability to keep this team here as a result of this.”

If you’re thinking, “Hey, didn’t Cleveland just approve a whole bunch of ‘sin tax’ money three years ago so its pro sports teams wouldn’t threaten to move?”, good memory! Except that Gilbert quickly decided that getting a whole bunch of money to ensure the team stayed put didn’t mean he couldn’t ask for more money on top of that to ensure the team would stay put, and nobody bothered to ask for the Cavs to extend their lease as part of that deal — in fact, the sin tax subsidies now extend several years beyond when the Indians‘, Cavaliers’, and Browns‘ leases expire (in 2023, 2027, and 2029, respectively). So the team threatening to leave is sorta kinda a viable threat, at least if you think moving the 11th most valuable franchise in the NBA to some other as-yet-to-be-determined city is viable in the first place.

Of course, this isn’t even Gilbert making the threat, but rather the county’s lawyer. Which is completely demented from a leverage standpoint — shouldn’t the local governments be providing reasons why local sports teams should want to stay, not pointing out ways they could leave if not gifted with public money? But given that this is a county that just lavished about $160 million worth of future tax money on its sports team owners without even asking that they sign longer leases in return, maybe it’s exactly the kind of completely demented we should expect.

Cavs owner doesn’t want $70m in subsidies after all, if it means letting the public vote

Well, check this out: Faced with the requirement of holding a public vote on his plan to use $70 million in city subsidies for a renovation of the Cleveland Cavaliers arena, team owner Dan Gilbert late yesterday announced via press release that he’d be taking his glass wall and going home:

Cleveland, Ohio (August 28, 2017) – The Cleveland Cavaliers announced today the cancellation of their participation in The Q Transformation Project of the publicly-owned Quicken Loans Arena, which would have:

  • Significantly upgraded one of the oldest arenas in the NBA
  • Make it more competitive for the long term with other nearby midwestern cities and national venues to maintain and attract additional events
  • Created over 2,500 project-related construction jobs
  • Grown The Q’s permanent job base to 3,200…

…and so on — you get the idea, which is that spending $70 million in tax money on upgrading a private sports team’s basketball arena was a totally awesome idea and you guys ruined it by going and having a petition drive to put spending public money before the public.

The actual reason given was that waiting on a referendum would “cause the groundbreaking of The Q Transformation to miss the current construction cycle, which pushes the overall price tag of the project higher due to rising construction costs,” and also that the Cavs expect interest rates to go up soon, which would make the arena renovation more expensive to finance. Neither of which quite makes sense — inflation in construction costs plus a possible interest rate hike still aren’t going to cost Gilbert an extra $70 million, and if the overall project got too pricey you’d think he could still bail on the deal even after a referendum was passed — but “construction and financing costs are on the rise and our polling shows we were going to get our heads handed to us in any public vote” is a more reasonable guess. (Though “Kyrie Irving is leaving and soon LeBron James will too so no need to renovate an arena when nobody’s going to show up to watch games anyway” is a reasonable alternate theory.)

The Cuyahoga County Progressive Caucus, one of the groups that had pushed for the referendum after the city council approved the subsidy last April, declared victory last night:

“Despite their stated reason for the cancellation, the real reason is that the citizens of Cleveland spoke loud and clear in their opposition to the project by gathering 13,000 valid signatures to force a referendum on the issue,” the group said. “The Cavaliers, Mayor [Frank] Jackson and Cleveland City Council all know that the project would have been soundly defeated at the ballot box. This is their way of saving face.”

So what now? The hook for calling a referendum was that Cuyahoga County was going to be selling bonds for the arena project, which is subject to repeal by voters under Ohio state law; I could certainly see a scenario where Gilbert would try to find a different financing mechanism where democracy wouldn’t be in play. On the other hand, if he’s really getting cold feet because of interest rates — or pending LeBronlessness — maybe he’ll just forget the whole idea ever happened. That’ll mean no NBA All-Star Game for Cleveland, no huge jump in the arena’s “permanent job base” (just because of a glass wall and some more space to walk around, really?), and no Gilbert tossing unspecified change at refurbishing local community basketball courts — but also that Cleveland will get to keep $70 million in hotel tax money to use for something else, which is almost certainly a better deal.

Kudos to the Progressive Caucus, then, and to democracy, and I guess even to Dan Gilbert for deciding not to put everyone through a costly election just to play out the final chapter in his doomed subsidy demand. Unless this turns out to be one of those horror movie tropes, in which case I guess we’ll all just meet back here in a few months.

Ballmer demands fast-tracked legal process, bonus billboards for proposed Inglewood arena

So we have a partial answer to the question of what public aid billionaire Los Angeles Clippers owner Steve Ballmer will be demanding for his proposed new NBA arena in Inglewood, and it’s “a bunch of stuff that’s worth money to him but isn’t a direct cash subsidy. Per the L.A. Times, which snuck a peek at the team’s draft legislation:

  • Any lawsuits against the arena under the California Environmental Quality Act would get fast-tracked to be wrapped up within nine months, and a court would be unable to halt construction even if it found environmental review to be inadequate. (The Sacramento Kings previously got this get-out-of-lawsuits-free card for their new arena, as did Ed Roski for his never-built City of Industry NFL stadium.)
  • The bill “would also allow the city to permit more billboards and other signage around the arena than otherwise allowed under the law.” No details in the Times report about how many more billboards, but clearly that’s a potentially large revenue source for Ballmer.

Things we still don’t know: Who would acquire the land for the arena, whether it would involve evicting current residents by eminent domain, if so who would pay for that, who would own the arena and would Ballmer pay property taxes and/or rent and/or money toward maintenance and operations, etc. If fast-tracking legal challenges and a bunch of free billboards is all Ballmer gets, it would hardly be the worst arena deal in history. But there’s still plenty of room to lard on more hidden subsidies as well, so everyone stay tuned.

 

Shreveport, Pensacola duking it out to throw $30m or so at minor-league Pelicans affiliate

I have a pretty good system of Google alerts (and helpful readers who send me links — thanks, helpful readers!) to let me know about stadium and arena battles large and small, but somehow the New Orleans Pelicans‘ bid to start an NBA D-League* team somewhere in the south in 2018 slipped through my net. Fortunately, Deadspin’s Patrick Redford has the scoop, courtesy of the Shreveport Times:

The Pelicans will apparently announce the winner in September, which is also when Shreveport will decide whether or not to go forward with one of the saddest and dumbest arena financing deals in recent memory.

As the Shreveport Times reported, Mayor Ollie Tyler announced plans to move forward with a $100 million complex in downtown Shreveport. More details will be revealed at a city council meeting tonight, but the complex is a mixed-use deal, which will include a 3,000-seat arena as well as condos, shops, and a sports complex. Tyler’s plan calls for the city to kick in $30 million of public money.

The plan actually calls for the city to sell $30 million in revenue bonds, with the revenue to come from … hang on, I’m sure it’s in the proposal somewhere … scroll, scroll … okay, it doesn’t actually indicate that at all. Maybe the team will pay lots of rent! Or maybe, considering that the Pelicans are owned by the guy who has a 13-foot statue of himself outside the stadium that he successfully got the state of Louisiana to both pay to renovate and to pay his team an annual fee to play in, it’ll just be tax revenue that the city would get anyway.

From what I can tell from this very uninformative TV report, the Shreveport city council voted 5-2 last night to approve … something, though whether it actually commits the city to go through with it if the Pelicans select it as a D-League site isn’t entirely clear. Meanwhile, Pensacola is pitching its own $80-100 million arena and mixed-use complex, with a “not specified” amount of public money. This is the problem with minor-league sports venue deals: With no shortage of small cities thinking this is just what they need to put them on the map, but a minuscule economic impact even by the usual not-very-impressive sports standards, it’s a perfect recipe for a costly bidding war. C’mon, Shreveport and Pensacola councilmembers, be like Nashville and read Deadspin before discussing your local sports venue deal!

Meanwhile, here’s an image of the Shreveport arena rendering. Do we think that there’s some kind of sports-pedestrian clip art that renderers use for these? If not, why is that woman in the sunglasses chewing her fingernails?

*Yeah, I know the D-League has a new name thanks to a corporate naming-rights deal, but neither Deadspin nor I play that game.