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.)

David Stern, who made sure Kings extorted Sacramento for cash instead of Anaheim or Seattle, has died

Former NBA commissioner David Stern died yesterday at age 77, three weeks after suffering a brain hemorrhage, and much of the coverage was along the lines of this:

Stern, wrote NBC Sports BayArea’s James Ham, rejected attempts by the Maloof family to move the team to either Anaheim or Seattle and “forced [them] to acquiesce and chose to re-enter negotiations with Sacramento on a potential new arena.” Ham quoted a Stern statement from 2016 that he’d told skeptics in the NBA office, “You know, guys, I used to do this when you were kicking the slats out of your crib. We’re going to keep this team in Sacramento. Between the mayor and the new owners, we’re getting that arena built. And stop, because now you’re pissing me off.”

That isn’t quite how it went down, though, or at least not the whole story. In the case of the Anaheim relocation in 2011, Stern gave the Maloofs plenty of rope to propose a relocation, but the owners got cold feet after they didn’t like the lease and TV rights deals being proposed. The Maloofs then proposed a new arena deal in Sacramento, which failed in a public vote after the owners themselves switched to opposing it. In 2013, attention switched to Chris Hansen’s bid to buy the team and move it to Seattle, but Stern carefully tempered his comments, noting that the NBA constitution requires taking into consideration “support for the team in the prior city” and any possible arena upgrades there before approving a move; the commissioner also repeatedly urged Sacramento buyers to up their bids for the team, and Sacramento city officials to guarantee public subsidies for a new arena, under pain of a potential move. Yes, eventually the NBA owners voted down the Seattle move, reportedly after Stern advocated for the team staying in Sacramento — but Stern was advocating for the team to stay after using the move threat to extract a higher purchase price and more arena subsidies, which is a different thing altogether. And even after the Kings’ future was supposedly secured in Sacramento, Stern wasn’t above rattling sabers about the team moving to Seattle after all if an arena wasn’t built posthaste.

And too, let’s not forget that Stern was in part behind Seattle losing its NBA team a few years earlier, blaming local officials over and over again for not “supporting” the Supersonics by building them a new arena, and threatening that “if the team moves, there’s not going to be another team there, not in any conceivable future plan that I could envision, and that would be too bad.” (Which could be another reason Stern was opposed to letting the Kings move there: It would have made it look like he wasn’t serious about his threats.)

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The point here isn’t to badmouth Stern after his passing — after all, his job was to be NBA commissioner, and trying to leverage both new owners and cities for the most cash possible is exactly what the NBA owners were paying him to do. And he certainly seemed to have a more coherent strategy for it than some other sports leagues I could name. But it’s important not to let rose-colored mythologizing get in the way of actual history: David Stern was a guy who, faced with a bunch of owners looking for a quick cash grab from a move, replied, Calm down and let’s see if we can keep the team in town and get the money and also keep another potential expansion target in reserve, because that’s how you make the real money. Now stop, because you’re pissing me off. R.I.P.

Friday roundup: Lotsa soccer news, and oh yeah, saving the world

Happy global climate strike day! As kids (and their adults) take to the streets today, it’s important to keep in mind two not-contradictory-though-they-may-seem-so things: We are seriously screwed even if we act now, but there’s still a lot we can do to keep ourselves from being even more seriously screwed. (And by “we” here I mostly mean governments, because it’s almost impossible for individuals alone to significantly impact carbon emissions just by shutting off lights and avoiding air travel, not that those aren’t important things to do, too.)

Anyway, enough about the fate of humanity, let’s talk about sports venues (and not even about the carbon footprints of building new ones and flying teams from city to city, which would be a whole other article):

Friday roundup: IRS hands sports owners another tax break, A’s accused of skimping on Coliseum land price, Rays could decide this summer on … something

Happy Friday! Here is a fatberg of stadium and arena news to clog up your weekend:

  • San Jose Mercury News columnist Daniel Borenstein says the Oakland A’s owners could be getting a discount of between $15 million and $65 million on their purchase of half the Oakland Coliseum site from Alameda County, which is hard to tell without opening up the site to other bids, which Alameda County didn’t do. You could also look at comparable land sale prices and try to guess, which shows that the A’s owners’ offer is maybe closer to fair value; it’s not a tremendous subsidy either way, but still oh go ahead, just write us a check for whatever you think is fair is probably not the best way to sell off public assets, yeah.
  • St. Petersburg Mayor Rick Kriseman says he expects to hear by this summer from Tampa Bay Rays owner Stuart Sternberg whether Sternberg will seek to build a stadium in St. Pete or across the bay in Tampa. Of course, Sternberg already announced once that he was picking Tampa and then gave up when nobody in Tampa wanted to pay for his $900 million stadium, so what an announcement this summer would exactly mean, other than who Sternberg will next go to hat in hand, remains unclear.
  • Fred Lindecke, who helped get an ordinance passed in St. Louis in 2002 that requires a voter referendum before spending public sports venues, would like to remind you that the soccer stadium deal approved last December still has to clear that hurdle, not that anybody is talking about it. Since the soccer subsidies would all be tax kickbacks and discounted land, not straight-up cash, I suspect this could be headed for another lawsuit.
  • Cory Booker and James Lankford have reintroduced their bill to block the use of federal tax-exempt bonds for sports venues, but only Booker got in the headline because Lankford isn’t running for president. (Okay, also it’s from a New Jersey news site, and Booker is from New Jersey.) Meanwhile, the IRS just handed sports team owners an exemption from an obscure provision of the Trump tax law that would have forced them to pay taxes on player trades; now teams can freely trade their employees like chattel without having to worry about taxes that all other business owners have to, thank god that’s resolved.
  • Golden State Warriors star Kevin Durant, for some reason, revealed that “Seattle is having a meeting to try to bring back the Sonics,” but turns out it’s just Chris Hansen meeting with a bunch of his partners and allies from his failed Sodo arena plan, not anyone from city government at all, so everybody please calm down.
  • The rival soccer team that lost out to David Beckham’s Inter Miami for the Lockhart Stadium site in Fort Lauderdale is now suing to block Beckham’s plans for a temporary stadium and permanent practice facility there, because this is David Beckham so of course they are.
  • Publicly owned Wayne State University is helping to build a $25 million arena for the Detroit Pistons‘ minor-league affiliate, and Henderson, Nevada could pay half the cost of a $22 million Las Vegas Golden Knights practice facility, and clearly cities will just hand out money if you put “SPORTZ” on the name of your project, even if it will draw pretty much zero new tourists or spending or anything. Which, yeah, I know is the entire premise of this site, but sometimes the craziness of it all just leaps up and smacks you in the face, you know?
  • The Philadelphia Union owners have hired architects to develop a “master plan” for development around their stadium in Chester, because they promised the city development and there hasn’t been any development and maybe drawing a picture of some development will make it appear, couldn’t hurt, right?
  • Wannabe Halifax CFL owner Anthony LeBlanc insisted that “we are moving things along, yeah” on getting federal land to build a stadium on, while showing no actual evidence that things are moving along. “The only direction that council has ever given on this is ‘dear staff, please analyze the business case when it comes,’” countered Halifax regional councillor Sam Austin. “Everything else is media swirl.”
  • Never mind that bill that could have repealed the Austin F.C. stadium’s property tax break, because its sponsor has grandfathered in the stadium and any other property tax breaks that were already approved.
  • Hamilton, Ontario, could be putting its arena up for sale, if you’re in the market for an arena in Hamilton, Ontario.
  • And finally, here’s an article by the Sacramento Bee’s Tony Bizjak on how an MLS franchise would be great for Sacramento because MLS offers cheap tickets and a diverse crowd who like public transportation and MILLENNIALS!!!, plus also maybe it could help incubate the next Google, somehow! And will it cost anything or have any other negative impacts? Yes, including $33 million in public subsidies, but Tony Bizjak doesn’t worry about such trivialities. MILLENNIALS, people!!!

Friday roundup: Jacksonville mayor says “whatever Jaguars want” on stadium renovations, that’s it, I’m done, I can’t even finish this headline

Running late on the roundup this week — I just published two new articles on the wastefulness of film tax credits and New York’s probably fruitless attempts to fight off sea level rise, plus I have another major writing deadline today — so let’s get to it:

Friday roundup: $278 million in public bonds demanded for pro lacrosse stadium, and … honestly, let’s just leave it there, nothing can top that

We have many newses this week:

  • The owners of the Chesapeake Bayhawks are proposing that Anne Arundel County, Maryland provide $278 million in county bonds and free land for a 10,000-seat … lacrosse stadium, really? I know lacrosse is unaccountably popular in Maryland, but that still seems pretty remarkable. (Some of the money would go to build retail and hotel space that the Bayhawks would own, which doesn’t actually make this better. The team owners have previously said they’d pay off the bonds over time, which does if they’d actually make the county whole, but there would still be lost property taxes and tax-exempt bond subsidies and that free land to account for.) The Bayhawks currently play at the Naval Academy’s lacrosse stadium in Annapolis, which was last renovated in 2004; team owner Brendan Kelly seems to consider this a crisis, saying, “I would ask the question: Do you want to fix the problem? Or are we going to kick the can down the road further.” There is a lacrosse team that does not have its own state-of-the-art lacrosse stadium, people. Won’t anyone think of the lacrosse children?
  • Here’s a thing New York Yankees president Randy Levine said this week about NYC F.C.‘s soccer stadium plans: “We are in active negotiations to get a new stadium here in New York. We hope to have an announcement this year.” That was enough to set off a string of self-admittedly overly hopeful soccer blog posts, so it’s worth remembering that 1) the latest NYC F.C. plan has all sorts of problems, and wasn’t even proposed by NYC F.C. but by a private developer; 2) saying overly hopeful things is literally team presidents’ job. No doubt Levine & Co. hope to have something more to report ASAP, but hope and $2.75 will get you a ride on the 4 train to get to an NYC F.C. match at Yankee Stadium.
  • If you’re jonesing for demolition porn of excavators going at arena seats, Oak View Group has you covered with a new video of reconstruction work at Seattle’s KeyArena. They’re keeping the roof, though, which will be good news for all your vintage roof fans.
  • Here’s a column by the Minneapolis Star Tribune’s Patrick Reusse about how the Minnesota Twins‘ stadium has been a good deal for taxpayers because in addition to spending $350 million on the stadium, the county spent $23 million each on libraries and youth sports projects using leftover money from the same sales tax hike. Reusse is memorable around these parts for writing an extraordinary column in 2012 taking back his support for Vikings stadium subsidies after they’d been approved, writing, “We in the Twin Cities sports media were so amped up over getting a new stadium for the Vikings and thus maintaining them as a subject to write and talk about that not much time was spent looking at the financial realities”; maybe he should just put a large “REMINDER: NO GETTING AMPED” post-it note on his computer monitor that he can consult before future columns?
  • Mexico City will tomorrow see the opening of Mexico’s most expensive baseball stadium, a $175 million, 20,000-seat new home for the Diablos Rojos del México. That’s nearly triple what it was originally projected to cost and with an opening date two years behind schedule, but it’s still a pittance compared to U.S. stadiums (albeit for a much smaller seating capacity) and I can’t find any evidence of public subsidies in news reports, at least.
  • The Wichita city council has approved giving the owners of the relocated New Orleans Baby Cakes four acres of land to develop at a price of $1 an acre, along with $77 million in tax money for a new stadium, despite public criticism that this is an unconscionable giveaway. Councilmember James Clendenin defended the deal on the grounds that “normally when we have developers come from out of town, they want millions upon millions upon millions of dollars in incentives,” and I guess this is just millions upon millions, so shut yer yaps, wouldja?
  • Derek Jeter says Miami Marlins attendance was so terrible last year in his first season of ownership because really it was always this terrible, but former owner Jeffrey Loria lied about how many tickets he sold. This is maybe the most Marlins sentence ever written.
  • Hey, that Sydney, Australia rugby stadium that the New South Wales state government started tearing down last week to make way for a $729 million replacement? Turns out a 2016 study found it could have been upgraded to meet safety standards for as little as $18 million. Whoopsie!

Seattle arena builders ask for a tax break, nothing is pure and innocent in this world

You know, it never fails: No sooner do I praise a sports venue deal for being the rare case that doesn’t screw over taxpayers than it turns out the team owner actually plans to screw over taxpayers at least a little. So I should have known that my Deadspin article a year and change ago about how the Seattle arena deal is an exceptionally good deal would beget this:

With costs climbing on the KeyArena renovation, members of the Los Angeles-based Oak View Group were in Olympia on Wednesday seeking to defer at least $80 million in sales tax payments related to that project and an NHL training facility

“We want everybody at the legislature to hear from us that we are not asking for any special consideration,’’ Leiweke said of the Olympia visit. “We’re not asking for a tax break. We’re not asking for a waiver. We’re not asking for a rebate. We’re simply working through the payment structure and we’re going to pay 100 percent of our taxes.’’

Well, no: If you require legislation to be passed just for you, then by definition you’re asking for special consideration. Even if the Mariners and the Seahawks owners got similar special consideration before you did.

The gain from the tax deferral is likely to be small: As the Seattle Times’ Geoff Baker explains it, OVG will even pay interest to the state on about $90 million in deferred construction sales tax payments. The main benefit would be shifting the cost from its capital books to its operating expense books, which would allow the arena builders to save money on its federal taxes by deducting them all at once rather than depreciating them over time:

“In effect, it’s a tax scheme that is designed to make sure you get your money back quicker,’’ [College of the Holy Cross sports economist Victor] Matheson said. “That all being said, it’s a small subsidy and it is not a subsidy from the taxpayers of Seattle and Washington, but a subsidy from federal taxpayers. And it isn’t a huge one. Even a stadium critic like me would have a hard time getting too worked up over it.’’

Me too! But it’s still a subsidy, even if a small one, and also one that as a U.S. federal taxpayer I’m going to help kick in for. So even if it’s not as bad as the Kansas City Chiefs owners trying to demand a full sales-tax break on the purchase of a bronze sculpture of late Chiefs founder Lamar Hunt Sr., it still makes me a little sad that we can never have nice things.

Seattle is almost definitely getting an NHL team one of these years

Looks like Seattle is getting an NHL franchise, as the league’s executive committee voted 9-0 yesterday to forward the city’s bid for an expansion team to a full vote of owners in December. Assuming all goes according to plan, Seattle should have a team playing in a rebuilt KeyArena by the fall of 2020, unless—

[NHL commissioner Gary Bettman] said speculation that a potential NHL lockout in September 2019 might delay a Seattle launch until October 2021 was overblown.

“The focus for everybody is 2020,” Bettman said. “That’s what we’re focused on. There are a variety of factors that could impact that, including the construction timeline. The sooner construction can begin, obviously, the more likely an early start.”

It’s a tight construction timeline, admittedly, and it’s not like there would be an easy backup plan for hosting games if the arena rebuild isn’t ready in time. (The WNBA champion Storm will be playing at least next season at the University of Washington’s 10,000-seat arena, which isn’t equipped for hockey; the university’s hockey team plays at OlympicView Arena, which holds so few people the internet can’t even be bothered to count the seats.) But one of these years, Seattle will become the NHL’s 32nd franchise, which, as previously noted, is just fine.

The fight over an NBA team, on the other hand, is just beginning, and could yet end up involving proposals for relocation, not just expansion. So it’s still possible that somebody will end up getting screwed by Seattle’s new arena, even if it’s residents of some other city that gets shaken down for money via a “You don’t want us to move to Seattle, now do you?” threat. Everything’s a tradeoff — especially under modern predatory capitalism.

Friday roundup: Trump tariff construction cost hikes, Beckham lawsuit tossed, Elon Musk inserts himself into headlines yet again

Lots of news to report this week, and that’s even without items that I can’t read because of Tronc Troncing:

Friday roundup: Bad spring training math, Beckham’s curse, and the opening of Megatron’s Butthole

No time for quips today, just the news:

  • A study by Arizona State University found that spring-training baseball was worth $373 million to the Arizona economy in 2018. I can’t find the actual report itself, but it looks like they came up with this number by interviewing a sample of out-of-town visitors at spring training games about how much they were spending on their trips — which would be a perfectly good methodology if not for the fact that lots of people travel to Arizona and then think “I’ll go see a baseball game while I’m there,” instead of traveling there just for baseball and thinking, “Sure, I’ll check out that big canyon, too.” Which is why when spring-training games have been canceled for labor conflicts, the observed impact on local economies has been pretty much zero. I wonder if the people who wrote this Arizona State report are actual economists, at least.
  • Nashville is getting an MLS franchise because it promised to build a soccer stadium, but it still might change its mind and not build a soccer stadium, and this is going to be great fun to watch if it does. (Not if you’re a Nashville MLS fan, I guess. But [insert requisite jibe about anything being more fun to watch than MLS soccer].)
  • MLB commissioner Rob Manfred said last week that he hopes MLB expands by two more teams during his lifetime (or during his tenure as commissioner — he wasn’t exactly clear), specifically mentioning “Portland, Las Vegas, Charlotte, Nashville in the United States, certainly Montreal, maybe Vancouver, in Canada. We think there’s places in Mexico we could go over the long haul.” That got people in those cities all excited, which is presumably the point in saying such things — of course, none of those cities have MLB-ready stadiums (unless you count Olympic Stadium in Montreal), so prepare for a stadium arms race sometime before Manfred dies.
  • Megatron’s Butthole is now fully operational.
  • The estimated cost of renovating Key Arena has risen from $600 million to $700 million, but the city won’t have to pay any of that because their deal with the developers says those guys have to pay any cost overruns. Kids, when signing your next arena deal, do that.
  • A Florida man was arrested for setting fire to golf carts at the golf course where David Beckham wants to build his soccer stadium, but police say it was just arson and has nothing to do with the stadium proposal. Except insomuch as David Beckham is cursed, okay? If construction on this place ever begins, I fully expect it to be interrupted by all its milk cows going dry.