Jacksonville kills $200m Jaguars Lot J subsidy, Khan says he’ll ask for money for some other project instead

So! Last Thursday the Jacksonville city council’s committee of the whole voted 15-4 in favor of granting more than $200 million in subsidies to Jaguars owner Shad Khan for his Lot J development project, making it a fait accompli that the plan would get the needed 13 votes for approval when the full council (the exact same people as the committee of the whole) voted on it last night. And then this happened:

The Jacksonville City Council on Tuesday rejected a $233 million development deal with Jaguars owner Shad Khan to build his proposed Lot J development next to TIAA Bank Field, as the deal was unable to overcome a barrage of criticism that it required too much of taxpayers and offered too little in return

Supporters of the bill defeated an attempt made Tuesday by Council President Tommy Hazouri to strip a controversial $65.5 million interest free “breadbox” loan from the deal, which Khan’s development team said was a necessary condition for them to build the development.

However, their efforts were a pyrrhic victory. Without the removal of the loan, the deal lost supporters and died in a 12-7 vote, one shy of the two-thirds majority it needed to pass.

Wha’ happened? In last night’s vote, councilmembers Randy DeFoor, Garrett Dennis, and Joyce Morgan switched sides to join Al Ferraro, Matt Carlucci, Danny Becton, and Tommy Hazouri in opposing the deal. Media reports aren’t entirely clear on what caused the defections — the Jacksonville Daily Record cited concerns about “an expected low return on investment for the city, lack of hard construction costs and a financial viability gap analysis being withheld by Cordish and what the public perceived as a lack of transparency in the deal,” but all that was as true last week as this one. (A financial analysis of the deal by the city auditor way back in November projected that the city would only get back 44 cents in revenue for each dollar it spent on subsidies.) It surely didn’t help when Dennis and Mayor Lenny Curry had a Twitter war last week accusing each other of cheating on their wives, but that still doesn’t quite explain why all three members voted one way last week and the other way yesterday.

Anyway, since the council still approved more than $155 million in Lot J subsidies (the $65.5 million interest-free loan would have only been worth maybe $30-40 million in value to Khan), what normally happens next is that the team will go back to the drawing board to see if it can rework the deal, maybe splitting the difference to, wait, what’s that now?

“We’ve pulled the plug on Lot J. It’s dead, but it doesn’t change the way we started this,” [Jaguars president Mark] Lamping said…

Lamping said Khan now will shift his focus to negotiation with the Downtown Investment Authority for his proposed Four Seasons hotel and medical, residential and retail development on the St. Johns riverfront at Metropolitan Park and the Shipyards.

There are a couple of things that could be going on here. The first, and less likely, one is that Khan is trying to grease the skids for a move out of Jacksonville by making a series of crazy demands and then throwing up his hands when the council rejects them, saying, hey, I tried. Or, the Lot J scheme was genuinely such a money-loser that Khan really only was into it if he could get a huge pile of city cash to do so; and now that the city has only offered a chintzy $155 million, he’ll move on to his next project and see if that raises less of a stink with the council. (And/or helps him revive interest in his Shipyards plan, which was fading as of last summer.) And, of course, the as-yet-unspecified amount of money he’s seeking for renovations to his stadium, which was just renovated in 2014 and again in 2017. Shad Khan is determined to have his publicly supported payday someday, somewhere, it’s just a matter of figuring out where to squeak his wheel.

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Friday roundup: Jacksonville doubles down on $200m+ Jaguars subsidy, MSG replacement vaportectured, Norfolk arena sabers rattled

So, yeah, some stuff happened this week, and is continuing to happen now. But let’s not let rampaging Viking cosplayers distract us from the fact that the new year has also brought a resurgence in sports subsidy activity, with a whole lot of news that normally I might write individual posts about if I hadn’t been up too late refreshing Google News, so instead you’ll have to bear with me through some long bullet points:

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Thursday roundup: NBA mulls expansion to raise quick cash, 60-year-old community-owned team sold to local rich dude, Crew may seek more tax breaks somehow

Happy pre-Christmas, everybody! (That’s the name for today, right? I really should Google that.) Here’s the stray news for the short holiday week:

  • NBA commissioner Adam Silver has called expansion the league’s “manifest destiny” and said that “it’s caused us to maybe dust off some of the analyses on the economic and competitive impacts of expansion” (what “it”? shh, don’t ask questions, the important man is talking) but “not to the point that expansion is on the front burner.” The implication is after losing like $1.5 billion in revenue, some quick cash from expansion fees sounds real good about now, but Silver’s not going to be the one to say that out loud, not when it might make him look desperate, not when it’s expansion cities and prospective owners that should be begging him to expand, that’s just how this is supposed to work, you know.
  • The Wisconsin Timber Rattlers, since 1958 run by a community-owned non-profit, have been sold to a local rich guy because, um, something about Covid. Also the non-profit’s chair, Tom Lehr, said “100% of the profits from the sale of the team to Third Base Ventures will be invested back into the team,” according to the Appleton Post-Crescent, which, what? This guy gets to buy the team, and also use the money he paid for it on the team as well? What is even happening.
  • The Columbus Crew‘s old stadium, which is set to become the team’s training ground plus public soccer fields, still belongs to the team while the land under it belongs to the state, and the team has to make $210,000 in payments in lieu of property taxes each year under a 2007 court settlement, but they’re working on a long-term lease now and a term sheet proposed by the team mentions “Ownership of existing MAPFRE Stadium to be discussed and examined in connection with real estate tax and other considerations,” and all this is a red flag but no one’s quite sure of what exactly. Maybe something that should have been considered before giving the Crew $98 million toward a new stadium? Ennnnh, that seems like a lot of work.
  • This year’s Rose Bowl is going to be played in Texas because that California has one of the nation’s worst coronavirus surges (Texas isn’t far behind, but Texas’s governor doesn’t care), and also this year’s Pro Bowl is going to be played on Madden, which warms my heart that our glorious future may finally arrive soon. If you’re wondering if the Pro Bowl had to be moved because its home stadium in Honolulu is on the verge of being condemned, nope, it was going to be in Las Vegas this year anyway, but, you know, Covid. Also, Honolulu’s outgoing mayor Kirk Caldwell warns that the city’s indoor arena is even older than the stadium and even though it’s getting a $43.6 million upgrade, “at some point you run out of life” and okay, yes, Caldwell’s plan for a $700 million replacement arena was already rejected and also he’s only mayor for another week, sorry, I don’t know why we’re actually talking about him.
  • There’s now an online petition against “any taxpayer funding being used to finance, construct, acquire, renovate, equip, enlarge, or operate a new baseball stadium within the City of Knoxville or Knox County.” Allow the debates over what counts as “taxpayer funding” to commence now!
  • If you want to work at F.C. Cincinnati‘s new stadium, they’re hiring! What about all the people who worked at the team’s old stadium, which actually averaged more fans per game than the new one will hold? Sorry, no room in the article for that!
  • The owners of the New York Yankees have agreed to provide ten $5,000 grants to local businesses suffering amid the pandemic — wait, seriously, $50,000? That’s roughly how much the Yankees pay Gerrit Cole for each batter he faces. “We are extremely appreciative of this support from the Yankees,” local bar owner Joe Bastone said, according to a statement issued by the Yankees, which ended up getting a bunch of media coverage out of it, all of it positive. Until now.
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Friday roundup: Titans seek overhaul of 21-year-old stadium, FC Cincy subsidy nears $100m, plus: bored sportswriters go rogue!

A quick programming note: The next two Friday roundups will be on Thursdays, since the next two Fridays are Christmas and New Year’s. Not that I’ll be doing much special those days — I’ve done pretty much nothing since March other than sit and stare at my laptop screen — but I’m doing this anyway as a courtesy to readers who may feel the need to go out and infect extended family members with a deadly disease or something.

And on to this week’s news remainders:

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Cleveland on hook for $12m in Browns stadium repairs, $50m more to come?

Cleveland Mayor Frank Jackson signed into law $12 million in spending on repairs to the Cleveland Browns‘ stadium yesterday, after the city council approved it last week. Since sports team owners are notorious for calling all sort of things “maintenance” — perhaps most memorably, that time former Detroit Tigers owner Tom Monaghan said that Tiger Stadium needed $100 million in repairs when that was actually the price tag for enclosing it with a roof — let’s see how legit these expenses are:

[The work includes] repairs to the stadium’s electrical and plumbing infrastructure, as well as replacing pedestrian ramps. … The proposed repairs also include the replacement of hot water tanks; the installation of chiller lines to the south end of the stadium; the replacement of compressors in walk-in coolers and freezers; the replacement of the stadium’s lighting control system; the replacement of corroded fire sprinkler lines as well as the patching and replacing of structural and non-structural concrete.

That indeed mostly seems like actual maintenance, not upgrades. (“Replacement of the stadium’s lighting control system” would depend on whether the old lighting control system is actually broken, or the Browns just want one that can run holographic replays.) So, no major shenanigans sighted here!

What this does point out, however, is a hidden cost of many stadium deals where the building is owned by the public, which is to say almost all stadium deals. If a normal company builds a headquarters, they’re responsible for patching the concrete when it crumbles. If they go and rent a headquarters, it’s their landlord’s responsibility, but they make regular rent payments that help underwrite the landlord’s costs. Browns owner Jimmy Haslam pays only $250,000 a year in rent, which isn’t nearly enough to pay off the city’s costs of repairing the stadium, let alone the city’s $296.3 million construction tab and the $120 million it gave the team in 2013 for additional upgrades like a new scoreboard.

But the public will own the stadium! is often put forward as a benefit of a stadium deal, when it’s actually a cost — most significantly, because the team owner then usually (though not always) gets out of paying any property taxes. (For Haslam, this amounts to more than $600,000 a year in savings, or well more than he pays in rent.) But there are additional benefits as well, most significantly the ability to send the city a checklist of items that need fixing and make them pay for it.

And according to an audit of the stadium’s condition conducted earlier this year, there are likely to be more invoices on the way to taxpayers: News 5 Cleveland reports that future repairs “could exceed $50 million over the next 10 years,” including the replacement of seats that are “in fair or poor condition” and “updates” to “broadcast and lighting facilities as well as its technology.” This is sounding like it’s starting to edge into upgrades and not repairs, but that’ll be for future mayors to haggle over — unless, of course, they’re haggling over a whole new stadium by then.

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Friday roundup: Phoenix to get USL stadium with giant disappearing soccer ball, plus more fallout from MLB slashing minor league teams

Too much going on this week to have time for more than a brief intro, but I do want to note that “’Company announces advertising campaign’ is not a story, no matter how easily that campaign can be metabolized by the publications it’s aimed at” is something that should be tattooed on the foreheads of all journalists, even if it is a quote from an article about Pantone colors.

And now, how sports team owners and their friends are trying to rip you off this week:

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The only thing Jacksonville residents hate more than Jaguars Lot J subsidies is Jaguars stadium subsidies

The polls are in from Jacksonville — well, one poll is, anyway — and local residents are strongly opposed to spending $200 million in public money on Jaguars owner Shad Khan’s Lot J development project, even more strongly opposed to funding a $250 million stadium renovation, and even more strongly in favor of Khan’s plans going to a public vote:

When registered voters were asked whether they support or oppose the city’s [Lot J] spending proposal, 54% of respondents said they strongly or somewhat oppose it with 43% supporting strongly or somewhat.

A strong majority of all respondents, 80%, said the question should be put to Jacksonville voters in the form of a referendum…

Respondents were also asked whether they support or oppose the City of Jacksonville splitting the cost of major improvements to TIAA Bank Field with the Jaguars, costing the city $250 million. A large majority, 62%, were opposed to this idea, with just 37% supporting the proposal. An even greater majority opposed building a new stadium for $700 million, at 77%.

None of this is surprising: It’s very common for local residents to be opposed to handing over hundreds of millions of dollars to local sports team owners, because, well, duh. It almost certainly doesn’t help that the Jaguars have been terrible in recent memory (when I just Googled “Jacksonville Jaguars record,” the first “People also ask” suggestion was “How bad are the Jacksonville Jaguars?”) and that Khan has already been to the well on this before: According to Jacksonville Business Journal, 49% of poll respondents said “previous public-private partnerships failed to live up to expectations.”

In the halls of political power and the adjacent corridors of sportswriting, though, it’s usually seen as appropriate to kowtow a bit to the local billionaire, which can make it difficult when determining how to balance the 800-pound gorilla asking for cash with the constituents (or readers) who are clamoring not to give it to him. This brings us to this amazing Florida Times Union column by former Jacksonville sports anchor and Jaguars preseason play-by-play announcer Sam Kouvaris, which bends over backwards to say that the Khan deal is both terrific and terrible at the same time:

Between the election, the reporting on the pandemic, lockdowns and everything else, it’s hard to figure out who to believe.

Great start! Of course, it’s always hard to figure out who to believe — figuring out who to believe is pretty much the whole point of journalism — but blaming “the reporting on the pandemic” makes this point topical, somehow, maybe?

This Lot J situation has me confused. I’m not sure I believe anybody. Not the media, not politicians, pollsters, nor businessmen involved.

A pox on all their houses! But do tell, why is everyone wrong?

I liked everything about it. It’s vibrant, it’s supposed bring people downtown and start to revitalize that side of the river.

The problem, it seemed, as the plan was fleshed out and scrutinized, was how to pay for it?

Well, yes. I can’t say I’ve read every line of media coverage of the Lot J plan, but I’m fairly certain no one would be opposed to replacing a parking lot with new development if it didn’t cost anyone any money.

If it’s Shad’s plan to work on downtown by starting at the stadium and marching west, then so be it. I’m all for hitching our wagon to Shad and seeing where he takes us.

Billionaires always have the best city planning ideas! Especially billionaires who used to sign your paychecks!

Keeping the Jaguars here is important on a lot of levels.

Especially especially billionaires who are threatening to move the team you’ve spent much of your career making a living by reporting on!

Winning at a 29% clip over the last eight years isn’t any way to build leverage.

The Jacksonville Jaguars are very bad. Do not give them money until they win games!

Perhaps the whole deal is on the up and up. Maybe it’s a way the city will continue to prosper and flourish at a new level, Shad will make money, and everybody will be happy. I sure hope that’s the case.

But all along, something just doesn’t feel right.

Definitely one of those!

You’ve got to agree with Council President Tommy Hazouri when he said, “If it’s going to take seven to nine years to build this project, what’s another two or three weeks?”

An actual opinion! It contradicts Kouvaris’s earlier statement that he doesn’t believe anybody, but let’s be happy for any conclusion we can get.

What never has made sense to me is how these negotiations get played out in public here in Jacksonville. Do we ever hear about the Steelers and Pittsburgh squabbling about a lease extension or stadium improvements? The Chiefs and Kansas City? Chicago and the Bears?

You’re joking, right?

If we’re going to be an NFL city, we’ll have to pony up the money to keep improving the stadium and perhaps at some point, build a new one.

Another actual opinion, one that somewhat contradicts the earlier one. Though I suppose “Let’s think about this for a few more weeks, then approve it” is a valid position, even if kind of a stupid one.

There’s more, including how the Jaguars management needs to better understand “ticket-buying fans” and “eat in their restaurants,” and how Khan’s lobbyist (“who has represented me in the past,” writes Kouvaris, with no explanation) is warning that a deal needs to be approved soon to avoid “deal fatigue,” and how Kouvaris ultimately wants “something where everybody wins.” That’s a lovely thing to want, but maybe not entirely realistic when you’re talking about who’s going to pony up $450 million toward a stadium development when most stadiums can’t even repay their own construction costs. Dividing a pie evenly is tough when you start out with negative pie — which is maybe why so many sportswriters prefer to go with “This is all too confusing for my puny little brain, I hope someone else can work it out! Also, listen to ticket-buying fans! But not pollsters, those guys are bad news.

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Friday roundup: More Jaguars move threats, more bad convention center spending, time is an endless loop of human folly

It’s Friday again! And December, how did that happen? “Passage of time,” what manner of witchcraft are you speaking of? Time is an eternal, unchanging present of toil and suffering under the grip of unending plagues! Thus has it ever been!

This notwithstanding, there was some news this week, though in keeping with the theme, it looks an awful lot like the news every week:

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Minneapolis seeks state bailout on Vikings stadium debt so it can pay convention center debt instead

Let’s start with the simple part of this story:

Rep. Mohamud Noor, DFL-Minneapolis, said he will seek relief from the city’s first scheduled debt payment of $17 million [on U.S. Bank Stadium] — and then push for a longer-term discussion about restructuring the stadium’s debt to give relief to Minneapolis.

The city of Minneapolis owes $150 million toward construction costs on the Minnesota Vikings‘ stadium, with the state covering another $348 million and team owner Zygi Wilf another $600 million. (Though when you add in the team’s property-tax break and city money being spent on stadium operations, Wilf’s tab is really closer to $0.) The pandemic has trashed the city’s budget, especially the sales taxes it had set aside for stadium debt payments, so Noor is looking to the state to bail it out.

The reason why the city is looking for state help — other than that cities will always do that when they can — has to do with the insanely convoluted financing structure the two levels of government set up during the rush to approve funding for the Vikings’ stadium. The city put off paying down any stadium debt until 2021, because it was busy paying off debt on its convention center until then. The state, meanwhile, decided to fun its share with pulltab gambling revenues — which turned out initially to bring in no money at all instead of the $62.5 million that had been projected, forcing the state to raid its cigarette tax fund instead to pay down stadium debt. Then Minnesotans finally started getting hep to the pulltab gambling thing and money started flowing from that, which led to a small but growing surplus in the pulltab fund, which led Minneapolis officials to start salivating over how nice that money would look plugging their budget hole.

So far this is all just city and state governments bickering over who’ll cover how much of $1-billion-plus stadium tab now that money is tight. But then we get to the debt on Minneapolis’s convention center, which is another drag on the city’s budget:

Earlier this fall, Minneapolis City Hall decided to refinance the remaining $26 million convention center debt for up to five years…

City Coordinator Mark Ruff declined multiple interview requests but provided a written statement saying the city had seen an “unprecedented decrease” in sales tax revenues from the pandemic. City staff recommended delaying the convention center debt for greater “flexibility,” he said.

But Ruff warned that if sales tax revenues do not recover quickly, “revenues will need to be diverted from future capital improvements at the Convention Center to debt payments.”

Put it all together, and we have: If Minnesota doesn’t share some of its surplus money it ended up with after dumping more cash into the stadium project, then Minneapolis won’t be able to spend more money to upgrade its convention center. A convention center that nobody wants to go to during Covid, and probably no one will want to go to even after Covid because convention spending is in a long-term decline. This is maybe not the argument that I would want to go to the state capital with, but all’s fair in love and bailouts.

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Jacksonville mayor tells council to “stop stalling” and vote on $200m Jaguars subsidy

If you were still wondering if Jacksonville Jaguars owner Shad Khan is really asking for public funding for “major” stadium renovations at the same time as he’s demanding $200 million in subsidies for a new development in his stadium parking lot, we now have confirmation that yes, he really is:

[Jacksonville city council finance committee chair Matt] Carlucci said a vote on Lot J should only happen if the development is bundled with stadium improvements and an extension of the Jags’ lease at TIAA Bank Field, set to expire in 2030. He said if the Jags were to leave Jacksonville in the future, the city would still be on the hook for Lot J.

“The stadium, Lot J and a lease extension are all linked together, and if we don’t do that right, the taxpayers will never forgive us,” Carlucci said.

That’s an excellent point, in that giving Khan $200 million without even asking for a lease extension seems, I believe the technical city-planning term is “nutso.” Though giving him $200 million for the Lot J development plus maybe an equal amount for stadium renovations at the same time would be equally nutso, unless he agrees to a lease extension until the 32nd century.

Carlucci is also asking for more time to evaluate the deal(s), as the Lot J plan is currently scheduled to be voted on by the Downtown Investment Authority tomorrow, discussed by the council on Thursday, and then voted on as early as next week. Jacksonville Mayor Lenny Curry, who designed the deal, is having none of that “due diligence” balderdash:

Do you want to take your time to think about devoting hundreds of millions of public dollars to a private stadium development project, or do you want to be an NFL city? Don’t think too long, there are plenty of other cities who would love to … what’s that, which cities? I said to stop stalling!

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