Friday roundup: Team owners rework tax bills and leases, Twins CEO claims team is winning (?) thanks to new stadium, and other privileges of the very rich

Tons more stadium and arena news to get to this week, so let’s dive right in without preamble:

Santa Clara to sue 49ers for stadium control, after team allegedly gave itself cut-rate rent for college bowl game, among other things

The simmering squabble between the San Francisco 49ers management and the city of Santa Clara blowed up real good last night, when the Santa Clara city council voted to strip the 49ers of their right to run concerts and other events at their stadium, on the grounds of having “grossly mismanaged” them:

The City Council voted 6-0 Tuesday, with council member Patricia Mahan absent, to initiate legal proceedings to end the team’s management agreement. The action would not affect the team’s home games or other National Football League activities, City Attorney Brian Doyle said.

“We have hit rock bottom and we have nothing to lose” by ending the agreement, Doyle said at the council meeting.

One of the city’s claims: The 49ers rented out the stadium to something called the Redbox Bowl, at a $500,000 loss to the city. “Guess who owns the Redbox Bowl?” said Doyle. “The 49ers.”

As you may recall if you were following when the 49ers’ crazy-convoluted stadium deal was arranged way back in 2012, the city of Santa Clara built and owned the stadium, paying it off partly from stadium revenues and partly from rent money the 49ers paid to the city to repay money that the 49ers loaned to the city after borrowing it from banks. (If you think that last clause is hard to read, think how it was to type it.) This, at the time, seemed like a maybe-promising way to fund a stadium, since the 49ers would get out of paying property taxes by not owning the stadium and get out of having to share a bunch of revenues with the NFL by having them go directly to the city, while the city would get all its debts paid off so long as 49ers fans bought enough personal seat licenses (which they did, not that they were all that happy about it afterwards).

Things have gone way downhill since then, including the 49ers owners threatening to withhold rent payments to the city; Santa Clara’s mayor threatening to seize management of the stadium if 49ers execs didn’t hand over documents on how they were spending city money; and finally last week the Rolling Stones complaining of mismanagement at the stadium and vowed never to play there again, which is honestly maybe kind of an idle threat for a band whose members range in age from 72 to 78, but anyway.

The 49ers have responded by calling Santa Clara’s actions “purely retaliatory.” There’s a city press conference scheduled for right about now to maybe explain exactly what lease clauses the team has violated that could allow Santa Clara to terminate the management contract — I’ll add an update if we learn anything new then.

UPDATE: Per SFist: “At the press conference, per KPIX, Santa Clara Mayor Lisa M. Gillmor leveled accusations of wage theft on the 49ers, saying they failed to pay prevailing wages for workers at the venue. Also she said that stadium manager Jim Mercurio had ‘received or purchased stock in two companies that were granted stadium authority contracts,’ which is a ‘clear conflict of interest.’ The team maintains that they will continue to manage the stadium for all event, and they say the city’s actions are ‘in direct violation of the clear language of the relevant contracts.'”

Friday roundup: New sports venues, new sports venue threats, and our dwindling journalistic resources

Deadspin’s Albert Burneko is a national treasure whether he’s writing about sports or movies or punctuation, and his takedown this week of a Fivethirtyeight article that asserts there are too many minor-league baseball teams is very much no exception. Drop whatever you’re doing — which is reading this post, so okay, drop whatever you were going to do after that — and read it now, whether you care about the purpose of sports as entertainment or the role of the media in management-labor relations or the increasing propensity to reduce human beings to measures of technocratic efficiency. With the demise of the alt-weeklies, there are fewer and fewer outlets eager to combine tenacious reporting and big-picture analysis and engaging writing toward the end of helping us understand the world we live in beyond “here are some potentially viral things that happened today,” so we need to cherish those that remain while we can.

And with that, here are some potentially viral (in the not especially infectious sense) things that happened this week:

49ers win approval to skimp on $90m in future school tax payments

The San Francisco 49ers are one of the rare sports teams that actually pay property taxes on their stadium — usually team owners get out of this by having the local government hold the deed on the place, but the 49ers owners contrived the world’s most convoluted lease-back deal instead — and now they’re going to be paying a little bit less, thanks to winning a property value reassessment that slashes the team’s annual tax bill in half:

The [Santa Clara school] district and agencies will have to pay the team a total of $36 million in refunds by June and figure out how to make do with $6 million less a year in tax revenue from then on…

“A 50% reduction for a single appeal is highly out of the ordinary. In my opinion, the AAB reached the wrong conclusion,” [County Assessor Larry] Stone wrote in a statement.

The tax dispute is a bit convoluted too, but apparently focuses on whether the 49ers owners the York family should be taxed on only half the value of their free use of public land (because they only control the stadium six months out of each year) or whether they should be taxed on the full value (because the six months they control the stadium includes football season, which is kind of the only time you want to operate a football stadium). The Santa Clara County Assessment Appeals Board ruled in favor of the Yorks, who will now get to cut their annual payments to the local school system by $6 million, which in present value comes to around $90 million worth of savings.

The backstory, of course, is that the Yorks built their new stadium back when the team was still good and fans weren’t afraid of broiling to death in the South Bay sunshine, and now significantly less people want to go see games there. Not that it really matters much — they already suckered fans into paying for most of the construction costs with personal seat licenses, and it’s not like they would likely be happily paying their tax bills if only the team were more successful. But it is a good reminder that when the going gets tough, the tough usually try to find a way to stick someone else with the bills.

Friday roundup: Possible Suns arena renovation funding plan, A’s and Rays still promising stadium news by year’s end (but don’t hold your breath)

When it rains, it pours, and this week provided a deluge of stadium news:

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: Saskatoon soccer frenzy, Phoenix hotel sale to fund Suns, and more!

And more!

This week in boondoggle vivisection: Plenty of good seats available in SF, Cleveland, Ottawa

We’ll get to the weekly news roundup in a minute, but first, I need to mention this editorial from yesterday’s Globe and Mail, which makes several eminently reasonable points about how Calgary shouldn’t capitulate to the Flames owners’ extortion attempts for arena cash (“using past bad decisions to justify terrible future decisions does not qualify as logic,” “arena financing is a hamster wheel, and here is an opportunity to jump off”), and then says this:

Everyone involved should take note of a remark this week by Neil deMause, renowned stadium boondoggle vivisectionist and creator of the fieldofschemes.com website: “The number of mayors who’ve been voted out of office for standing up to sports team subsidy demands remains zero.”

That’s right, I am a major-newspaper-certified renowned boondoggle vivisectionist, y’all. Clearly it’s time to order some new business cards.

Okay, the rest of the week’s news:

  • The Los Angeles Rams aren’t the only California team having trouble getting fans to turn out for games in the September heat: The San Francisco 49ers are seeing so many empty seats on the sunny side of their stadium that they’ve hired architects to see if it’d be possible to add a sun shade. One problem: The stadium can’t get any taller, as it’s in the flight path of San Jose’s airport. Until then, the 49ers are handing out free water bottles and sunscreen to fans on the hot side of the stadium, which is nice and all, but probably isn’t what you want for your big marketing push. This once again points up how smart the 49ers management was to stick fans with PSLs before the team got lousy and people noticed how crappy the new stadium was for actually watching football in.
  • And speaking of empty seats, the Cleveland Indians won their American League–record 22nd straight game yesterday, but they still can’t sell out their ballpark, which not that long ago saw a record sellout streak of 455 straight games. Indians GM Mike Chernoff blamed Cleveland’s small size, the start of the school year, and “weekdays,” three things that apparently didn’t exist in the ’90s. At least he didn’t blame the 23-year-old stadium or demand upgrades as a solution — yet, anyway.
  • And also speaking of empty seats, the Ottawa Senators have begun tarping over part of their upper deck for every game, because they can’t sell tickets there. The Senators owner is already blaming his 21-year-old arena for that one (apparently the last owner built it in the wrong place), so team president Tom Anselmi was left to say: “We just need more of us to come to more games more often.” Can’t argue with that!
  • And also also speaking of empty seats, the 2018 Pyeongchang Winter Olympics have only sold about 5% of available tickets so far to actual fans (ticket brokers have bought up another 18%), with less than five months to go before the games start. If you’re looking to snap up a bargain to watch curling, though, be forewarned: Not all the new hotels planned for the Olympics are finished yet.
  • And speaking of seats that a team hopes won’t be empty, the Oakland A’s will be letting in fans for free to a game next April against the White Sox. Make jokes all you want about how dismal an A’s-White Sox matchup will be, it’s still free baseball, and you never know what you might see that you’ve never seen before.
  • NHL commissioner Gary Bettman declared that that the scaled-down Nassau Coliseum is “not a viable option” for the New York Islanders, two weeks before the team is set to present plans to Nassau County for a new arena near Belmont Park. A total coincidence, I’m sure.
  • The Rhode Island state senate started hearings on a new Pawtucket Red Sox proposal yesterday, with the team owners and their allies noting that “the team’s 54-percent share of stadium costs is the highest portion of private investment in 14 AA and AAA ballparks built over the last decade,” according to the Providence Journal. What was that someone was just saying about using bad decisions to justify terrible future decisions?
  • Deadspin’s Drew Magary has come up with a new nickname for the Atlanta Falcons‘ new iris-roofed stadium: Megatron’s Butthole. Drew Magary needs to be put in charge of all stadium nicknames, starting immediately.

Friday roundup: Beckham sued over MLS land purchase, Browns’ flammable stadium, and more!

It’s Friday roundup time! Let’s get started:

  • A local Miami landowner is suing Miami-Dade County over its plan to sell land to David Beckham’s would-be MLS ownership group for a new stadium, arguing that the no-bid deal violates state law requiring public land to be sold to the “highest and best bidder.” Bruce Matheson, who owns land nearby the planned stadium site in the Overtown neighborhood but “spends most of his time aboard his 72-foot Argosy yacht,” according to Miami New Times, has previously blocked the use of a public park for expansion of the Miami Open tennis tournament, so he might just know what he’s doing here. Also, David Beckham is clearly cursed, so that can only help Matheson’s case.
  • In case it wasn’t clear that Louisville’s KFC Yum! Center subsidy deal was a complete disaster from last October’s report that the city was losing almost $10 million a year and the arena was in danger of going bankrupt, Louisville’s KFC Yum! Center is a complete disaster. One big reason why: sales-tax projections were based on past sales-tax growth, which included a sales-tax rate hike in 1990, which wasn’t going to happen again. Whoops! The latest plan is to have the city bail out the arena by taking on an extra $100 million in debt, which tenants the University of Louisville could pay off with less than four years’ worth of the profits they’re making on running the place, but won’t because finders keepers, losers weepers.
  • Wichita is about to spend $60 million on a new stadium for the indy-minor-league Wichita Wingnuts — slogan: If You’re Gonna Go, Then Go Nuts! — and the manager of nearby Picasso’s Pizza is excited about it: “People from all over the Wichita area love some Picasso’s,” says Efrain Ramirez. “Because we’re Picasso’s, you gotta make it look cool, it’s gotta be artistic. You gotta put your flair on it.” Well, excited about something, anyway. Spare a thought for the poor small-city reporter who has to wring a quote about economic development out of a pizzeria manager, okay?
  • Speaking of sports venues and local businesses, some bar owners near the Detroit Red Wings‘ new downtown arena are excited about it, while others are worried they’ll get “trampled” by the “big guys.” No interviews were conducted by the Detroit News with bar owners near the Red Wings’ old downtown arena, which will now close. This has been your moment in 21st-century journalism.
  • The Cleveland Browns‘ stadium is covered in the same flammable cladding that caused the deadly Grenfell Tower fire, but Cleveland’s top building official promises this poses “zero risk to the fans.” Presumably because if you’re watching a Browns game, death will come as sweet release.
  • The turf at the San Francisco 49ers stadium in Santa Clara continues to suck.
  • The Roma soccer club is owned by Americans, so they are naturally inclined to levy stadium threats. It also plays in Italy’s Serie A, which like all soccer leagues outside the U.S. works by promotion and relegation, so if the team threatened to move, Rome could just start a new team to replace it. So instead team president James Pallotta is threatening that if the ownership group doesn’t get approval to build a new stadium, they’ll sell the team to … someone who won’t demand a new stadium? You may not have thought this entirely through, James.
  • A Russian farmer has built a stadium out of straw to poke fun at the $700 million St. Petersburg is spending on a new World Cup soccer stadium. Cost of the straw stadium: $675. Be sure to click the link above for a truly bizarre Russian video for 2016 with a giant straw bear and a straw sphinx and … watermelons? Guys, I am slightly worried about whoever’s in charge of media links for ESPN.

Santa Clara declares 49ers in breach of lease, threatens to seize stadium three days before Xmas

The city of Santa Clara’s showdown with the San Francisco 49ers over handing over budget documents to show who’s spending what on running the place got kicked up a notch before Thanksgiving, with the city council voting to find the team in violation of its lease, a move that could lead the city to seize operational control of the stadium if the Niners owners don’t cough up the documents by December 22:

“We hired ManCo. They work for us. They don’t get to decide what is withheld from the owners of the stadium,” [Santa Clara Mayor Lisa] Gillmor said. “How do we know we are managing this public asset in the proper manner if we cannot get the documents from the management company that we hired to manage the stadium?”

Representatives for the 49ers countered that the team has been giving the city regular reports and has lived up to its end of the deal. They said the team is withholding information in two areas it considers confidential: security plans and financial information related to non-NFL events.

Making security information available would put the public at risk, while disclosing the details of the non-NFL events would damage ManCo’s ability to effectively negotiate with promoters such as LiveNation and AEG Live, the team says.

This is a weird dispute to crop up just two years into a team’s move to a new city, needless to say, though Gillmor and friends have a point that it’s hard to determine revenue-sharing shares when your partner won’t fess up to what their total revenues are. That it’s coming up now seems to come down to a bunch of factors: new city officials elected since the stadium project was approved who are less starry-eyed about the arrival of the NFL; a crappily written lease that didn’t specify what documents the 49ers would turn over or how the city would audit their finances; and a team that’s so dismal on the field that even 49ers fans are probably happy (or indifferent) enough for the city to take them to task. (“The 49ers are broken all around the place,” resident Dorothy Rosa told last week’s council hearing. “They don’t know how to run a football team. They don’t know how to run anything.”)

And speaking of the Niners’ on-field woes, the terrible team continues to be terrible news for people who bought the high-priced personal seat licenses that helped fund the new Santa Clara stadium, only to find themselves forced to choose between paying through the nose for near-worthless tickets every year or unloading their PSLs at a huge loss:

[Tom] Addison wanted out after the 2015 season. He wanted to sell what the team called his Stadium Builder Licenses so he did not have to keep spending $5,000 annually for four season tickets in the corner of an end zone, a requirement to maintain the licenses.

He was able to sell all four on the secondary market, but at $2,000 apiece after dropping his asking price, and recouped only $8,000 of the original $20,000 investment. The alternative would have been walking away from the licenses and getting none of the money back.

“I was relieved to get rid of them,” Addison said in the dining room of his Burlingame home. “I was so happy when the guy wanted to buy all four. I was happy to get out.”

Which, you know, there’s that thing that P.T. Barnum never said about suckers — plus, about half of the PSLs were bought up by ticket brokers, who will just write this off as a bad bet. Still, with things so bad that 6% of all PSL holders have just defaulted on their annual payments and walked away with nothing rather than have to keep plunking down money for tickets every year, you have to wonder how eager, say, Los Angeles Rams fans will be to put down cash for PSLs once those go on sale next year.