No tax, please, we’re the Super Bowl

Getting to host a Super Bowl isn’t all about whether you’ve built a new enough stadium or are in a place where it’s sunny in February. No, the key to a successful Super Bowl bid is also about bribes, or as they’re called in NFL lingo, “financial demands.” The Santa Clara city council voted unanimously last night to accede to the NFL’s requirements by rebating a whole slew of fees and taxes, which were nicely summarized by newballpark.org:

  • 10% NFL Ticket Surcharge – At a conservative set price of $500 per SB L ticket, the $50 surcharge would yield $3.75 million with an expanded capacity of 75,000.
  • $0.35 Ticket fee – Meant to fund some senior and youth programs. A cap of $250,000 per year is imposed on this revenue source. If the 49ers play at least one home game, it’s likely that the 49ers would hit the cap, rendering additional collection of this fee moot.
  • Hotel tax – A Mello Roos district was created to provide some stadium funding, backed by a hike in the transit occupancy tax from 9.5% to 11.5% in the stadium’s immediate area. The NFL asked for its share (350 rooms for an unspecified number of days) to be waived. Assuming that the NFL needs 350 rooms for the full two weeks, the City would forego some $70,000+ in hotel taxes. The City notes that it expects to make up this loss via taxes collected on additional room bookings.
  • Off Site Parking fee – The City has imposed a $4.54 fee per space for event parking. That too will be waived. This appears to be for all Super Bowl activities, not just the game itself. The City notes that the fee is meant to offset the cost of traffic management.

Total cost of all this to Santa Clara taxpayers: Nobody bothered to ask! As newballpark.org continues, “Strangely, no estimates of this impact were disclosed, even as the City touts $300 million in additional economic activity for the region.” (Much of which would be taking place in the San Francisco part of the region, since S.F. would be the official “host city” for Super Bowl week events, even as Santa Clara would be the actual city hosting the game.)

We’ve been through before with Indianapolis, of course, so none of it should be any surprise. But it’s a reminder of how cities can host a major event like the Super Bowl and still come out of it with an operating loss. Good thing the Super Bowl brings in all sorts of ancillary economic benefits — oh wait.

Will the Super Bowl blackout spark calls for more New Orleans stadium subsidies? No, seriously

I happened to be watching the Super Bowl with FoS correspondent David Dyte, so naturally when the lights went out, I made the same joke I haul out every time anything goes wrong at a sporting event, whether falling concrete or the hot dog stand running out of mustard: “Looks like they need a new stadium.”

It turns out someone else had the same idea, only they weren’t joking:

The most recent trend for Super Bowl cities and facilities is to head to newer facilities.  Lucas Oil Stadium in Indianapolis, New Meadowlands Stadium in NY/NJ, Reliant Stadium in Houston, and U of Phoenix being excellent recent examples.

New Orleans has cashed in on their historical calling card as a festive host city.

But in the aftermath of Sunday night’s second half blackout, New Orleans may need a new football stadium before they play host to their 11th Super Bowl.

That’s from Forbes.com “contributor” (which I believe means unpaid volunteer blogger) Patrick Rishe, who if nothing else deserves props for one of the quickest SEO grabs of last night, getting his demand for a new New Orleans stadium out to the world before the third quarter was even over. (Though I’m still waiting for the “What time did the Super Bowl blackout start?” headlines.) Rishe is an economics professor and runs some kind of sports consulting firm, so he’s probably not the most reliable source for stadium demand rumors; even if other actual news outlets are speculating on what the blackout will mean for New Orleans’ 2018 Super Bowl bid, nobody’s talking about a brand new stadium just yet, not when Louisiana just spent $336 million on renovating the Superdome after Hurricane Katrina.

And yet, Miami is talking about it (or another round of taxpayer-subsidized renovations at least), for a stadium that’s 12 years younger than the Superdome. Given that all evidence is that Super Bowls mean pretty nothing for local economies, that New Orleans has way more pressing needs than a new stadium, that the city isn’t exactly hurting for ways to attract tourists in February, that the NFL is going to want to keep going back to New Orleans regardless because rich people like to party, and finally — as recent events have shown — that getting a chance on the world stage can as easily result in global embarrassment as global glory, this would be pretty much absolutely crazy. But then, we’re in the crazy business here.

Super Bowl spawns stadium stories

The weekend of the Super Bowl — I understand that some team won by a guy accidentally falling on his butt for a touchdown, which is truly the greatest sports moment ever — brought with it a plethora of stadium stories at least tenuously connected to the big game. My personal favorite is the one about how nice the weather would be at the Super Bowl in New Jersey if only it were now instead of two years from now, but other highlights include:

On balance, it was a pretty good run of pieces — at least it’s better than regurgitating unsubstantiated claims about how much big sporting events bring to the local economy — even if we likely only got it because of Super Bowl-related search-engine-grubbing. Not that I’d know anything about that.

Indianapolis to lose money on Super Bowl

Every so often, I get a call from a journalist asking what I think the economic benefits are to a city of hosting a Super Bowl. To which I can now answer with a link to this Indianapolis Business Journal story:

Scores of businesses in and around Indianapolis are licking their chops in hopes of scoring a windfall from the city’s hosting of the Super Bowl on Feb. 5.

But the city entity that manages Lucas Oil Stadium, where the game will be played, expects to lose money.

The Capital Improvement Board of Marion County is budgeting for total Super Bowl expenses of $8 million and revenue of nearly $7.2 million, leaving a loss of $810,000.

The main added costs are for extra police time and hiring of additional temporary workers. That’s partly made up for new tax revenues from the estimated $200 million in spending that will go on in the city during Super Bowl week,

But that tax money is limited, in part because, notes the IBJ:

  • The NFL is using its tax-exempt status (yes, the NFL is tax-exempt, and yes, lots of other people also think this is ridiculous) to get its wmployees out of paying hotel and restaurant taxes.
  • Food and beverage taxes collected inside Lucas Oil Stadium also won’t be going to the CIB, but will be diverted to the NFL.

However, Indianapolitans will at least get the thrill of watching the Super Bowl on TV and knowing that they could be there, if only they had tickets. Plus the free publicity that comes from the world learning what it’s like in Indianapolis in January. With benefits like these, who needs tax revenues?

Businesses on Super Bowl week: Nobody goes there, it’s too crowded

The other day i mentioned a St. Louis restaurateur located near the Rams stadium who says he closes on Sundays rather than have his customers fight their way through game-day traffic. Today’s Fort Worth Star-Telegram gives a more detailed look at the mixed feelings local businesses have over the flood of humanity that accompanies football games, then disappears the rest of the year. Key paragraphs:

Just south of Cowboys Stadium, Bill Testa, managing partner of the 54-year-old Candlelite Inn restaurant along Division Street, has pre-sold his lot to a parking vendor. It is already sold out, according to Parkwhiz.com.

Testa has catered some Cowboys games and believes that his restaurant could actually see an uptick in customers because of the lane closures. Yet there’s a small “For Sale by Owner” sign outside the restaurant entrance, an indication that Testa would like to move the Arlington institution to a new location.

“It’s hard for my longtime customers to get here when a game is going on,” Testa said. “And many of my customers that used to live around here have moved away. They live in Southlake or south Arlington or Mansfield.

“If I could sell the place tomorrow, I would. But I would move somewhere else in Arlington. I’ve had tire-kickers, but nobody can get financing in this economy.”

Which is pretty much what Phil Porter found, only at the macro level.