Friday roundup: Stadium construction continues despite sick workers, drained city budgets may not slow subsidy demands, and other news from our continuing hellscape

How did everyone do during Week Whatever (depending on where you live) of the new weirdness? I finished another jigsaw puzzle, spent way more time than I thought possible trying to understand the new unemployment insurance rules, had the best idea ever, and wrote another article about how the media should stop feeding the troll. (Here’s the previous one, if I neglected to post a link to it before, which I probably did.) And, of course, continued to write this site, even if the subject matter, like all subject matter everywhere, has taken a decided turn for the microbial. Hopefully it’s helping to inform or at least distract you, because it looks like we may be here a while.

Anyway, it’s Friday again, so let’s celebrate getting another week closer to the end of this unknowably long tunnel with some stadium and arena news:

  • Construction is now shut down on the Worcester Red Sox stadium, but continues on the in-progress stadiums for the Los Angeles Rams and Chargers, the Las Vegas Raiders, and the Texas Rangers, even after workers on the latter two projects tested positive for COVID-19, and despite it being pretty much impossible to do construction while maintaining a six-foot distance from your fellow workers. The USA Today article reporting all this cites continued construction as a “boost to the economy,” which is slightly weird in that 1) pretty much all economic activity is a boost to the economy, but everyone has kind of decided now that keeping millions of people from dying is more important (okay, almost everyone), and 2) given that these stadiums will all have to be finished eventually regardless, shutting down construction would only push the economic activity a few weeks into the future, to a time when construction workers would actually have stores and restaurants open where they could spend their salary. It really would be nice if journalists writing about economics talked to an economist every once in a while.
  • Raleigh Mayor Mary-Ann Baldwin says she’s preparing for a “recession budget” that could require cutting back on planned projects including “a planned renovation of the PNC Arena, an expansion of the Raleigh Convention Center, an addition to the Marbles Kids Museum, a proposed soccer stadium in south Raleigh and a recreational complex at Brier Creek,” reports the News & Observer. Since every local government in the U.S. if not the world is about to see its tax revenues plummet, could this mean a temporary lull in stadium and arena demands while teams have to wait for treasuries to refill? Or will team owners just do like during the Great Recession and pivot from “times are good, now is when you should spend your surplus on giving us new sports venues” to “times are tough, now is when you should be spending to promote any development jobs you can get”? Hawaii officials say the latter, and they don’t even have a team owner lobbying them, so I think you know where I’d be laying my bets.
  • A new poll shows that sports fans believe they’ll be less likely to go to live sporting events once they’ve been “deemed safe,” mostly over fears that they won’t actually be safe. (Nearly two-thirds said they’d be concerned about “health safety,” and more said they’d avoid indoor events than outdoor ones.) There’s presumably some push-poll effect here — if someone asks you if you’re going to be concerned about your health at large events, that’s going to get you thinking about how you maybe should be concerned — but still it’s at least one data point suggesting that game attendance could suffer for a while despite pent-up hunger for live sports.
  • Meanwhile, ratings have plummeted for pro wrestling events before empty venues, which could be a sign that a big part of watching televised sports is enjoying the roar of the crowd, or that pro wrestling isn’t really a sport, take your pick. Where are those New Jersey Nets sound operators when you need them?
  • Don’t count on getting back your “sports fee” on your cable bill even if there’s no sports to watch, though maybe if your TV provider can recoup some fees they’re paying to sports leagues, they’ll consider sharing some of the savings with you.
  • A study by an “advertising intelligence and sales enablement platform” that is no doubt really annoyed right now that this press release didn’t get me to use their name and promote their brand projects that ad spending on sporting events will drop by $1 billion this year. And will that cost sports teams, or the cable and broadcast networks that are contracted to carry them? Sorry, didn’t study that part, we figured Forbes would report on this even without that info, and we were right!
  • Speaking of dumb Forbes articles, here’s one about how baseball should make up for lost revenue by expanding, which overlooks both that this is undoubtedly the worst time imaginable to get the highest expansion fee possible, and that MLB teams are all owned by billionaires so really the issue isn’t having cash on hand, it’s getting yearly income back up, and diluting your share of national revenues by one-fifteenth (if two new teams were added) is no way to do that.
  • But hey, at least stadiums come in handy for herding homeless people into en masse to keep them from getting sick, that’s neither disturbingly dystopian nor terrible social distancing policy, right? What’s that you say? You’re right, let’s instead spend some time revisiting cab-hailing purse woman, that’s a much more soothing start to the weekend.

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.)

Islanders to play at Nassau Coliseum while waiting for new wine bar to open

New York Gov. Andrew Cuomo announced Saturday that the Islanders will play all home games at Nassau Coliseum for this year’s playoffs and all of next season as they await their new Belmont Park arena’s opening in 2021. Thus brings to an end the Brooklyn Islanders experiment, which everyone knew was a terrible idea at the time as the Brooklyn Nets‘ arena was designed to be too small for hockey and also Brooklyn is not in Nassau County where the Islanders’ fan base lives, but everyone also pretended it made total sense because then-owner Charles Wang wanted to give a middle finger to Nassau County for not approving his arena plans there, revenge really isn’t the best way to run a railroad, is it?

(And yes, it’s a little weird that the governor announced this, but also not that weird, because Cuomo has a long history of swooping in to show up in places where he can take credit for changes of plans. We should probably be glad that the announcement wasn’t made by Billy Joel.)

The state of New York has provided $6 million toward an $8.5 million renovation of the Coliseum to make it more NHL-ready for its single season as sole home ice, because, as the state said at the time, this will “build momentum and excitement for the transformational redevelopment of Belmont Park,” and why should either the Islanders or the Coliseum’s owner, Nassau County, or operator, Mikhail Prokhorov, pay for that when taxpayers in Buffalo can foot the bill?

Anyway, all this is leading up to today’s news, which is that some new renderings of the Islanders’ planned Belmont Park arena have dropped, and they are, um, interesting:

Now, I know we’ve been over how the artists paid to draw renderings are just pulling from a bucket of clip-art “entourage” people, but these people are exceptionally odd. The ones in the lobby image appear to be on their way to job interviews, and they’re almost all choosing to take the nearly-empty stairs over the even-more-empty escalator. The people in the other images at least include a few Islanders jerseys, but everyone seems far more interested in chatting and drinking than watching hockey (there is, in fact, no hockey to be seen anywhere except on video screens). And everyone is preternaturally young and slim, which have you seen what actual Islanders fans look like? The whole scene looks more like a high-end wine bar with an odd hockey theme, except of course at a bar way more people than this would be looking at their phones.

Maybe it all means nothing more than the mood the renderer was in that day, but it’s hard not to come away from these images with a sense that somebody is trying to sell a new hockey arena as hip and trendy and not a place where people go to drink beer and shout at people on ice skates. I have no idea who the audience for this might be — stores that might want to locate at the mall being built nearby? people who’ve heard about this “hockey” thing but never gone to a game because they didn’t think it was Instagrammable enough? — but clearly somebody signed off on it. While I’m generally a fan of Hanlon’s Razor, sometimes reading too much into things is the only way to make our own fun.

Friday roundup: D-Backs, Angels hedge on new stadium plans, NJ demands 76ers repay 0.5% of tax breaks, and other foolishness

Another busy Friday where I need to squeeze in the news roundup when and where I can! (Also, yeah, New Yorkers already knew this about Mike Bloomberg, who also was responsible for this.)

Saturday roundup: Manfred endorses Tampontreal Ex-Rays, NYCFC readies Bronx stadium plan (maybe), everybody in Nashville sues everybody else

Man, I sure picked the wrong week to get so sick that I couldn’t post for a couple of days! But even if it’s now the weekend and I’m only at about 80%, the news is at 110%, so let’s get to it:

  • First up is Thursday’s declaration by MLB commissioner Rob Manfred that he and baseball owners are “100% convinced” that having the Tampa Bay Rays play half their games in Montreal “is best way to keep Major League Baseball in Tampa Bay.” That’s not entirely surprising — I mean, it’s surprising that we have a major sports executive saying that the best way to keep a team from moving is to let it move half its games, but no more surprising than when Rays owner Stuart Sternberg first said it last June — since it’s very rare for sports commissioners and fellow owners to stand in the way of their fellow owners’ stadium or relocation plans, especially if it doesn’t infringe on their territories. (Speaking of territories, Toronto Blue Jays president Mark Shapiro said, “We are supportive of them exploring it,” if you were wondering.) The plan itself remains, in the words of the great unemployed sports editor Barry Petchesky, “completely batshit,” not least because it would require getting not one but two cities to build not one but two new stadiums just to land half a team, but also for a billion other reasons. It still makes the most sense as a Madman Theory strategy by Sternberg to scare Tampa Bay or Montreal into competing to build him at least one stadium — can you imagine the headlines to come about “Montreal is moving ahead with its stadium while Tampa lags behind?” or vice versa? — but sports owners are just rich, not necessarily smart, so who the hell knows what Sternberg really intends to do? Whatever it is, though, he’ll have Manfred’s support, because Manfred knows who signs his checks.
  • NYC F.C.‘s plan for a new stadium just south of Yankee Stadium has been reportedly almost ready for more than a year and a half now, but now it’s supposedly really almost ready, according to a different New York Times reporter than the one who reported the initial rumor. The outline of the plan remains roughly the same: The Yankees owners, who are minority owners of the MLS club, would allow the city to demolish a parking garage that their lease otherwise requires remain in place, a private developer would take the garage and a parcel across the street and the street itself (plus a highway off-ramp) and build housing and a hotel and other stuff on part of it while leasing the rest to NYC F.C. to build a stadium on, which would — again, supposedly — allow the whole thing to move forward without public money being used for construction. Being used for other things is another story: The Times doesn’t mention whether the team or developers would pay the city anything for the section of East 153rd Street that would need to be demapped and buried beneath a soccer pitch, or how much the developers would pay to lease the garage site, or if either parcel would pay property taxes. (The Times reports that “Maddd and N.Y.C.F.C. [would] convey the [street] property to the city” then lease it back, which certainly sounds like an attempt to evade property taxes.) City officials said that “a deal has not been reached, and more conversations are needed,” so maybe none of these things have even been decided; tune back in soon, or maybe in another year and a half!
  • The lawsuit filed by Save Our Fairgrounds claiming that Nashville S.C. stadium project would take up too much public land needed for other uses is moving to trial, and Nashville S.C. has sued to intervene in their lawsuit, and everybody’s trying to figure out if NASCAR and soccer can coexist on adjacent parcels, and soccer fans are mad that that stadium isn’t getting built yet, and the community coalition that negotiated a community benefits agreement to go along with the stadium plan is mad that nobody’s consulting them about any of this. It’s only a matter of time before Jimmy Carter is called in to resolve this.
  • Connecticut Gov. Ned Lamont has put $55 million into his state budget proposal over the next two years to renovate Hartford’s arena, with the rest of the cost — estimated at between $100 million and $250 million, depending on how extensive it is — to be paid off by private investors who would get … something. The state is studying it now! Get off their back!
  • A bunch of the Carolina Panthers fans who bought “permanent seat licenses” to help finance the team’s stadium back in 1993 have found that the “permanent” part isn’t actually so much true: About 900 seats in the front of one end zone are being ripped out to make way for luxury suites for soccer (or a standing-room “supporters’ section — the latter makes more sense, but the Charlotte Observer article on this is frustratingly unclear), so fans with PSLs there are being offered either to move to other nearby locations or to sell their licenses back to the team for 25% over what they initially paid for them. No wonder everyone else started calling them “personal” seat licenses!
  • Also, the Panthers are having their stadium property tax bill reduced by $3.5 million a year, because they asked nicely. Or just asked, and are a major sports franchise and therefore an 800-pound gorilla, with all the privileges that go with that. One of those two.
  • The Jacksonville Jaguars are going to play two home games in London next year, which the team’s website says is “strategically aligned” with development in their Jacksonville stadium’s parking lot, somehow, though is one extra week of construction time really going to help them all that much? Or maybe this is some weird kind of brinkmanship, as in “approve our Lot J development, stat, or we’ll keep moving games to London?” Anyway, cue people freaking out about the Jaguars moving to London again now, which team owner Shad Khan can’t be unhappy about because savvy negotiators and leverage and all that.
  • A poll by the Oakland Athletics on where the team should build a new stadium found that Oakland residents backed the team’s preferred Howard Terminal site by 63-29%, but a poll by a group that opposes the Howard Terminal plan found that residents prefer the current Oakland Coliseum site by a 62-29% margin. Reminder: Polls are garbage!
  • This video of an entire Russian hockey arena collapsing during reconstruction work, with a worker clearly visible on the roof as it gives way, doesn’t actually have much to with stadium subsidies, but it sure is impressive-looking, in a horrific way.

Friday roundup: Nashville SC “disappointed” mayor upset at overruns, Miami paying Super Bowl teams’ hotel bills, and the return of Cab-Hailing Purse Woman

It’s been a long week and there is apparently some other stuff in the news and also I want to go read the new Deadspin writers’ temporary blog that is not Deadspin, so let’s get straight to this week’s roundup, which is long, because remember what I literally just said about it having been a long week?

I absolutely cannot wait for the first stadium report to calculate the projected economic impact of Cab-Hailing Purse Woman. Clearly she’ll go anywhere to see a game of baseball and/or soccerfootball! How can your city possibly turn up its nose at the spending on ride-hailing services she will bring?

UPDATE: Someone just forwarded me another article with more Royals stadium renderings, and OMG that sign:

If you’re having trouble reading it, the side facing the camera reads “HEY CDC KC HAS THE FEVER,” which is apparently a joke about the coronavirus epidemic now threatening to sweep the globe? And the other side, facing the field, reads “TODAY’S MY BIRTHDAY SURPRISE ME WITH A WIN” which is a way too on-the-nose reference to the fact that the Royals have lost more than 100 games the last two years. Forget any innovations in stadium design, I want to hear more about how the Royals can draw more fans by encouraging negging.

Friday roundup: Panthers owner donated to Charlotte officials during stadium lobbying, St. Louis MLS didn’t need $30m in state money after all, and what time the Super Bowl economic impact rationalizations start

Happy Friday, and try not to think about how much you’re contributing to climate change by reading this on whatever electronic device you’re using. Though at least reading this in text doesn’t require a giant server farm like watching a video about stadiums would — “Streaming one hour of Netflix a week requires more electricity, annually, than the yearly output of two new refrigerators” is one of the more alarming sentences I’ve read ever — so maybe it counts as harm reduction? I almost linked to an amusing video clip to deliver my punchline, wouldn’t that have been ironic!

And now, the news:

Cuomo’s Penn Station expansion plan could cement MSG’s $550m-and-counting tax break in place for eternity

With New York Gov. Andrew Cuomo again proposing an expansion of Manhattan’s Penn Station — this one with an estimated $8 billion price tag, to be funded mostly by ¯_(ツ)_/¯ — Gothamist asked me to look into the state of the eternal tax exemption for Madison Square Garden, the arena that sits atop the train station, which the state accidentally put into place in 1982. The answer: The tax break has now cost New York City a total of $550 million and could hit $1 billion by 2030, legislation to repeal it keeps going nowhere, and Cuomo’s Penn funding plan could write it into tax law forever.

Cuomo’s Penn Station expansion plan (which is at least the sixth iteration of an expansion plan since one was first floated by then-Senator Pat Moynihan in the early ’90s) proposes another massive tax kickback, siphoning off untold billions of future property-tax dollars — technically payments in lieu of property taxes, or PILOTs—from an undisclosed area around the train station to pay for expansion of the transit complex. It’s the same mechanism that was used to partially subsidize Hudson Yards, accounting for just over $1 billion of the city’s $5.6 billion total tab.

The governor’s Powerpoint presentation on his plans includes a diagram on page 51 showing a “development district” that would include Penn Station and several blocks around it. Cuomo’s office referred questions to the state Empire State Development corporation, which indicated that this would be both the size of the new project and the size of the PILOT diversion district, though “the exact boundaries and parcels have yet to be finalized.”

If Madison Square Garden does end up within the area carved out to pay PILOTs, notes Kaehny, that could have the effect of cementing MSG’s tax break in place — or at least limiting the amount of future taxes Dolan and his successors pay, and ensuring that the proceeds go to the governor’s redevelopment project, not to city coffers.

There are a lot of question marks here, to be sure — it’s not even certain whether Cuomo’s PILOT district will be approved by the city council, or if the expansion will ever get off the ground at all — but Kaehny isn’t wrong to worry. Though the way things are going in Albany, even getting a thin sliver of tax payments that immediately get dumped into building a new auxiliary-station-plus-upscale-mall might be preferable to just letting the tax break ride forever.

And speaking of letting the tax break ride forever, here’s what an MSG spokesperson said when asked why that was really necessary:

“We appreciate that people have their opinions about our location, but the truth is that Madison Square Garden’s tax abatement pales in comparison to the billions in public benefits received by the other New York sports venues.”

All the other kids’ parents let them get away with even more! Someday I really want to see the industrial-strength vats of chutzpah that PR professionals bulk-order to keep under their desks.

New York state reveals $27.6m in Islanders arena tax breaks, more still hidden?

Big news, everybody! Just over five months after I filed a Freedom of Information Law request asking how much in property tax breaks the state of New York is providing to the new New York Islanders arena at Belmont Park, I finally got a reply! And the documents provided are:

No explanation was provided for why it took five months to send one page of a document — In New York state, FOIL requests are supposed to be fulfilled within 20 days, unless the agency receiving the request has a good reason to take longer — but never mind! We now finally have some more information about the size of the tax breaks being handed out to the arena developers, and they total about $27.6 million in present value (see the numbers at the bottom) over the next 20 years, as the level of payments in lieu of taxes slowly rise to the full property-tax rate.

Except! You’ll note that this is just the tax breaks on the hotel, retail, and office space part of the complex. The arena itself, it’s previously been reported, will pay a “guaranteed minimum annual payment” of $1 million, based in some unexplained way on ticket sales, and escalating each year, again by an unexplained percentage. The state Empire State Development FOIL office didn’t provide projections for these arena PILOT numbers or how much of a discount they’ll represent from normal property-tax rates, so we really still have no idea how much of a total tax break the project will be getting, except that it’s at minimum $27.6 million and potentially a whole lot more than that.

If you’re scoring at home, this now leaves us with a total state subsidy of:

  • $41 million in grants and the value of a no-interest state loan for a new train station to service the arena
  • $27.6 million in tax breaks for the retail/office/hotel development
  • ??? in tax breaks for the arena
  • –$50 million in upfront lease payments from the developers for the land
  • +??? for whatever the land is actually worth, which the state says is $35.9 million to $41 million, but other estimates show could potentially be anywhere from $80 million to $300 million higher than that (I have another FOIL request pending on the land appraisal)

So add it all up, and it’s at least $54 million, and likely a good bit more, though whether “a good bit” means a few tens of millions or hundreds of millions is anyone’s guess. And as that’d make the difference between “not the worst arena deal in the world in terms of public subsidies” and “actually, maybe one of the worst arena deals in the world in terms of public subsidies,” we’re really going to have to wait until those two sets of questions marks above are filled in. Hopefully soon! Or at least before the arena is scheduled to open in October 2021, which looks pretty unlikely given that that’s only 21 months away and right now the arena site is still mostly a mud pit, but we’ll see!

Ilitches offer Detroit quarter-acre of vacant lots to make up for Red Wings arena being surrounded by vacant lots

This article in the Detroit News on developments surrounding development surrounding the Red Wings and Pistons arena requires a bit of unraveling to get to the bottom of, so bear with me for a minute:

Once upon a time, a city named Detroit gave the local pizza barons $261.5 million in city and state funds plus $50 million in free land to build a new hockey arena, then another $34.5 million to the local basketball team to move into the new arena, then $74 million more to build themselves two parking garages, a pizza company headquarters, and a Google office with all of 100 workers that’s actually inside the arena itself. All this was in hopes the arena would spur lots of additional development, but in reality it’s surrounded by vacant lots, lots and lots of lots.

The pizza barons felt bad about this, possibly because they’d agreed in their deal with the city to already start developing this land two years ago. (The Detroit News article is silent on whether there were established penalties in place for missing this deadline; a Crain’s Detroit article from last month says the Ilitch family was “in violation” of the 2013 agreement to start construction by the end of 2017, but not what the consequences of this were.) So they came up with a new plan: Buy another three years of time to come up with a plan — making them five years late in total — by giving the city two pieces of vacant land totaling a quarter of an acre:

The Brush Park lot that may become a city park is at 242 Watson. It’s 0.172 acres. The Ilitch-linked entity bought it for $3,000 in 2009. It is currently valued at $390,000, according to property tax records.

The other property that may become a park is a 0.065-acre  lot at 3118 Fourth. The land is valued at $111,600, according to property tax records.

So that’s $500,000 in vacant land in exchange for a three-year extension on meeting the requirements of a deal that got the Ilitches $385.5 million in cash and land. You can sort of see why Detroit is handing them more rope — city officials want the promised development, and the Ilitches are their best hope for making it happen — but you can also see where this will be the exact same case three years from now, meaning the Ilitches can always offer up another 100-by-100-foot lot (that’s how big a quarter of an acre is) then if they still don’t feel like building anything.

All of which is a excellent cautionary tale about handing over control of your city’s land, plus hundreds of millions of dollars in arena money, to a single developer in hopes that they’ll make it bloom, especially if you have no Plan B for what to do if they decide, “Enh, the real estate market isn’t hot enough this decade.” A spokesperson for Mayor Mike Duggan told the News that the latest deal includes “potential penalties” if the Ilitches blow off the new deadline, including possibly having the city retake ownership of the property that was sold to the Ilitches as part of the arena deal — that’s something of a hammer, anyway, but even so it will have allowed the Ilitches to control most of downtown and hold it hostage to their own business whims for nearly a decade, which isn’t really the best way to get people interested in moving to your hollowed-out city. And there were almost certainly more effective ways to spend that $385.5 million — but then, those ways weren’t being pushed by the local pizza baron, and that’s what makes all the difference.