Blue Jackets bailout leaves Columbus schools, state arena board squabbling over tax money

The Columbus Blue Jackets arena saga is one of the weirder ones, with the team building an arena mostly with private money, then complaining it was losing money and getting the county to bail them out by taking the arena off their hands, then a local group trying to force the county to let residents vote on whether to default on the arena bonds (and failing). Now there’s a new twist: As part of the bailout deal, the Blue Jackets owners agreed to make an annual $1 million a year payment to the Columbus school system in lieu of property taxes. Starting in 2017, that deal expires — meaning the arena will be looking at a $4 million tax bill, and the Franklin County Convention Facilities Authority will have to pay it itself.

This sounds bad, and it sort of is if you’re the arena authority, which is why the people who run that body is asking the state legislature to extend the tax exemption. But when you think about it, this is just a squabble between two public agencies over who’ll pay whom: Either the arena board gets more money to run its building, or the school system gets more money to run its schools. Or, you know, the state could just throw some more money everybody’s way and everyone could go home happy, except the recipients of whichever services got cut to make sure that the arena and the Columbus schools were both made whole.

The main lesson here, really, is this one:

“I don’t know what they knew or didn’t know” about the looming tax bill, said Don Brown, the facilities authority’s executive director since February and previously Franklin County’s administrator. “I’m not aware that there was a public discussion.”

That? Don’t do that. If you’re going to bail out your local hockey team, at least have a public discussion about what all the costs are going to be, including those a few years out. That is all.

Hartford arena operator proposes $250m renovation, because $250m is a nice round number

Connecticut’s Capital Region Development Authority is proposing $250 million in state-funded upgrades to the Building Formerly Known As The Hartford Civic Center, which would include redoing concourses, converting skyboxes to restaurants and clubs, and rebuilding the outer wall so that passersby can see in:

“The objective is to make this building a new building,” [authority executive director Michael] Freimuth said. “It has to look, feel and smell new.”

There’s no money-grubbing sports team owner behind this move — the Hartford Whalers moved out a while back, in case you didn’t notice — but rather just a public arena manager asking the state for a pile of cash to spruce up the building it runs. So is this a bad idea or not?

The question, as it should always be with stadium development deals (or development deals of any kind), is not “Is the public paying for it?” but “What is the public getting for it?” The arena authority claims that spending $250 million on renovations will help produce more revenues from the building, which currently runs about a $3 million a year loss for the state. Freimuth didn’t provide any details on how much more revenue, though, beyond saying that he hopes the arena “would be better than break-even” — and I’d hope even the most math-challenged readers (or legislators) can see that spending $250 million to bring in an extra $3 million a year would be a horrible, horrible investment. (Freimuth also hinted that the renovations could help land an NHL team, though 1) nobody thinks the NHL is ready to go back to Hartford, and 2) if any new revenues are set to pay off the renovation costs and not go into the team’s pocket, why would an NHL owner be attracted by them?)

So should Connecticut just sit and live with an oldish arena, if there’s no way to economically justify the improvements? Maybe. Or maybe somebody needs to look at that $250 million price tag and figure out which items on it are really likely to boost revenues, and which ones are just there because they look neat. Not that there isn’t some intangible benefit to having a nicer-looking arena in the middle of your downtown, but there’s benefit to most other things the state could be doing with $250 million too — just because somebody came up with a design that costs that much doesn’t mean state officials should fall victim to the edifice complex.

New St. Pete councilmember could be deciding vote for Rays lease buyout

You can tell how blasé I’ve become about this whole electoral-process-making-any-difference thing when I didn’t even bother to check until late yesterday who’d won what in stadium-related races. (I knew about Ohio rejecting pot monopolies and Kentucky electing a crazy guy governor, because Facebook, duh.) So, a quick recap:

  • Glendale, Arizona voters recalled city councilmember Gary Sherwood, who’d been one of the prime supporters of the Arizona Coyotes and their sweetheart lease deal. Not that it matters all that much — Glendale’s council was already solidly against the Coyotes lease, and Sherwood has already said he’s planning to run for his old seat again next August — but Coyotes owner Anthony LeBlanc should probably give up on waiting for Glendale to come to what he thinks its senses should be.
  • The one open seat on the St. Peterburg city council has gone to Lisa Wheeler-Brown, who could give Mayor Rick Kriseman a pivotal fifth vote (out of eight) in support of his plan to let the Tampa Bay Rays buy their way out of their lease clause preventing them from moving elsewhere in the metropolitan area. That means that come January, Kriseman could presumably reintroduce his plan, which the old council rejected but Rays owner Stuart Sternberg is okay with, and have it approved, which could lead to the Rays stadium chase moving into the “see which local governments we can shake loose how much money from” phase.

And that may be it, so far as I can tell. It was a slow election day — I hear there’s something bigger at stake next year, so I’ll to try to pay more attention by then.


Coyotes owner to Glendale: Plenty of cities would be glad to have us, don’t make me show you

The Arizona Coyotes‘ search for a new home in the Phoenix arena now that Glendale has said they’d have to bid for the right to operate their old arena there is “moving pretty quickly,” with multiple possible locations, according to team CEO Anthony LeBlanc:

“I don’t think anything has progressed to a point where it would be prudent to state what options look like but things are moving pretty quickly; in particular with a couple of these options,” he said. “The city of Phoenix has been the most vocal. They have an NBA franchise (Suns) that they are very tied to and they want to ensure there’s no hiccup in regards to that.

“We’re working as closely as we can to understand what all the options look like and there are other communities and stakeholders we are talking to.”

In addition to Phoenix, the Coyotes have had at least “some level of discussion” around sites in Tempe and Glendale, according to Arizona Sports. There’s been no indication of how an arena in any of these places would be paid for, let alone whether any of these cities would offer the kind of sweetheart arena operating lease that the team has become accustomed to in Glendale — for all we know, “some level of discussion” just means these cities joined the team’s “So You Want To Have A Hockey Franchise?” Facebook group.

LeBlanc himself, in fact, immediately took the opportunity to use these phantom arenas as a way to try to pressure Glendale into reconsider its opposition to giving him a no-bid contract to run their arena:

“Our hope is that somebody will take a look at what Broward County has done and ask a simple question: ‘Has there been an economic analysis of what happens if the Coyotes leave?’ Unfortunately, if you’re going to ignore the revenue impact of the team being here and you’re only going to look at what your expectation is on the expense side, you’re not going to make the right decisions.”

There’s a recall election today of the Glendale city councilmember who helped push through the Coyotes’ lease deal in the first place by conducting secret lobbying of his council colleagues, which may help explain some of LeBlanc’s timing here.

Florida Panthers owner, rebuffed on $70m subsidy demand, asks county for $86m instead

Florida Panthers owner Vincent Viola, complaining that the team he bought in 2013 is losing money, has issued a demand for tens of millions of dollars in tax subsidies from Broward County to make his team profitable:

Hemorrhaging tens of millions of dollars each year, the Florida Panthers have made a new request for public assistance at the BB&T Center hockey arena.

The complex package of aid they’re seeking amounts to $86 million in tourist taxes, which are paid by hotel visitors, and will be publicly debated by county commissioners for the first time Tuesday.

Hang on, why is this familiar? Wasn’t there something about this, oh, almost two years ago:

The Florida Panthers professional hockey team says it’s losing more than $20 million a year and needs more public funds to survive.

The struggling team is asking for a rewrite of its contract with Broward county. Under the team’s proposal, the county would use additional tourism taxes to pick up $70 million in BB&T Center costs currently being paid by the Panthers.

Yep, that was it. The main differences between then and now are that Viola’s demands have gone up by about 20%, and that now there’s a long laundry list of favor-shuffling to go along with the tax subsidy plan:

  • Instead of using the county cash to defray the team’s rent costs (which go to help repay the county’s construction costs on the Panthers’ arena, which was otherwise entirely publicly funded), Viola would use the money to defray his operating and maintenance costs for such things as paying the electric bill. Different line item, in other words, same team budget.
  • Viola would stop paying half a million dollars a year in tourism marketing, and instead would give the county a free ad board and luxury suite, which would probably be more valuable if anybody ever went to the arena for hockey games.
  • The county would get development rights on 88 acres of parking lots that the team currently controls.
  • Share money with the county from any NHL expansion fees (“after the Panthers’ losses are covered”) and from any profits on eventual sale of the team.
  • Share operating profits with the county, though if Viola’s previous plan is any guide, the team would be redefining “profits” to be sure there aren’t any to share.

That’s all potentially slightly better for the public than Viola’s last proposal — mostly if the development rights are worth anything, though cue “swampland in Florida” jokes here. But it would still be $86 million in public money being handed to the local sports team owner just to keep him from losing money on the team he just decided to buy two years ago — and which is probably breaking even once the money-losing hockey team is balanced with the money-making arena, and which in any case is locked into a lease through 2028. Which Viola would now be able to break starting in 2023 under the new deal, if he were still showing losses (or “losses”).

Okay, so still pretty bad. Certainly no reason for the county, which rejected Viola’s last demand, to reconsider when it’s basically the same—

But county officials view the new request more favorably, saying it directs public money into the county-owned arena itself, not to the hockey team.

The team’s costs for running the county-owned arena, that is, which the team gets all the revenue from, except any profits it can’t hide them on its books. The South Florida Sun-Sentinel doesn’t actually name any of these favorably-viewing county officials, so if you just want to shout “Man, are you guys dumb!” in the general direction of south Florida, that should suffice.

Blues owner says 21-year-old arena needs “major renovation,” may seek city subsidies

There needs to be a name for the phenomenon when one team owner in a city demands stadium upgrades, and then another owner in the same city chimes in that he wants them as well. (The “Me-Too Effect”?) Anyway, the St. Louis Blues‘ Scottrade Center was built in 1994, just one year before the Rams‘ Edward Jones Dome opened, so naturally the Blues’ owner says it needs improvements, and is looking for them to be on somebody else’s dime:

St. Louis Blues owner Tom Stillman says the Scottrade Center is in desperate need of an upgrade, and has met with city of St. Louis officials on what a renovation could include and how it can be financed.

“All around the league, particularly in the NBA and NHL, arenas around the 20-year mark tend to go through a major renovation and that is going to be necessary at the Scottrade Center — probably even more so (in St. Louis) than in other markets,” he said while speaking on a panel at a Washington University business of sports seminar. “We are in the early stages of planning a renovation… Obviously part of the aim is to be the best possible home for the NHL and the St. Louis Blues, but Scottrade plays a key role in bringing other big events to St. Louis, like major concerts and other sporting events like NCAA March Madness. We’re not going to continue to draw those events unless we upgrade the arena significantly.”

The obsolescence claim, the threat of lost economic activity if the arena isn’t upgraded — yup, that’s two of the main gambits from the standard playbook. No threat to move to Las Vegas yet, but there’s plenty of time for that.

As for how extensive these renovations would be or how they’d be paid for, nobody is talking. The Blues are losing money according to Forbes, which is how Stillman’s ownership group was able to pick them up for a bargain price of $120 million in 2012. It’ll be fun to see if the renovation demands end up being more than the entire franchise is worth — given construction prices these days, it won’t be hard.

Calgary mayor: Flames arena-stadium plan “not even in the oven yet”

Calgary Mayor Naheed Nenshi is back from vacation, and talking about the Flames‘ $890 million arena-stadium-mashup proposal. Here’s his answer to a video question from a concerned Flames fan, transcribed and translated from the original Canadian:

Just so people understand this, the amount of public investment that would be required to make that work would actually make that the largest public works project in Calgary’s history — or maybe second largest after the West LRT. So these are really, really, really big dollars. So it’s really important for us to have a conversation with Calgarians about whether hat’s a good use of public money. I have often said that public money needs to be for public benefit, not for private profit, and the question for all Calgarians now is whether there’s enough public benefit in his to justify that kind of public money.

There’s going to be weeks and months to continue to discuss questions like “Is that the right size? Can the transportation networks support it? Is the environmental contamination just too difficult to fix?”…

Long story short, some people have said that the CalgaryNEXT proposal is half-baked. I would argue it’s not even in the oven yet.

Good questions being asked, reasonable perspective — yup, sounds like one of the Gang of Four, all right.


Coyotes owners declare allergy to competitive bidding for arena lease, may seek new home in Phoenix

And the other shoe has dropped in the Glendale arena management kerfuffle:

When the City of Glendale receives bids from companies hoping to manage Gila River Arena, the Coyotes won’t be among them.

“The Coyotes have no intention of participating in the Glendale RFP (request for proposal),” Coyotes president, CEO and co-owner Anthony LeBlanc said Wednesday in a terse and brief response.

The story so far: The Coyotes owners had a crazy-sweetheart lease deal with Glendale that paid them almost $8 million a year just to run the arena, then Glendale officials found a loophole that would let them terminate the lease, then the two sides agreed on a new lease that expires in 2017, then Glendale announced it would put in place a competitive bidding process for who’d get to run the arena. Which sounded like a great idea — at least it would determine once and for all what the market will bear in terms of an arena management fee — to everyone except the Coyotes owners, who now say if they have to compete for the right to be paid to manage their own arena, they want no part of it.

Now, there’s nothing stopping the Coyotes from continuing to play in Glendale under someone else’s arena management, but Arizona Sports speculates that the team’s owners have other ideas:

So what does it mean for the Coyotes’ future in Glendale? LeBlanc wouldn’t comment other than to say: “We are committed to Arizona.”

Glaring in its omission from that statement was the word, “Glendale.”

While it is likely the team will remain in Glendale for the remainder of its agreement with the city, the efforts to find another home in the Valley are likely in overdrive now.

Speculation on the possibility of a new downtown arena for the Suns and Coyotes has existed for at least a year. So has the idea of building an arena along the 101 corridor in Scottsdale.

Old arena not working out financially? Just build a new one! Surely that will be the solution, and if it’s not, hopefully you’ve worked out a way to walk away from it debt-free, like you did with the previous one.

Of course, there’s no way on earth the Coyotes will get a new arena anywhere approved and built by 2017 — there isn’t even a hint of a site, let alone a budget or a determination of who would pay for it — so they’re going to have to be somebody’s tenants for at least a season or two. That could be in Glendale, or it could be the Suns‘ arena in Phoenix, which is notably awkward for hockey, one reason the team moved to Glendale in the first place. Maybe the Coyotes owners can even try to get a bidding war going between the two cities — presumably they’re okay with bidding so long as they’re not the ones doing it, right?




Flames CEO on those opposed to giving him $500m+ in public cash: “People who h8 are going to h8”

Representatives of the Calgary Flames, the Calgary mayor’s office, and other “stakeholders” (e.g., local developers, because can’t have a meeting without them, right?) met yesterday to discuss the Flames’ $890-million-or-maybe-a-lot-more arenastadium proposal. And while Mayor Naheed Nenshi withheld comment for now following the talks, Flames CEO Ken King did not. At all:

King downplayed the project’s detractors, saying they were the vocal minority.

“There are people that are against anything that’s ever built,” he said, singling out the Canadian Taxpayers Federation, which recently launched an online petition in protest of any tax dollars being used to fund the project.

“People who hate are going to hate,” King said.

He also said it could be difficult to sway the opinion of some politicians — who he wouldn’t name — who are “dead set against it.”

“I’ve had no political pushback other than the people you know who have been outspoken about it,” King offered. “There are political people … you’re written about them.”

Oh, Ken — so close. Also, implicitly dissing the guy across the table for you by calling him a hater if he doesn’t cut you a nine-figure check doesn’t seem like the best negotiating strategy to me, but maybe this is just how they do things on the mean streets of Canada.

Glendale opens Coyotes arena management deal up for bids, sky doesn’t fall (yet, anyway)

Back in July when the city of Glendale renegotiated its lease with the Arizona Coyotes to make it slightly less onerous and a whole lot shorter, I wrote:

The new lease only lasts until summer of 2017, after which everyone has to figure this out all over again.

Turns out, though, Glendale officials don’t intend to wait that long, and they don’t necessarily plan on doing their figuring out with the Coyotes management:

The Glendale City Council on Tuesday voted to hire Beacon Sports Capital Partners LLC as a consultant to seek bidders to manage the arena, with the manager taking over as early as July 2016…

Vice Mayor Ian Hugh said Wednesday the city hopes to select an arena manager as early as January and IceArizona will be considered if it responds to the city’s request for proposals.

In case you’re wondering why it’s a big deal who manages the arena, it’s a humongous one, because under prior leases the city has been paying IceArizona, the Coyotes owners, $7-8 million a year to run the place. IceArizona swears this is totally reasonable; other observers have disagreed, and now, if nothing else, we’ll get to see if Glendale can do better by actually bringing in other bidders instead of just going to the hockey team and asking, “How much do you charge?”

Of course, any other arena manager would also have to negotiate a rental fee or revenue share with the Coyotes, who will be one of their competing bidders, so this has the potential to be a total mess. But it’s the kind of mess that might end up with the city not left totally holding the bag, or at least not as much of a bag as it might otherwise have to, so I approve! Especially since it promises to be great fun to watch from a distance.