New York Rangers to play home game as road team to protect $50m-a-year tax dodge

In what I suppose is a tax dodge but is actually kind of hilarious, the New York Rangers are going to be playing a game in New York City as the road team against the Buffalo Sabres, all because they don’t want to spoil the eternal property tax break they were accidentally gifted 35 years ago:

When the Buffalo Sabres and New York Rangers square off in the 2018 NHL Winter Classic in Queens, the Sabres will be the home team despite being headquartered 385 miles away…

Madison Square Garden, the privately owned Manhattan home of the Rangers and the NBA’s New York Knicks, would risk a lucrative property-tax exemption worth more than $40 million a year if either team plays home games in New York City outside the iconic arena…

“If one or both of said teams shall cease to play their home games in said property at any time, the tax exemption provided herein shall cease immediately and such property shall immediately be restored to the tax rolls,” New York’s Real Property Tax Law states.

You can see why the state legislature wrote the language that way back in 1982: They didn’t want to give the Knicks and Rangers a massive tax break and then have the teams leave town anyway, as they were at the time threatening to do without the subsidy. (Though the bill’s crafters also either neglected to notice or intentionally snuck in language that made the tax break extend indefinitely, something that’s now cost the city government more than $400 million.) But apparently they didn’t notice the loophole of the teams playing home games and calling them road games — it’s not like the NBA or NHL would really abet the teams’ tax dodge by designated all of their games as road games, I don’t think, but…

Anyway, all of this subterfuge, and the now $50 million annual cost of the tax break, could be avoided if the state legislature would just pass a bill to rescind it after 35 years. (Mayor Ed Koch claimed he thought he was approving just a 10-year tax break at the time.) Such a bill is annually introduced to the state assembly by Manhattan assemblymember Brian Kavanagh, and for the fifth year in a row is sitting in committee with no action. With government watchdogs like these, NHL-abetted loopholes are all MSG’s owners need to keep raking in the dough.

I’m really busy today, so here is a picture of a kitten rescued from the Red Wings arena site

Okay, that’s a pretty clickbaity headline, but really the credit goes to the staff of the Detroit Free Press, who wrote a whole damn article about an adorable six-month-old kitten that was found on the construction site for the Detroit Red Wings‘ new arena, brought to the Humane Society, and eventually relocated to “a safe, outdoor location,” which is nothing at all like “a farm upstate”:

As today is super-busy for me, I will just note that the cat was dubbed “Little Squeesars” and that the Free Press staffers at least had enough shame to keep their names off the byline. Also that the Red Wings arena is costing the public $334.5 million, about which no one has any shame at all. But who can put a price on cuteness!

Detroit’s “renaissance” has enriched its billionaire sports owners while rest of city suffers

If you want a depressing read about the impact of Dan Gilbert, the billionaire Quicken Loans baron, Cleveland Cavaliers owner, and would-be Detroit MLS owner, on his hometown of Detroit, there’s a great one by Shikha Dalmia in The Week. Among the highlights:

  • Gilbert is pushing for the state legislature to approve a super-TIF bill that would kick back property, sales, and income taxes from environmentally contaminated “brownfields” sites to help pay for the project. It would only apply to projects costing over $500 million in cities of more than 600,000, so the only eligible developer is Gilbert, who is proposing a giant project on the former site of the Hudson’s department store in downtown Detroit.
  • Gilbert got $50 million in tax breaks to move his Quicken headquarters from the suburbs to Detroit.
  • He and his partner, Pistons owner Tom Gores, are seeking $300 million in cash and land in exchange for building a new soccer complex on a half-finished jail site (and a new jail elsewhere).
  • Detroit is about to open a new $187.3 million light rail system that will link “Detroit’s downtown, dubbed Gilbertville because it houses the Quicken office and other buildings where Gilbert’s employees live, with the midtown area, where the entertainment district [built by Gilbert’s fellow sports billionaire, the late Tigers and Red Wings owner Mike Ilitch] is. Never mind that Detroit’s jobless and carless residents would have much more use for bus lines transporting them to jobs outside the city.”

Okay, maybe it’s a high price to pay, but at least Detroit is finally undergoing a long-awaited renaissance as a result, right? Well, actually:

The whole argument for pouring taxpayer dollars into this area is that its growth will spill over to the rest of the city, opening up jobs and business opportunities for all Detroiters. But research by Michigan State University’s Laura Reese and Wayne State University’s Gary Sands published earlier this year suggests that on virtually every metric, life outside the targeted zone is worse than it was even in 2010, when the alleged renaissance began.

Detroit’s overall population actually declined by 2.6 percent between 2010 and 2014. The unemployment rate among Detroiters increased by 2.4 percentage points between 2010 and 2013. This may have been because of the bankruptcy-induced layoffs of city employees, but Sands maintains that the trends don’t seem to have changed much in 2015. “About half of the neighborhoods in the periphery saw employment and payroll declines,” he notes. What’s more, although the overall number of Detroit businesses remained unchanged between 2014 and 2015, 13 of the more peripheral city zipcodes saw a decline.

In other words, far from the city core leading a comeback, it is at best siphoning — and at worst destroying — business and employment in the rest of Detroit, perhaps because smaller enterprises are having trouble competing with powerful billionaires who can dip into taxpayer pockets and divert other public resources toward their grand designs.

The whole thing is a terrific read, if you like to be depressed about how our cities are increasingly being run as engines for boosting the profits of their richest citizens. But you almost certainly do, since you read this website, so by all means go check it out.

New Calgary report: Lookit, a parking lot, maybe somebody could build a Flames arena there?

The Calgary city council was presented with a new city report on the “Plan B” option for a new Calgary Flames arena just north of the Saddledome yesterday, and, um:

The report doesn’t include renderings, or information about cost or funding, and city administration refused to answer questions about the report ahead of Monday’s meeting.

Also:

The new centre, for which there are no plans yet, would include an NHL-level arena along with other “ancillary services” that are yet to be determined, the report says.

“Preliminary site planning and architectural investigations have determined that there is sufficient site area for an event centre with the same specifications and details as the event centre included as part of the CalgaryNEXT design,” the report said.

So basically, this report says, hey, there’s a big empty parking lot near the Flames’ old arena, bet you could fit an arena there. That’s nice and all, but wake me when somebody actually has some idea what it would cost or who would pay for it. Meanwhile, here are some Flames fans debating the new site. (Don’t click the link for the report, it’s broken.)

Islanders really definitely considering building new arena at Belmont Park, maybe

Confirming rumors that first emerged last summer and then re-emerged in February, NHL commissioner Gary Bettman said on Friday that the owners of the New York Islanders are definitely going to bid on state-owned land at Belmont Park racetrack, with the goal of building a new arena there:

“Yes, there is an RFP [request for proposal] for Belmont and I know they are going to participate in that,” Bettman said of the Islanders. “I believe that everyone thinks there is a terrific opportunity there, if not at Willets Point, to create a more hockey friendly environment for the Islanders, which is something [Islanders co-owner] Scott [Malkin] is committed to do.”

You’ll note that all this is still pretty hedgy: “Participating” in bids for the land isn’t the same as actually committing to building an arena (the New York Cosmos participated in bidding for years, and that went nowhere), and Bettman still isn’t ruling out building in Willets Point near the Mets‘ stadium, either. He did rule out playing at the renovated Nassau Coliseum as “not a long-term option,” but really all this comes down to is: The Islanders owners want a new arena of their own, and they’re going to try to get one, by gum.

Who would pay for both construction and land costs remains a mystery. Yes, Tim Leiweke’s Oak View Group and his partners at Madison Square Garden seem eager to make a splash in the arena business regardless of the cost, but that still doesn’t necessarily make the finances of yet another New York–area arena work out. I’ll close, by repeating what I said back in February:

There are way too many unknowns here to say whether this story could have legs, or is mostly just the Islanders owners trying to leverage Prokhorov into giving them a lease extension in Brooklyn that lets them keep their guaranteed-income deal and/or renovates the Barclays Center to be a less sucky place to watch hockey. I’m in an optimistic mood today, so I’ll say I hope that this is another indicator of a burgeoning arms race within Big Arena that sees billionaires throwing money at new venues without demanding big public subsidies, just because they’re trying to drive each other out of business. It couldn’t end well — anybody remember the Borders-Barnes & Noble war? — but at least the only casualties would be some private corporation’s bottom line.

The new Belmont Park request for proposals is expected to be issued soonish. If nothing else, it will be a very interesting ride.

Ottawa mayor says he’ll consider public money for arena that’s supposed to use no public money

And meanwhile, in Ottawa, where Senators owner Eugene Melnyk promised last year that he’d build a new arena and surrounding development with “no government money” … you know where the rest of this sentence is going already, don’t you?

Mayor Jim Watson isn’t ruling out investing public money into a downtown NHL arena at LeBreton Flats.

“I don’t know if they’re going to come forward and ask for any of those dollars,” the mayor told reporters after Wednesday’s council meeting. “Certainly I want to make sure that whatever happens there is to the benefit of the taxpayers of Ottawa.”…

While the mayor repeated that he wasn’t going “to speculate on something that hasn’t been asked,” it is the first time he has seemed open to the possibility of putting taxpayers money into the arena.

“My bottom line is, whatever is being asked from us, does it make sense and is there a return on our investment whether it be through property or development charges or the increased market value assessment of the property,” Watson said.

Yeah, you know, if you don’t want to speculate about something that hasn’t been asked, maybe openly speculating about it isn’t the best way to go about it. To be fair, Watson was probably asked about this by a reporter, and felt like he had to say something, and so he improvised a line about “return on investment” based on something he vaguely remembered Naheed Nenshi saying, and it ended up as a headline. So cut Mayor Paralipsis a break, okay? This whole talking-while-governing thing is hard.

The Coyotes arena-subsidy saga is even more pathetic when you lay it all out in one place

Here’s a fun headline to start your week with:

Arizona’s Terrible Hockey Team Wants a Third Taxpayer Funded Stadium Since 1996

The article, in the libertarian magazine Reason, doesn’t break a lot of new ground, but it is a great overview of the Arizona Coyotes situation, in which the team relocated from Winnipeg to Phoenix in 1996, then across town to Glendale in 2002, and now is trying to move to Tempe or anyplace else in the Phoenix area that will build them a new arena. The team owners are not just looking to play off cities against each other, though, but get state funding, which is extra-stupid because:

Since the team is already in the area, building a new stadium would not create a new source of tax revenue for Arizona, says Victor Matheson, a sports economist at the College of the Holy Cross. Moving from Glendale to Tempe, Matheson says, merely would shift the economic benefits from one municipality to another.

And also:

Building more stadiums in a single metropolitan area will only create more competition for a limited number of major events.

“Lady Gaga isn’t going to play both Phoenix and Glendale,” is how Matheson puts it.

And then there’s:

The Coyotes are unlikely to leave for greener pastures, though, because NHL executives care much more about having a team in the Phoenix area than anyone in the Phoenix area cares about having a hockey team. The Phoenix metropolitan area is the sixth largest media market in the United States, which means an NHL benefits from having a presence there—even if the team is terrible and the fans are apathetic—for marketing purposes and television advertising revenue.

That’s more debatable: The NHL’s national U.S. TV revenue is pretty piddly as these things go, and I really doubt NBC said during negotiations, “Well, since you have that all-important Phoenix hockey viewership market, we’ll tack on an extra $25 million a year.” More likely is that NHL commissioner Gary Bettman is fixated on his “Sunbelt strategy” to to seed NHL franchises across the U.S. South and West, and doesn’t want to back down — though since that’s a strategy predicated on filling U.S. markets to get bigger U.S. TV deals, I suppose Reason is at least half-right. You’d kind of think by now that some of the other NHL owners would be saying, “Gary, this whole Arizona thing isn’t working out, let the team move somewhere that it can actually sell a ticket or two,” but I suppose where there’s arena-subsidy life, there’s hope.

Flames CEO threatens to move team, denies he’s threatening to move team, universe explodes

Almost 20 years ago, Joanna Cagan and I coined the term “non-threat threat” for the common practice of sports team owners warning that their teams would leave without a new stadium, while simultaneously saying that that was the last thing they wanted. (We could have gone with the “paratrooper gambit,” but in the days before hotlinking we weren’t sure everyone would get the reference.) But until now I’d never seen a team owner actually levy a move threat while explicitly claiming he wasn’t making a move threat — until now:

“There would be no threat to move, we would just move, and it would be over. And I’m trying my level best to make sure that day never comes, frankly,” [Calgary Flames CEO Ken] King said during an interview on Sportsnet Fan 590 in Toronto on Wednesday.

So I sort of know what he’s saying — “There won’t be any warning, we’ll just be gone, boom” — except that saying that on the radio is actually pretty much the definition of a threat. That last bit about “trying my level best to make sure that day never comes,” meanwhile, is straight out of the Vercotti brothers playbook, or concern trolling if you prefer.

The goal of this non-threat threat, of course, is to shift the terms of the Calgary Flames arena debate, from “Why should the city give your team $1.2 billion?” to “How are we going to keep the team in town?” (The timing, coming two days after Calgary Mayor Naheed Nenshi declared the Flames owners’ previous arena plan “dead,” was surely not coincidental.) And with that “hey, we don’t want to move” element, King simultaneously gets to introduce plausible deniability, which both keeps fans from descending with torches and pitchforks and also sidesteps any questions about exactly where the team is threatening to move to — since it’s not really a threat, see?

Whether this is a real non-threat or a fake one, though, depends on exactly that: What other options do the Flames owners have? The team currently sits smack in the middle of the NHL as far as team valuation, according to Forbes, and turns about a $20 million a year profit. Would oil sands tycoon N. Murray Edwards and his fellow owners really move the team to, say, Seattle (if that city built a new arena) or Quebec (which would require selling the team to local owners there) in hopes that it would catapult them into the upper tier of NHL franchises? It’s not impossible, but it also doesn’t seem very likely, compared to the more plausible interpretation that King is just dropping idle threats (sorry, sorry, non-threats) in order to panic Calgary fans and elected officials into not caring about that $1.2 billion.

And so how’s that panic going, anyway? Mayor Nenshi seemed unperturbed, or feigned unperturbation at least:

“The owners of the Calgary Flames have repeatedly assured Calgarians that they would not threaten to move the team, and I assume that they have not shifted from that position,” Nenshi said. “I plan to enjoy the playoff run while letting the conversations continue.”

The Calgary Herald, meanwhile, scoured social media to find that some people are made at Nenshi (“nenshi do u work as much as u tweet???if flames leaves calgary,you should leave yyc”) while some are mad at King (“If this is such a great idea, then why don’t these well-off business people pool their resources and build one?“), which should surprise no one who’s ever been on social media. (No reports yet on whether the threat has moved the poll numbers on an arena subsidy plan.)

Over the weekend, King tried to clarify things, or at least forestall some pitchforks, by issuing a statement on the Flames website that read in part:

In response to a question, are you going to use the threat of moving as a tactic, I said we would not. I also said we would “just move.” The facts are we need a solution and if it is deemed that there is no made in Calgary solution we will have to make a decision at that time, which logically could include deciding to move the team. It is merely one out of a few possible outcomes if we are unable to reach a deal with the City that will work for both sides.

To which one Flames fan replied on Twitter:

Yep, that about sums it up. Though if it ends up working as a savvy negotiation tactic, King will surely be able to live with the Twitter ridicule.

Calgary mayor sticks fork in Flames-Stampeders combined stadium-arena plan

It’s always best not to assign too much significance to the exact wording of off-the-cuff remarks, and the CalgaryNEXT stadiarena plan for the Calgary Flames and Stampeders has been pretty much dead since it was revealed last April that the public cost would be at least $1.2 billion, and the city council could still overrule him, and declaring one plan dead isn’t the same as declaring all plans dead. Still! Calgary Mayor Naheed Nenshi actually using the word “dead” — as in, “the thing about a new arena project, and I’ll use those terms because CalgaryNEXT, the West Village project, is dead” — is a pretty good sign that the Chest Protector Dome is, in fact, dead. Time to move on to Plan B, of which nobody actually has a clear one, but it sounds a lot more polite than “lump it.”

The more interesting statement by Nenshi came after the “dead” thing, actually:

“But, the thing about a new arena project is that our first criteria has always been public money for public benefit, so it really is up to the Calgary Sports and Entertainment (Corp.) to figure out what the public benefit is,” the mayor continued.

Again, that’s nothing new from Nenshi, who’s consistently said he won’t approve any plan without a clear public benefit. But it’s also a bit of a thrown gauntlet: You want money for a new arena, first show me why I should build you one. This is an eminently reasonable way to approach subsidy demands, whether from a hockey team or an auto plant, and provides an even better reason to consider making the great leap northward.

Coyotes’ $170m tax kickback bill is mostly dead, owners go back to drawing board

So if Arizona Coyotes owner Andrew Barroway and NHL commissioner Gary Bettman though that threatening vaguely that the franchise “cannot survive” in its existing arena in Glendale was going to shake loose money from the state legislature, yeah, no, that’s not happening. State senate president Steve Yarbrough told the Arizona Republic yesterday that “I have no expectation that that bill is going to move,” and even the bill’s sponsor was reduced to mumbling something about how where there’s life, there’s hope:

[Sen. Bob] Worsley, who pushed the bill through a committee he chairs in February, said it “may be the case” the legislation is in trouble. Yet he noted that no bills truly are dead until the Legislature adjourns.

So assuming that the bill to write as much as $1 billion in blank checks to local sports teams for new buildings isn’t going anywhere, now what? Barroway and his co-owners may not be getting paid $8 million a year to run the Glendale arena anymore, but they still have a fairly cushy lease that has already been extended through 2018, so they can easily keep going year-to-year while trying to find some other Phoenix-area elected body eager to throw public money at them. They could try to move the team, but the options there aren’t much better: Quebec would require selling the team to Quebecor, Seattle still doesn’t have an NHL-ready arena, and other cities are even more of a shot in the dark. The real answer here appears to be “if you’re going to buy a hockey franchise, maybe don’t buy one that plays in a non-hockey hotbed and has never been able to draw flies,” but Barroway and company have made their bed, so honestly unless you’re a Coyotes fan, there’s no reason to worry about how they choose to lie in it.