MSG investing in new Islanders arena on Long Island is so crazy it might just be crazy

There are rumors, and then there are rumors that lead to eyebrow-raising headlines:

A supergroup of New York sports executives, including owners of the New York Rangers and the New York Mets, is lining up to invest in a new arena just outside of Queens for the National Hockey League’s Islanders, according to people familiar with the discussions…

The new arena proposal is a joint venture between the Islanders, Oak View Group and Sterling Project Development, said the people, who asked to be anonymous because the talks are private. James Dolan’s Madison Square Garden Co., which controls the Rangers, long the Islanders hated rivals, is an investor in Oak View Group, the private equity group run by Tim Leiweke and Irving Azoff. The Wilpon family, which owns the Mets, controls Sterling Project Development.

Much of this isn’t new: Bloomberg News reported last summer that the Islanders owners were looking at the Belmont Park racetrack site as a potential backup to building an arena next to the Mets‘ stadium in Willets Point, and apparently (according to those “people familiar with the discussions”) it’s now moved up to being Plan A. The new bit is the involvement of Oak View, the company run by former AEG exec Leiweke that has also expressed interest in renovating Seattle’s KeyArena, and which includes Dolan’s Madison Square Garden Co. as an investor.

Let’s start with the ways this makes some sense: Belmont Park is close to the Islanders’ old fan base, it has decent transit and highway access, and the state has been looking for a way to redevelop the site for years to no avail. And if you’re going to look to build a whole new arena in an already-glutted market, who better to turn to than Leiweke, who is desperate enough to make a splash in the arena game that he could well be willing to take on plans that more established arena operators might consider too risky.

On the other hand … this makes no damn sense. The New York City area already has arenas in Manhattan, Brooklyn, Newark, and Nassau County — it just had to close one in New Jersey because there weren’t enough concert acts to go around, and it’s now apparently being used as rehearsal space. Adding another arena would just put one of the existing ones on the brink. And it really makes no sense for MSG to want to spend hundreds of millions of dollars to compete with itself — unless Dolan thinks he’s better off owning two arenas to try to drive Mikhail Prokhorov’s two arenas (Brooklyn and Nassau) out of business, which would be a strange kind of loss leadering, but then, Dolan is after all an idiot.

There’s also always the possibility that the Islanders owners, Mets owners, and Oak View could try to demand public money to sweeten the pot: Bloomberg reports vaguely that “New York Governor Andrew Cuomo has taken part in the proposed arena talks and is seeking to attach infrastructure improvement projects to it,” and we know that Cuomo is big on building things that he can call “infrastructure,” especially when he can do so via a combination of tax breaks for private developers and Ida Know. There’s also always the possibility of going back to Nassau County voters to see if they’d be more amenable to funding a new arena now, or maybe seeing if Islanders fans on Long Island would buy commemorative bricks or something to stop having to trek to Brooklyn to see games.

All of which is to say that 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.

AZ legislators not actually all that stoked about approving $1b-plus in sports subsidies

So it turns out that giving Arizona Coyotes owner Anthony LeBlanc $170 million in state tax breaks to move from one part of the Phoenix area to another and also approving as much as $375 million in tax breaks for any other pro sports team that wanted a new stadium isn’t so popular in the Arizona state legislature after all. Or at least, isn’t quite popular enough to get a majority, probably:

A plan that would provide $225 million in public financing for a new $395 million Arizona Coyotes arena likely does not have the votes to pass the state Senate, key lawmakers told The Arizona Republic/azcentral Thursday.

Sens. Debbie Lesko, R-Peoria, and John Kavanagh, R-Fountain Hills, said they definitely were going to vote against the plan, while Minority Leader Katie Hobbs, D-Phoenix, said there is little support among the chamber’s 13 Democrats. Meanwhile, Senate President Steve Yarbrough, R-Chandler, said he had “serious reservations” about the plan that would allow the National Hockey League team to build an arena in downtown Phoenix or the East Valley.

The utter stupidity of such a plan aside, this points up the political difficulty of getting state support for the subsidy deal: In addition to it becoming a partisan political issue (the sponsor of the bill is a member of the state’s Republican majority), there are regional splits as well, with West Valley legislators of both parties opposing a bill that would likely be used to subsidize a move of the Coyotes out of Glendale, which is in the West Valley. (Peoria is adjacent to Glendale, though Fountain Hills is in the East Valley.) Add in any legislators who are just opposed on the principle that throwing over a billion dollars at your state’s sports teams for no damn reason is a terrible idea — hey, it’s always possible — and the bill is “on life support,” according to the Arizona Republic.

Not that it won’t eventually happen, in some form. (You know how politicians love to haggle.) But it looks like it’s going to take a few more strands of spaghetti thrown at the wall before one of them sticks.

Connecticut governor says if he spends $250m on arena, “folks” may bring a hockey team

Connecticut Gov. Dannel Malloy has explained that his screwy invitation to let the New York Islanders play in Hartford isn’t so screwy after all, because, um, some other guys who don’t actually have a hockey team called him about playing in Hartford if they got one:

“As a result of sending that letter, getting as much publicity as it got, we have been contacted by a group that would very much like to explore … bringing a team should they be successful in acquiring it,” Gov. Dannel P. Malloy said Friday afternoon during a tour of the 42-year-old downtown arena…

“There are folks who are seeking to understand exactly what our plan calls for, and that’s not exclusively the Islanders anymore,” he said. “We’ve been contacted by other folks who are interesting in acquiring an NHL team and want to know what we would do to this facility to modernize it.”

That “modernize it” is the rub — aside from the vagueness of “folks” being the rub, obviously — since Malloy is proposing $250 million in renovations to the Hartford arena at a time when the state is facing a $1.3 billion deficit. The governor, trying to get out in front of the criticism, painted this as courage:

“We have a decision to make, do we close this facility in the next few years and give away the traffic in the downtown, give away the attraction of this facility in a city that’s fighting to make a comeback and fighting to retain the jobs it currently has, which I think is not the way to go, quite frankly,” he said. “And that’s why I’m more than willing to take some political heat to accomplish what I think is in the best interest of Hartford, the capital region and the state of Connecticut.”

That is indeed the decision to make, but deciding it’s “not the way to go” before actually crunching the numbers is, well, not the way to go. How about a study comparing whether it would be more beneficial to the state’s economy to put $250 million into a hockey arena without a hockey team or into, say, local education budgets? Hey, Connecticut legislators, maybe one of you would like to take this on as a spring project?

Arizona senators push to give Coyotes, Suns, D-Backs up to $1.1b for new arenas and stadium

Arizona Coyotes owner Anthony LeBlanc may not have any idea where he wants to build a new hockey arena now that Arizona State University pulled out of a planned venue in Tempe, but that’s not going to stop members of the Arizona state senate from pushing legislation to give him $170 million in sales- and hotel-tax kickbacks to help build one. And hey, while we’re at it, let’s make it easier for the Diamondbacks and Phoenix Suns to get state subsidies, too:

The bill would allow creation of “community engagement” districts of up to 30 acres. Within them, up to half of the state’s share of sales taxes generated from retail sales and hotel stays would be dedicated to paying the bond debt for new sports or entertainment facilities. It also would allow an additional 2 percent district sales tax to be applied to all purchases within the district, with those revenues also dedicated to defraying the cost of facility construction.

In the case of the Coyotes, the plan envisions public funding covering 57 percent of a new arena’s cost, with new sales taxes covering $170 million and the host city contributing $55 million. The Coyotes said the team’s portion would be $170 million, amounting to a 43 percent contribution toward the $395 million total cost.

This is a bit of a hybrid bill, combining super-TIFs (where half of existing sales and hotel taxes would be kicked back to pay teams’ construction costs) with a new sales tax surcharge in the area around the new sports venue. The math on how much of a subsidy this amounts to gets dicey — virtually all of a TIF would be cannibalized from sales and hotel tax receipts elsewhere in the state, but a slice of a sales tax surcharge could come out of a team owner’s pockets, depending on how big the surcharge area is — but the vast majority of it would be a straight-up gift to team owners, all to allow cities in one part of Arizona to steal teams from cities in another.

You’ll note that I said “teams,” not just the Coyotes. That’s because the new super-TIF districts could be applied to help build any new sports and entertainment facilities. The only limit is that state money would only be allowed to pay for half of construction costs up to $750 million — meaning that if the Coyotes, Suns, and Diamondbacks all availed themselves of the legislation, as you know they would love to do, Arizona taxpayers could potentially be on the hook for $1.125 billion. (If the Coyotes stick to their $170 million demand, the max would be only $920 million, but as we’ve seen before, sports construction costs only tend to go up, and there’s nothing stopping LeBlanc from revising his ask as time goes on.)

Now, the bill has so far only passed one committee in one branch of the Arizona legislature — Sen. Bob Worsley of Mesa used one of those “gut an unrelated bill and insert your own language” tricks to get it on the agenda of his own transportation and technology committee — and none of the teams involved have identified places where they’d like to build new facilities, or how to pay for their halves. Still, it’s a pretty remarkable response to a “crisis” started by the Coyotes’ need to leave their nearly-new arena in Glendale because … hey, Coyotes ownership, why do you need to leave again?

“It does not work in Glendale,” Ahron Cohen,the team’s general counsel, told the Senate panel. “In 2013, our ownership group bought the team. The previous ownership chose to go out there.”

Oh. Well, if it “doesn’t work,” then it doesn’t work. I thought you were going to say something about how you couldn’t bear to be forced to compete for the rights to operate the arena instead of just being handed $8 million a year by Glendale in a no-bid contract. Good thing it’s not that, because asking the state of Arizona to pay you a couple hundred mil to get you out of that pickle would be chutzpah in the Nth degree, and only complete morons in state government would actually consider it.

St. Louis council approves $127m for Blues, MLS venues, voters can still block the latter

St. Louis lawmakers took major steps last week toward throwing $127 million at upgrades for the Blues‘ hockey arena and construction of an MLS soccer stadium, though the latter will depend on the results of an April voter referendum:

  • The board of aldermen voted on Friday to approve $67 million in subsidies for Blues arena renovations. (It will add up to $105 million over time, but it’s worth $67 million in present value. And while it would mix sales taxes, ticket taxes, and other revenues, all those are all diversion of existing taxes, not new ones the team owners are agreeing to pay, so as discussed earlier, it’s all money that the city would otherwise be able to spend on other things if not being siphoned off for the Blues owners.) Alderman Steve Conway defended the subsidy as necessary to keep drawing NCAA events (“If we don’t make improvements, what comes into general revenue diminishes over time”), though he didn’t appear to provide numbers showing that any added revenue is worth the expense; Alderman Antonio French retorted, “We do not have $105 million to give to anybody. And we’re about to give money to some of the richest people in town because they want a new scoreboard.”
  • Circuit court judge Michael Mullen approved putting $60 million in funding for a new MLS stadium on the April ballot, despite the board of aldermen having approved it too late for the deadline after the initial bill was withdrawn and revised. There will actually be two votes: one to raise sales taxes by 0.5% to expand St. Louis’s light rail system, which would automatically cause use taxes on out-of-state purchases to rise by the same amount; the other would approve taking those use taxes and pouring them into paying off $60 million worth of stadium costs. If either fails to get a majority, the stadium subsidy wouldn’t happen.

The soccer stadium vote will be, unless I’m mistaken, the first time that St. Louis voters will actually be going to the polls under the law approved by a 2002 referendum requiring a public vote on any sports subsidies. (The Cardinals stadium had already been approved then, and the Rams stadium never happened.) The only poll on the subject that I can find is just of Democratic primary voters (though St. Louis is pretty overwhelmingly Democratic); it found respondents opposed to soccer subsidies by a 61-22 margin, so I think it’s fair to say the proposal faces an uphill battle. There’s still two months of campaign spending left, though, so open up those Jamba Juice (and Bain Capital) coffers, Paul Edgerley!

Broward considers razing Panthers’ 19-year-old arena, this isn’t even surprising anymore

The Florida Panthers‘ arena in Broward County (I’m not going to go through the trouble of remembering its current corporate name) opened 19 years ago, at public expense, as a way to get the team to stay in the Miami area long-term. So, naturally, it’s time for the county to start thinking about tearing it down:

This week, Broward County embraced a development vision for the land, a potential playbook created by the Urban Land Institute… The institute’s land use experts said the county-owned BB&T Center, a giant venue surrounded by parking spaces, represents “an opportunity lost.’’

The main reason for hiring ULI is to figure out how to develop the land around the arena — which the county bought back for $86 million in 2015 — which would have been a better idea before spending the money, but better late than never. But that deal also handed Panthers owner Vincent Viola an out clause in his lease, so the consultants are also being tasked with figuring out what to do with the land if the team leaves:

The consultants explored three alternatives: the Panthers extend their lease, and a casino is added; the Panthers extend their lease, and office and housing are added; and the Panthers leave, the arena is demolished, and housing, a casino and offices are added. The third option would bring in the most tax revenue and income to the county, at an estimated $391.3 million over 11 years, the report said.

On the one hand, you could probably come up with more economically productive uses for the land than a hockey arena, assuming Broward County has much more time before it’s underwater. Though if the county ends up having to build the Panthers a new arena somewhere else to keep them after they opt out of their lease, that’s less helpful. That out clause really was as bad an idea as it sounded at the time.

Coyotes owner now OK with staying in Glendale while he waits to be gifted with a new arena

Arizona Coyotes owner Anthony LeBlance said yesterday that he’s still “pretty confident” he’ll get a new arena somewhere, and blah blah blah whatever, of course he’ll say that, but — hey, what’s that?

The Coyotes still have no intention of calling Gila River Arena home for any longer than they have to.

“We’re okay staying in Glendale if we know that there’s certainty of a new facility coming online and shovels in the ground,” said LeBlanc.

Well, that’s new. Admittedly, LeBlanc doesn’t have much of a choice but to stay in Glendale for a while if he wants to stay in the Phoenix area and has to wait on a new arena, but previously he’d made noise about getting out of Glendale “as soon as practicable,” and … okay, I guess this isn’t technically any different, but it does put more of an emphasis on being willing to stay put for a while if necessary. Though only if he can smell those shovels in the ground. Otherwise … he’s not saying, but you don’t wanna cross him, man, there’s no telling what he’ll do. Just not move to Portland or Seattle, because he wouldn’t do that. Is this threat working yet?

CT governor, facing $1.3b deficit, proposes $250m for Hartford arena upgrades, just because

Connecticut Gov. (and Stephen Colbert lookalike) Dannel Malloy wants to spend $250 million on renovations to Hartford’s arena because, because … “investment,” I guess?

Malloy’s budget chief confirmed Monday that the governor’s two-year capital plan — to be unveiled Wednesday along with the state’s proposed operating budget — will include $50 million in 2018 and $75 million in 2019.

“We are essentially suggesting, if the legislature approves this funding, they are committing to the full $250 million,” Ben Barnes said.

Barnes said the proposal is consistent with other state investments in downtown Hartford, including apartment conversions, Front Street and the new University of Connecticut campus.

Well, no, not really. A new UConn campus at least benefits UConn students, who are otherwise being packed in increasing numbers into Storrs, an infinitesimal town in the eastern part of the state that is only accessible by mule train. (I may be exaggerating, but as I was reminded when I spoke there in November, not by much.) A renovated arena with an extra 3,000 seats benefits getting more people to go to events at the arena, I guess, but there aren’t many of those. So why exactly is this a priority for state spending?

When the arena upgrade was first proposed a couple of months ago, the best argument anyone could come up with was that millennials won’t live downtown unless it has a nicer hockey arena. But more recently, of course, there has arisen another, even less likely, goal: Luring the New York Islanders to Hartford.

“I’m going to send another letter to the commissioners spelling out what we think would be appropriate in the modernization of that facility so he may have an understanding of what we are trying to do,” Malloy said. “Listen, this is a long shot, but if you don’t reach out and if you’re not in the discussion, then you can’t be considered.”

Okay, sure, saying you’re willing to upgrade your arena if a team is willing to move there — and even having an upgrade plan ready to go — isn’t a terrible idea. The two things you don’t want to do, though, are: committing to the money without first getting a lease agreement from a team that you’re sure will help repay the cost of upgrades; and committing to the money without even being sure a team will come at all. Those are the two things Gov. Malloy is now doing, because Gov. Malloy apparently thinks a quarter-billion dollars grows on trees.

State legislators are less sure about the money trees, according to the Hartford Courant, which notes that “there is a growing resistance to using bonds — essentially the state’s credit card — for big-ticket projects when funding is being cut to social service programs, road improvements and school programs.” With the state already facing a $1.3 billion deficit, you have to think that spending $250 million on a hockey arena with no hockey team will prompt at least a little bit of debate, but we’ll see how it goes as budget season kicks into full gear.

Glendale legislator: Wait, why exactly should we pay for another city to steal the Coyotes?

Hey, here’s a question you don’t see asked nearly often enough: Why the heck should a state government pay to help a pro sports team leave one part of the state for another? The state is Arizona, where even after Coyotes owner Anthony LeBlanc’s Tempe arena plans crashed and burned last week, state senator Bob Worsley (who represents Mesa, in the East Valley) is still pushing for $200 million in state sales tax kickbacks that LeBlanc could use for a new arena elsewhere in the state. State representative Anthony Kern (who represents Glendale, in the West Valley), meanwhile, is having none of that:

“This legislation comes down to a simple public-policy question: Should taxpayers be asked to pay for a new arena that will directly compete with already existing facilities that taxpayers are still paying off?” Kern said…

“We want the Coyotes to be successful on and off the ice and to do so in the publicly-funded Gila River Arena that the public built — Glendale taxpayers built — for them to play in.”

While I’m not sure “taxpayers are still paying off” is the most sensible argument — would it be okay for the state to subsidize one Arizona city stealing a team from another if Glendale’s arena were already paid for? — Kern has a point with the rest of it. The only thing stopping the Coyotes from playing in Glendale, after all, is that LeBlanc is refusing to do so unless he gets to manage the arena and get paid by the city for it, which isn’t exactly the kind of crisis that the state needs to run in and solve. Unless you think that he’s going to move the team out of state if his demands aren’t met, which he hasn’t threatened to do yet—

According to officials in Seattle and Portland, members of the Arizona Coyotes have toured arenas in both locations in the past three months. The destinations appear to have been the KeyArena in Seattle and the Moda Center in Portland, Ore...

Arizona Coyotes Executive Vice President of Communications Rich Nairn denied the rumors, when asked about the reports of members touring the two arenas.

“That is false,” Nairn said via email.

So, either this is a rumor that Seattle and Portland are spreading for unknown reasons, or it’s a non-threat threat by LeBlanc. Either way, a whole lot of sabers are being rattled, which is to be expected, but that’s no reason to panic just yet and start throwing sales tax money around.

Hartford offers to host Islanders if they’re left homeless, gets into this headline

With the New York Islanders potentially homeless starting in 2019, it was only a matter of time before other cities eager to lure a hockey team started throwing their hats in the ring. And first up is … nope, not Quebec. Not Seattle, either. Think closer to home — yep, you’ve got it:

[Connecticut] Governor Dannel Malloy and [Hartford] Mayor Luke Bronin … sent a joint letter addressed to New York Islanders ownership Friday inviting the NHL club to play at Hartford’s XL Center…

“This is a ready market anxious for an NHL team, eager to fill seats, buy merchandise, and support your team,” Malloy and Bronin wrote to Islanders owners Jon Ledecky, Scott Malkin and Charles Wang (who owns a minority stake). “Your AHL affiliate is in nearby Bridgeport, allowing quick and easy access to your minor-league players, and represents a footing in Connecticut of the Islander franchise.”

I mean, worth a shot and all, but Hartford is pretty much completely inaccessible to the Islanders’ fan base on Long Island (at least until somebody builds that Oyster Bay-Rye Bridge); and if the team’s owners really wanted to up and start over with a new fan base, Quebec and Seattle both have newer arenas and larger populations to offer. Hartford might make a tiny bit of sense as a temporary emergency move if the Islanders had no where else to play, to lure in some Connecticut fans to attach themselves to the team, and then once they’re back in a permanent home they’d travel down to … nope, still no bridge. Okay, this mostly makes sense as a way to put out a press release with “Hartford” and “hockey” in it, and I just fell for it. Damn — well played, Dannel and Luke, well played.