Friday update: Bad D.C. arena math, bad Bucks arena math, bad Columbus ticket tax math

It must be September, because my TV is filled with Jim Cantore and Anderson Cooper standing ankle-deep in water. But anyway:

  • Washington, D.C., is about to open its new Mystics home arena and Wizards practice facility, and Mayor Muriel Bowser says it’s a model of how the city would build a new NFL stadium as well. “We know [sports] can help our bottom line by attracting people to our city, but it also has a big impact when we’re winning on our collective psyche,” says Bowser of an arena that got $50 million in public subsidies for two teams that were already playing in D.C. anyway. Maybe she should go back to using her terrible soccer stadium deal as a model instead.
  • People in Calgary are starting to ask whether, if the city is looking to spend $3 billion on hosting the 2026 Olympics, maybe it should build a new Flames arena as part of the deal? Camels, man.
  • Buffalo Bills co-owner Kim Pegula says she’s going to wait until after the gubernatorial elections this November to start negotiating a new stadium with whoever ends up in charge of the state. It won’t be the lox-and-raisin-bagel lady.
  • Speaking of the Pegulas and New York’s current governor, they’re planning an $18 million upgrade of Rochester’s arena that hosts the Rochester Americans minor-league hockey team (which the Pegulas also own), with costs to be split among the owners and city and state taxpayers. Split how? Sorry, no room in the Associated Press article, ask again later!
  • The AP did find time to fact-check Wisconsin Gov. Scott Walker’s claim that the new Milwaukee Bucks arena would return three dollars in new taxes for each one spent, and found that “Walker omits some of the state money spent on the 20-year arena deal and relies on income tax estimates that experts call unreliable.” I could’ve told them that — in fact, I did, three years ago.
  • “‘Ticket tax’ proposal could lead to higher prices on movies, theater, sports in Columbus” reads a headline on ‘s website, something that the station’s reporter asserts in the accompanying video without saying where he got it from. He’s at least partly wrong: Ticket prices are already set as high as the market will bear, so unless the ticket tax changes the market — in other words, unless people in Columbus are forced to spend more on movies and theater and such because the other options (staying at home and watching TV, going out to eat) aren’t good enough, mostly this will just mean prices will stay roughly the same but a bigger share will go to theater/team owner’s tax bills. (I could try to find an economist to estimate exactly how big a share, but isn’t that really WSYX’s job?)
  • Former Oakland A’s exec Andy Dolich says the team owners may be looking at buying both the Howard Terminal site and the Oakland Coliseum site, and using the revenues from one to pay the costs of prepping the other for baseball, which, if the Coliseum site is such a cash cow and Howard Terminal such a money pit, wouldn’t they be better off just buying the Coliseum site and developing that? Or is the idea that Oakland would somehow give up the Coliseum site at a discounted price in order to get a new A’s stadium done? I have a lot of math questions here.
  • With nobody wanting to spend $250 million on a major renovation of Hartford’s arena, the agency that manages the XL Center is now looking for a $100 million state-funded upgrade instead. Still waiting to hear whether this would actually generate $100 million worth of new revenues for the arena; if not, the state would be better off just giving the arena a pile of cash to subsidize its bottom line, no?
  • Cobb County is only letting the Atlanta Braves owners out of part of the $1.5 million they owed on water and sewer costs for their new stadium. Yay?

Columbus arena hurt by lack of ticket tax, Hartford arena hurt by presence of one?

Columbus’s Nationwide Arena, the privately built and publicly bailed-out home of the Blue Jackets, is running out of money unless the county rides to the rescue with a citywide tax on sports and entertainment tickets:

The initial proposal outlined in January was for the city to levy a tax of 3 to 8 percent on tickets to arts, cultural, entertainment and professional sporting events within the city limits and for Franklin County to contribute sales-tax revenue.

Together, those sources could generate $15 million to $20 million a year, with $4 million being earmarked for the arena and the rest going to artists and organizations that the arts council supports.

Basically, what’s going on is that the county funded the arena bailout, including future renovations, with a casino tax, and Columbus residents just haven’t been gambling their money away like everyone had hoped. And while initially the county arena authority proposed just a tax on tickets at the arena, that’s expanded to a tax on all tickets anywhere in Columbus, and arts groups and their supporters are understandably miffed about the prospect of having to be taxed in order to fund a competing entertainment option just because the Blue Jackets needed to make more money.

(Ticket taxes, as has been covered here ad infinitum, tend to come out of the pockets of those selling tickets, not buying them, as they’re already charging the maximum that the market will bear; though there’s some argument that a citywide ticket tax would hit ticket buyers a bit harder, since they wouldn’t be able to avoid it by going to see some event other than hockey.)

So we have the specter of Don Brown, executive director of the Franklin County Convention Facilities Authority, saying of a money-losing arena, “To keep that magic happening, we have to keep reinvesting in the arena itself.” Magic!

Plenty of other local governments have funded their sports venues with ticket taxes, of course, among them Hartford, Connecticut — where the public operators of that city’s arena want nothing more than their ticket tax to go away:

The overseers of the XL Center in Hartford say the venue is feeling the sting, in more ways than one, from a 10 percent state admissions tax that kicked in six months ago.

The levy has played a role in the 16,000-seat arena striking out on as many as a dozen events, mainly concerts, that it bid on, according to Michael Freimuth, executive director of the Capital Region Development Authority (CRDA), XL Center’s management overseer…

The problem, Freimuth said, is that the tax curtails a show’s potential profit margin “by such a degree that it results in the building losing actual events and the subsequent revenues.”

Connecticut’s is a statewide tax (though some venues have gotten exemptions, including the Hartford arena at times in the past), so it’s not entirely clear what the arena managers or concert promoters are griping about — it’s not like they can get out of the tax by just going to, say, Bridgeport. Though I suppose griping is how concert promoters get better deals — Freimuth told the Hartford Business Journal that “They say ‘you just took my margin down, split it with me,'” which indeed sounds like something a concert promoter would say.

The lesson here is: You can’t get blood from a stone, or much more money from a concert industry that has other options, especially when you’re a market like Columbus or Hartford that big-name acts can just skip if they aren’t feeling the profits. Though if you’re a concert promoter, you totally can try to get a state to cut your taxes to boost your profits by threatening to blacklist them. And if it seems like letting sports teams and promoters play states off against each other in a bidding war to the bottom is bad public policy, yeah, maybe Congress should have listened to David Minge.

Friday roundup: Graceland seeks arena money, Marlins and Cards seek spring-training stadium money, guy in Raleigh seeks MLS stadium money

In no particular order, or as we call it in New York, Mets style:

Connecticut puts Hartford arena up for sale, hints at paying buyer to take it off its hands

If you’ve always dreamed of owning the former home of the Hartford Whalers, yesterday was your lucky day, as the state Capital Region Development Authority officially put it up for sale — and the state of Connecticut might help you buy it from itself, what?

[CRDA executive director Michael] Freimuth said the state is not pledging to devote funds for improvements as part of the RFP, but “the state could be a player. I would think honestly whatever proposals come in, it would require some state participation.”

So what this sounds like is that the CRDA is hoping that some state renovation funds could sweeten the pot to get higher bids for the arena, though given that the arena is already owned by a state authority, it would be more straightforward just to let people bid whatever they want without involving subsidies, but of course straightforward isn’t always what state officials (or arena owners) want, because it’s too obvious where the money is going then.

Anyway, Freimuth says that the CRDA has already received multiple bids, which is good, because running an arena in a mid-sized city with lots of competition elsewhere in the state and no major-league sports tenants isn’t exactly the kind of thing that sets investors’ hearts a-flutter. Let’s just keep our fingers crossed that whoever buys the building doesn’t demand more in “state participation” than they pay the state in the first place, because that’s the kind of offer that Connecticut can’t afford not to refuse.

Friday roundup: Spending on training facilities is a bad idea, Portland seeks MLB team, Jays game postponed after roof hit by falling ice

I can’t believe none of you wrote in to ask why I hadn’t reported on a Toronto Blue Jays game getting postponed due to falling ice puncturing a hole in the stadium roof, but I guess you’re all acclimated to waiting for the Friday roundup now for that sort of thing. But wait no longer! (Well, wait a few bullet points for that one in particular.)

Friday roundup: Marlins claim British residency, video football with real humans, and the White Sox stadium that never was

Busy (minor) news week! And away we go…

  • Derek Jeter’s Miami Marlins ownership group, facing a lawsuit by the city of Miami and Miami-Dade County over the team stiffing the public on the share of sale proceeds they were promised, are trying to stave it off by claiming that (deep breath) because one of the owners of an umbrella company of an umbrella company of the umbrella company that owns the Marlins is a business incorporated in the British Virgin Islands, the case should be arbitrated by a federal judge who handles international trade issues. Maybe the Marlins should quit trying to sell tickets to baseball games and sell tickets to the court proceedings instead.
  • Tampa Bay Rays chief development officer Melanie Lenz, in response to concerns that a big-ass baseball stadium wouldn’t fit into the Ybor City historic district that it would be on the border of, said that “we expect to build a next-generation, neighborhood ballpark that fits within the fabric of the Ybor City community,” though she didn’t give any details. That’s vague enough to be reassuring without actually promising anything concrete, but it’s worth making a note of just in case the historic district ends up becoming a stumbling block in stadium talks, which, stranger things have happened.
  • A guy wants to start a football league where fans vote on what plays to run via Twitch, and build an arena in Las Vegas for people to watch … the players? The voting? The Las Vegas Review-Journal article about it was a bit unclear, though it did say that the organizers want to “create the experience of playing a football video game with real people,” which isn’t creepy at all. It also reports that the league plans to use blockchain technology, which is how you know it’s probably a sham.
  • Something called the Badger Herald, which I assume is a University of Wisconsin student paper but which I really hope is a newspaper targeted entirely at badgers, ran an article by a junior economics major arguing that the new Milwaukee Bucks arena will be a boon to the city because during the first few years “many will come from across the state to watch the Bucks play in this impressive new facility” and after that it will “continue giving the people of Milwaukee a reason to be optimistic.” The author also says that the arena was built after “the NBA gave the Bucks an ultimatum — either obtain a new arena, or the NBA would buy the Bucks and sell the franchise to another city,” which, uh, no, that’s not what happened at all.
  • Here’s a really nice article for CBS Sports by my old Baseball Prospectus colleague Dayn Perry on the Chicago White Sox ballpark proposed by architect Philip Bess that never got built. Come for the cool pictures of spiders, stay for the extended explanation of why supporting columns that obstruct some views are a design feature that stadium architects never should have abandoned!
  • The Los Angeles Rams are trying to pull a San Francisco 49ers, according to Deadspin, by making a run at a Super Bowl in the same year they’re selling personal seat licenses for their new stadium. More power to ’em, but prospective Rams PSL buyers, check how that worked out for 49ers fans before you hand over your credit card numbers, okay?
  • The state of Connecticut has cut $100 million for Hartford arena renovations from the state budget, at least for now, so that it can use the money toward a $550 million bailout of the city of Hartford itself. Is that what they call a “no win-win situation“?
  • NHL commissioner Gary Bettman says the New York Islanders need to move back to Long Island because Brooklyn’s Barclays Center “wasn’t built for hockey,” which he actually pointed out at the time they moved there, but did anybody listen?
  • Alameda County is moving to sell its share of the Oakland Coliseum complex to the city of Oakland, which should make negotiations over what to do with the site slightly simpler, anyway.
  • That Missouri governor who killed a proposed St. Louis MLS stadium subsidy, calling it “welfare for millionaires,” is now under pressure to resign after his former hairdresser claimed he groped her, slapped her, and coerced her into sex acts. Maybe we should just stop electing men to public office? Just a thought.

Hartford arena director says building needs $100m renovation because it’s “tired”

The head of the state authority in charge of Hartford’s XL Center says it needs costly upgrades before it can be sold to a private operator, because of “tired systems”:

“The building is truly out of its prime,” Michael W. Freimuth, executive director of the Capital Region Development Authority, said in a legislative hearing. “It has had a very difficult time competing, primarily with our own casinos, let alone when Springfield comes along. It requires quite a bit of upgrade, not simply of its tired systems which we can’t even find parts for anymore but just the way it presents itself.”

Among other things, apparently none of the elevators or escalators at the building are functioning. The Connecticut legislature is currently considering a $100 million proposal by Gov. Dannel Malloy to rehab the arena, though Freimuth didn’t say whether that would be enough to make it competitive.

The other obvious question that Freimuth didn’t answer is whether anybody would pay $100 million to buy the arena — if not, it’d be kind of a dumb investment by the state. But apparently he considers the XL Center too big to fail, or too downtown to fail, or something:

Knocking down the building could cost as much as $40 million, Freimuth said, all to create a hole in the middle of downtown.

“Frankly, having that go dark at the center of town, well, symbolically, it sends a lot of bad vibes, obviously,” Freimuth said. “It impacts everything from parking revenue to restaurant revenue to taxes. … The event load plays into the hotels.”…

The arena also is considered a key amenity in the city’s revitalization and is attractive to people moving into the new downtown apartments, Freimuth said.

This is the same claim that arena advocates made a year and change ago, when they argued that nobody was going to move to downtown Hartford without a renovated arena, despite tons of people in fact moving to downtown Hartford in recent years. Maybe millennials just like climbing stairs? Damn kids today are killing escalators, too.

Friday roundup: CFL in Halifax, Columbus ghost stadium, Sydney is the new Atlanta, and more!

Are any of my American readers even out there, or are you all too busy tormenting retail workers with your demands for discounted goods? If so, you’re missing out, because we’ve got all your goods right here, at our everyday discount of free!

  • The CFL is considering expanding to Halifax, which means Halifax would need a CFL stadium, which means somebody would have to pay for a Halifax CFL stadium. Halifax Mayor Mike Savage says a stadium is “not a capital priority at this time” and would have to be built “without putting taxpayers at risk.” The Ottawa RedBlacks stadium model is being floated, which is slightly weird because that ended up costing taxpayers a bundle of money plus free land, but maybe “taxpayer risk” is defined differently in Halifax. Anyway, we’ve been this far before, so grains of salt apply.
  • Remember how I wasn’t sure what would be included in the $75 million in public “infrastructure” spending that F.C. Cincinnati is demanding? Turns out that’s because nobody’s sure: WCPO notes that the team hasn’t provided any cost estimates or a traffic study, which “leaves us wondering where, exactly, FC Cincinnati came up with its figures.” I’ll take “nice round number, slightly less than the $100 million elected officials balked at previously” in the pool, please.
  • A guy in Columbus came up with an idea to use county sales tax money to build a new stadium to keep the Crew in town, then the next day said it was just an idea he came up with over the weekend by himself and never mind.
  • The city of Worcester is still trying to lure the Pawtucket Red Sox to town, and the state of Massachusetts may be getting involved, with one unnamed source telling the Worcester Telegram that stadium funding would need to be a “a three-legged stool” among the city, state, and team. You know this article is just going to be waved around in the Rhode Island legislature as it heads toward a vote on public funding for a PawSox stadium there, and what was everyone just saying about the role of enablers in abuse, again? (Not that stadium swindles are morally equivalent to sexual harassment, obviously, but you get my point. Also, why are all the articles about the role of enablers in sexual harassment a month old, are we not going to pay attention to that after all?)
  • The state of Connecticut may spend $40 million on upgrades to Hartford’s arena and some retail properties near its entrance, on the grounds that it might make it more attractive to buyers. If this seems like getting it backwards to you, yeah, me too, but at least it’s better than spending $250 million on the arena and then not selling it.
  • Laney College students, faculty, and staff all hate the idea of an Oakland A’s stadium on their campus. “They want to disrupt our education by building a ballpark across the street with noisy construction, traffic gridlock, pollution, and alcohol consumption by fans,” Associated Students of Laney College President Keith Welch told KCBS-TV. “We will not sacrifice our education so that the A’s owners can make more money.” Pretty sure they won’t get a vote, though.
  • “Industry experts” say that the new Milwaukee Bucks arena will charge more for concert tickets because … it’ll draw bigger-name acts that cost more, I think they’re saying? That doesn’t actually seem like a detriment, though they also note that the new arena has a higher percentage of seats in the lower bowl, which people will pay more for even if they’re way in the back of the lower bowl, and helps explains why arena and stadium designers are so obsessed with getting as many lower-deck seats as possible even if it makes for crappier upper-deck seats. Which we kind of knew already, but a reminder always helps.
  • And move over, Atlanta, there’s a new planned stadium obsolescence king in town: The state of New South Wales is planning to spend $2 billion Australian (about $1.5 billion U.S.) to tear down the Sydney stadium it built for the 2000 Olympics, along with another smaller stadium in Sydney built in 1988, in order to build newer ones that are more ideally shaped for rugby, I think? Because nobody thought of that in 2000? I need to wait for my Australian rugby correspondent to return from holiday break for a more authoritative analysis, but right now this is looking like one of the worst throw-good-money-after-bad deals in stadium history, and it’s not even in America, the land that has perfected the stadium swindle. Crikey!

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?

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.