Islanders to pay one-tenth as much per acre for Belmont arena as Aqueduct land goes for

When I tried to do some quick-and-dirty estimates last week of how much of a sweetheart deal the New York Islanders owners will be getting on state-owned land at Belmont Park for a new arena, I came up with a discount of anywhere from 52-87%. (Or, put another way, the land is likely worth anywhere from double to eight times what the Islanders are paying for it.) Now, Norman Oder’s Atlantic Yards Report has come up with another comparable to use as a basis for estimating the land’s true value: a 67-acre parcel at nearby (sort of) Aqueduct Park that was leased to a video lottery terminal company starting in 2010. Oder shows all his math in his own post, but let’s cut to the final numbers that count here:

Aqueduct: $189,055 per acre each year

Belmont: $18,984 per acre each year

So the Islanders owners’ consortium will be pay almost precisely one-tenth per acre what racetrack land on the other side of Queens went for seven years ago. That’s not enough to definitively say “Islanders should be paying ten times as much for arena land as they are” or anything, but the more data points we get here, the more we can say that this proposed lease looks real bad for taxpayers, man. And that’s before even getting to those Long Island Railroad costs.

Friday roundup: Trump rescued stadium tax break, Sacramento MLS group needs more cash, more!

Happy interval between Hanukkah and Christmas! If anyone is out there reading this and not getting on a plane from somewhere to somewhere else — or is reading this while waiting for a plane from somewhere to somewhere else — enjoy your lightning-round news of the week:

  • San Diego Union-Tribune columnist Kevin Acee, who never met a stadium or arena deal he didn’t love to bits, says that several people are interested in building a new arena in San Diego, including the owners of the Padres and new Brooklyn Nets minority owner Joe Tsai. Acee adds, “Several people insisted in recent weeks the Nets will remain in Brooklyn long-term and there are no plans to ever move the team to San Diego,” which, given the relative size of the markets, is possibly the least surprising sentence ever written in the English language. Also, Acee includes zero attributed quotes in his story, and says nothing about how such an arena would be paid for, so take it with a large grain of salt for the moment.
  • Donald Trump made retaining the tax-exempt bond subsidy for sports stadiums in the tax bill “a priority,” according to one GOP aide. So when he tweeted in October, “Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!”, either he didn’t mean anyone to take him seriously just because he was the president of the United States speaking out on a matter of public policy, or more likely he just forgot to check with his funders before clicking Tweet.
  • “The Miami Open tennis tournament won permission to move to the Miami Dolphins’ stadium, with the kickoff planned in 2019,” reports the Associated Press, which seems to be slightly confused about how a tennis match starts.
  • After the NBA used the promise of an All-Star Game for Cleveland in 2020 or 2021 if it approved publicly funded arena renovations for the Cavaliers, and the city approved $70 million worth, the league gave those games to Chicago and Indianapolis. Not that there’s really that much value in hosting an NBA All-Star Game, but still, HA ha, suckers.
  • Apparently the reason why Sacramento didn’t get an MLS expansion team along with Nashville this week is the league is worried the city’s ownership group doesn’t have enough cash for a $150 million expansion fee and a $250 million stadium. All they need is to find someone with deep pockets who thinks the best thing to do with their money is to invest it in a U.S. soccer franchise that will start off $400 million in the hole, and, well, good thing that P.T. Barnum movie is opening this week, that’s all I can say.
  • There’s a “Plan B” stadium proposal for the Pawtucket Red Sox, where instead of helping to fund the stadium directly, the state would instead give the city all income and sales taxes collected at the stadium and let the city use the money on construction costs. Rhode Island state senate president Dominick Ruggerio says he doesn’t “see that as being a viable alternative,” and plans to submit his own stadium-financing bill, which probably won’t pass the state house. This could go on for a while, until somebody remembers where they stored the money generating machine.
  • The Arena Football League is now down to four teams, in part because the Cleveland Gladiators had to suspend operations for the next two seasons thanks to renovations to the Cavaliers’ arena. This was reported in the Albany Times-Union, which has to care because Albany is supposed to be getting an AFL expansion team this year, and man, do I feel sorry for whoever got stuck with being the Times-Union beat reporter on this team, because this is looking like a sad year ahead for them.
  • Deadspin’s Drew Magary weighed in this week on arena and stadium subsidies and concluded that “Arenas Are Important And Football Stadiums Are Not,” according to his headline, but really he meant “if you’re going to waste money on something, at least arenas can be used more days of the year,” which, fair enough. Or as Magary puts it as only he can: “We are entering an age of horrific corruption, and so I have accepted the fact that living in a fraud-free America is a hilarious pipe dream. All I can do is hope for the least of all corruptions, and pray that a bare scrap of public good accidentally comes out of it. If you are some ambitious dickbag city councilman looking to make his name for himself, an arena should be your priority when it comes to getting worked over.”
  • NHL commissioner Gary Bettman spoke out again about the Calgary Flames arena situation, calling it “very frustrating” and saying that “they’ll hang out and hang on as long as they can and we’ll just have to deal with those things as they come up,” but insisting that “yes, Quebec City has a building, but nobody’s moving right now, we’re not expanding East.” Which either means the Flames owners really don’t want to threaten to move right now (or ever), since making overt move threats is usually Bettman’s job, or it means even Bettman is sick of trying to pretend that the Flames have a viable threat to go anywhere.

Isles’ “privately funded” arena could get cheap land, new rail line at taxpayer expense

It’s official: A development consortium made up of the owners of the New York Islanders, Sterling Equities (owners of the Mets), Madison Square Garden (owner of the Knicks and Rangers), and Oak View Group (builders of Seattle’s renovated KeyArena) won permission to build a new hockey arena and mixed-use development in a parking lot adjacent to the state-owned Belmont Park racetrack. And while Islanders owner Jon Ledecky declined to say how much the arena would cost, he did promise, “We’re not looking for government funds.”

We have heard that before, though, and it doesn’t always work out so well — remember that a Yankees exec promised that that team’s new stadium would be built with “no public subsidies,” and then it wound up getting more than a billion dollars worth. And while there’s no sign that the Islanders deal will turn out to be the biggest sports handout in history like that one did, there are several places where it could end up tapping significant public dollars.

For starters, the Islanders group will be leasing the Belmont Park land from the state, so as I noted yesterday, one big question is whether they’ll pay full market value. And the answer appears to be not by a long shot:

Marshall, who is a member of Newsday’s editorial board, hasn’t circled back to confirm this yet (UPDATE: Norman Oder tweets that the state has confirmed to him that it’s just $40 million total), but assuming she’s correct, $40 million over 49 years is an absolutely pathetic payment for 43 acres of land. That’s maybe $10-15 million in present value — here’s a tenth-of-an-acre vacant lot in nearby Floral Park that’s going for $729,000, which would imply that the Belmont Park property should be worth around $313 million, or more than 20 times what the Islanders are paying for it. (If you use this exceptionally hideous lot as a comparable instead, it’s only worth six times what the Islanders are paying, but that’s still not good.)

(UPDATE #2: Oder has updated his Bridge article to note that the state says $40 million is “the upfront value over the term of the lease for the build out” — he sent me this quote from a state spokesperson, it’s not in the article verbatim. So if it’s lease payments worth $40 million in present value, that’d amount to a taxpayer-subsidized discount of between $44 million and $273 million, depending on which nearby Zillow listing you go by.)

Marshall also notes that since the land will continue to be owned by the state, it won’t pay property taxes, but will instead pay payments in lieu of property taxes, aka PILOTs, and whether those will be as much as regular taxpayers would pay is “to be determined.”

And if $300 million in lease breaks isn’t worrisome enough, there’s also the matter of getting fans to the new arena, which is currently served only by a part-time rail spur off the Long Island Rail Road, something the state has promised to upgrade to full-time service at taxpayer expense. How much taxpayer expense? As Aaron Gordon reports for the Village Voice, even the state doesn’t know:

Despite the LIRR committing to “developing a plan to expand LIRR service to Belmont Park Station for events year-round,” according to the press release, a spokesperson for the MTA, which runs the LIRR, said the agency doesn’t have any accompanying cost estimates. Which is to say, the MTA has promised to provide a service for which they don’t know the actual cost.

So there are a lot of unknowns here, to say the least — and that’s if the Islanders even go ahead with the arena, which they’re sure acting like they will, but it’s an awfully expensive endeavor even with partners who have an incentive to pound the owners of the Barclays Center into dust by outmaneuvering them for concerts. (The Barclays group also operates the newly renovated Nassau Coliseum, which could be odd arena out for bookings if the Belmont arena happens.) Though the Barclays owners, for their part, seem less concerned about facing new competition than eager to get the Islanders away from taking up space at the Brooklyn arena and into their other venue on a temporary basis:

There are many, many shoes left to drop here. Let’s hope against hope that when it all shakes out, this looks more like the Seattle arena deal than the Yankees one, but I’m not holding my breath.

And, almost forgot: renderings! Renderings that look like they were done with a cheap tray of watercolors and no lessons in perspective (I especially like the building that bends in the middle, like the top part is toppling over), but given that “blurry” seems to be the name of the game with this project, it’s probably appropriate:

 

 

Islanders win right to build arena at Belmont Park, now have to say how they’ll pay for it

The state of New York is set to pick the winning bid to develop land next to Belmont Park racetrack and, SPOILER ALERT, it’s gonna be the New York Islanders‘ arena plan:

The hockey team was informed Tuesday that its proposal to build a new arena at Belmont Park in Elmont was selected as the winning bid, according to people familiar with the situation…

The Islanders’ bid includes an 18,000-seat, year-round arena that would host 150 events annually as well as 435,000-square feet of space for retail, a hotel with 200 to 250 rooms and a 10,000-square foot “innovation center” that would be developed with resident input.

So, whee, the Islanders are finally giving up on the failed Brooklyn experiment and getting a new arena closer to their Long Island fanbase, right? Yeah, well, maybe. Getting permission to use the Belmont Park land was always going to be the easy part; actually coming up with money to build the thing will be another story. Yes, the team’s owners have partnered with the Mets owners and Oak View Group, the company run by former AEG honcho Tim Leiweke and Madison Square Garden, and have vowed that the private partners are “fully committed to financing the arena.” And yes, it’s possible they might even want to do that, if only as a way of getting a leg up in the ongoing war for arena dominance between the region’s major sports operators, though it’ll cost them big, and there’s no guarantee that a Belmont arena will outdraw Brooklyn’s Barclays Center and its affiliated Nassau Coliseum for concerts and such.

So when the announcement does come later today — or at least when the Islanders owners have to declare whether they’re opting out of their Brooklyn lease, in January — there are two things we should keep an eye out for in particular:

  • What are the terms of the lease for the racetrack land? This is a hugely valuable piece of state property, so if the Islanders owners and their partners are getting it for anything less than market value, that’d be a giveaway by taxpayers.
  • Will there be any tax kickbacks or other hidden subsidies? None have been hinted at so far, but then, they’ve had no reason to when it would only risk pissing people off. Not requiring the Islanders to pay property taxes (or payments in lieu of them, if the land remains state-owned and off the tax rolls), or kicking back tax receipts in some kind of tax-increment plan are the two main concerns, but your imagination is the limit here.

I don’t want to get too negative: If the Islanders are actually paying their way, this could be a good solution for a franchise that shortsightedly succumbed to the lure of Brooklyn hipness and impulsively moved to an arena that’s terrible for hockey and nowhere near where most of its fans live — not to mention a way of getting a new arena for the tristate area by parlaying a turf war among would-be arena operators into an actually reasonable bid, not too far from what Seattle did. But as history shows that there’s often another shoe to drop with these “we’re gonna build an arena and pay for it ourselves!!!” announcements, I’m going to wait for more details before giving this an unhesitant thumbs up.

Coyotes sign up for another year in Glendale, this could keep going on forever

Arizona Coyotes owner Anthony LeBlanc already once declared that there was no way his team could play any longer at Glendale’s arena now that they didn’t manage it (and get paid handsomely for doing so), and then agreed to extend his lease for another year. So it should really be no surprise that, despite vowing not to do it again, LeBlanc’s successor Andrew Barroway has done it again:

“We are absolutely planning to play next season at Gila River Arena and are focused on building a winning hockey team, positively contributing to our community, and achieving success in all aspects of our business,” said Ahron Cohen, the team’s chief operating officer told The Arizona Republic...

The Coyotes had until Dec. 31 to notify AEG, the arena manager, whether the team plans to play elsewhere for the 2018-19 season. If the team does nothing, the lease automatically renews for one more year in Glendale.

Cohen noted the Coyotes have an “evergreen lease,” meaning it can continually renew annually with AEG.

Dale Adams, AEG general manager, said the Coyotes never gave him the impression that they would leave.

“I don’t know where they would go,” Adams said.

That’s an excellent point, since Coyotes arena plans are continuing to go nowhere fast. It’s entirely possible that the team will continue to bumble along (both on-ice and in terms of getting fans to show up) in Glendale for the foreseeable future, since apparently that’s still more lucrative than spending their own money to build a new arena in a better location elsewhere in the Phoenix area, and nobody seems to think that moving to Houston or Quebec, say, would be a better option. This is why one generally shouldn’t believe team move threat ultimatums: On rare occasions they’re true, but at least 90% of the time they’re just hissy fits.

Ottawa Senators owner threatens to threaten to move team, but not “right now”

And speaking of oblique move threats, Ottawa Senators owner Eugene Melnyk dropped some more on Friday:

“If it doesn’t look good here, it could look very, very nice somewhere else, but I’m not suggesting that right now. All I’m saying is that I would never sell the team.”

This isn’t anything new, as NHL commissioner Gary Bettman just said essentially the same thing last month, though it is new for Melnyk to say it quite so bluntly. Melnyk is still angling for final development rights (and a discounted price) for land for a new arena in Ottawa, and hinting at moving the team is always a good way to turn up the heat on that, except of course that the easiest alternative option would be Quebec, and he’d have to sell the team to have it go there since Quebecor wants to own any team that plays in its new arena, so that’s out if “would never sell the team” is a hard and fast rule. And Seattle is reportedly only being considered for an expansion franchise, so … Houston? Are we supposed to think that it looks “very, very nice” in Houston for the Ottawa Senators? It’d really help if team owners would be more specific about their threats, though I suppose being specific is exactly the opposite of the effect they’re shooting for.

Islanders and NYCFC shed no light whatever on their Belmont bids

There was a public “listening session” yesterday on plans for redeveloping land alongside Belmont Park, and both the New York Islanders and NYC F.C. made presentations, and “details” were “revealed,” according to the New York Post headline, and oh boy oh boy let’s see what we’ve got:

Reps for the NYCFC soccer organization, which currently plays at Yankee Stadium in The Bronx, say the team’s plans for a 26,000-seat stadium at the Elmont, LI, site would also include 400,000 square feet of retail and entertainment space, 15.3 acres of open space, a 5-acre park and 2-acre soccer facility…

The Islanders’ plan calling for an 18,000-seat arena was revealed to include an entertainment hub, hotel and retail village.

Wait, that’s it? We already knew pretty much all that — not down to the tenth of an acre, sure, but “sports facility accompanied by other development” was both teams’ plan all along. No details about how this would be funded? No renderings? Come on, we gotta at least get some renderings!

That’s not a rendering! There aren’t even any fireworks or lens flare! This Monday sucks.

(Here’s a video of the Islanders’ developer talking about how he used to build snowmen with Mets co-owner Jeff Wilpon when they were kids, which is something, I guess.)

Friday roundup: Battles over Blues arena, Vegas bond subsidy, Belmont land for Islanders

Let’s get right to this week’s remainders:

Yeah, it looks like Seattle is getting an NHL expansion team ASAP

Looks like Seattle is being fast-tracked to get an NHL expansion team now that it’s getting a renovated arena:

A Seattle ownership group has been authorized to file an application for an NHL expansion team that would begin play in the 2020-21 season, NHL Commissioner Gary Bettman said Thursday.

The cost of the team would be $650 million, and Commissioner Bettman said the NHL is looking at only Seattle for possible expansion…

“That doesn’t mean we have granted an expansion team,” Commissioner Bettman said following the Board of Governors meeting. “We have agreed as a league to take and consider an expansion application and to let them run in the next few months a season ticket drive.”

So basically, “show up with a $650 million check and some season-ticket pledges, and you’re in.” If anyone thinks that the Seattle ownership group — which includes both former Philip Anschutz lieutenant Tim Leiweke and Hollywood mogul Jerry Bruckheimer — can’t muster that, please raise your hand.

The only surprise here is that the NHL didn’t wait to use Seattle as leverage to get arenas for all the teams seeking them — hell, Calgary was already getting ready to freak out that this might cost them the Flames if they didn’t build a new arena, but now that’s off the table. Presumably the lure of $650 million in quick cash — up from the $500 million that the Las Vegas Golden Knights owners paid just last year, NHL deputy commissioner Bill Daly explained, because of market size differences (sure, okay) and “inflation” (um, in one year, seriously?) — outweighed the benefits of having a great move threat, especially when there’s always Houston for that.

Is an NHL franchise in Seattle really worth $650 million? The average team value, according to Forbes, is $594 million, though the magazine has a tendency to underestimate sale prices (though that could also just be a sign that team owners have a tendency to overpay for teams). That means Bruckheimer & Co. could presumably pick up a low-value franchise for a lot less than that and move it to Seattle, but by signaling that it’s expansion or nothing, the league cuts off that option and means the Seattle group has to meet its asking price if it wants an anchor sports tenant for its new arena.

Really, the only surprise here is that the NHL didn’t ask for $1 billion, because why not? Unless you think that sports league operators have any shame, which, nah, can’t be that.

Lightning offer to stay in Tampa 16 more years, only demand $61m in tax money to do so

Here is a headline from the business section of the Tampa Bay Times, “winner of 12 Pulitzer Prizes”:

Hold on to your Bolts: Lightning in talks to stay in Tampa through 2037

And here is the fourth paragraph of said article:

In exchange, Hillsborough County will commit $61 million over the next two decades to maintenance and upgrades of Amalie Arena, home of the Lightning and Tampa Bay Storm and one of the area’s top entertainment and concert venues. The money will come from the fifth cent of the Tourist Development Tax, a fee assessed on each night’s stay at a hotel or motel.

In journalism circles, this is a trick known as “burying the lede,” spelled that way either in order to distinguish it from the actual word “lead” or because journalists are just nuts. It’s a very bad thing to do, because readers who only get as far as scanning the headline — which, having spent some time with web traffic numbers in the age of Facebook, I would say is likely most readers — come away thinking “yay, more years of hockey!” and miss the part where it’s going to cost them an extra $61 million over the next 20 years.

And it’s an extra $61 million, no doubt about that, because there’s even more lede buried even further down in graf (yes, “graf”) #7:

The county owns Amalie Arena, but under the existing contract Hillsborough is not under any obligation to pay for maintenance or upgrades. That onus falls on the team, which runs the day-to-day operations.

This is becoming a standard ploy for team owners getting to the end of their stadium and arenas leases who don’t actually want new buildings (or don’t think they can get away with demanding new buildings) but do want to extort some kind of cash handouts in exchange for their continued existence. So how does $3.8 million a year (that’s $61 million over 16 years, since the Lightning already committed to staying put through 2021 in exchange for a previous bundle of public kickbacks) compare to other recent lease extension shakedowns?

So Hillsborough County taxpayers can at least say they’re getting a better deal than some other cities, though not all, and not even quite as good a deal as they got a few years ago. More to the point, though, did they have to give up this much? Lightning owner Jeff Vinik has not only expressed no interest in leaving Tampa, he has operating rights to a money-making arena, and is investing in a $3 billion downtown development project in the city. So the guy already has innumerable reasons not to flee town, even before handing him $61 million as a bonus. Far be it from me to tell Hillsborough County officials how to do their job, but are you guys sure you’re good at this whole lease negotiations part of it?