Friday roundup: Naming-rights woes, Austin update, and the World’s Largest Chest of Drawers

It’s Friday already? Seems like we were just doing this, but the pile of stories in my Instapaper queue says otherwise, so away we go:

  • The Florida state house has again passed a bill that would ban building or renovating private sports facilities on public land, which would potentially affect the Tampa Bay Rays, among others. This is kind of a dumb idea, as we discussed back in October, since there’s nothing wrong per se with putting stadiums on public land so long as the public gets a good deal for it; a far better plan would be a Seattle-style bill to require that local governments get a return on their investment in any sports lease project. But then, this bill already passed the Florida house last year and died in the senate, so probably not worth getting worked up over too much just yet.
  • Sports Authority agreed in 2011 to pay $6 million a year for 25 years for the naming rights to the Denver Broncos stadium, and now Sports Authority is bankrupt, and Metropolitan State University of Denver marketing professor Darrin Duber-Smith is saying I told you so: “My big warning was, ‘I’m not sure Sports Authority is a big enough or healthy enough company to commit that much money from their marketing budget each year.’ And I was right.” The Broncos are now looking for another company to pay $10 million a year for naming rights, and haven’t found any takers yet, hmm, I wonder why?
  • Chelsea F.C. will get to move ahead with its new-stadium plans after the town council used a compulsory purchase order — like eminent domain, surely you’ll remember it from that Kinks song — to clear an injunction that a nearby family had gotten on the grounds that the new stadium would block their sunlight. The purchase order isn’t actually seizing their home, but the land next to it, which is enough to invalidate the injunction; not that this doesn’t raise all kinds of interesting questions about the use of state power for private interests, I’m sure, but man, don’t you wish this were the only kind of stadium controversy we had to put up with in North America? League monopoly power over who gets a franchise is a bad, bad thing.
  • High Point, North Carolina is spending $35 million on a stadium to bring an indie minor-league Atlantic League baseball team to town, and City Manager Greg Demko says this will help the city’s commercial tax base recover, because “the construction of a stadium is like an anchor for the revitalization and development of a downtown.” Demko is going to be so disappointed, but at least he got mention of his city in a Bloomberg article as “home to the World’s Largest Chest of Drawers,” and you can’t buy publicity like that.
  • New Seattle mayor Jenny Durkan says that while it’s “a longshot,” it wouldn’t be impossible for Chris Hansen to build his Sodo arena while OVG renovates KeyArena at the same time. I’m going to interpret the tea leaves here as “Hey, if you want to spend your money to try to compete with another arena across town, be my guest,” but stranger things have happened, maybe?
  • The city of Austin has issued a report on eight possible sites for a stadium for a relocated Columbus Crew, and are now waiting on Crew owner Anthony Precourt to tell them which, if any, he likes. A consultant for Precourt has since ruled out a site or two, but it looks like nothing might be ready for the city council to vote on February 15 as planned; Austin MLS lobbyist Richard Suttle says the problem is “between the holidays, flu season and winter storms, it’s been slow going.” It’s not quite helping to spark women’s suffrage, but the flu still reminds us who’s boss from time to time.
  • Now that Amazon has announced its short list of cities that will get to bid on its new second headquarters, it’s time for another look at how to stop corporations from launching interstate bidding wars to be their homes, which once again leads us to David Minge’s 1999 bill for a federal excise tax on public subsidies. “Of all those offers [made to Amazon] there’s one obvious one that should have been made and it should have come from Congress,” University of Minnesota economist and former Minneapolis Federal Reserve research director Arthur Rolnick, who helped Minge concoct that bill, tells CityLab. “Now if that offer were on the table it would end it, it would end the bidding war. Then Amazon would simply base its decision on where location is best for business.” It’d work for sports leagues, too!

Seattle approves KeyArena renovation, Hansen still won’t give up on SoDo plan

Seattle’s KeyArena renovation plan is officially a go, as the city council voted 7-1 yesterday to approve a memorandum of understanding with Oak View Group to redo the former home of the Sonics (and current home of the Storm) in the hopes of luring both NBA and NHL franchises. Mayor Jenny Durkan still has to sign the MOU, but she’s expected to do that tomorrow.

Assuming this is the final verdict — there’s still a traffic plan to be worked out before construction can begin — it marks the end of a years-long debate that began with Chris Hansen proposing an arena in the SoDo neighborhood near the Mariners and Seahawks stadiums, and eventually, after a last-minute obstacle thrown in the way of the Hansen project by the Port of Seattle and its seaport unions, the city instead settling on hiring Tim Leiweke’s Oak View Group to renovate the city’s existing arena, which was just renovated 20 years ago, but that’s like 140 in arena years. Hansen subsequently issued a statement insisting that “our plan to build a 100% privately funded arena in SoDo represents the best chance to bring the NBA back to Seattle”; the OVG MOU bars the city from contributing financially to any other large arena, but presumably there would be ways of structuring a SoDo deal to get around this clause — the bigger question is whether Seattle could support two full-size arenas, which is probably a no.

There will no doubt be huge arguments about whether this is the right decision for the city, for basketball fans, and for residents concerned about traffic — I expect they’ll be starting in the comments section the instant I hit “publish” — but as I’ve noted before, this long, convoluted process at least got Seattle a deal that doesn’t cost much in public money, after losing a team in part because the city and state refused to cough up a ton of public money, and that’s got to be a win.

It’s considered likely that Seattle will land an NHL team first, since that league is salivating for a franchise there, and has an odd number of teams after approving the Las Vegas Golden Knights but no second expansion franchise, in part because Seattle didn’t have its arena ducks in a row yet. You have to wonder if maybe the NHL will wait a bit first to use Seattle as leverage for teams like the Arizona Coyotes and Calgary Flames and New York Islanders to extract new arena funding — but nah, there’s always Houston for that.

As for a new Sonics, that’ll have to wait until the NBA either expands (nothing on the horizon, supposedly) or a team relocates (no clear candidates right now, either), but you have to figure Seattle will be next in line or close to it. The only real question is whether OVG will agree to a friendly enough arena lease to lure an NBA team, if it thinks it can make more money from concerts. (OVG’s lease with the city earns it an eight-year extension if it can bring in either an NHL or NBA team, but there’s no bonus for doing both.)

In the meantime, Seattle is getting a franchise in the new minor-league North American Premier Basketball League, which will play somewhere as yet to be determined. The Seattle Weekly chose to headline this as “It’s Not the NBA, but Professional Basketball Is on Its Way,” which seems to imply that the WNBA’s Storm aren’t professional basketball players? I guess there’s only so much progress you can have in a city at once.

Friday news: Phoenix funds Brewers but not Suns, brewers float crowdfunding Crew, and more!

So, so much news this week. Or news items, anyway. How much of this is “news” is a matter of opinion, but okay, okay, I’ll get right to it:

  • Four of Phoenix’s nine city council members are opposed to the Suns‘ request for $250 million in city money for arena renovations, which helps explain why the council cut off talks with the team earlier this week. Four other councilmembers haven’t stated their position, and the ninth is Mayor Greg Stanton, who strongly supports the deal, meaning any chance Suns owner Robert Sarver has of getting his taxpayer windfall really is going to come down to when exactly Stanton quits to run for Congress.
  • Speaking of Phoenix, the Milwaukee Brewers will remain there for spring training for another 25 years under a deal where the city will pay $2 million a year for the next five years for renovations plus $1.4 million a year in operating costs over 25 years, let’s see, that comes to something like $35 million in present value? “This is a great model of how a professional sports team can work together with the city to extend their stay potentially permanently, which is amazing, and we’re doing it in a way where taxpayers are being protected,” said Daniel Valenzuela, one of the councilmembers opposed to the Suns deal, who clearly has a flexible notion of “great” and “protected.”
  • And also speaking of Phoenix (sort of), the Arizona Coyotes are under investigation by the National Labor Relations Board for allegedly having “spied on staff, engaged in union busting and fired two employees who raised concerns about pay.” None of which has anything directly to do with arenas, except that 1) this won’t make it any easier for the Coyotes owners to negotiate a place to play starting next season, when their Glendale lease runs out, and 2) #LOLCoyotes.
  • A U.S. representative from Texas is trying to get Congress to grandfather in the Texas Rangers‘ new stadium from any ban on use of tax-exempt bonds in the tax bill, saying it would otherwise cost the city of Arlington $200 million more in interest payments since the bonds haven’t been sold yet. (Reason #372 why cities really should provide fixed contributions to stadium projects, not “Hey, we’ll sell the bonds, and you pay for whatever share you feel like and we’ll cover the rest no matter how crappy the loan deal ends up being.”) Also, the NFL has come out against the whole ban on tax-exempt bonds because duh — okay, fine, they say because “You can look around the country and see the economic development that’s generated from some of these stadiums” — while other sports leagues aren’t saying anything in public, though I’m sure their lobbyists are saying a ton in private.
  • A Hamilton County commissioner said he’s being pressured to fund a stadium for F.C. Cincinnati because Cincinnati will need a sports team if the Bengals leave when their lease ends in 2026 and now newspapers are running articles about whether the Bengals are moving out of Cincinnati and saying they might do so because of “market size” even though market size really doesn’t matter to NFL franchise revenues because of national TV contracts and oh god, please make it stop.
  • MLB commissioner Rob Manfred says the proposed Oakland A’s stadium site has pros and cons. Noted!
  • NHL commissioner Gary Bettman says the Calgary Flames‘ arena “needs to be replaced” and the team can’t be “viable for the long term” without a new one. Not true according to the numbers that the team is clearing about $20 million in profits a year, but noted anyway!
  • Cincinnati Mayor John Cranley is set to announce his proposal for city subsidies for F.C. Cincinnati today, but won’t provide details. (Psst: He’s already said he’ll put up about $35 million via tax increment financing kickbacks.)
  • The Seattle Council’s Committee on Civic Arenas unanimously approved Oak View Group’s plan to renovate KeyArena yesterday, so it looks likely that this thing is going to happen soon. Though apparently the House tax bill would eliminate the Historic Preservation Tax Credit, which the project was counting on for maybe $60 million of its costs, man, I really need to read through that entire tax bill to see what else is hidden in it, don’t I?
  • The owners of the Rochester Rhinos USL club say they need $1.3 million by the end of the month to keep from folding, and want some of that to come from county hotel tax money. Given that the state of New York already paid $20 million to build their stadium, and the city of Rochester has spent $1.6 million on operating expenses over the last two seasons to help out the team, that seems a bit on the overreaching side, though maybe they’re just trying to fill all their spaces in local-government bingo.
  • There’s a crowdfunding campaign to buy the Columbus Crew and keep them from moving to Austin. You can’t kick in just yet, but you can buy beer from the beer company that is proposing to buy the team and then sell half of it to fans, and no, this whole thing is in no way an attempt to get free publicity on the part of the beer company, why do you ask?

Friday roundup: New soccer stadiums, yet another Vegas arena, Falcons roof still not done

Happy fifth anniversary of Hurricane Sandy, everybody! While you get ready to go to your anniversary parties and dress up as, um, hurricanes, and you know what, this riff isn’t going anywhere, let’s get to the news:

  • Had you forgotten about former UNLV basketball star Jackie Robinson’s $1.4 billion retractable-roofed-arena-plus-hotel-plus-other-stuff project just because Las Vegas already has one new arena, he hasn’t — and now says it’s a $2.7 billion project that will include a 63-story hotel, a conference center, a 24-lane bowling alley, and a wedding chapel. No construction has begun yet, but Robinson says it will all be completed by 2020, or else maybe by then it will cost $5.2 billion and include a space elevator.
  • Chris Hansen is trying a new gambit to turn attention away from Oak View Group’s KeyArena renovation plan and toward his SoDo new-arena plan, and it involves declaring the OVG plan a “public” and not a “private” process, which would require a longer environmental review process, and if your eyes are glazing over already I don’t blame you, skip to the next item, it’s got juicy if unproven allegations of political corruption in it.
  • New York Mets owner Fred Wilpon has given Gov. Andrew Cuomo’s 2017 re-election campaign a $65,000 donation that’s twice as large as all other donations he’s previously given the governor combined, and with Wilpon in the midst of looking to get approval from the state for a new soccer stadium Islanders arena (sorry, had a brain fart on this one while typing) next to Belmont Park racetrack … well, you connect the dots. (Or don’t: An Empire State Development spokesperson snapped, “Participation in the political process has zero bearing on any of this and any of these ‘sources’ with questions are free to contact us instead of trafficking in conspiracy theories.”) Bigger question: Fred Wilpon has $65,000 to spare?
  • The Atlanta Falcons‘ retractable roof is now set to finally work by March 2018. Probably.
  • Nashville held a hearing on its proposed $75 million soccer stadium subsidy deal, and if you guessed that a self-proclaimed soccer mom said it would be a “feather in our cap” while a non-soccer-fan local resident said “you’re asking me to help fund a quarter-of-a-billion-dollar project for another sports team that most likely will not benefit me,” then you’re right on the money.
  • The prospective NASL team San Diego 1904 F.C. is planning a stadium that will cost only $15 million because it will be built modularly elsewhere and shipped to the stadium site in Oceanside, but at least they didn’t skimp on the searchlight renderings.
  • The chair of Rhode Island’s senate finance committee says he’ll put a halt to the Pawtucket Red Sox‘ $38 million stadium subsidy request if the team owners don’t provide more financial information. It sounds like this is over the team’s internal finances, and could be resolved with a non-disclosure agreement, but still, it’s something to keep an eye on, since projects have succeeded or fallen over pettier things.
  • Louisville approved $30 million in bonds to help pay for a new Louisville City F.C. soccer stadium, in exchange for which the team will repay $14.5 million over 10 years, which comes to about $11 million in present value, so the city will only lose $19 million on the deal, unless there’s still plans for as much as $35 million in state property-tax kickbacks via a TIF, in which case this is really a $54 million subsidy for a minor-league soccer stadium. Maybe they should go with one of those modular dealies instead? Just a thought.

Friday roundup: A’s pollution woes, Falcons roof woes, Hansen email woes, and more!

Whole lot of news leftovers this week, so let’s get right to it:

  • It’s not certain yet how serious the environmental cleanup issues at the Oakland A’s proposed Peralta Community College stadium site are, but anytime you have the phrases “the amount of hazardous materials in the ground is unclear” and “two possible groundwater plumes impacted by carcinogens” in one article, that’s not a good sign. Meanwhile, local residents are concerned about gentrification and traffic and all the other things that local residents would be concerned about.
  • There’s another new poll in Calgary, and this time it’s Naheed Nenshi who’s leading Bill Smith by double digits, instead of the other way around. This poll’s methodology is even dodgier than the last one — it was of people who signed up for an online survey — so pretty much all we can say definitely at this point is no one knows. Though it does seem pretty clear from yet another poll that whoever Calgarians are voting for on Monday, it won’t be because of their position on a Flames arena.
  • The Atlanta Falcons‘ retractable roof won’t be retracting this season, and may even not be ready for the start of next season. These things are hard, man.
  • Nevada is preparing to sell $200 million in bonds (to be repaid by a state gas tax) to fund highway improvements for the new Las Vegas Raiders stadium, though Gov. Brian Sandoval says the state would have to make the improvements anyway. Eventually. But then he said, “I just don’t want us to do work that has to be undone,” so your guess is as good as mine here.
  • Pawtucket is preparing to scrape off future increases in property tax receipts for a 60- to 70-acre swath of downtown and hand them over to the Pawtucket Red Sox for a new stadium, an amount they expect to total at least $890,000 a year. Because downtown Pawtucket would never grow without a new baseball stadium, and there’s no chance of a shortfall that would cause Pawtucket to dip into its general fund, and nobody should think too hard about whether if minor-league baseball stadiums are really so great for development, this wouldn’t mean that property tax revenues should be expected to fall in the part of the city that the PawSox would be abandoning. Really, it’ll all be cool, man, you’ll see.
  • Somebody asked Tim Leiweke what he thinks of building a new stadium for the Tampa Bay Rays for some reason, and given that he’s a guy that is in the business of building new stadiums, it’s unsurprising that he thinks it’s a great idea. Though I am somewhat surprised that he employed the phrase “Every snowbird in Canada will want to watch the Toronto Blue Jays when they come and play,” given that having to depend on fans of road teams to fill the seats is already kind of a problem.
  • The study showing that spending $30 million in city money on a $30-million-or-so Louisville City F.C. stadium would pay off for the city turns out to have been funded by the soccer team, and city councilmembers are not happy. “There’s something there that someone doesn’t want us to find,” said councilmember Kevin Kramer. “I just don’t know what it is.” And College of the Holy Cross economics professor Victor Matheson chimed in, “I expect for-profit sports team owners to generate absurdly high economic estimate numbers in order to con gullible city council members into granting subsidies.” I don’t know where you could possibly be getting that idea, Victor!
  • Congress is considering a bill to eliminate the use of federally tax-exempt bonds for sports facilities, and … oh, wait, it’s the same bill that Cory Booker and James Lankford introduced back in June, and which hasn’t gotten a committee hearing yet in either the House or the Senate. It has four sponsors in the House, though, and two in the Senate, so only 263 more votes to go!
  • A Miami-Dade judge has dismissed a lawsuit charging that the sale of public land to David Beckham’s MLS franchise illegally evaded competitive bidding laws, then immediately suggested that the case will really be decided on appeal: “I found this to be an extremely challenging decision. Brighter minds than me will tell me whether I was right or wrong.” MLS maybe should be having backup plans for a different expansion franchise starting next season, just a thought.
  • The New York Times real estate section is doing what it does best, declaring the new Milwaukee Bucks arena to be “a pivotal point for a city that has struggled with a decline in industrial activity,” because cranes, dammit, okay? Maybe somebody should have called over to the Times sports section to fact-check this?
  • And last but not least, Chris Hansen is now saying that his SoDo arena plan missed a chance at reconsideration by the Seattle city council because the council’s emails requesting additional information got caught in his spam filter or something. If that’s not a sign that it’s time to knock off for the weekend, I don’t know what is.

Hansen to Seattle: Okay, how about if we build two arenas?

Would-be Seattle arena builder Chris Hansen seems to have resigned himself to the city approving Oak View Group’s plan to renovate KeyArena, which appears to be a fait accompli despite its main backer resigning in disgrace last month. That doesn’t mean Hansen is giving up on his own arena dreams, though, not when Seattle could just have two pro sports arenas, amirite?

Hansen says he also now believes the city could move forward on KeyArena and his proposal.

“I think it would work better when you consider the purchase price for NBA teams. Look at Houston as an NBA comp,” said Hansen.

The NBA’s Rockets just sold for $2.2 billion.

“A venue with an NHL partners and music partner and NBA partner is inherently going to lead to issues,” he said, “with how to divvy up the pie.”

There are several things wrong with this argument. First off, one doesn’t “divvy up an arena pie,” because there is no pie: Arenas don’t bring in money, NBA and NHL games and concerts bring in money. I suppose one could argue that there are a few things about an arena you can only sell once regardless of how many events you hold there (naming rights and some ad signage, maybe), but those are unlikely to make up for the fact that you only have to pay to build one arena.

Secondly, the history of urban areas building multiple arenas for multiple pro teams is not great: They end up competing for concerts to fill the dates around the sports schedule, and something often ends up being demolished or abandoned. Sure, there are exceptions, especially in cities larger than Seattle where there are tons of concerts to go around. But again, putting in twice (or close to twice) the construction costs to get back the same amount of total sports and concert revenues is a pretty dumb business plan all around.

Plus, does it really make sense for Seattle to devote two parcels of land to sports arenas when one will do? You get the idea.

But hey, if Hansen wants to go up against Tim Leiweke in an arena marketing war, more power to him, I guess. This guy clearly really wants to own an NBA team in Seattle, and really thinks the best way to do that is to build an arena in SoDo. And I’m on record as saying I think Seattle should do everything in its power to keep both Hansen’s and Oak View’s bids alive to see if they’ll keep upping the ante, so really, all good here.

KeyArena renovation plan may duck “return on investment” analysis, should anybody care?

Since I lauded Seattle’s Initiative 91 recently for its influence on getting the city to strike a hard bargain with would-be arena developers, I should probably also note that the language of the initiative itself kind of sucks. Declaring that any public sports subsidies need to provide a return on taxpayer investment equal to the rate provided by a treasury bill sounded simple at the time, but when you don’t define “investment” (is it just upfront cash, or money over time, or tax breaks?), the math breaks down to the point where nobody knows anything anymore.

This is coming up again because nobody can decide whether I-91 should apply to Oak View Group’s plan to renovate KeyArena, since there’s no actual city bonds in play, just tax breaks. That’s either an acceptable loophole or a violation of the spirit of the law, depending on which I-91 progenitor you ask:

Former city councilmember [Nick] Licata notes the city put entrepreneur Chris Hansen’s proposed-arena plan for Sodo through a detailed financial formula in 2012 before declaring it I-91 compliant. He figures the same should happen this time.

“The last time, our goal was, ‘Does it meet the intent, even if it’s not necessarily the mechanism that’s perfect?’ ” Licata said. “You can calculate that.”

But Van Dyk, onetime leader of the activist group Citizens for More Important Things, said the biggest test of I-91 already was met during a Request for Proposals phase and the drafting of a Memorandum of Understanding (MOU) that had input from various community leaders and groups.

“I’m just glad to see them spending a lot of their money,” he said of OVG. “Because there was an open, transparent, public-bidding process … I think the probability that the public was snookered is extremely low.”

In the end, it probably doesn’t matter much: The amount of public money at stake is low enough, and the wording of I-91 is loosey-goosey enough, that there’s probably a way to rule that the OVG plan meets its standards, just as Chris Hansen’s SoDo arena plan was determined to despite involving a bunch of public money. (The trick is mostly in assigning lots of value to “new” tax revenues that are projected to result from an arena, which is a handwavy enough notion that you can cook a lot of books with it without outright lying.) I-91 showed that establishing the principle that taxpayers shouldn’t take a bath on sports subsidy deals can be hugely valuable for holding the line on team owner demands — just as we’re seeing right now in Calgary — but we have a long way to go in figuring out how to make these restrictions into legally enforceable documents. “You can’t just change the letter of the law, you have to change the culture” is a pretty good credo for all occasions, but it’s always nice to have another reminder.

Seattle mayor cancels arena MOU announcement so he can resign in disgrace instead

Well, I don’t think anyone saw quite that coming: Seattle Mayor Ed Murray was all set to hold a press conference announcing a memorandum of understanding for a KeyArena renovation, when staffers abruptly took down the renderings and canceled the event so that Murray could instead resign as mayor after a fifth (!) person accused him of sexually abusing them as a child:

He announced his resignation Tuesday, hours after news emerged that a younger cousin was publicly accusing Murray of molesting him in New York in the 1970s.

Murray, a former Democratic state legislator elected mayor in 2013, didn’t appear in public to make the announcement. Instead, he issued a statement saying his resignation would be effective 5 p.m. Wednesday.

“While the allegations against me are not true, it is important that my personal issues do not affect the ability of our city government to conduct the public’s business,” the mayor said.

The MOU was still sent by the mayor’s office — which will now be temporarily run by city council president Bruce Harrell until previously scheduled elections in November — to the council, which will have a much more interesting time discussing it than expected. Early reports (the mayor’s office’s web site doesn’t appear to have the actual agreement posted yet, but then it also still hasn’t caught up to the news that the mayor isn’t mayor anymore) are that Tim Leiweke’s Oak View Group has:

  • sweetened the pot with $40 million in money for traffic mitigation in the notoriously car-crowded area around the arena, plus $20 million for a “community fund”
  • agreed to pay rent on KeyArena equal to what the city currently earns from the building, with a similar deal in place for associated parking garages
  • promised to pay all cost overruns and all operating expenses, “including day-to-day and long-term capital upkeep”

I still want to read the fine print — presumably OVG is still looking for $40 million in tax breaks as part of the deal — but this certainly looks like an improvement for taxpayers on the initial proposal, and further evidence that starting a bidding war between two developers for your city’s arena affections is a promising strategy. In particular, that $40 million in transportation money isn’t just a bone to throw to Seattleites worried that the Key neighborhood would get too choked with cars if a pro sports team again played there, but also a commitment by OVG to match Chris Hansen’s similar pledge for transit improvements around his proposed Sodo arena. Whether this is a good deal is still to be determined; but it’s a way better deal than most cities get, and that’s to Seattle officials’ credit.

It’s also a deal that loses its biggest booster with the departure of Murray, who was trying to fast-track the Key plan so he could have some legacy other than “mayor who was forced to resign for abusing teenagers.” That’s not a bad thing at all, necessarily: The council can now take its time to beat on the plan with sticks to make sure there are no hidden pitfalls, and even do an in-depth comparison to Hansen’s latest ante-upping plan to build a Sodo arena and renovate Key himself as a concert venue, if it wants. But either way, it will be considering two plans that are at worst pretty close to break-even for taxpayers, and that’s unheard of in modern sports venue politics.

As for any of this getting an NBA team back to replace the Sonics, that’s still in the distantish future: The league has been clear that no expansion teams are forthcoming anytime soon, and there aren’t any teams immediately looking to move, either. Hansen is a committed hoops fan, but he also may have cheesed off the NBA by giving money to block an arena in Sacramento for the Kings so he could try to buy them instead; Leiweke may be more interested in concerts than sports, but he also should have a good relationship with the leagues from his time at AEG, operators of the Staples Center, among other arenas. Really, the main obstacle to getting an NBA (or NHL) team in Seattle is that the league has been holding out for a new or renovated arena, since to do otherwise would mean admitting that allowing the Sonics to move just because they had to play in a building renovated way back in 1994 was a mistake, so adopting either of these plans should get the leagues willing to talk, at least.

Either a Sodo arena or a renovated Key would come with lots of construction debt that a sports team would have to help pay off via rent if nothing else, so there’s still a chance of a Sprint Center outcome with an arena so busy with concerts that it doesn’t need teams (though without the tons of public debt part, and also Seattle is twice as big a TV market as Kansas City). But if the goal here was to give the city a shot at new sports teams without saddling taxpayers with the costs, Seattle is doing a bang-up negotiating job so far.

Hansen proposes to redo KeyArena as concert venue with own money, Seattle mayor says “meh”

I had a long article published at Deadspin on Wednesday, in which I examined the ongoing negotiations between the city of Seattle and various would-be arena builders or renovators, and determined that whatever the outcome, all things considered this could be better than a poke in the eye with a sharp stick:

In coming weeks, the city council is set to decide between two plans for new or refurbished arenas, both of which would involve some public money, but in either case far, far less than the 75 percent that is typical of modern sports facility deals. Whatever happens, Seattle is not going to get royally hosed, and as things go these days, that’s a not insignificant accomplishment.

The current frontrunner, as I discuss in the article, is almost certainly Oak View Group’s proposal to renovate KeyArena in exchange for $40 million in tax breaks (and $50 million in historic preservation credits), which is slated to have a formal MOU submitted by the mayor next week. That would leave Chris Hansen’s plan to build a new arena in the Sodo district (for $70 million or so in tax breaks) out in the cold.

And Hansen apparently sees the writing on the wall, and doesn’t like it, because yesterday he dropped a bombshell announcement: If his new arena is approved, he’ll spend $90 million of his own money to convert KeyArena into two theaters, one indoor, one outdoor:

There are some obvious questions here, like: Is $90 million really enough to do this kind of major retrofit? And, are there enough concerts to go around in the Seattle area to fill both a new arena and a pair of smaller theater spaces? And, who’d be collecting the revenue from these new theaters, and who would pay for maintenance and operations on them? You get the idea.

Still, if you’re running a bidding war for the right to be Seattle’s arena proprietors — which is very much what Seattle should be doing, to get the best deal possible — it’s something you absolutely have to at least look at, if only so you can go back to OVG and say, “Okay, now top this.” Seattle Mayor Ed Murray, though, seems less than enthused, as his development office issued a statement saying, in effect, “too little, too late”:

If the SODO Arena Group was interested in redeveloping KeyArena, they should have submitted their proposal during the RFP process, which would have shown a willingness to work with the City on this project. They did not submit a proposal and continue to show no interest in working in partnership with the City.

This is not how I would play it, needless to say, even if taking a look at Hansen’s latest plan might delay putting the finishing touches on that OVG MOU. And it certainly seems to validate complaints by Hansen’s backers that Murray is trying to grease the skids for the OVG deal, less for reasons of hard cold economics than just because it’s politically easier to get it passed before the mayor leaves office in disgrace at the end of the year. Hopefully the Seattle city council will at least vet all the plans on the table before signing off on anything — at this point it’s likely a decision between one problematic-but-not-awful plan and another, but that still doesn’t mean you shouldn’t stop to consider if one arena proposal is more equal than the other.

Seattle study showing SoDo arena fiscal winner actually doesn’t show that, says study author

I’ve had this study of the projected economic impact of the two competing Seattle arena proposals bookmarked for a couple of weeks now, waiting for a chance to dig into it to see what it actually says. Since I’m on the road now, I’m especially glad that the Seattle Times’ Geoff Baker has gone and done it for me, with the upshot of: Even the economists who conducted the study say it doesn’t really declare either plan the winner.

Chris Hansen and his Sodo arena group paid $16,000 for the “Seattle Arena Public Finance Analysis” study by UW Evans School of Public Policy and Governance professor Justin Marlowe and three graduate students. Sodo arena backers trumpeted the 3-to-1 advantage.

But a review by The Seattle Times found a high potential for fluctuation in the study — including use of raw property and sales-tax data without deeper “opportunity cost” context, an approach two sports economists say favors the Sodo group’s proposal

Up to now, though, the study’s claimed 3-to-1 advantage for the Sodo site — a gap Marlowe pegs at $68 million — has garnered the most attention.

“I get why everyone is focused on that number,” Marlowe said. “But again, the second part is the really important part. What if what’s on the table changes? Then you get different numbers.”

In short: The “opportunity cost” bit is that the study assumes nothing else would be built on the Sodo site without an arena, and if something were, that would generate tax revenue that would make redoing KeyArena look better by comparison. Also, the study didn’t account for payments in lieu of property taxes that the Key developers would be responsible for on the value of their improvements to the property — which could be as much as $657,000 a year (present value in the neighborhood of $10 million), or could be less, nobody really knows.

In short: Who the hell knows? This is one problem with economic projections: They’re inherently guesswork, and sometimes the error bars overlap to such a point that there’s no clear winner. This is actually kind of a good sign — it means that having a bidding process for a new/renovated arena has both developers upping their packages to be in the same range — but it also doesn’t make the decision any easier. It may come down to which site city officials decide is the best location from a planning standpoint for an arena, since the cost will be roughly the same; or to which site has the most politically connected people pulling for it, which would be disappointing but typical, and really not the worst thing since at least neither plan is much worse than the other. (Though it’s still entirely possible they’d both be mild money losers for the city — which would also be disappointing but typical.)