L.A. labor group trying to force vote on Inglewood stadium, unless they get jobs pledge, then whatever

AEG may have given up its battle against St. Louis Rams owner Stan Kroenke’s planned Inglewood stadium, but another foe has emerged: the Los Angeles County Federation of Labor, which is gathering signatures to try to force a public vote on the project:

The Federation’s main concern, executive secretary Rusty Hicks said, is that the development agreement that Inglewood’s City Council unanimously approved Feb. 24 doesn’t mandate well-paying, long-term jobs during and after construction of the $1.86 billion stadium and the entertainment and retail complex around it.

If the labor group can get 6,000 signatures by next Wednesday, it can force a public vote, overruling the city council decision to forgo a public vote by getting a public vote on the ballot and then voting to approve it without a public vote. (I’ve said it before, I’ll say it again: California is weird.) Though if the only holdup is an agreement to promise some union jobs, that seems like a small price for Kroenke to pay to make the petition drive go away — and indeed, Inglewood Mayor James Butts told the L.A. Times that he’s “certain within the next five to seven days everything will be worked out to everyone’s satisfaction.” Now somebody just needs to inform L.A. Curbed’s headline writers.

Missouri development agency claims state would profit on Rams stadium because NFL players pay income taxes

That Missouri state hearing to talk about the economic benefits of a St. Louis Rams stadium but not whether Missouri should build a St. Louis Rams stadium happened yesterday, and the Missouri Department of Economic Development held up its end by bringing along a report claiming to show that the state would earn a net $295 million in added tax revenue over 30 years:

The biggest chunk of the money would come from personal income taxes paid by football players, staff and coaches. They will pump an estimated $9.6 million into state coffers this year, an amount that is projected to grow by at least 3 percent a year and probably, “significantly” more.

That’s $9.6 million in just state income taxes, over and above what the state gets now? The top tax bracket in Missouri is 6%, so Rams players and staff would need to be paid an extra $160 million to make that work out, this for a team whose entire player payroll currently is only $151 million. Also, as committee chair Jay Barnes pointed out, Rams state income tax payments have actually been going down the last two years, to a total of $17.8 million in 2014.

There are other problems with the report (which doesn’t appear to be publicly available yet), including that it estimates only $12 million a year in state debt payments, when currently subsidy plans would require at least double that; and that it doesn’t appear to have calculated the negative economic impact of saddling Missourians with either $24 million a year in new taxes or in lessened spending on other projects. Mostly, then, it tells us that Gov. Jay Nixon looks to be preparing to justify spending money on an NFL stadium by going down the path of Wisconsin Gov. Scott Walker: Athletes make a lot of money and keep making more money so let’s make sure they stick around by taking all the income tax they pay and giving it back to their employers and then everyone will win! It makes total sense, so long as you don’t think about it too much.

Missouri to hold Rams stadium impact hearing, not conclude anything from it

The Missouri House Government Oversight and Accountability is holding a hearing today at noon on the economic impact of a proposed St. Louis Rams stadium, but not on whether a new stadium would be a good idea. As committee chair Jay Barnes wrote in his weekly newsletter last week:, R-Jefferson City. House Speaker John Diehl, R-Town and Country, asked Barnes to analyze the stadium’s costs and benefits.

In his weekly newsletter, Barnes called his committee’s work “a limited inquiry that will not reach whether government should finance a new stadium. Just because something may profit the government does not mean it should be done.” Yeah, I don’t get it either.

You may not watch the hearing online, because the Missouri legislature apparently does not do such things for committee meetings. (Its video archives page consists almost entirely of Microsoft Word files.) In fact, its website warns that “Notice of the intent to audio or video record all or any portion of a committee proceeding must be given to the Chairman of each committee in advance of the hearing,” so don’t even think of having a friend sneak in there with a tape recorder, either. If anything important happens, just trust that the Missouri legislature will tell you.

Goldman Sachs has secret plan to control NFL team relocations, or something

Vampire squid sighting! Sharp-eyed readers might already have noticed that when the San Diego Chargers and Oakland Raiders announced their Carson stadium plan, neither team’s execs actually took the stage, but a guy from Goldman Sachs did. Now, the Voice of San Diego theorizes that the firm is even more intimately involved in the plan to move the Chargers north:

SportsBusiness Journal’s Daniel Kaplan, citing unnamed sources, reported Monday that Goldman Sachs will finance the Chargers’ costs of moving to L.A. by covering “any operating losses suffered by the team in the first few years in that city as well as costs for any renovations needed in a temporary venue.” If they relocate, the Chargers are expected to play in the Los Angeles Memorial Coliseum or the Rose Bowl while a new L.A.-area stadium is under construction…

Meanwhile, Goldman Sachs managing director Greg Carey is advising Missouri Gov. Jay Nixon’s task force on building a publicly funded stadium to keep the Rams from moving to Los Angeles. The St. Louis Regional Convention and Sports Complex Authority hired Goldman two years ago to find ways to keep the Rams, or at least NFL football, in St. Louis.

The Voice’s Beau Lynott puts all this together to suggest that since Goldman would make more money on a Carson stadium than a San Diego one (since it would cost more and require more private lending), and keeping the Rams in St. Louis would mean they’d get to help finance two stadiums instead of one, the firm is secretly trying to maneuver that scenario into happening. Or not secretly, maybe, but … fiendishly? Yeah, “fiendishly” sounds about right, even for things that Goldman Sachs just does as a matter of everyday business, because come on, people, Goldman Sachs.

Meanwhile, the Carson stadium backers launched a ballot initiative on Wednesday, which means they’re now looking at an Inglewood scenario: Either hold a public vote this summer, or have the city council just vote it in once the ballot signatures are collected, thus avoiding both the normal environmental review and an actual vote. Three guesses which one the Chargers would like to see.

I’m still having a really hard time finding the exact language of the Carson proposal or figuring out what’s being proposed — an attorney for the project promised that “not one penny [of city money] will go into the project,” but everybody says that. If anyone does manage to track it down, can you throw a link into comments? Thanks!

AEG issues another report on how Inglewood stadium would be a menace to planes

Apparently AEG’s plan to block Stan Kroenke’s Inglewood stadium plan is to pay anyone in sight to issue reports about how it’s too near the airport. Following on last week’s report claiming that it would be a terrorist missile pad, AEG has now commissioned a former chair of the National Transportation Safety Board to show that planes could crash into it, or fly real low over it and scare people, or something:

According to the [Mark] Rosenker report, approaching aircraft could be as little as 300 feet above the Inglewood stadium, potentially dangerously close for the safety of the plane as well as fans in the stadium.

“The (safety) margins are not there,” Rosenker told the Post-Dispatch on Tuesday. “You lose an engine. Something bad has happened for whatever reason, and you have got to come down quickly. This is not a place that you want to be having to dodge around to guarantee that you get in there safely and not collide with anything before you touch that touchdown zone.

“It’s a bad idea, just in general. … Why put something that could be a catastrophic result in a place, where if you put it anyplace else, you take all of those problems off the table?”

Now, I am not a former NTSB chair, but I am a Mets fan, which means that I’ve been overflown by hundreds if not thousands of planes while at games, both at Shea Stadium and at Citi Field, which was allowed to be built six years ago in the flight path of LaGuardia Airport without anyone raising any alarms. Also, FAA regulations do try to account for this, saying no buildings in a flight path within three miles of an airport can be more than 200 feet tall — the stadium would be about 150 feet tall, so what’s the problem, exactly?

(I could also point out that the only stadium ever to be hit by a plane wasn’t anywhere near a flight path.)

I guess Rosenker’s point, such as he has one beyond “Can I have my check now?”, is that if you’re going to have a football stadium, you might as well do it somewhere that’s not near an airport, just to be better safe than sorry. In which case, you know what’s nowhere near LAX? The Edward Jones Dome. I bet the Rams could keep playing there for years and nobody would crash into it.

St. Louis stadium plan for Rams nears $1B, would only require tearing down most of everything in sight

The state of Missouri has released some new renderings of its proposed St. Louis Rams stadium, featuring lights that won’t shine in the eyes of passing boat captains and some local buildings not being demolished. It still looks like it would wipe out the newly renovated, nationally historic Hammond Apartments, though, in addition to most of the remaining old warehouses by the river:

That’s a lot of riverfront land dedicated to parking lots, as well as a reminder that the Jones Dome would still be there, serving as a very-occasional plenary hall for conventions, I guess? There would also be crazy geometric shaped video boards, and room for additional seating for Super Bowls, and a $985 million price tag that nobody has much of a clue how to pay for. But it’ll bring more tourists and huge profits around each event, so what’s to complain about?

AEG says Kroenke’s Inglewood stadium no good because terrorists could shoot down airplanes from it

In what the Los Angeles Times calls “a bold move to undercut an NFL stadium at Hollywood Park” — “bold” being an adjective usually reserved by journalists for the sort of things done by, say, Vladimir Putin — AEG has attempted to throw a roadblock in the path of St. Louis Rams owner Stan Kroenke’s proposed Inglewood stadium by getting former Secretary of Homeland Security Tom Ridge to write a report that it would be too tempting a terrorist target and should not be built:

In a 14-page report, Ridge suggests that because the Inglewood stadium proposed by St. Louis Rams owner Stan Kroenke would lie within three to four miles of Los Angeles International Airport and beneath the flight path of airliners, terrorists might try to shoot down a plane or crash one into the stadium, scenarios Ridge described as “a terrorist event ‘twofer.’ “

Because when terrorists want to shoot down an airplane, the first thing they do is look for an NFL stadium to launch surface-to-air missiles from. It’s easy to bring those in, so long as you put them in a clear plastic bag.

The Times reports that “it is not known how widely AEG distributed the report,” which the paper got from Ridge’s PR firm. NFL vice-president Eric Grubman effectively dismissed its findings, saying, “We feel that the best approach is to look at these things with an independent eye.”

In addition to giving everyone a good laugh, the AEG report should show what we have to look forward to as three different developers and three different NFL owners all circle around the L.A. market, which is full corporate titan smackdown action. Recall that when the owners of Madison Square Garden faced off with the New York Jets owners over a proposed Manhattan stadium, it culminated in a giant ad war, so one can only hope that this will have as entertaining a denouement.

Back nearer to planet Earth, meanwhile, the Oakland Raiders are reportedly looking for a smaller, 55,000-seat stadium in Oakland, which would be more in line with the NFL’s new marketing reality, not to mention with what Raiders owner Mark Davis said two years ago, than an 80,000-seat behemoth in Carson. Not that anybody, including Davis, is proposing how to build such a thing, but it’s a way to get another Raiders stadium story into the paper, so hey, do what you gotta do.

And speaking of getting stadium stories into the paper, consummate NFL insider Peter King has an article at SI.com theorizing that since Kroenke seems to be “the most determined owner to want to move to Los Angeles” (though he hasn’t actually said anything about moving, and has only partnered with a development company in Inglewood on a stadium with unspecified funding) and St. Louis has the most advanced stadium plan (though it has its own problems with mystery funding), maybe the Rams will move to L.A. and then the San Diego Chargers will move in with them and the Raiders will move to a new stadium in St. Louis?

Even King calls this “a virtual sports-talk-show bit of guesswork by me,” but that doesn’t stop him from putting it in print. (And in a pull quote.) Nor does it stop him from writing his entire column with only two people quoted: Grubman and St. Louis stadium plan chief David Peacock, neither of whom say anything other than what you’d expect them to say. (Grubman talks about L.A. having “real momentum,” Peacock says “if we do our job, I can’t imagine 24 votes to approve the Rams moving.”) And now I just wrote almost two paragraphs about this piece of wild speculation, so maybe I’m no better than the rest of them — though at least I reserved the headline for the far more entertaining piece of wild speculation. That’s the defense I’m going with, anyway.

Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Rams owner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”

Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys, New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.

Inglewood approves stadium plan with no public vote, as construction cost nears record $1.9B

The Inglewood city council voted unanimously yesterday to approve an NFL stadium near the old Hollywood Park racetrack site, bypassing both the usual environmental review and the public referendum that would normally be required to bypass the environmental review. The project, spearheaded by St. Louis Rams owner Stan Kroenke, can now move ahead just as soon as—

An economic impact report commissioned by the city estimated the privately funded stadium with open-air sides and a clear retractable roof could be the most expensive in U.S. sports history: $1.86 billion.

Okay, so to paraphrase things Everett Dirksen never said, this Inglewood project is starting to get into some real money. I’m already on record as being skeptical of Kroenke being able to make an Inglewood stadium pencil out when we were talking about $1.5 billion; at $1.86 billion, which is more than half a billion more than the 49ers spent on their stadium in Santa Clara without needing to worry about any NFL relocation fees, it seems like madness. (Or leverage to extract more money from St. Louis.) But I guess we’re one step closer to finding out whether Kroenke is super-smart, super-crazy, or super-smart about appearing to be super-crazy.

There is still one other possible way the Inglewood stadium, even if it doesn’t collapse of its own weight could be blocked, which is that a petition drive could be launched for a referendum to block the deal from going through without a referendum. No word yet of anyone launching such a campaign, but I’m sure someone will do so eventually, because California.

Moving railroads for Rams would add $25m to stadium’s $900m price tag

Missouri Gov. Jay Nixon announced his deal to move rail lines to make way for a new St. Louis Rams stadium yesterday as expected, and the cost is expected to be about $25 million. It’s unclear as yet whether the private railroad and electric utilities would get reimbursed by the state for these costs — if so, then add that to the $405 million in new bonds and state tax credits that Nixon has already proposed, and we’d be talking about a $430 million public price tag for a new $900 million Rams stadium. Assuming there aren’t any more hidden costs still to come, because we know what can happen.

Nixon said a couple of other things in his press conference, meanwhile, that are worth of note:

“If we do nothing, people will stand here 10 years from now and it will look exactly like it looks like right [now],” Nixon said, referring to the area where the new stadium would stand. “This is our chance to transform a blighted area that would remain blighted if not for the construction.”

Politicians endorsing development projects always say this, but seriously, how does he know? There’s already been some redevelopment in the “blighted” riverfront area, so it’s always possible there would be more; not to mention that history shows that when historic buildings are saved from the wrecking ball, redevelopment can happen in the most unexpected ways.

“The state would also lose approximately $10 million in state income taxes paid by NFL players each and every year. For every game they play here, NFL players pay taxes on their income, both the home team and the visitors.

 

“Last year when the Rams shut out the Raiders and the Redskins, those teams may not have put points on the board, but they did put something in the state coffers.”

Oy, this again. Yes, NFL players pay state taxes, but as with Wisconsin Gov. Scott Walker’s proposed “jock tax,” at least some of that money would flow into state coffers anyway as fans spent their football dollars on something else. Not to mention that Nixon cleverly overlooks that even $10 million a year in state income taxes wouldn’t come close to paying off the $24 million a year that Missouri would be sinking into the new stadium — even before paying for $55 million in state tax breaks (or $25 million to move the railroad tracks, if that ends up being public).

In short: How can you tell when an elected official isn’t telling the truth? You know the punchline.