Minneapolis developer claims Super Bowl will fund its affordable housing project, is this for real?

Could it be? An actual benefit that a city is getting from hosting the Super Bowl? That’s what the Minneapolis Star Tribune is reporting about that city’s hosting of the 2018 game, which has supposedly helped local developers create a new subsidized housing project for middle-income earners:

[For-profit developer] Ryan [Cos.], First Covenant Church, and Community Housing Development Corp. (CHDC) a year ago outlined a rough vision for a six-story apartment building across S. 6th Street from the new Vikings stadium. This week, they submitted to the city a near-final plan for the $38 million project, which was designed by UrbanWorks Architecture…

Ryan, First Covenant and CHDC found a way to make the math work for their project, one that takes the Olympics for inspiration. They have an unnamed private partner with a nice budget for housing and operational space during the Super Bowl festivities that is close to committing to the project.

Since the building’s site is within the Super Bowl’s required security perimeter, 500 feet from the stadium, the group plans to first rent the building to this private entity at a rate that would make the project financially possible — and without subsidy.

So, great, right? The “unnamed private partner” gets space to use during the Super Bowl, people earning $20,000 to $55,000 a year get some new affordable apartments, and it’s a win-win all around!

Well, maybe. The developers say their model is Olympic Villages, which after the games are over are often repurposed for other uses, but those are usually built with Olympics money, not paid for by a particular private entity looking to rent short-term space. Not only is the CHDC’s private partner unnamed, but so is the amount they’re willing to pay to rent the buildings for Super Bowl week — you can get a one-bedroom in downtown Minneapolis during the Super Bowl on Airbnb for a whopping $8,000 a night, so if you double that for the prime location and multiply by a full week and for 160 apartments, that’s: $20 million, maybe? And that’s the retail price, so I’d be very surprised if the private partner is paying more than $10 million for the Super Bowl rental, which comes to about $60,000 an apartment, which is about one-quarter the typical cost of building affordable housing in Minneapolis, though if they just need it to span the gap between their costs and what renters can afford to pay … maybe. Or it’s possible this project would be happening anyway, but they’re getting a little extra cash and some added publicity via the Super Bowl angle.

I would love to see a way to fund affordable housing on the backs of rich people who are willing to pay whatever it takes to live next to the Super Bowl for a week, but I’d need to see more numbers (and names) attached to this before I’m willing to give it the full three cheers. In housing as in stadiums, please hold your applause until all the financial details are in.

NFL gives three Super Bowls to cities with new stadiums, implies, “Keep ’em coming”

The NFL awarded the 2019, 2020, and 2021 Super Bowls to Atlanta, Miami, and Los Angeles yesterday, continuing its policy of using the big game as a reward to cities and teams with new or significantly renovated stadiums. Or as Rams owner Stan Kroenke said following the decision, “I think they are telling the communities and the owners who stick their necks out that it’s worthwhile.”

The most important target of the announcement, then, isn’t the three cities that will now get the questionable benefit of hosting the NFL’s annual week-long road show, but those that are being wooed with that dubious carrot. Right now most of the reporting is on how New Orleans and Tampa Bay were snubbed because their stadiums aren’t as shiny as the cities that got the nod, but it’ll be interesting to see how this plays into future coverage of stadium campaigns — already, San Diego Union Tribune chief Chargers stadium cheerleader Kevin Acee has written that the possibility of getting a Super Bowl shouldn’t be the reason to vote for a new stadium, but really he means that you should vote for a new stadium regardless, so all remains right with the world.

Interestingly, there’s no reporting yet that I can see out of Las Vegas on the Super Bowl decision, but that may be because they’re too busy covering yesterday’s conflicting comments on a potential Oakland Raiders move from owner Mark Davis (“This is the real deal. If Las Vegas can come through, we’re going to be there”) and NFL commissioner Roger Goodell (“It’s very premature at this point. Until we have more information, it’s pure speculation”). This could be just everyone playing their role — in terms of using Vegas as leverage in hopes of drumming up stadium subsidies from Oakland, Davis is bad cop, Goodell is good cop — or it could be a sign of deeper rifts among league owners over whether Davis should get to bolt from a bigger market to a smaller one in exchange for a lucrative (to him) stadium deal, and on what terms. We won’t know for sure until the next ESPN postmortem, I expect.

NFL commissioner waves around well-worn Super Bowl promise to boost Chargers petition drive

NFL commissioner Roger Goodell did what commissioners do on Saturday, promising San Diego a Super Bowl if it approves a new stadium for the Chargers. Well, not promising exactly:

“I’m confident that if they can get a stadium built here, the owners will want to support it with a Super Bowl,” Goodell said. “I think that’s what this community deserves, and we’re all going to work to try and find a solution.”

Yeah, you can totally take that promise to the bank. Not that San Diego wouldn’t get a Super Bowl with a new stadium — they hold them every year, after all, and it wouldn’t be too hard to work San Diego into the rotation at least once — but Goodell’s appearance was far less “announcement” than “media event,” designed to help kick off the Chargers’ petition campaign for $1.15 billion in city spending on a new stadium and convention center annex. A Super Bowl also wouldn’t much help in paying that off, as innumerable economists have found, but at least it might be a pleasant distraction, maybe?

Super Bowl tourists drove away usual visitors to South Bay, just as economists predicted

It’s been a month since Santa Clara welcomed the Super Bowl to the San Francisco 49ersslippery turf, so how did the South Bay make out in terms of that $800 million in economic impact that the NFL projected? Take it away, Team San Jose, the tourism bureau with the instantly dated name:

Even with room rates falling below astronomical predictions, they were still high enough above normal to make the three-day Super Bowl weekend “the best weekend of hotel performance in San Jose history,” said Ben Roschke, Team San Jose’s director of business development.

Sounds great! And what are the actual numbers?

Instead of selling out every single room during Super Bowl week, as the city projected, San Jose hotels actually welcomed fewer guests than the same week last year, preliminary figures released Monday show.

With three out of every 10 rooms vacant, the city won’t reap the nearly $1.9 million in additional hotel taxes it forecast Super Bowl week would deliver. Instead, a report submitted by Smith Travel Research shows the city will likely receive about $600,000 in extra hotel taxes, said Victor Matheson, an economist at College of the Holy Cross, who studies the economics of Super Bowls.

That’s not enough to offset the $1.25 million in costs mostly for police services during Super Bowl week.

How could hotel occupancy rates be both above normal and below normal? The trick is in what timespan you look at: For Super Bowl weekend, even sky-high hotel rates weren’t enough to keep people away, which makes sense given that if you’re already dropping obscene amounts of money on Super Bowl tickets, getting gouged on a hotel stay isn’t that big a deal. However, for the entire week before the game, occupancy rates were down 9% from the same week last year, presumably because business travelers steered clear of the hiked room fees (by 64%, according to the Smith Travel report), while football fans didn’t show up until closer to game time.

This is probably fine for the hotels, since they ended up making more money from the increased room rates, even if they hosted fewer people overall. In terms of overall local economic impact, though, it’s terrible, because it means for the first half of Super Bowl week, there were far fewer hotel visitors knocking around San Jose and spending their luscious out-of-town dollars elsewhere in town, something that gamegoers couldn’t make up for during their relatively short stays. (Sales tax receipt figures for Super Bowl week haven’t been released yet, but anecdotal reports from San Jose business owners were that Super Bowl week was “kind of a letdown” and “wasn’t too much different from a normal week.”)

If all that sounds familiar, it should, because economists like Phil Porter have been noting this trend for more than 15 years already. Matheson ended up telling the San Jose Mercury News that the Bay Area as a whole could break even on its Super Bowl hosting costs, which is nice, but isn’t exactly an $800 million windfall.

 

Hot dog vendors sue Super Bowl concessionaire for trapping them on bus line with no pay

A group of Super Bowl 50 workers have sued Levi’s Stadium concessionaire Centerplate for labor law violations, charging that they were illegally denied required pay and rest breaks during the game. If this sounds familiar, it’s probably because you saw lead plaintiff Gabriel Thompson’s writeup of his Super Bowl hot-dog-vending experience in Slate (with the help of a grant from the Nation Investigative Fund — hi, Esther!):

I swipe my card at 8:36 a.m. I am now on the clock, more than 90 minutes after I arrived to catch the shuttle. This unpaid time is likely illegal: In 2000, the California Supreme Court ruled that employers who require workers to travel in company vehicles must be paid from the time they were told to arrive at the departure point…

[After the game,] thousands of workers are shuffling slowly along a path that follows alongside a tennis court, passes over a small bridge and finally spills out onto a road, where two buses idle. It takes me seven minutes to make my way to the end of the line; by that time it has stopped completely. We all wait for another 20 minutes, without moving. More workers join, and the line becomes tighter and hotter. Many people have been on their feet since 4 a.m., and we are packed so closely that sitting down is impossible. One woman starts sobbing.

Another hour passes. We’ve moved about two hundred feet. “There’s gonna be a riot here!” someone yells. It certainly feels possible. A chant breaks out: “We want to go home! We want to go home!” The crowd gets even tighter and pushier. At one point, a group next to me tries to shove its way through, but there’s nowhere to go, and they only succeed in knocking a few people to the ground. A second woman breaks down into tears and is escorted out. It’s now 11 p.m. The urge to sit has become overwhelming. Two groups of men have somehow decided they ought to fight each other, but it’s too crowded even to do that. I end up next to a temp from Culinary Staffing America, who, like me, has already clocked out and so likely won’t be paid for this time. Others nearby, direct employees of Levi’s Stadium, are incredulous when we tell them that. They’ve been instructed to clock out after they reach Avaya Stadium.

The two takeaways here: The bulk of the jobs created by the presence of a Super Bowl (such that it really creates any at all) are exceptionally crappy ones; and crappy jobs in the 21st century U.S. are exceptionally crappy indeed. One of Thompson’s co-workers in Santa Clara was a woman who earned $11 an hour through a temp agency and “was living in a storage unit in a San Jose trailer park.” America!

The Super Bowl and the NFL are both still awful for living things

I did not see the Super Bowl — I actually spent the day rewatching “League of Denial” with my son, after which he decided he’d rather play FIFA 16 on the PS4 than watch American football — so don’t have any actual Super Bowl-related content to use as clickbait, though I know that’s how the game is played. So instead, I’ll direct you to read this article about how the Super Bowl is bad for cities, or this video from the Wall Street Journal, or this two-year-old article by me that still holds true. Or maybe you’d prefer an article on how stadiums get to host Super Bowls just as rewards for teams building them even if they suck, or a list of all the specific ways that the host stadium for this Super Bowl sucks, helpfully titled “Levi’s Stadium is garbage”?

Hope you enjoyed the game! It would be sad if all those players‘ brain cells, not to mention those public tax kickbacks, had died for nothing.

Idiotic lease clause could force Houston to spend $50m on upgrading Texans stadium for Super Bowl

To the list of crazy things that the NFL demands in order to allow cities the honor of hosting the Super Bowl (free billboards, free police officers, free bowling alleys), add spending $50 million to make the luxury suites more luxurious at your 13-year-old stadium. That’s what Houston was told for its plans to host the 2017 Super Bowl:

Peter O’Reilly, the NFL’s senior vice president of events, said Monday that upgrading the stadium’s WiFi is something the bid committee has agreed to do. In terms of sprucing up the seating, he said he noted on a recent visit that NRG “is in a very good place at this stage in its stadium life, but there are opportunities to upgrade that are common across Super Bowl stadiums as they prepare and continue to make sure they are state-of-the-art.”

So far, no Houston government officials have stepped up to offer $50 million to the cause — in fact, Harris County Commissioner Steve Radack swore earlier this week that “I’m not about to vote to spend a single dollar of county money updating these luxury suites” — and it doesn’t appear that the Super Bowl bid committee actually committed to it as a condition of hosting the big game. So the NFL seemingly doesn’t have a leg to stand on, unless there’s something in the Texans‘ stadium lease:

A clause in that lease agreement says the county must maintain the facility in “first class” condition and “a manner comparable to other stadiums.”

Noooooooooooo! Don’t you people ever learn?

Minnesota legislators want to give more tax breaks to Super Bowl, because NFL asked nicely

Minneapolis was awarded the 2018 Super Bowl last May, after agreeing to a completely crazy list of NFL demands that includes everything from league exemption from local taxes to putting up more cellphone towers if the NFL isn’t happy with reception. But that apparently isn’t enough:

Senate Majority Leader Tom Bakk said Tuesday that he and House Speaker Kurt Daudt will push for $2.8 million in additional tax relief sought by Super Bowl organizers for the 2018 game in Minneapolis…

Minnesota already exempts sales tax on tickets to the game itself, a law dating from the 1992 Super Bowl in Minneapolis. That’s worth about $9.5 million in forgone revenue, state officials have said.

The new request would extend that exemption to cover events related to the game at the new Vikings stadium, such as an interactive zone for fans or certain tailgating events.

Apparently the NFL thought it was getting this tax break, but nobody in state government ever signed off on it, and Gov. Mark Dayton is now invoking the “no backsies” rule to tell the league that if they wanted it that bad, they should have made it part of the agreement. Daudt, though, has no problem with handing over an additional $2.8 million after the fact:

“I wish that they didn’t ask for all of these sorts of tax breaks, but it is an economic benefit to the community. It’s kind of a ‘but for’ — it doesn’t happen if we don’t have the Super Bowl here,” Daudt said.

We could argue that “economic benefit” notion all day, but more to the point: Dude, you already got the Super Bowl! The NFL is capable of a lot of things, but even it wouldn’t threaten to change the location of a Super Bowl that’s already been announced over a matter of a couple million dollars. At worst, the league might grumble about not approving future Minneapolis Super Bowl bids (though by the time Minneapolis comes around again on the Super Bowl rotation, none of these people are likely to still be in office), or leave Minneapolis a scathing Yelp review or something.

Anyway, it sounds like legislative leaders want to try to push this through, but Dayton has no intention of signing it, so maybe it’s just a way for the top legislators to tell the NFL, “Hey, we tried. Can we still sit in your luxury box?” And hey, look, at least Bakk and Daudt draw the line somewhere:

State leaders made it clear their largesse wouldn’t extend to waiving player income taxes for the time they’re in Minnesota. Those costs will be covered by private fund-raising, officials with the host committee said.

I really, really want to see the fundraising letter for that one. For 70 cents a day, you can free an NFL player from the tyranny of state income taxes! Though come to think of it, that might be a decent selling point with some funders.

Credit card company issues lame-ass report on Super Bowl spending, gets name in headlines (but not this one)

First Data, which processes credit and debit card payments, has put out a press release about spending at last Sunday’s Super Bowl in Glendale, and Darren Rovell is ON IT:

Super Bowl XLIX in Glendale, Arizona, resulted in no significant consumer spending growth to the greater Phoenix area, according to an analysis of consumer spending patterns from payments technology company First Data, which says it annually handles 60 billion credit and debit card transactions.

The company’s data shows spending growth from the two weeks surrounding last Sunday’s game was only 3.1 percent better than average compared to the same time period a year before when the spending in the area grew 6.4 percent.

This is along the lines of what actual economic studies have found, so it’s tempting to take this as confirmation that the Super Bowl doesn’t do squat for local spending, because it mostly just displaces visitors who steer clear of town because they don’t want the hassle of dealing with the Super Bowl. First Data, though, didn’t exactly do an exhaustive study: It only looked at credit card and debit card charges, obviously, and just compared spending in the Phoenix area to the same time period the year before without controlling for any other factors. In other words, this could be an actual sign of something, or it could just be a random fluctuation that means zippo.

Also, Rovell doesn’t bother to calculate what a 3.1% hike in spending (compared to “average” — average over the whole year, average for February, what?) means in actual dollars, though presumably he has the First Data report (he didn’t link to it) and a calculator. But, you know, ESPN isn’t paying him to think, just to reprint press releases, and there’s another one on the pile, so no time to lose!

No, there’s still no Super Bowl windfall for cities, no matter what you read in the paper

If you haven’t gotten enough of me griping about media coverage of sports economic reports here — or just want to read about it all in one place — hie thee to FAIR.org’s newly expanded website, where I’ve written all about how the media all too often parrot claims of economic windfalls from sports without even checking if they have any basis in fact.

There are occasional exceptions, obviously (I cite several), but as one journalist who has done time fact-checking his peers says:

“For every one good article you see, there are ten others that don’t bother to do it, and the good ones just get lost,” says Noah Pransky of WTSP-TV in Tampa Bay, who also reports on sports economics at his own website, Shadow of the Stadium. “An industry joke is that reporters have always been mathematically challenged, but the problem has been magnified in recent years by the 24-hour news cycle and staff depletion at traditional media outlets.”

Remember, kids: Just because you read it in the newspaper doesn’t mean it’s true! Blogs, though, are 100% accurate. I read a study that said so.