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

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

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

MSG evicts Liberty, local official threatens to respond by pulling arena’s tax break

Back when Madison Square Garden announced it was putting the New York Liberty up for sale last fall, I wondered where the team would play once offloaded, noting that Brooklyn’s Barclays Center is pretty booked up with concerts, and Newark’s Prudential Center was pretty much an attendance disaster when the Liberty played there during MSG renovations a few years back. But even I didn’t count on MSG giving the Liberty the boot as soon as this season — while it still owns the team — and relegating games to a tiny community gym in suburban Westchester County:

For the upcoming season, the team will be downgraded to the Westchester Community Center, a dinky, 5,000 seat arena in White Plains, New York. The New York Liberty often had 10,000 attendees during their 2017 season home games.

The Liberty will actually play two home games at the Garden this year, but both will start at 11 am, presumably so that the arena can be cleared out in time to hold yet another Billy Joel concert or whatever in the evening. The rest will be in White Plains, in a space where I have been once in my lifetime as a New Yorker, for a White Plains Golden Apples USBL game in the 1980s of which I have precisely two memories: seeing Spud Webb pass to Manute Bol, which was extremely similar to watching someone hand things up to a man on a ladder; and the daunting challenge of getting a Metro-North commuter train to White Plains, then walking to the arena, and that was when I still lived in Manhattan, where the trains at least leave from.

Manhattan borough president Gale Brewer, who also lives in Manhattan, is nonetheless hopping mad about New York City’s only pro women’s sports team (no, Sky Blue F.C. doesn’t count as in New York City, and roller derby doesn’t count as a pro sport) getting exiled to the ‘burbs. Brewer is mad enough, in fact, that she’s threatening to hit MSG where it hurts, by repealing their eternal tax exemption on the Garden that is now saving them (and costing the city) $42 million a year:

“I and many of my colleagues in the City Council and State Legislature have never been convinced that this abatement constitutes good policy,” Brewer wrote.

“Shameful actions like this one, banishing a popular women’s professional sports team where its fan base cannot reach it, do not help your case.”

That’s a fine enough point, but, uh, Gale, you’re not actually on the city council or in the state legislature. And it’s actually the latter of those that has jurisdiction over the tax break, which was extended in 1982 in exchange for the Knicks and Rangers promising not to move for at least ten years, and which never expired because then-mayor Ed Koch forgot to have someone write in an expiration date.

A more viable threat by city officials, if Brewer wants to go that route, would be responding to MSG evicting the Liberty by in turn evicting MSG: The World’s Most Famous Arena only has the right to sit atop the entombed remnants of Penn Station thanks to a special zoning permit from the city, and that is set to expire in 2023. I’ve been skeptical that the city would give an entire arena and three (now two) pro sports teams the heave-ho, even in order to build a new Penn Station entrance, but maybe angry WNBA fans will be the catalyst? Okay, probably not, but at least it’d be a more realistic thing for Brewer to grandstand on.

Friday roundup: Tons of news, but you’ll forget it all once you see that Houston is spending public money on a pro rugby stadium

And in other news that doesn’t involve proposed Tampa Bay Rays stadium sites:

  • United Airlines is spending $69 million on naming rights to the Los Angeles Coliseum in advance of the 2028 Olympics, but IOC rules prohibit corporate names during the Olympics, oops. Hope you enjoy the most expensive college-football naming rights deal in history, United!
  • Hotel revenue fell 16% in San Diego last year after the Chargers left town, but went up 0.2% in St. Louis after the Rams left. I’m not honestly sure what if anything this means — you’d really have to look at hotel revenue on football weekends to do this right, and it doesn’t look like this study did — but feel free to speculate wildly.
  • Did I mention the Yahoo Finance article yet that compares the Amazon HQ2 chase to the competition to host the Super Bowl, and cites me saying that while Amazon will bring more jobs, “that said, there’s almost no way it’s worth the kind of money that cities are talking about”? Well, now I have, enjoy!
  • AL.com has recalculated the public costs of a proposed University of Alabama-Birmingham football stadium and come up with a total of $18.2 million a year — $10.7 million from a bunch of county taxes, $3.5 million from a new car rental tax surcharge, $1 million from other county funds, and $3 million from city funds — not the $15.7 million I had previously reported. UAB and a naming rights sponsor and other private contributors, meanwhile, would only put in $4 million a year, and only for the first ten years. Out of his goddamn mind, I tell you.
  • Norman Oder of Atlantic Yards Report filed a Freedom of Information Law request to see the competing bids for the Belmont Park site that eventually got awarded to the New York Islanders, and was shot down on the grounds that it would “impair present or imminent contract awards.” Wait, wasn’t the contract already awarded? Will it be okay to ask again once it’s too late to do anything about it?
  • The WNBA’s Chicago Sky are moving to the new DePaul basketball arena that the city of Chicago helped pay for, which I guess is marginally good for Chicago in that it gets to steal a tiny sliver of economic activity from Rosemont, screw those guys, right? (Actually, Rosemont is apparently a gated community, so maybe screw those guys.)
  • A New Orleans Pelicans game was delayed because the arena roof leaked. No one is demanding that a new arena be built just yet that I’ve heard, but given that the current one is 19 whole years old, it’s gotta to be a matter of time, even if this one does have a fire fountain.
  • The Pittsburgh Pirates are threatening to sue the city-county sports authority over who’ll pay how much for $10 million in improvements to their stadium, because apparently the people who write these stadium leases are idiots.
  • If you enjoy this site but were thinking, “Wouldn’t this be better as a YouTube video with lots of animated charts?”, Vox has got you covered.
  • The Houston city council has approved spending $3.2 million in tax dollars on a pro rugby stadium for the Houston SaberCats, who are a pro rugby team that is going to play in a pro rugby league, which councilmember Jack Christie calls “a beautiful example of public-private partnerships that we ought to look at in the future, because as far as I have heard, there’s not been one city tax dollar used for this development.” I’m done. Have a good weekend.

If Madison Square Garden sells the Liberty, where are they going to play?

The owners of the New York Liberty, one of the WNBA’s three remaining original franchises still in the same city they started off in, are putting the team up for sale. That’s of interest if you’re a WNBA fan — I’m actually a former Liberty season ticket holder, so I qualify as one of the few and the proud even if I haven’t been to see a game in the last couple of years — but also for readers of this site in general, because of what it says about the arena industry.

In brief: The Liberty are owned by James Dolan’s Madison Square Garden Co., which also owns the Knicks, the Rangers, and its namesake arena. The team, and the WNBA in general, was launched in 1997 for a bunch of overlapping reasons: to take advantage of excitement over the 1996 U.S. women’s Olympic basketball team, to fill dates in the otherwise-slow summer months (which is why the league plays outside of the traditional wintertime schedule for basketball), to make the NBA look women-friendly and provide a more affordable product to rope in fans priced out or alienated by the men’s game, and to beat down an attempt by the independent American Basketball League to horn in on the NBA’s pro hoops monopoly. The ABL was gone within a year and a half, and the Olympians were soon forgotten, but the WNBA has burbled on for another two decades, with modest attendance and revenues but remarkable longevity for a startup league, in no small thanks to the NBA’s financial backing.

That’s starting to change, though: While originally all the WNBA teams were fully owned offshoots of NBA siblings — down to teams getting sister names, like the Sacramento Monarchs to complement the Kings and the execrably named Detroit Shock to go alongside the equally-terribly-named-if-you-think-about-it Pistons — that’s starting to change, with more and more teams independently owned and operated. And the Liberty would be the biggest independent team of all once cut loose from MSG, which clearly has decided that it would rather get out of the women’s basketball game and stick to its core business of crappy men’s teams and lots and lots of concerts.

The big question for a future Liberty owner, meanwhile, is: Where are they going to play? Renting out MSG is a possibility, of course, but unless there’s some sweetheart lease deal baked into the sale agreement, it would likely be prohibitively expensive, since you’d be bidding against all those concerts. The Barclays Center in Brooklyn is another option that might come slightly cheaper, but again it’s pretty busy with concerts, even in the summer. (One problem with a basketball schedule is that it seriously restricts your flexibility for hosting concerts, which are typically booked long after a team’s home games are set in stone.) When MSG was getting renovated in the summers a few seasons back the Liberty played in Newark’s Prudential Center, but attendance was pretty bad (I picked up Stubhub seats ten rows from the court for one game for $3 apiece); Nassau Coliseum desperately needs something to fill dates, but it’s way out on Long Island.

I suppose a new Liberty owner could try to demand a new arena of their own, but that’s not going to go far when your fan base is the size of a WNBA team’s. Maybe this could all be part of the plan to build a new arena for the Islanders out by Belmont Park, something that Dolan is a part-investor in, so … I dunno, we’re deep into the tea leaves here. It’s an interesting moment, though, one that could end up revealing a lot about not only the future of women’s pro sports, but how arena managers are thinking about the relative value of sports vs. other events. I’ll have more on this soon, I hope.

Wizards’ $50m practice arena renderings are scenes from a post-apocalpytic nightmare

New renderings for the Washington Wizards practice facility (and Mystics home arena) to be built with at least $50 million in city money were released yesterday, and, I’m sorry, what?

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The new arena will apparently be surrounded by a massive frozen pond, or maybe a thin coating of a liquid polymer. Fortunately, no one will be around to try to walk on it, since that could get ugly.

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Is that a WNBA player? If so, why is she wearing so much makeup? What’s suspending the banner (?) in midair like that? And why on earth is there a film reel countdown projected (?) on a brick wall? What is it counting down to? Will there be any concession stands, or will the whole place just feel like an empty hotel lobby?

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The most important part of any new development: lens flare.

new-dcpract-5Put it all together and you have … dear lord. At least the rest of human civilization appears to have been destroyed in whatever cataclysm turned the very ground into a shiny flat surface, so no one will be around to see this. When the aliens land, though, they’re going to be disappointed that there’s nowhere to buy any curly fries.

NYU study: Relocating MSG would cost $5B, give it a rest already

Certain sectors of the New York City policy world (the Municipal Art Society, the New York Times editorial board) have been calling for a while for the relocation of Madison Square Garden, so that a new, grand Penn Station could be built in its place. (The old, grand Penn Station was demolished in the 1960s to make way for the current Madison Square Garden, the fourth building to bear that name.) NYU’s Rudin Center for Transportation Policy and Management released a study last week of how much it would cost to do this, and came up with … do I hear $5 billion?

Screen Shot 2016-05-06 at 8.23.17 AMThis isn’t really all that surprising: A billion and a half for a new MSG sounds about right given that just renovating the old one cost a billion, and acquiring new land could easily cost half that in this market. (The Rudin report looks at the price of buying up the annex to the Farley post office building across the street Morgan post office annex a couple of blocks to the southwest, but other sites would be priced similarly, if you could even find any.) And almost $3 billion for building a new Penn Station is already the price tag established by Gov. Andrew Cuomo for his plans (which would leave MSG intact but build lots of new stuff under it).

It’s also important to consider the political context, with Cuomo’s plan to expand Penn Station with MSG in place (to be paid for by some as-yet-unidentified private developer — applications were due two weeks ago, but if any have been revealed it’s news to me) going up against the MAS and Regional Plan Association’s insistence that MSG really needs to be kicked out. Given that Rudin director Mitchell Moss has already endorsed Cuomo’s plan, and his report’s conclusion is “It’s time to move on,” it’s easy to see some political gamesmanship going on here.

Still, this whole mess is a reminder that as easy as it is to envision redesigning your city to undo past mistakes (tearing down one of the greatest public spaces ever, building a kind-of-ugly sports arena in its place), there’s something to be said for actually existing architecture, both in that it’s already paid for, and in that the city has grown up around it to accommodate it. Not to say that nothing should ever get built or torn down, but it’s important to look at the true costs of doing so, and whether the money could be better spent mitigating the effects of your last mistakes.

D.C. council asks not to pay for Wizards cost overruns, mayor implies that it must hate black people

Oh yay, it’s some actual news for once! Washington, D.C. councilmembers have gotten cranky about Mayor Muriel Bowser’s plan to stick taxpayers with not just the $50 million cost of a new Wizards practice facility but all cost overruns as well — which was first revealed back in December, okay, but it takes a while for the D.C. council to work up a good head of cranky — and have introduced a bill to cap the district’s costs at $50 million:

“The District’s tax dollars are finite, and we have an obligation to our residents and businesses to use their funds as responsibly and efficiently as possible,” [at-large councilmember Elissa] Silverman said in a statement from the dais. “If we have to put more money toward a practice arena because of cost overruns, there is less money for new school construction, new ambulances and fire trucks, new and remodeled recreation centers, and other needed civic infrastructure, especially in Ward 8.”

Silverman also noted that the way the mayor has put forward her plan, the council wouldn’t even have to vote on it — unless the council blocks it by this Thursday, the spending deal will be “passively” approved, which is the kind of crazy that sounds about right for D.C. governance. (Several councilmembers have already filed a motion to extend the arena decision until April 7.)

Bowser’s chief of staff John Falcicchio showed that the council has no monopoly on the cranky, telling Washington City Paper: “It’s troubling that certain Councilmembers would move to strip $5 million from a job creating project in Ward 8. This is similar to the Council’s effort last year to defund the RISE Center at St. Elizabeths. Don’t tread on Ward 8.” Why are you picking on poor Ward 8, councilmembers? Do you think Ward 8 doesn’t deserve your blank checks? If you really loved Ward 8, you would buy it a pony.

All this over whether D.C. taxpayers will pay for an entire $50 million NBA practice arena, or will pay for an entire $50 million NBA practice arena plus any additional costs that crop up when the Wizards decide they want gold-plated exercise equipment. Representative democracy sure seemed like a good idea at the time.

Wizards practice arena plan would put taxpayers on hook for full cost, plus overruns

If the idea of Washington, D.C. spending $50 million on a practice facility for the Wizards sounded terrible enough, it just got worse: The city government would be on the hook for all cost overruns as well, with the team’s share limited to $4.5 million in rent payments over 19 years:

Monumental is the only tenant lined up for the facility and is expected to use it about 40 percent of the time, through Wizards practices, Mystics games and games from a NBA D-League franchise that has not yet been created. Events DC, the city’s convention and sports arm, would be responsible for booking events the rest of the time and would pay for any overruns beyond $55 million.

[D.C. council chair Phil] Mendelson said since Monumental’s contribution of $4.5 million equated to the rent the company would pay over the 19-year lease it expects to sign, the mayor had committed to paying for the entire bill even though ticket sales will go to Monumental. “How will we make any money off of this?” Mendelson asked.

The details of the deal for the arena, which would also host Mystics WNBA games and maybe an NBA D-League team, are still not worked out. Mendelson actually supports the plan, despite his qualms, so it looks to have a good chance of passing — if so, I hope they’ll at least chisel his “How will we make any money off of this?” quote into the cornerstone.

D.C. residents give resounding thumbs-down to mayor’s NFL stadium plans

Residents of the area around RFK Stadium really do not like Mayor Muriel Bowser’s idea to use the land for a new NFL stadium:

More than 150 residents of Capitol Hill filled a church gymnasium Wednesday night to propose ideas for re-use of the Robert F. Kennedy stadium property.

Most of the ideas centered around sports: playing fields, a pool, a boathouse, skating rinks, walking trails, even a velodrome.

There was one idea they widely and intensely opposed: building a new stadium for the Redskins. And almost every one of the more than 20 people who stood up to oppose a new NFL stadium did so without saying the team’s name.

Meanwhile, two former National Park Service workers who live near the St. Elizabeth’s Hospital site really do not like Mayor Bowser’s idea to use it for a new Wizards practice facility:

“I don’t think we need it over here,” said Alphonzo Walker, an unemployed 53-year-old who lives in Ward 8.

“I don’t know about this area,” said Eric Clark, also unemployed and in his 50s, though a few years older than Mr. Walker. “What’s going to happen to the homeless who live there?”

Okay, sure, small sample size. Still, the general principle is valid: If you have a plot of available land, and a plan to dedicate a few tens or hundreds of millions of dollars in city money towards it, what’s the best way to generate jobs and other benefits for the surrounding neighborhood, if that’s your goal? Think carefully before you answer.

D.C. mayor proposes $55m Wizards practice arena, because city was out of other sports to subsidize

Washington, D.C. Mayor Muriel Bowser has scheduled a press conference today to announce her proposal for the construction of a brand-new sports facility in the District. Nope, not the NFL stadium she talked about last week. But wait, you ask: Don’t the Nationals and the Capitals and the Wizards and D.C. United all have new buildings either in place or under construction? What on earth is there left to build?

D.C. Mayor Muriel E. Bowser has reached a tentative deal to build a $56.3 million Wizards basketball practice facility and Mystics arena for majority team owner Ted Leonsis on the east campus of the former St. Elizabeths hospital in one of the poorest corners of the nation’s capital.

Yes, you read that right: a $56.3 million practice facility. Plus a home court for the WNBA’s Mystics, because apparently the team is giving up on ever again being able to sell more than 5,000 tickets a game, despite the league average attendance being over 7,000. (Yes, I’m sure lots of those tickets are freebies or heavily discounted, but still.) The money would come overwhelmingly from public pockets: $23 million from the city itself, plus $27 million from the city-funded Events D.C. tourism bureau, with Wizards owner Ted Leonsis chipping in a whole $5 million, plus another $10 million for unspecified “redevelopment and community philanthropic investments.”

Bowser’s administration says this will be a terrific use of public money, notes the Washington City Paper, because:

A press release about the new facility estimates that it will generate $90 million in tax revenues over 20 years, in part by hosting Mystics WNBA games and an estimated 90 non-basketball events a year.

Okay, so let’s get this straight: Having the Mystics sell fewer tickets at a new arena instead of more back at their old arena would generate more in tax revenues because … there’s such a pent-up demand for concert dates that the Verizon Center will be able to fill those former Mystics dates with lots of new revenue-earning events? While also slotting in another 90 new events at the new arena? All of which will be spending by people who never would have been in D.C. otherwise, because after all, it’s not a big tourist town.

Not to mention that at a 5.75% city sales tax rate, to provide $4.5 million a year in new tax revenues, this new practice facility — practice facility, keep reminding yourself that — would need to generate an additional $78 million a year in sales all by its lonesome. That seems pretty unlikely — though if it could be such a cash cow, you have to wonder why Leonsis can’t just build it with his own money instead of making the people of D.C. build it for him and then hope to earn it back through sales taxes. It’s not like he’d need to take out a loan, even.

If there’s any argument for handing $50 million in public money to one of the richest guys in town, I suppose it would be that this is supposed to “revitalize” a rundown section of Southeast D.C., because what business owner can resist the draw of selling their wares to 17 games a year worth of WNBA fans? There is a Metro stop nearby, so it’s always possible you’ll eventually see condos springing up in Anacostia, like you do in pretty much every other D.C. neighborhood with transit. Of course, whether condos — or easy access to WNBA games — is what poor neighborhoods really most need out of $50 million in public spending is another story, but hey, beggars can’t be choosers, right?

This whole mess still needs to go before the D.C. council, where it will no doubt be the subject of months of raucous debate before it gets approved at the last minute by councilmembers scrawling out an agreement in ballpoint pen on the council floor. Democracy!