February 08, 2010
Goodell: Players should help pay for L.A. stadium
Well, this is interesting: NFL commissioner Roger Goodell, in his pre-Super Bowl press conference on Friday, departed from the usual script of league commissioners endorsing team move threats by throwing a bit of cold water on developer Ed Roski's attempts to lure an NFL team to the Los Angeles area:
"I don't think we can guarantee that a team will be there," Goodell said. "We are all working very hard to get a team back in the Los Angeles market because we know there are millions of fans there that would love to see NFL football as part of their community. I think progress is being made. The good news is clearance has been given to build a stadium." ...
Goodell, however, didn't sound as optimistic about the time frame considering the economic climate and the ongoing labor talks between the league and players' union, which could cause a lockout in 2011 after the current labor pact expires.
"The key issue is the challenges of financing a facility in this environment with the labor agreement that we have," Goodell said. "The cost of building that stadium is almost entirely on the ownership and that is a big burden to pay in this type of environment."
That last clause is the key: Roski's plan is for a team-funded stadium, albeit with lots of public money for land and infrastructure. What Goodell appears to be doing is injecting the L.A. stadium battle into the now-escalating NFL labor talks, hinting that the players union should kick back some shared revenue in exchange for getting a stadium that will increase the league's revenues. Okay, more than hinted:
"Investing in a new stadium in Los Angeles will generate more revenue that the players will share in," Goodell said. "That's the kind of investment if we work together with the players association and the clubs where we can develop a relationship and invest in those kinds of facilities that will generate new revenue and allow the game to grow and allow us to get back and engage millions of fans in Southern California and that will be good for us and that will be good for the players."
Goodell reiterated the point on Face The Nation yesterday, saying, "You have to invest in these stadiums that we're in today. ... And we need to make sure that the owners have the capital to be able to do that. And then the pie grows and everyone benefits."
No reply from the union yet that I've seen, unless you count this.
Cactus League teams balk at helping fund Cubs stadium
The city council of Mesa, Arizona, agreed last month to put a vote on the November ballot on building a new $84 million spring-training home for the Chicago Cubs, who otherwise were threatening to move to Florida. This isn't that unusual: Baseball teams move their spring facilities all the time, which makes for lots of opportunities to set up bidding wars for stadium subsidies.
Where it gets interesting is in how Mesa has proposed to fund this one: Partly with a rental-car surcharge, but partly with a leaguewide ticket tax on Cactus League games, on the argument that since the Cubs are the league's biggest draw, the other teams in the league should chip in to keep them around. (Most economists will tell you that ticket taxes generally come out of team owner pockets, as they're prevented from raising prices as high as they would otherwise.) The rest of the league, unsurprisingly, is not too thrilled, and several teams are openly opposing a ticket tax to help the Cubs — including Jerry Reinsdorf, owner of the rival Chicago White Sox, who play in Glendale.
Mesa Mayor Scott Smith replied: "Is this the same Jerry Reinsdorf that skipped out on Pima County taxpayers who had spent tens of millions of dollars to provide him with a taxpayer-funded stadium, to come to Glendale, where Maricopa County taxpayers provided him a Taj Mahal spring-training facility?" Noting that Reinsdorf also has a publicly subsidized stadium in Chicago — one that he got by threatening to move to Florida — Smith added, "The irony is delicious."
The Arizona Diamondbacks are opposed to the Mesa deal as well, and baseball blogger Brandon Larrabee can't help but note that they're "an interesting addition to the Arizona anti-tax crowd, given that their own stadium tax was so controversial it got a Maricopa County Supervisor shot." By a crazy guy, admittedly, but if you want to take it as a cautionary tale, be my guest.
February 04, 2010
Pawlenty unleashes trial balloons for Vikings subsidies
That bck burner sure didn't last long. Yesterday Minnesota Gov. Tim Pawlenty jumped with both feet into the Vikings stadium push, suggesting to Minnesota Public Radio that the state could use sports lottery money or tax-increment financing to provide between $29 million and $42 million a year toward an $870 million stadium.
Okay, maybe jumped with one foot, or one and a half feet: Pawlenty declined to actually endorse either funding scheme. Still, for something he isn't actually committing to support, he did go on about it a lot:
"If you look at the Minnesota Lottery, for example, there's new games added all the time in the lottery," Pawlenty told a radio audience. "There was one just added the other day called Mega Millions that's going to generate $20 million a year," the governor said.
Although 40 percent of those funds -- $ 8 million -- is constitutionally dedicated to an environmental trust fund, "the other $12 [million] can be used for other stuff. People will say it should go into schools or roads or whatever, but ... that's another way to do [the stadium]."
It's a bit unclear whether Pawlenty was talking about adding a new lottery or siphoning off money from Mega Millions proceeds, but either way it's money that the state would be losing — once you hit market saturation with your lotteries, there's no way to sell more tickets, as the state of Maryland found out when it was forced to abandon a planned education lottery after realizing it had tapped out the gambling market with stadium lotteries. As for the TIF, the Minneapolis Star Tribune called this a "particularly novel" solution, which I suppose it is if you've been in a coma since 2003.
Portland Timbers get their stadium reno deal; Beavers future uncertain
It took a while, but yesterday the Portland city council approved a $31 million plan to renovate PGE Park to be soccer-only, clearing the way for the Portland Timbers to start play there as an MLS club in 2011. Most of the money will be provided by taxpayers, though partly via a convoluted "prepaid rent" scheme that makes it hard to understand exactly who's paying for what.
Meanwhile, the Portland Beavers minor-league baseball team — owned, like the Timbers, by Merritt Paulson, son of former Bush treasury secretary Henry — will be without a home after the 2010 season. Paulson had previously threatened that this would be a deal-breaker for any renovation plan, but who really takes sports team owner threats seriously, anyway?
49ers footing nearly entire Santa Clara stadium lobbying bill
The numbers are in for how much of the budget for Santa Clarans for Economic Progress, the group that's lobbying for a new 49ers stadium, is supplied by the team itself, and the answer is pretty damn near all of it:
Of the almost $364,000 in cash or work time donated to Santa Clarans for Economic Progress -- a group of business owners, former civic officials and others -- all but $985 of it came from the team, the records show. The contribution total includes about $147,000 in staff time from at least five team employees working on the campaign.
The next biggest contributor to the effort was former City Councilwoman Lisa Gillmor with $200.
I think this officially redefines Santa Clarans for Economic Progress from a "49ers-funded group" to a "49ers front group." Journalists, reset your stylebooks.
Grim wreaker coming for Giants Stadium today
Demolition is set to begin today at Giants Stadium, and the Newark Star-Ledger has the headline:
Wreaking ball is set to swing at Giants Stadium
What, did the Star-Ledger lay off all its copy editors? Oh, right.
February 03, 2010
New Yankees stadium a four-star hotel in a sea of poverty
Headline of the day, from my colleagues at the Village Voice blog: New Yankee Stadium Helps Lift Bronx to Poorest, Hungriest Place in America. (They're really on a roll.)
The details:
Here's new evidence of what the new Yankee Stadium has brought to The Bronx. Not only is the borough home to one of the poorest congressional districts in America -- the home of the new, heavily-subsidized stadium and the current World Champs can also boast that their 'hood is also the hungriest Congressional district in the nation!
As of the last census, in 2000, the 16th Congressional District was the poorest in the nation, with 42.2 percent of residents living below the poverty line. Now, nearly a decade later, a new Gallup poll finds that more than 36 percent of people in the 16th have reported that there are times when they have not had money to buy food for themselves or their family.
To be fair, the new Yankees stadium has only been open a year, and hadn't even opened when these numbers were compiled, so you can't actually blame Bronx hunger on the team, though it is reasonable to ask what the city could have done to alleviate poverty with its $691 million share of the stadium costs. And Bronx asthma is still fair game.
February 02, 2010
Dolphins roof demand hits resistance
Bloomberg has a long story today about resistance to the Miami Dolphins' demands for a taxpayer-funded roof on their stadium, which they say is needed so it can host future Super Bowls without risking somebody getting rained on. Along with lots of quotes from local elected officials noting that Miami is flat broke and already on the hook for a new Florida Marlins stadium, there's this keeper of a quote from one sports economist:
The Super Bowl is worth $30 million to $90 million, said Victor Matheson, a sports economist at the College of the Holy Cross in Worcester, Massachusetts.
"You could host a Super Bowl every year for the next 20 and be lucky to recoup your costs," said Matheson, co-author of a 2004 paper on the event's economic impact.
"A great majority of our community was outraged at the Marlins Stadium deal," added David Karsh, a spokesperson for Miami city commissioner David Sarnoff. "You would have to anticipate similar sentiment if yet more public funds are steered toward benefiting wealthy team owners." Karsh cleverly forgot to mention that it was his boss who, after opposing the Marlins project, ultimately cast the deciding vote that allowed it to move ahead.
Philly MLS stadium to be named for electric company
The home of the new Philadelphia Union MLS team starting play in 2011 this spring will be named for Pennsylvania Power and Light, in a deal worth a reported $20 million over 10 years. If you're wondering why an electric utility needs to buy a giant billboard, it probably has something to do with the fact that Pennsylvania just deregulated its electricity markets starting January 1. Now, on top of 30% rate hikes, PPL customers get to help foot the bill for their electricity company's soccer-stadium ad campaign to convince people that name recognition is more important than those 30% rate hikes.
Of course, the Pennsylvania legislators who voted for electricity deregulation couldn't have seen this coming, because it's not like anything like this has ever happened before.
February 01, 2010
Bengals offer lease concessions — in exchange for lease concessions
Well, check this out: The Cincinnati Bengals have actually offered to cough up lease concessions in order to help bail Hamilton County's stadium fund out of its $13 million a year in losses. The offer by Bengals VP Troy Blackburn — which was actually made last October, but only released yesterday following a series of public-records requests — was estimated by the team to be worth $40 million, but the math is, shall we say, a bit funny:
- The Bengals would pay $1 million in rent each year from 2010 to 2014. That's $5 million cumulative, though more like $4.3 million in present value, since some of the money wouldn't come until years down the road.
- The team would pay for $2 million in stadium capital repairs by the end of the 2011 season.
- Waiving a requirement that the county pay the team about $2.6 million a year to play at Paul Brown Stadium — that's right, according to their lease, the Bengals pay negative rent — from 2018 through 2026. That's $23.4 million in cumulative dollars, but since so much of the payments are far in the future, it's only worth about $12.5 million in 2010 dollars.
- Staff reductions at the stadium, which the team controls but the county funds, estimated at $2 million in savings over 15 years.
Even as the Bengals count, that's only about $32 million, and in real numbers it's more like $21 million. Still, at least they're offering something, right?
However, the Bengals are also making demands in exchange: The county would have to give up its stadium luxury box, as well as revenue from non-NFL events, and — these are potentially biggies — hand over any naming-rights revenue and agree never to impose ticket taxes. Also, while the Bengals deny it, there are indications that the team might be granted an out clause in its lease ten years before they could otherwise leave. Little wonder, then, that county commissioner (and longtime Bengals nemesis) Todd Portune called it a lousy deal, saying, "If the offer didn't come with strings it would be a very generous offer. It's a start but there's a long way to go." That's what they said about the Treaty of Greenville.
January 29, 2010
St. Pete to Rays stadium study group: Wrong answer! Go away now!
Whoopsie! Looks like that Tampa Bay Rays stadium commission stepped on the wrong toes when it suggested building a new stadium closer to Tampa, possibly in north Pinellas County or even Hillsborough County across the bay. The city of St. Petersburg, where the Rays currently play and which pulled together the A Baseball Community committee in the first place, is now telling the task force it doesn't want to meet with them to discuss their findings. "Any relationship the city may have had with ABC has been effectively severed," city attorney John Wolfe and city administrator Rick Mussett wrote to the city council this week, and other local officials concurred:
Council Chairwoman Leslie Curran said she would not put the ABC presentation on the agenda.
The coalition "kind of took on a life of its own,'' she said. "The purpose of it to begin with, as far as I understand, was to focus on St. Petersburg, and I'm not willing to bring any idea forward that goes outside the city."
New Mayor Bill Foster concurred.
"The city is not going to do anything that indicates we don't still believe that Tropicana Field is a suitable stadium,'' he said.
As amusing as it is for a city to refuse to read a report that it itself commissioned, what all this means for the Rays' stadium push is a bit unclear. On the one hand, the team has a long-term lease at Tropicana Field, and would undoubtedly need St. Pete's cooperation to extricate itself from the lease in exchange for returning the land to the city for development, as was floated once before. On the other hand, the specter of a move across the bay has at least gotten St. Pete eager to talk — both Curran and Foster invited Rays management to contact them directly about stadium talks. On the third hand, it seems like the Rays owners themselves would like to relocate closer to Tampa, so a new opportunity to open talks to stay in St. Pete might not be what they were hoping for.
Given all that, it's probably not surprising that Rays VP for stadium wheedling Michael Kalt issued a terse one-line statement that "We are not prepared to share our reaction at this time." Or maybe he's just too busy plotting his secret move to New Jersey.
A's owner gnashing teeth over slow pace of MLB study
It's been ten whole months now since Bud Selig appointed a three-man commission to investigate whether the Oakland A's can move to San Jose, and apparently A's owner Lew Wolff is getting impatient. At least, he's antsy enough to tell the San Jose Mercury News have unnamed sources tell the San Jose Mercury News that Selig's commission should get on with it already.
In fact, as far as Merc News columnist Mark Purdy is concerned, if MLB doesn't act soon — and act to approve a San Jose move — the team could be headed out of California:
Bottom line: Wolff has not yet reached the boiling point where he's threatening to leave the Bay Area — or, more likely, sell to another owner who would move the team out of Northern California. But the teapot is building steam. It's hot stove season in more ways than one. Time to tend to this burner, commissioner.
Old threats never die, it seems, no matter how many times owners cry wolf. I hope at least Purdy is getting a pay raise for his honest reporting.
January 28, 2010
Consultant to San Diego: All the other cities fund NFL stadiums, you should too!
The San Diego Chargers have announced they won't be opting out of their Qualcomm Stadium lease this fall, an action that comes as exactly zero surprise, since no new stadiums (including the proposed one east of Los Angeles) would be ready in time for them to move this year anyway. Add in that the penalty the Chargers would have to pay to break their lease plummets from $53 million this year to $26 million in 2011 and ... why is this worthy of a 600-word news story again?
Also falling in the dubious news category is the report given by "sports financing consultant" Mitchell Ziets yesterday to San Diego development officials, in which he concluded that significant public financing would be needed for a new Chargers stadium. His evidence? The 11 NFL stadiums built since 2002 had an average of 55% of their costs paid for by the public. He added that a new stadium would only work "if it makes sense for everybody," but apparently didn't actually attempt to calculate, say, what a stadium would cost or how it would benefit the city.
Given that the city of San Diego is paying Ziets $160,000 for his consulting services, you have to hope Ziets bought a really nice calculator to come up with that 55% figure. Though I suppose it's still more exhaustive research than reading Bret Easton Ellis.
Dolphins float new hotel tax for stadium reno subsidies
The owners of the Miami Dolphins have come up with a plan to get that $250 million for stadium improvements that they don't want to pay for: Increased hotel taxes. This would require action by the state legislature, since state law caps tourist taxes at 6%, and Miami-Dade County is already up against the cap.
County approval would also be required, though, and Miami-Dade County Mayor Carlos Alvarez has already come out against the hotel-tax plan, or any taxpayer spending at all: "I would not be supportive of any public funding for the renovation of the Dolphins' stadium," he told the Miami Herald. "Now is not the time." Add in that a raised hotel tax would be a target for dozens of sports and arts groups if the state approved it — "Do you know how many people are going to jump on that bandwagon?" one former hotel association executive told the Herald — and you can probably file this one under "trial balloon" for now.
Of course, even trial balloons have their uses, and this one did provide the Dolphins a chance to get the alleged urgency of stadium renovations into the newspaper — the 2014 Super Bowl isn't going to host itself, you know! "The clock is ticking to show we have some movement,'' Dolphins lobbyist Ron Book told the Herald. "Certainly we have to have something to show the owners, to show what we are doing to keep the stadium in a position that they find acceptable." Or else people just might have to find another reason to visit Miami in February.
January 26, 2010
Detroit News: Joe Louis needs more women's restrooms, let's build a new arena
With the owners of the Detroit Red Wings having chosen to opt out of their lease at Joe Louis Arena this July, it's about time for the drumbeat of new-arena articles to begin. And indeed, they're in full swing: Last week it was speculation that the Wings could move in with the Pistons in Auburn Hills short-term, then work on building a new downtown arena together. Today, it's a report — like the earlier one, also from the Detroit News — that surveys the state of Joe Louis Arena and finds it to be "beyond repair."
The exact list of charges: The concrete steps need to be fixed, there are inadequate restrooms, seats are too cramped, and parking is inadequate. The Wings, report the News, "say it would cost them $10 million in renovations to remain at The Joe." Wait a minute — $10 million? Shouldn't that headline actually read: "As lease winds down, Joe Louis Arena could be repaired for a fraction of what a new arena would cost"?
K.C. risked defaulting on Royals lease in 2009
Hey, remember how Kansas City agreed to spend $425 million on stadium renovations a few years back in exchange for the Royals and Chiefs agreeing to stay in town for another 25 years? Looks like somebody should have read the fine print: Thanks to a tussle between the city and state over who'll pay $4 million a year in ongoing upkeep and improvement costs to Kauffman Stadium and Arrowhead Stadium, the city nearly defaulted on its lease last year, to the point where Royals management had drafted a letter declaring the city in default. If that happened, the teams could leave before the 25 years were up, effectively making the entire $425 million expense worthless — except inasmuch as having nicer digs would give them less reason to want to leave. Still, it's a worthwhile reminder that leases are only as good as their fine print — something K.C. could have learned just by looking across the state.
Indy Biz Journal: NFL playoff games rule!
It's playoff season, which means it must be time for another article touting the economic benefits of your team making the playoffs. Today's entry comes courtesy of the Indianapolis Business Journal, which, typical of these articles, doesn't actually attempt to quantify the impact of the Colts' Super Bowl run, but throws out lots of anecdotal evidence like "Sales [of Colts caps and shirts] were so strong, the stadium shop stayed open until 11 p.m., about five hours after the game ended"!
Of course, money spent on Peyton Manning shirts is money not spent on something else — unless Colts fans have set aside money in special team merchandise accounts — so a lot of that money is just being redirected from somewhere else in the regional economy. (Hotel spending, which is also up, is a bit more of a legit gain, since typically hotel-room stays in the dead of winter in Indianapolis are pretty minimal.) Indianapolis Convention & Visitors Association CEO Don Welsh exulted to the Business Journal: "You can't overemphasize how good something like this Colts run is for the city, not only in terms of direct visitor spending but exposure." Well, sure you can. That's why we're supposed to have journalists, to evaluate just how much emphasis is warranted, according to the actual numbers. Remember journalists?
Portland to delay stadium financing until after stadium is complete?
The Portland city council is set to vote tomorrow on an agreement with Timbers owner Merritt Paulson to convert PGE Park to soccer-only, and inveterate blogger Bojack notes something odd about the deal: The city would apparently hold off on issuing bonds to pay for the renovation until the construction is already complete, instead using a short-term line of credit to pay initial costs, then later deciding whether to pay them off with bonds or cash. Bojack says that as a result, "Portland taxpayers won't get to see (or pass on) the terms of the mortgage until after the stadium project is finished" — and, more important, wouldn't have the opportunity to file a petition challenge to the bonds, because the project would already be complete by then. Tomorrow should be an interesting city council meeting.
Rays study hits all the stadium-playbook arguments
The A Baseball Community coalition (I just can't get enough of that name), the group of local business leaders put together by the city of St. Petersburg to support the Rays' stadium push, issued their final report yesterday, and it looked much like their earlier interim report: The Rays need a new stadium! And they need one closer to the area's population center in Tampa, a conclusion the group already reached last July.
As for why the Rays need a new stadium, the ABC report gives plenty of reasons. Now, way back in the first edition of the book Field of Schemes, we put together a list of arguments that teams and their boosters typically make for new stadium construction — a sort of stadium-seekers' playbook. (The chapter is entitled "The Art of the Steal.") How well did ABC hit all the typical rationales? Let's count:
- The Home-Field Disadvantage: The 20-year-old Tropicana Field, says the report, is "nearing the end of its economically useful life" thanks to insufficiently lavish concessions concourses and luxury boxes. This term — "economically obsolete" — has become a popular shorthand for "No, the place isn't falling down, but we could make more money in a new one."
- Faking a Move: The report warns that "the region now faces the risk of losing its baseball team at some point in the future," a scenario that it warns could cause "irreparable damage to the economic, social and cultural well-being of the region." Notwithstanding that thanks to the Rays' tough lease, that couldn't be a threat for at least a decade.
- Leveling the Playing Field: The Rays need a new stadium "to stay consistently competitive," according to the St. Petersburg Times' summary of the report, which is kind of a funny argument to make just a little over a year after the team went to the World Series. Though it may explain why Rays officials have started muttering darkly that the team may need to trade Carl Crawford and Carlos Pena if revenues don't pick up in the near term.
- Playing the Numbers: It doesn't look like the ABC report directly stresses the alleged economic benefits of building a stadium, though St. Petersburg Mayor Bill Foster did reply by calling the Rays an "economic driver for our city." Whether they're enough of an economic driver to be worth a new $550 million stadium even while the old one is still being paid off is left as an exercise for readers.
Left unstated in all this is where the money for a new stadium is going to come from — all involved seem to agree that now's not the time to talk about that, given that Florida is in the depths of an economic crisis. ABC chief Jeff Lyash, rather, suggested that this was the time to "actively build consensus and put a plan in place, so when conditions are supportive of raising revenue, we are ready to move." In other words, the goal of the report is to lay the groundwork now for a new stadium, in particular establishing that it's a "need" that must be addressed sooner or later, so that the team can begin floating specific plans once the state has some money again.
To its credit, the St. Pete Times ran a pros-and-cons box with opposition responses to the ABC arguments, including "Economic impact studies are often overblown," "Many fans like the Trop," and "Seventeen years remain on the Trop agreement." The big question here, though, is: Is it worth it to publicly subsidize a new stadium for the Rays, and if not, is it worth it for the Rays to build a new stadium on their own? To say that the team would be happier in a brand-spanking-new building so long as they didn't pay for it isn't news; the real test is whether there's really $550 million worth of benefits to go around (to both public and team) if one were built. If not, then no amount of economic recovery is going to make it a good deal, and it might be worth exploring cheaper options, like renovating the Trop — or starting a Fundable page to help pay Carl Crawford's contract.
January 25, 2010
Kings arena land swap to involve TIF subsidies?
More details are emerging about the Sacramento Kings' proposed crazy three-way land swap arena deal, and they put the emphasis on the "crazy." The Sacramento Bee (whose direct link to the full article is broken) calls the plan "audacious," "fragile," and "still-evolving"; it also gives a hint at some of the public subsidies that would be required:
The development team is counting on concessions from the city. The arena site would be a parcel of city-owned land at the railyard. The city also would be expected to donate 100 acres it owns near Arco for the new fairgrounds, Kamilos said. The developers also plan to ask the city for other forms of financial aid.
Without endorsing any of the proposals, Assistant City Manager John Dangberg acknowledged that any arena deal would likely require "a significant public investment," including land grants. To support the project, the city would consider contributing some of the tax dollars generated by the deal, he said. That way, the city wouldn't have to raise taxes.
That's right, it's our old friend TIFs. And while local officials like to tout the free-lunch aspects of tax increment financing — it's money that otherwise wouldn't exist! — they avert their eyes to the less salutary aspects, like the fact that new development brings new public service costs that those new property tax revenues are normally expected to cover, or that TIF-subsidized sites can siphon off development from other local sites that would otherwise pay full property taxes.
In any case, the land swap plan sounds like it's still pretty up in the air — one of the developers behind it tells the Bee that "We're hoping there is a land-development opportunity as part of this ... Cal Expo or something else." It may just be a trial balloon, but the NBA's designation of the plan as its favorite means that it's the balloon that everyone has their eyes on.
Vikings float suburban stadium, federal stimulus subsidies
It was a momentous weekend for the Minnesota Vikings in more ways than one: On Friday, team execs floated a new stadium plan featuring — you guessed it — federal stimulus subsidies.
A new wrinkle developed in the Minnesota Vikings' stadium strategy on Friday, when team officials said they are looking at federal stimulus money to help them build a new home that just might be located in the suburbs. ...
To help finance the deal, the Vikings are exploring federal Build America Bonds, along with a possible 2 percent increase in the hospitality tax across the seven-county metro area.
Build America Bonds are a seriously weird financial instrument: Designed to kick-start those "shovel-ready" construction projects we've heard so much about, they're not tax-free like typical federall subsidized bonds. Rather, they achieve the same effect by having the federal government match 35% of the payments to bondholders — effectively allowing the local government that issues the bonds to offer a lower interest rate, since bondholders are getting a bonus on top of that. In its first year local governments issued about $50 billion in Build America Bonds, putting the feds on the hook for about $1 billion a year in subsidies, a number that will rise as more bonds are issued.
Vikings stadium executive Lester Bagley says that Build America Bonds could be used for about $1 million a year in stadium bond payments, which is a really piddly amount on a projected $870 million stadium. A state budget official also told the Minneapolis Star Tribune that it would have to study whether an NFL stadium could be considered a "governmental purpose" under federal tax law. You know that stadium-hungry teams are going to be watching this one with bated breath.
If nothing else, from the sound of this suburban gambit, it seems as if Bagley is trying to set up a bidding war among Minneapolis and the surrounding suburbs to be the Vikes' new home. (Not that that worked so well last time.) At least they don't seem to be waving the Los Angeles threat too overtly — though Bagley did warn last week, in typical non-threat threat fashion, that "it's clear that in order to retain the Vikings for the next generation in Minnesota, we have to resolve our stadium issue."
January 22, 2010
Santa Clara 49ers vote set for June (maybe)
As expected, the Santa Clarans for Economic Progress petitions to hold a public vote on building a stadium for the San Francisco 49ers have been found to be valid. (Or a random sampling of them were, anyway. You know, this could have saved us all a lot of time ten years ago.) Now the referendum, as written by the group (and its sponsors, the 49ers), will automatically go on the ballot for a previously scheduled special election on June 8.
Or maybe not, as the San Jose Mercury News has switched gears and now reports that the Santa Clara city council will decide on Tuesday when the vote will take place. Though the same article says that it will take a simple majority of voters "to approve building a $937 NFL stadium in the city," so fact-checking (or proofreading) may not be the Merc News' strong point.
January 21, 2010
Wizards break ground, economic impact study rejoices
In case you've been holding your breath waiting to see if the Kansas City, Kansas council would approve the Wizards' already-in-the-works stadium plan, it did so on Tuesday. The team, wasting no time, immediately broke ground yesterday on the project, which is to include an 18,000-seat soccer-only stadium to be ready for the 2012 season.
MLSnet, the soccer league's web arm, reports:
The economic impact of the development was the most talked-about issue during the course of the board's meeting. Every speaking member praised the impact the project would have on Wyandotte County, in terms of both money and job creation.
Between the stadium, offices, and field complex, OnGoal, LLC's development is expected to create over 8,000 new jobs in the Wyandotte County area, with a total economic impact of over $500 million annually.
Ignore the "economic impact" numbers, which are meaningless, and focus on the job figures: With the public set to provide $147 million in sales tax rebates for the overall project, that'd come to under $20,000 per new job created, which is actually pretty reasonable as economic development projects go. The big question, of course, is whether all 8,000 jobs (most of which presumably wouldn't be Wizards-related) would really be "new," or if some of them would have located elsewhere in Wyandotte County without the subsidy. And there's also the question of whether the county could do just as well by spending its sales tax money on something else — especially given the recent findings that the most effective job creation measure may be giving money to the unemployed.
January 20, 2010
Maryland approves Baltimore soccer stadium study
Baltimore Mayor Sheila Dixon's idea of building a soccer stadium in South Baltimore took another baby step forward yesterday, as the Maryland Stadium Authority approved spending $100,000 to study the possibility of a new stadium for either D.C. United or the minor-league Crystal Palace Baltimore. Or rather, to "explore the benefits" of building a 17,000- to 20,000-seat stadium, for which you'd presumably need to know stuff like how much it would cost and who would pay for it — but given typical economic impact studies, maybe not.
January 19, 2010
Dolphins stadium gets yet another new name
The building formerly known as Dolphin Stadium has signed a new five-year naming rights deal under which it will be redubbed "Sun Life Stadium." That means when viewers tune in for the Super Bowl next month, they'll hear repeated references to ... a newspaper chain? A fruit drink? Whoever had "Canadian insurance company" in the pool, you're a winner!
The Miami Herald says that this will be the building's seventh name in 23 years, but a bunch of those were minor changes (Pro Player Park to Pro Player Stadium, Dolphins Stadium to Dolphin Stadium), making this the first major naming rights resale for the place since Pro Player went bankrupt. The interesting bit here, though, is that Sun Life coughed up a relatively high $7.5 million a year for naming rights, showing that a used stadium name may actually be worth something after all — at least, if it means guaranteed screen time during a Super Bowl.
Portugal told to consider razing new soccer stadiums
Further evidence that stadiums built for mega-events like the Olympics and the World Cup are white elephants as soon as they're built: Elected officials in Aveiro and Leiria, Portugal are saying those cities should consider demolishing stadiums built for the 2004 European soccer championships to save on maintenance costs and make way for more useful development.
To be fair, it doesn't sound like either city is going to jump at this idea, and either way, razing the stadiums isn't going to wipe out the $214 million in construction debt the two cities took on. And replacing them with shopping malls or business centers, as former Portuguese economy minister Augusto Mateus suggests, isn't necessarily going to help, given that those could end up just diverting development that would otherwise happen elsewhere. (Caveat: I'm not as up on the latest in Portuguese land use politics as I really should be.) Still, that they're even having this debate should be a bit of a red flag to cities being told that new stadiums will help put their cities on the map — once again, be careful of "on the map" for what.
January 18, 2010
NBA choo-choo-chooses railyard land swap as best Kings plan
The city of Sacramento may be kicking around seven proposals for a new Kings arena, but the NBA has already declared its favorite — and it's not the one from downtown developer Thomas Enterprises that seemed to be the safe choice of local pundits. Rather, the league is backing something called the Sacramento Convergence, a complicated land-swap deal that would build an arena on city-controlled land at the downtown railyards, transfer the Arco Arena site and adjacent property to the state for a new state fairgrounds, and sell the current Cal Expo site to developer Gerry Kamilos for redevelopment.
As if that weren't confusing enough, the financial details of the project as reported are still murky: The Sacramento Business Journal says that the "initial phase" would cost up to $700 million, and that the Kings owners "would commit $300 million to the financing of the project, paying $10 million a year for 30 years" — though as anyone who's taken out a mortgage should know, that's not actually the same thing. (Depending on the interest rate, it would at most pay off $150 million in up-front costs.) Also not reported: how much money would be brought in by selling the Cal Expo site, which as we've seen is key to this kind of land-swap deal.
For their part, both Mayor Kevin Johnson and the head of his arena task force say they're still exploring all options, and aren't going to back a plan just because the NBA likes it. Which raises the question: Why the heck did the NBA even pick a favorite at this point, when on the face of it they shouldn't care who builds an arena, so long as it gets done without money their (or the Kings') money? John Moag, the former Maryland Stadium Authority chief who's been named the league's point man on the Sacramento arena push, told the Sacramento Bee that he liked the Convergence project because it included private partners "who are going to show me the money" — but if they're going to put up capital, they're going to want revenue back as well, so it doesn't actually help the project's bottom line.
Of course, maybe they're just hoping to steer clear of some of the more fanciful proposals, like the one for a riverfront arena whose restaurateur mastermind told the Bee, "Our river would literally come alive." Yikes!
January 14, 2010
Marlins garage back within budget
So it turns out the Miami City Commission really did manage to keep the Florida Marlins parking garage price tag within their budget, as today they approved $92 million in bonds to fund the project, after initial estimates had been as high as $135 million. The trick? They "renegotiated the cost" with the construction firm, according to the Miami Herald. Makes you wonder what else cities could get cheaper if they stopped just paying whatever bill they were handed.
January 13, 2010
49ers file Santa Clara stadium petitions; vote in June?
The Santa Clara 49ers stadium took another step closer to a public vote yesterday, as the team-backed group Santa Clarans for Economic Progress submitted 8,043 signatures towards putting an initiative on the ballot. If at least 4,640 of the signatures are found valid, the city council has the choice of putting it on the ballot in June, or waiting until the regular election in November; if it clears 6,970 valid names, the vote automatically takes place in June.
There's been a ton of debate among Santa Clarans (several of whom have posted comments on this site) about whether the paid signature gatherers were misinforming people about the purpose of the petitions. (The city council has the option of putting its own referendum on the ballot if the 49ers don't, which would potentially provide more public disclosure and safeguards.) It's not immediately clear if this is grounds for challenging the petition signatures, or indeed what you can do if you've signed the petition and now wish you hadn't.
Vancouver library mandates Olympics-only ads
Speaking of the questionable benefits of sports mega-events, here's another one: Public libraries forced to cater to Olympic advertisers!
An internal memo obtained by The Tyee advises Vancouver Public Library branches to protect Olympic sponsors.
"Do not have Pepsi or Dairy Queen sponsor your event," read guidelines sent to VPL branch heads and supervisory staff last fall. "Coke and McDonald's are the Olympic sponsors. If you are planning a kids' event and approaching sponsors, approach McDonald's and not another well-known fast-food outlet."
VPL marketing director Jean Kavanagh added that the ban extends to such things as audio-visual equipment made by non-sponsors: "I would get some tape and put it over the 'Sony.' Just a little piece of tape."
The city of Vancouver says this is the library's call, but given that it already passed its own legislation banning "unauthorized" signs near Olympic venues, it's kind of abandoned the moral high ground here.
January 12, 2010
You can re-enter Fremont in the Oakland A's sweepstakes after the city — as predicted here last summer — has pitched the now-closing NUMMI auto plant site as a possible stadium site. This is adjacent to the Warm Springs site that was previously rejected, in part because of opposition from NUMMI.
The Fremont plan is still a bit hazy, but would apparently involve the city buying the 370-acre property with redevelopment funds (i.e., bonds based on kicking back future property taxes, aka TIFs), building roads and other infrastructure, then handing over 120 acres to the A's for a stadium. No word on whether the A's would pay rent on the site, though it's probably ominous that Mayor Bob Wasserman called a ballpark a potential "catalyst for development," which in these cases usually means "loss leader."
The one new twist is that the plan would be put up to a public vote in November, something that previous Fremont plans would not have. The Fremont Citizens Network, whose protests helped kill the earlier plans last year, has vowed to defeat this one too, with president Kathy McDonald promising, "If this ridiculous thing actually goes to a vote in November, I guarantee that our campaign will not only be about defeating this proposal, but replacing a few heads."
Meanwhile, Oakland city leaders are still pushing for their own stadium plans, with local political bigwigs starting the nonprofit group Let's Go Oakland! to stump for a stadium at one of four sites. They already have 30,216 Facebook fans, so look out, San Jose!
January 11, 2010
Economist: Don't expect windfall from World Cup
Nice piece from ABC News on Friday of the dubious benefits of hosting the World Cup, on which South Africa is spending $1.7 billion for new stadiums. A large part of the article consists of quotes from sports economist Rob Baade, who notes that his studies of such "mega-events" show they're not worth all they're cracked up to be in economic terms:
Before the Summer Olympics in 2004, the excitement among business owners in Athens, Greece was palpable, Baade recalled. After the Games? Not so much.
"They all told me they wouldn't do it again," he said, "because the infrastructure that is so critical to creating something in the way of an economic legacy was really disruptive to the normal flow of economic activity, so much so that some business owners said their revenues were down by 80 to 90 percent as a games...When you disrupt commercial activity, you've got to consider that as a cost."
"When you put all those things together, that's a pretty lengthy list," he cautioned. "We really found that mega-events do not provide the kind of boost that apologists for the games argue will occur as a consequence. Things don't materialize as a lot of people hope and think."
Not to be dissuaded, sports consultant Lee-Anne Bac of Grant Thornton played the "intangibles" card, saying the real benefit would be that the World Cup "really starts to put South Africa on the map." But as I'm sure Baade would be quick to point out, there is such a thing as bad publicity.
