November 25, 2002
NYC redevelopment exec addresses Olympic costs, sorta
On Friday, the online Gotham Gazette conducted an online chat with Roland Betts, a member of both the U.S. Olympic Committee and the Lower Manhattan Development Corporation. Highlights include the exchange:
GG: But someone has to pay the interest on those bonds, and isn't that the taxpayers?
Betts: Yes, but it's more complicated than that.
GG: Could you explain it to us briefly?
Betts: I'd rather that you address your specific questions about the Olympic Funding to the NYC 2012 committee, since I am a member of the USOC and not the 2012 committee.
GG: You wrote just now that "neither project is funded by taxpayer dollars." We thought you were talking about rebuilding downtown and the Olympics. Is this correct?
[Long pause. No answer]
November 23, 2002
Padres charged with stadium "bait and switch"
The San Diego Padres have revised plans for development around their new stadium, replacing low-rise apartment buildings with high-rises, and largely eliminating views of the field from a picnic area beyond the outfield wall. One local developer told the Union-Tribune the new design constituted a "bait and switch" on plans approved in a public vote in 1998; Wayne Metlitz, a resident of the East Village neighborhood that had several blocks demolished to make way for the stadium, noted: "I think certainly the park was appealing to everybody, and it was a big draw to the project. I think it helped convince some people to vote for it."
November 22, 2002
Gateway Corp. faces bankruptcy
The Gateway Economic Development Corp., owner of Cleveland's Jacobs Field and Gund Arena, is on the brink of insolvency, according to indefatigable Cleveland journalist Roldo Bartimole. The non-profit agency is losing millions a year, and is not expected to be able to make property tax payments in January. Their tenants, the Cleveland Indians, meanwhile, are the seventh most valuable team in baseball, though club revenues have begun to slip what with Jacobs Field having just passed through its eighth-year attendance slump. On the bright side... hmm, give me a minute... Wil Cordero is finally gone?
Chargers ticket guarantee just gets worse and worse
You can't make this stuff up: the city of San Diego has been paying the Chargers $38,454 a week to buy tickets for seats that don't exist. "Don't assume that people aren't furious about this," city councilman Brian Maienschein told the San Diego Union-Tribune. Tomorrow: Hath hell a fury like a San Diego city councilman scorned?
November 21, 2002
Expos "home games" in San Juan official
The MLB-owned team will play 22 "home games" in San Juan, Puerto Rico next year. "At least, every month there will be games in Montreal; the team won't wind up being away for a month and a half," Expos executive vice-president for the glass being half full Claude Delorme told the Montreal Gazette. "The positive for fans, if there is one, is that it will be less costly for a season ticket."
Chargers to bolt S.D.?
The San Diego Chargers, already the beneficiaries of a lease that pays them more for not selling tickets than for selling them, have a chance to extort even more concessions from the city: Starting Dec. 1, the Chargers have a 60-day window in which to activate an escape clause in their 25-year lease on Qualcomm Stadium; rumors are rampant the team would then seek to move to Los Angeles, though no NFL-ready stadium exists there, and the city has not been eager to fund one. The Citizens Task Force on Chargers Issues claims the city could nullify the escape clause, which allows the team to opt out of its lease if revenues fall short of covering payroll, by writing a $5 million check to the team; local attorney Mark Aguirre says he'll sue the Chargers for "unfair business practices" if they try to activate the escape clause. Stay tuned...
November 20, 2002
D.C. debates who should fund stadium
To no one's surprise, D.C. Mayor Anthony Williams' promised $200 million in funding for a new baseball stadium (assuming a big-league team can be landed) turns out not to have meant the city actually has $200 million to spare. "With this economy, there is no extra money for this project," D.C. council finance committee head Jack Evans told the Washington Post, suggesting the "private sector" could instead build a projected $400 million ballpark. Mayor Williams, meanwhile, is looking at ticket and concessions taxes, plus possibly a new lottery or cigarette tax, to raise his promised share of the money. Don't be surprised if TIFs rear their ugly head in this one.
Another $29m for St. Louis stadium
The St. Louis Cardinals picked up more public money for their planned stadium yesterday when the Missouri Development Finance Board approved issuing $29 million in tax credits for the team. The Cards still need to scrounge up a daunting $275 million in private investments toward the $400-million-plus project, plus convince St. Louis County to kick in $45 million in hotel taxes.
November 15, 2002
D.C. group still hankering for Expos
A group looking to bring baseball back to Washington, D.C., has sent a 70-page missive to MLB commish Bud Selig documenting its top five choices for a new stadium site. The report claims that financing for a $342-million-plus stadium "could be completed within 120 days," according to AP, to which we can only say: yeah, right. Meanwhile, the expected target of D.C.'s wooing, the league-owned Montreal Expos, could be nearing agreement to play 20 "home games" in San Juan, Puerto Rico, next season.
November 13, 2002
BoSox get Yawkey Way discount
Even without a new stadium, the city of Boston is subsidizing the Red Sox with below-market rents for their new shopping concourse on Yawkey Way, according to the Boston Herald. The team's rent payments of $900 a game for the 22,000-square-foot street - previously occupied by licensed street vendors, who were evicted to make way for the expanded Sox concourse - are just 10% of the going rate per foot at local flea markets, according to the Herald. The city is currently considering granting a permanent easement to the ballclub to use the street on game days, angering many local residents.
November 12, 2002
NYC Olympics plan: smoke and mirrors?
The plan for bringing the 2012 Summer Olympics to New York would commit the city to $5 billion in construction projects, based on a tenuous financing plan that could fall victim to real estate slumps, cannibalization of the existing property tax base, or ... oh, heck, just read the article, I wrote it.
Charlotte council approves $260m for arena
The Charlotte, N.C., city council, stung by the loss of the Hornets to New Orleans (sorry, the pun is obligatory), yesterday approved spending $260 million in city money on a new arena for an NBA expansion team starting in 2004. The deal "tentatively commits" (the Charlotte Observer's words, not ours) the city to sign an official contract with the NBA by January 12. Under the proposed deal, the city would pay all construction costs, including cost overruns, through a complicated financial plan that would involve hotel taxes and the sale of city land; the team would keep all arena revenues, including naming rights proceeds. Unless the team agrees to pay a substantial rent (the Observer article doesn't say), this could compete with the Indiana Pacers' deal for the Conseco Fieldhouse as the most generous public basketball arena subsidy in history.
November 08, 2002
Red Sox near decision to stay at Fenway, or maybe not
According to a report in the Boston Globe, Boston Red Sox stadium adviser Janet Marie Smith has said planned minor renovations for Fenway Park indicate the ballclub feels "optimism" about staying in the 90-year-old ballpark for the long term. According to a report in the Boston Herald, Smith said these renovations, which include seats atop the Green Monster and right-field roof, are "just plain, old-fashioned fix-ups" and any decision on Fenway's future could take another year. Hmm.
November 07, 2002
NYC Olympics would cost $7.2 billion, include new stadium, arena
At a City Hall news conference yesterday, New York City Mayor Mike Bloomberg and deputy mayor (and former NYC2012 president) Dan Doctoroff outlined plans for a mammoth contruction project to accompany the city's bid for the 2012 Summer Olympics. Included would be: $2.7 billion for operations and facilities, to be paid out of Olympic revenues; a $1.5 billion Olympic Village in Queens, to be privately developed; and $3 billion in construction on Manhattan's West Side, including an extension of the #7 subway line, expansion of the Jacob Javits Convention Center, and a domed Olympic/football stadium to be constructed atop a concrete slab over existing railroad yards. Aside from a (yet-to-be-determined) contribution from the New York Jets, the remainder of the $3 billion would be paid off by the city using tax increment financing. Bloomberg further suggested that a new arena for the Knicks, Rangers, and Liberty could be included in the plan, asserting: "Madison Square Garden is a very old building. It is 20 or 30 years old. In this day and age, convention and sports facilities don't survive that long. They can't stay economically viable."
New MN governor could reopen stadium debate
Jesse Ventura is gone, Tim Pawlenty in as governor of Minnesota, and Twins and Vikings execs are both cautiously hopeful this will mean they can resume their push for new stadiums. But Pawlenty's public statements, at least, have been at best lukewarm to public stadium funding: as state house majority leader, he voted against an earlier Twins stadium funding bill. And while the new governor supports a new football facility for the University of Minnesota that the Vikings might share, he told Minnesota Public Radio that "they don't need a stadium anything like an NFL stadium. If the Vikings wanted to be a partner and pay for - fully - for their share, and so that the state wasn't subsidizing their share of the stadium, I might be open to that."
St. Louis voters approve limits on sports subsidies
In a referendum bitterly opposed by the St. Louis Cardinals and their part-owner, the St. Louis Post-Dispatch, 55% of city voters approved a requirement that any city funding for sports facilities needs to go before a public vote. Whether this will affect last month's decision by the St. Louis board of aldermen to rebate the city's 5% ticket tax to help pay off a new stadium - a decision made before this week's vote, and which involves a tax rebate, not a city expense - is still unclear.
November 04, 2002
Cheering in the press box
Journalism is at its worst when sports stories are involved - reporters being conditioned to consider this the one area where it's okay to openly root for the home team - and when newshounds smell bad plays on words, it's Katie, bar the door. And so it was with local reportage of New York's selection as U.S. candidate for the 2012 Olympics, the Daily News asserting that while "New York City may feel like a gold-medal winner" after having "cleared an Olympic hurdle," it "hasn't reached the finish line yet." The headline on one News story: "Now, N.Y. Has To Beat The World." If you're a New Yorker, who're you gonna root for when you see that? The world?
November 03, 2002
New York gets 2012 USOC nod, $6.5 billion bill
The fix is in - er, that is, the votes - and New York is the U.S. Olympic Committee's candidate to host the 2012 Summer Olympics. Initially been considered a longshot because of its mammoth $6.5 billion construction budget (including a $1.5 billion subway extension, $1 billion convention center expansion, and a $1.6 billion Olympic Stadium on the West Side of Manhattan that would be the most expensive athletic facility in history, jointly paid for by the city and the New York Jets), New York was approved over San Francisco by almost 60% of voting USOC members.
The bulk of the Games' public cost is supposed to be raised by "tax increment financing," a controversial instrument whereby local property taxes are used to pay off construction bonds - the city's Independent Budget Office warned in September that other cities using TIFs have fallen short of expected revenues, forcing bailouts from the general fund and so "undermining the reason for using TIF in the first place." Moreover, residents of the neighborhoods targeted as Olympic sites are stepping up their anti-Olympic organizing, promising to make for an interesting three-year interval until the IOC selects its final choice for the 2012 Games from among the cities remaining in contention: New York, Paris, London, Rio de Janeiro, Toronto, Moscow, Istanbul, Madrid, and as many as four different German cities.
Meanwhile, at least one Bay Area columnist suggested that San Francisco was the real winner here, for being spared spending the next ten years with "a herd of blazered hyenas (with a few human beings of honor and decency sprinkled on top for cover) whose only regret in life is that they only have two hands to put in your pockets."
November 01, 2002
Great American Ballpark no boon to payroll
With the cellar-dwelling Detroit Tigers, Pittsburgh Pirates and Milwaukee Brewers already having exploded the myth that new baseball stadiums mean winning teams, the Cincinnati Reds have become the latest club to downsize their dreams. (In baseball terms, that comes to 0.83 Sterling Hitchcocks.) The bump in player payroll when the new publicly funded Great American Ballpark opens next spring could be as little as $5 million, says the Cincinnati Enquirer. No word yet on whether Cincinnati will sue the Reds if forced to sit through another year of Brian Moehler.
USOC, St. Louis Votes Loom
With the USOC to make its final decision on the U.S. candidate for the 2012 Summer Olympics on Saturday, controversy continues to swirl around New York's ambitious construction plan, which would be funded using the untried method of tax increment financing. New York City's bid for the 2012 games would cost $6.5 billion, more than double the official estimate, thanks to billions for an Olympic stadium and subway line extension not included in the formal bid document - this according to a Bear Stearns report obtained by the New York Post. Not to say we told you so, but: we told you so. . . .
With St. Louis' Coalition Against Public Funding For Stadiums preparing for a November 5 referendum that would require a public vote on all stadium funding plans, city officials are scurrying to approve a deal for teh Cardinalsbefore the public can get involved. On October 18, the board of aldermen agreed to scrap the city's 5% tax on Cards' tickets if a new stadium is built, potentially providing $102 million over 30 years in funding for the planned $333 million project. The board is also considering exempting a new stadium for paying property taxes for 25 years, providing millions more in public subsidies. Since the tax breaks would not go into effect until 2006 at the earliest, backers of Proposition S could argue that they would still be subject to a public vote, assuming the referendum passes. . . .
Ohio's Hamilton County may sue the Bengals for a new lease deal on Paul Brown Stadium, arguing that the team's dismal record since moving into the publicly funded facility puts it in violation of lease requirements to field a competitive team. . . . An attempted referendum on the new Arizona Cardinals stadium planned for Glendale may be off, after a judge disqualified enough signatures to knock the measure off the November ballot. . . .
The Indianapolis Colts, saddled with a stadium built when Strom Thurmond was still an octogenarian, are heating up move threats. The team can opt out of its lease following the 2006 season by paying the city $77 million in damages, though owner Jim Irsay could attempt to void the clause by charging the RCA Dome is no longer a "first-class facility." . . . Just when you thought San Diego's lease with the Chargers (in which the city must buy unsold tickets at face value) couldn't get any worse: city councilmember Jim Madaffer reports that "sold out" signs have been posted for games for which the Chargers demanded city subsidies. The city is currently withholding a $100,000 payment to the team until the matter is resolved. "The free ride sports teams enjoyed in the 1990s is over," said Madaffer. "We're going to make it clear to the San Diego Chargers that they're dealing with a different animal. The tone today is a very different one than in 1997." . . .
After insisting a new stadium would make his club competitive, San Diego Padres owner John Moores backed off his predictions this month, saying only that the under-construction facility would put the team "in the middle of the pack" in revenues. "Without the new ballpark, I'm pretty confident we would have been the center for the bull's eye on contraction," added Moores, apparently unaware that MLB agreed to forgo eliminating teams as part of its new collective bargaining agreement with the players' union. . . . In other Moores news, the Pads' owner and scandal-ridden corporate exec (Moores is accused of selling $600 million of Peregrine Systems stock shortly before it went bankrupt, this after allegedly giving insider-trading tips to a city council member who voted on the Padres' stadium deal) announced he would cut off donations to San Diego State University after a student newspaper columnist suggested that the school should remove plaques honoring the man Fortune called the nation's 14th greediest executive. . . . And in other contraction non-threat news, Minnesota Twins owner Carl Pohlad told reporters following the team's first-round playoff win, "We have to win the next two rounds, and I'm not even going to talk about contraction until then," adding, "I don't feel guilty about anything. Why should I? If you had to pay the bills and they were $15 million to $20 million a year, you would make the same decision, too." Twins All-Star outfielder Torii Hunter, when told of Pohlad's remarks, replied: "I want to say something but I can't. Now you've made me mad." . . .
Meanwhile, with contraction off the table, the fate of the Montreal Expos for 2003 has yet to be decided. (MLB bought the club from then-owner Jeffrey Loria last winter, ostensibly to shut it down.) The latest rumors have had the team remaining in Montreal but playing some "home" games in such farflung locales at Portland, Oregon, and San Juan, Puerto Rico - though one report in the New York Daily News insisted that the team could be moved to Boston, where it would share Fenway Park with the Red Sox. In exchange for moving games to Puerto Rico, according to the Washington Post, the local government would be asked to "guarantee" $300,000 a game. . . .
John Henry, owner of the Boston Red Sox, is now thought to be leaning toward a minor renovation of Fenway Park, adding perhaps a few hundred seats on top of the Green Monster and the rightfield roof. No word on whether Henry would ask for public funding, though the citizen group Save Fenway Park! had proposed seeking federal landmarks preservation funds. . . . The Chicago Cubs' plans to expand Wrigley Field's bleachers appear to be stalled, as the team continues to wrangle with owners of buildings across the street whose valuable rooftop views would be obscured by the new seating. Mayor Richard Daley the Younger has so far taken a hard line with the ballclub, nixing sidewalk pillars that would have allowed the Cubs to expand by an additional 1,000 seats, and demanding that the team start paying rent on land adjacent to Wrigley that it's been using rent-free for years. . . .
The slumping economy continues to take its toll on luxury seat sales. Hit particularly hard is the NBA, where club seats remain unsold across the country; the Seattle Supersonics, according to the Boston Herald, have completely discontinued sale of club seats for lack of interest, and other teams are considering scaling back on the high-priced seating. . . . This month's Arthur Andersen award for creative accounting goes to the Atlanta Braves, who told the Atlanta Business Chronicle they would lose "millions" for the the third year in a row in 2002. The Braves, of course, are owned by AOL-Time Warner, which also owns the club's TV outlet, TBS. According to calculations by baseball business guru Doug Pappas, TBS underpays the Braves by as much as $35 million a year for its TV rights, an amount that would easily be enough to shift the team into the black.
--November 1, 2002
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