Field of Schemes

June 30, 2004

Bettman: All lucre equally filthy to me

Still no decision from the Pennsylvania state legislature on the pending bill legalizing slot machines, but NHL commish Gary Bettman has weighed in, saying he has no problem if the state wants to give some of the proceeds to the Pittsburgh Penguins to help pay for a new arena. "It's the way Allegheny County and the state of Pennsylvania want to finance an arena," Bettman told the Pittsburgh Post-Gazette. "Gambling has become so pervasive, through lotteries and legalized casinos. ... If there's no sports book, I don't think it's presented much of an issue for any of our leagues." Bettman added that he'd even be okay with a combined arena/casino run by the Penguins: "I don't think we want them on the concourse. But the fact of the matter is that there are lots of multipurpose facilities adjacent to operations that do other things."

Gambling, of course, and slot machines in particular, are one of the most regressive taxes available, drawing disproportionately from the poor. Several studies have found that the costs of gambling addiction end up far outstripping any benefits a state might get from legalized gambling.

June 27, 2004

"Don't worry - I'm going to build it myself"

Long article in today's Washington Post on Bud Selig's history of stadium-grubbing for his Milwaukee Brewers, and what it likely means for D.C. and Northern Virginia in their quest to land the Montreal Expos. Among the highlights:

Former Wisconsin governor Tommy Thompson, now U.S. secretary of health and human services, refuses to attend games at Miller Park, the stadium he helped get built with taxpayer money, after various run-ins with Selig. "There were just so many misleadings and mischaracterizations," Thompson told the Post.
Selig originally promised, according to Thompson, "I'm building a new stadium, and I wanted you to know. Don't worry about it. I'm going to build it myself." Almost the entire $413.9 million cost would end up being footed by taxpayers.
At one point, Thompson appointed Milwaukee Journal CEO Robert Kahlor to chair a stadium task force while he was simultaneously registered as a lobbyist for the stadium issue.
A recent audit by the Wisconsin Legislative Audit Bureau revealed that annual $3.85 million payments from taxpayers to the Brewers, targeted for stadium maintenance, have instead been used to service $50 million in the team's outstanding debt. (The annual payments had been the final piece of the funding puzzle that effective reduced Selig's contribution to zero.)
"I would be very, very nervous if I was a taxpayer in the Greater Washington, D.C., area," Wisconsin state senator Michael Ellis told the Post. "Nobody is better equipped to show people how to fleece the taxpayers into building them a new stadium than Allan H. [Bud] Selig. He could write a textbook on how he committed the taxpayers of Wisconsin to build a stadium at no cost whatsoever to the Seligs."

June 25, 2004

Sacramento council unsure on Kings arena

The Sacramento city council met for four hours Tuesday to discuss simmering plans to fund a new Kings basketball arena. The conclusion: They need more information. Councilmembers said once a plan is finalized, they'd be amenable to putting the matter to a public vote, which would apparently satisfy Kings co-owner Joe Maloof who told the council: "Let's give them the opportunity to vote, that's all we ask. ... We want to do what's right for the community. Let the people decide."

Of course, how the people vote could easily depend on how an arena referendum is worded: anti-arena councilmember Dave Jones, who called further discussion of the plan "a waste if taxpayers' money," noted of a poll that showed the electorate evenly split on supporting a new Kings arena: "You didn't asked the simple question 'Do you support a publicly funded arena .. yes or no.' That simple question didn't get asked." And Sacramento Bee sports columnist Marcos Breton notes that a referendum for the fall ballot would need to be finalized by July 22 - and "there is no way the monstrous task of formulating an arena financing plan can be done by the July 22 deadline."

Meanwhile, the Kings owners say they're doing fine at the 16-year-old Arco Arena: "From a business standpoint, we're doing great here," team president John Thomas told the Bee. "The only pressure for a new arena is that eventually these buildings wear out." Somebody alert the Fordham Rams before they fall through the floor!

Thanks to FoS correspondent Ken F. for the links.

Whither Youppi, cont'd

Hecksapoppin in the Montreal Expos relocation saga. With D.C.'s onetime lock of a bid faltering as people realize there's no agreement on either a site or a funding mechanism - Baseball Prospectus' Will Carroll went so far as to declare Washington's bid "all but dead" - other contenders are again gearing up their own hype machines. Las Vegas stadium consultant Mike Shapiro said a $420 million, 40,000-seat retractable-roofed stadium could be built without local tax dollars (presumably he's not counting the tax-increment financing that has been floated as a stadium funding source). Meanwhile, Northern Virginia is touting itself as the new front-runner for its plan that supposedly can provide a $442 million stadium with existing legislative approvals - except that lawyers for the stadium effort now say neighboring Fairfax County will need to approve new highways before the plan can go forward.

"We have been told that the decision will come during All-Star break and announced in August," Loudoun County Board of Supervisors chair Scott York told the Loudoun Times-Mirror. While that's certainly possible, given the unsettled nature of all the stadium plans, we're putting even money on nothing getting decided until 2005. (See the righthand column for the latest Expos odds.)

Thanks to FoS correspondents Erika T. and Herschel K. for the links.

Louisiana approves Saints subsidy loan

The Louisiana state legislature has approved a $7.5 million loan from the state Department of Economic Development to the Superdome Commission to cover this year's shortfall in reverse rent payments to the New Orleans Saints. Still to be determined: How the commission will repay the state for the loan, and what the state will do next year, when the shortfall is expected to be still larger. The state is paying the Saints a total of $186 million over ten years, as part of a deal brokered to keep the team in town without building them a new stadium.

June 22, 2004

NY Assembly mulls Javits bill

The New York State Assembly held its promised hearing yesterday on Gov. Pataki's controversial legislation to expand the Jacob Javits Convention Center. As expected, the hot topic was whether Pataki's bill was a backdoor measure to sneak through authorization for a $1.4 billion Jets stadium without legislative approval. FoS correspondent Stephanie Greenwood of Good Jobs New York was there, and writes:

Chair of the Corporations, Authorities and Commission Committee Richard Brodsky pressed city and state administration officials to accept new language that would ensure the bill was not "a sports stadium in convention center's clothing." The original bill, introduced three weeks before the end of the state legislative session, includes authorization to finance unspecified "adjacent facilities" within an area including the proposed site for the Jets stadium. Deputy Mayor Daniel Doctoroff drew laughter from the crowd when he declared that "the legislation before you is not about the New York Sports and Convention Center."

Doctoroff and Empire State Development Corporation senior counsel Anita Laremont told Assembly members - Richard Brodsky, Scott Stringer, Richard Gottfried, Deborah Glick, and Ryan Karben - that the bill had been amended to clarify that it would not authorize the financing or construction of a professional sports facility. (Other problems with the original bill, apparently also under discussion, included the removal of comptroller oversight, responsible contracting requirements, and the role of a community advisory group.)

On the other hand, there's still language in the proposed bill that would permit the Javits Center to operate any convention activities to take place at a "facility" nearby, just on the off-chance that the city decides to build one. No state legislation is needed to build the Jets stadium [Editor's note: This remains to be seen], but the state does need to sign off to allow the stadium to operate "in a convention mode" when there are no game, the part that is supposed to cause the influx of tourist dollars and jobs that would justify the stadium's $600 million public pricetag.

Assemblymember Brodsky pushed each person who testified to accept that the only Javits bill with a chance of passage would in no way authorize "the financing, construction, operation, and maintenance" of a sports facility.

Adds FoS correspondent Darren Dahl:

In other news, the city released its environmental impact study as part of its rezoning plan for the West Side. One key assumption of the study is an MTA survey which claims that 68 percent of NY Jets ticket holders would use public transportation on game day - a figure that stands out when compared with Baltimore, Pittsburgh and Seattle where, on average, only 18 percent of fans use public transportation.

With the state legislative session due to end today, and the Assembly firmly in the hands of the Democrats, it seems unlikely that a Javits expansion bill will pass this session. But then, New York state has a long tradition of cutting deals in smoke-filled rooms.

In other news, we really hope Stephanie saved us some no-stadium cupcakes.

Virginia to D.C.: Drop dead

Northern Virginia unveiled its latest proposal yesterday for a $442 million baseball stadium near Dulles Airport in Loudoun County. Among the highlights:

A private developer has agreed to put up $82 million in land and infrastructure costs; it's not clear how they'd be repaid, whether through rental payments or a share of stadium revenues or what.
In response to MLB demands that owners of the wherever-they-end-up Montreal Expos not have to pay upfront stadium costs, the team would now be asked to pay $10 million a year in rent instead; since that would still reduce an owner's return on investment, and so the likely sale price, it's unclear whether this will quell MLB's qualms.
Meanwhile, to allay the concerns of another roadblock, Baltimore Orioles owner Peter Angelos, Virginia is now downplaying the notion that it will draw fans from the District of Columbia, instead noting that 1.5 million Virginians live within an hour's rush-hour drive of the proposed stadium site. Of course, drawing only local fans means that the tax-increment financing planned to pay for most of the stadium costs would likely end up completely cannibalized from existing spending within the state, but Virginia officials declined to bring up that point during yesterday's announcement.

Stadium fatigue, revisited

A report from the San Diego Padres' new Petco Park, from Baseball Prospectus' Joe Sheehan (subscription only):

"This was the 33rd game in the new park, played on a pleasant Saturday night in June. (It was even an interleague game!) So I was more than a little surprised to see entire sections in the second tier empty, and more than a few vacant seats in the upper deck. If the new-park honeymoon is getting shorter and shorter, then the Padres barely made it back from the beach before trouble began.

"At Petco, the Padres have stripped down the promotion calendar a bit while ratcheting up ticket prices; they may have overshot the mark, judging from the crowd I saw. ... Unless this team continues to play well, and I mean winning-the-division well, they are going to have a tough time filling the park with the walkup attendees who can make the difference between black ink and red. The $45 price tag on loge outfield seats is going to keep more people away than it brings in."

June 21, 2004

Jets vs. Javits: Who controls the space?

FoS correspondent Darren Dahl writes:

Another wrinkle still needs to be ironed out in the planning of the West Side New York Jets stadium: who gets to decide what happens with the 38 non-sports events planners expect to draw each year. [Editor's note: Yeah, right.] Newsday's Errol Cockfield details Jacob Javits Center Chairman Robert Boyle's concern over who will control what amounts to an extension of the convention center's space - him or the Jets. The central issue revolves around revenue sharing, and according to Jets' President Jay Cross, "a lot depends on who takes the risk."

According to a study funded by the folks at Madison Square Garden, the issue is somewhat moot: the study says that three similar facilities in Atlanta, Indianapolis, and St. Louis hosted an average of only 11 non-sports events last year.

Expos! Getcher Expos!

More jockeying for position in the three-legged race to be the new home of the Montreal Expos:

Northern Virginia's Loudoun County is set to announce details of its stadium plan today, holding out the lure of a $4.5 billion housing and commercial development to improve the attractiveness of its site in the middle of nowhere. "This site has the potential to provide a new paradigm in where baseball stadiums are located and how urban-style town centers are developed," said developer Laurence E. Bensignor, providing his own new paradigm in English grammar.
Goofus and Gallant are exhorting Norfolk area businesses to get behind their stadium plan by putting down deposits on season tickets and distributing brochures. "We need to get the business community behind us," said Will Somerindyke Jr. "If the community steps up and shows support, it will really help this effort and future efforts." Of course, if the Expos move to D.C. or Northern Virginia, the notion of "future efforts" is fairly moot.
And finally, a prospective ownership group has submitted a bid to MLB to buy the Expos and move them to San Juan, Puerto Rico. We'd make a snide remark about how MLB's deadline for bids passed last month - but then, they're from Miami, where there's apparently a different definition of "deadline."

Thanks to FoS correspondent Neal S. for the links.

More doubts on Jets stadium impact

The New York Times' Charles Bagli weighs in on the controversy over the economic impact of the proposed New York Jets stadium, noting that the most successful stadium/convention center hybrid, the St. Louis Rams' Edward Jones Dome, drew only 32 events in 2003, most of which were either sporting events or low-paying consumer shows. Also in Bagli's report: Jets president Jay Cross now admits that, as we reported earlier this month, the stadium would be unable to host NHL or NBA All-Star games without an NHL or NBA franchise playing there.

June 18, 2004

1,382,400-second timeout

I'm going to be on the road the next two weeks, so expect news updates here to be a bit more sporadic than usual. (Various FoS correspondents have offered to help out in the interim, though, and interested readers are invited to e-mail news items to neild@fieldofschemes.com.) Anything that slips through the cracks, we'll catch up on when I get back on July 5.

War of numbers in Portland

The Oregonian casts doubt on Portland's simmering stadium plans for luring the Montreal Expos, noting they assume taxes from an overly optimistic $75 million team payroll - which would have to grow by 5% a year for 25 years - corporate seat license sales that would require virtually every company in town to buy four seats, as-yet-undetermined business taxes, and other dubious economic assumptions. Ballpark boosters respond in an op-ed that a stadium would bring in new visitors from across the Washington state border, and that even though MLB payrolls have fallen of late, they were going up before that, so there. The whole debate may in any case soon be moot: pro-stadium Mayor Vera Katz leaves office at the end of the year, and neither of her possible replacements is warm to the idea of ballpark building.

Another redo for MSG?

At the same time as it's lobbying to block a $1.4 billion New York Jets stadium three blocks away, Cablevision - owner of the Knicks and Rangers - has issued a request for proposals to renovate Madison Square Garden, adding luxury suites, meeting spaces, and restaurants. "Madison Square Garden has started the process of a major renovation to create a state-of-the art facility and will do it without taxpayer money," MSG spokesperson Barry Watkins told the New York Times - which is sort of true, unless you count the $11 million a year in city property-tax breaks Cablevision gets, which has already paid off the last Garden renovation in the 1980s.

Cincy stadium taxes coming up short

Move over, New Orleans: Ohio's Hamilton County reports that the 0.5% sales tax hike used to fund new stadiums for the Cincinnati Reds and Bengals isn't bringing in as much revenue as anticipated, which could lead to a shortfall of as much as $286 million. "I see this as a fiscal time bomb," County Commissioner Phil Heimlich told the Cincinnati Enquirer, suggesting that unless Ohioans start shopping in a hurry, the county will need to cut social services and court operations.

June 17, 2004

Dallas needs arena's permission to build stadium

After the Cowboys broke off stadium talks earlier this month, the city of Dallas has continued to talk about reopening talks on the team's $650 million stadium project. One new obstacle has emerged, however: the city's lease with operators of the American Airlines Center, which prohibits the city from building a facility that would compete with that arena for concerts and other events. "It's a big problem," Mayor Laura Miller told the Dallas Morning News. "American Airlines Center keeps saying, 'You can't do this; you can't do that.' Our attorneys are going to continue to work on it." City councilmember Mitchell Rasansky was more blunt: "It stinks. What a deal they pulled off."

Memphis report: Liberty Bowl not worth fixing

A report commissioned by the city of Memphis says that the 39-year-old Liberty Bowl, home to the University of Memphis' college football team and the annual Liberty Bowl game, is "fast approaching obsolescence and may not have enough redeeming qualities to justify the amount of renovation and upgrading that would be required." Renovating the stadium would cost between $115.6 million and $146.8 million, while a new stadium would be between $175 million and $195 million. The report's authors: stadium architects HOK, who might reasonably be expected to have some self-interest in promoting a new stadium that they themselves could build.

Nonetheless, some city council members appear to have drunk the Kool-Aid, with parks committee chair Joe Brown enthusing: "We've got to stop thinking like some little backwater town. Pro sports players spend money. People come to see pro sports, and they spend money." Memphis already owes $250 million on the new FedEx Forum, built for the Grizzlies, plus another $30 million in remaining debt on the ten-year-old Pyramid, which the Forum is set to replace this fall.

June 16, 2004

Doctoroff: We don't need no stinkin' elected officials

This just in from the Around The Rings newsletter on the Olympics, as relayed by Brian Hatch's newyorkgames.org:

[New York deputy mayor Dan] Doctoroff told Around the Rings it wasn't the first time he's been greeted this way. He was neither fussed by the outbursts nor persuaded to change to consider a change in [Jets stadium] plans to mollify public opinion.

"I have a high degree of confidence that we are going to be successful," he says. "It does not require a vote of the city council or the state legislature."

This is apparently Doctoroff's first outright statement that he plans to secure $600 million in city and state money without asking elected bodies for approval - as we noted last week, this will be easier said than done. It's also a contradiction of what Doctoroff testified before the city council earlier this month, when he said "what we are saying is that it will cost roughly $20 million a year over time, but whether in fact that will go through the budget or not is something that we'll determine over the next several months."

Ratner seeks possession of Brooklynites' condos, souls

As fieldofschemes.com readers will recall, would-be Brooklyn Nets owner Bruce Ratner has been instructing Brooklyn condo owners who accept his million-dollar buyout to sign a gag order prohibiting them from speaking out against Ratner's arena plans, or giving money to groups that do. Now the New York Post, having obtained a copy of Ratner's purchase agreement, confirms what we'd been hearing scuttlebutt about for weeks: Ratner is also requiring that the board of 636 Pacific Street, which would be demolished to make way for the arena, designate two homeowners to "testify in favor of the project at hearings" and to the press.

Now that the contracts have been made public, it'll be interesting to see if Ratner backs off the demand, given that any testimony from 636 Pacific residents will now come tainted with the label of "paid shill." Of course, given that the Knicks just fired veteran announcer Marv Albert when he wouldn't agree to a clause prohibiting him from criticizing the team, maybe sports owners are figuring paid shills are better than no shills at all.

Expos to D.C. still faces hurdles

Lots of fodder for Expos Kremlinologists (Expologists? Youppologists?) to chew on regarding the possibility of the team moving to Washington, D.C., for next season. Baltimore Orioles owner Peter Angelos is sounding resigned to having the Expos on his doorstep, telling the Associated Press, "Unfortunately, I have no choice. After all, Washington is also my capital." Angelos would no doubt be paid compensation for infringing on on his territorial rights, possibly in the neighborhood of $50 million.

Even with the threat of an Angelos lawsuit out of the way, though, MLB still has an existing legal action to worry about: the RICO suit by 14 former minority owners of the Expos against MLB and then-Expos owner (and now Florida Marlins owner) Jeffrey Loria, charging a conspiracy "that had as its object the destruction of baseball in Montreal, so that Mr. Loria and his co-conspirators could justify relocating the franchise to the United States." A ruling to determine whether the case can proceed is expected in August; the plaintiffs' lawyer,Jeffrey Kessler, has threatened to file for an injunction against the Expos' relocation once it's annopunced by MLB.

Meanwhile, back on the stadium-funding front, D.C. officials have begun meeting with local business leaders to brief them on plans to help finance a stadium with as much as $20 million a year in new business taxes. D.C. Chamber of Commerce president Chamber President Barbara Lang was noncommital at best, telling the Washington Post, "We told them if they wanted us to sell this, we needed a lot more information. And even then, we weren't quite sure we could sell it. We found some of this troubling. . . . We wanted to be supportive, but we could not do it, at least the way we see it right now."

June 15, 2004

Sticks and stones will break Dan's bones...

This is what passes for "balance" in the mainstream media these days: A long article in this week's New York magazine on the proposed Jets stadium calls deputy mayor Dan Doctoroff a "zealot" and compares him to The Music Man, but largely gives him a free ride on his economic numbers: Doctoroff's claim that the stadium would turn a $30 million a year profit in tax revenue is printed without rebuttal - or, for that matter, without noting that these figures were drawn from a study commissioned by the Jets.

In an even bigger omission, New York mag writes of the city's $600 million share of the stadium plan:

"Doctoroff argues that the Jets are hardly getting a free ride. The $600 million public investment covers $375 million to build a platform over the rail yards and $225 million for a retractable roof. In order to build anything over the rail yards, they have to be covered with a platform. By this logic, the $375 million is not a gift but a necessary expense to turn the rail yards into a developable site."

What the article doesn't reveal is that, according to Doctoroff's own testimony to the city council, the Jets would get to deduct the cost of the platform from their "fair-market" rent payments for development rights to the site. The Jets would, in effect, be paying only for the value of rights to a platform-less rail yard, then getting the deck for free - which is pretty much the definition of a "gift."

Late note: You can read my much less wordy take on the current state of the Jets stadium plans in this week's Village Voice.

Baltimore fears D.C. Expos' impact

As part of a special series on the possibility of the Montreal Expos moving to Washington, D.C., the Baltimore Sun concludes, "For Washington fans, the offer marks the chance of a lifetime. For Peter G. Angelos, owner of the Orioles, it's a potential disaster." Adds Donald Fry of the Greater Baltimore Committee, "I think there would be significant economic fallout in Baltimore should Major League Baseball give D.C. a third chance to prove its support for baseball."

Actually, Angelos is expected to be compensated by MLB for giving up territorial rights to D.C., so don't cry for the Orioles owner. For Baltimore as a whole, it's a more difficult issue: While claims of the O's economic impact are no doubt overstated, a team in D.C. would specifically reduce the number of fans traveling from out-of-state to see O's games - exactly those fans whose new tax dollars the team promised it would lure when it asked the state of Maryland for $226 million to build Camden Yards. If the Expos were to move to D.C., the state's annual $11 million loss on its investment would likely grow even larger.

The most unintentionally funny remark in the Sun series, meanwhile, is from stadium consultant Marc Ganis, who tells the paper, "If the Orioles' revenues are ... diminished by $10 million a year ... the Orioles are going to spend $10 million less a year in the community. All of that money just gets lost." Given that the Orioles would likely just cut payroll to make up any shortfall in profits - as the Sun itself concludes - what community are we talking about here, Aruba?

Sacramento residents mull arena

The first of three community discussions on a proposed $300 million Sacramento Kings arena was held yesterday. Tony Giannoni, the local developer backing the plan who organized the meeting, suggested that the arena could be funded through a mix of an airport car rental tax, diversion of downtown sales taxes, surcharges on downtown businesses, and ticket taxes, plus unspecified proceeds from development of land near the Kings' current home of Arco Arena. Reaction, according to the Sacramento Bee, was predictably "mixed": Some said it would cost too much money or leave the city with too much public debt, others said it could spur development, etc. Two more community forums are scheduled for later this week.

June 14, 2004

Goofus vs. Gallant

It's subscription-only, but The New Republic's website has an excellent analysis by Aaron Schatz that compares L.A.'s courting of an NFL team with D.C.'s of an MLB franchise, concluding:

Los Angeles and Washington offer case studies in the right and wrong ways to attract a sports franchise. Williams has bought into the fantasy that stadiums and professional sports teams are worth the expenditure of public money because they generate economic growth. By courting Major League Baseball so aggressively, he has enmeshed himself in a bidding war for which D.C. taxpayers will almost certainly pay a steep price. Los Angeles, on the other hand, has basically dared the NFL to ignore its lack of a football franchise. And as of two weeks ago, it appears that the city has called the league's bluff. In the end, both mayors will probably get their teams. But only one will have served the interests of his constituents in doing so.

Immovable object touts movable franchise

In an irony that only those who saw him imitate a third baseman can appreciate, former Oakland A's player Carney Lansford has suggested that his old team might want to move to get a new stadium. "The only way to survive is a new stadium," said Lansford of the first-place A's, who have won the A.L. West three of the last four years. "I would hate to see them leave Oakland, but if they have to leave, I'd like to see them stay in the Bay Area."

As for the San Francisco Giants' claim to territorial rights to the South Bay, which MLB has said it will respect if the A's try to move there, Lansford added: "I don't think that's a valid argument, and I think that can be beat in a court." Wow, he can imitate a lawyer, too!

June 13, 2004

Build it, and Jim Thome will come

Carl Pohlad's pet columnist Sid Hartman is keeping up the drumbeats for a new Minnesota Twins stadium, pointing to the Philadelphia Phillies' signing of free agents Jim Thome and trades for high-priced pitchers Eric Milton, Billy Wagner, and Kevin Millwood as a sign of "what a franchise can do when it gets a new stadium."

Hartman fails to mention that all those high-priced acquisitions still haven't let the Phils catch the stadium-deprived Florida Marlins. As of this morning's standings, in fact, of the six division-leading teams, exactly zero are playing in new stadiums. And of the six last-place teams, three (Seattle, Pittsburgh, and Colorado) have moved to new taxpayer-subsidized digs in recent years. And, for that matter, the Twins (34-27) - that would be the first-place Twins - have a better record than the Phillies (31-28).

In any case, even if you concede that having more money helps teams win (or at least can't hurt), there's still the question of whether a new ballpark in itself would bring in revenues after construction costs - in which case Pohlad should just ask his old banker pals for a loan and put shovels in the ground himself - or whether it's only the public subsidies he's after that would - in which case, as a Minnesota legislator once suggested, it might be cheaper for taxpayers just to pay Brad Radke's salary.

June 11, 2004

Not-so-super Mario world

Mario Lemieux, erstwhile hero of Pittsburgh for buying the Penguins out of bankruptcy in 1999, is back at the business of shaking down his adopted hometown for arena funds. Last June, you'll recall, Lemieux issued the not-so-veiled ultimatum: "This franchise is a free agent in 2007 [when the Penguins' lease expires]. I hope they understand that." In February, Pens' president Ken Sawyer elaborated: "It's really up to the public sector now to come to us and say, 'We're ready to sit and talk about the arena.' The clock is ticking: 2007 is when the team could leave town, and that possibility is real." Now it's Lemieux's turn again, telling reporters in his first public statements since last November:

"The franchise right now is not for sale. Although I've had limited inquiries, it is not for sale ... right now. But it might be in the future. Who knows?"

"If there's no new arena, we have to explore all of our options. It's encouraging that people out there are interested in this franchise and know that this team is going to be good for many years to come. It's a good opportunity for somebody at this stage to come in and inquire about it."

"With my partners, we have spent a lot of money trying to put a deal together to insure that this team stays here in Pittsburgh beyond 2007. Now, we have to look at that and really think if it was something that we needed to do. We acted in good faith. We thought people would get behind us, the community, especially our local leaders. Which has not happened at all over the last three years."

"Whether the Penguins are here or not, I think this region needs a new facility. Don't you agree? I mean, eventually, before this one falls down."

"The more we wait, the more the cost is going to go up. ... The price of steel is going up. You wait another year or two, the cost might be $30 million, $40 million, $50 million more than it is right now."

The move threat, the obsolescence claim, the hurry-up offense - yep, he hit all the tactics from the playbook. Lemieux also dismissed talk of a privately funded arena, and pegged his hopes on getting a share of the boodle from a legalization of slot machines: "We're watching the slots very closely. That's probably the last chance we have to make an arena deal. ... If that doesn't happen, I don't see an arena being built here."

Newark sells arena bonds (maybe)

Two days after a New Jersey judge shot down a referendum campaign to block a new Devils arena in Newark, the city's housing authority - that's right, the housing authority - sold $210 million worth of bonds to finance the city's share of the project. (The bonds are to be repaid with lease payments on Newark's marine terminal.) In a last-ditch effort to block the arena, city councilmembers Luis Quintana and Augusto Amador have asked an appellate judge for a temporary restraining order against the bond sale, which is due to be completed on June 24.

Brother, can you spare $7.1 million?

With the deadline for the state of Louisiana to pay the New Orleans Saints their annual reverse rent payment fast approaching, Gov. Kathleen Blanco is scrambling to find ways to fill a $7.1 million gap without raiding the state's general fund. "For the time being, we may have to beg or borrow money from one or another pots of money out there," Blanco told the New Orleans Times-Picayune. "Every morning I wake up with a new idea . . . and then my idea blows up." Borrowing money from existing revenue streams would only put off the cash crunch for a year or two, at which point the state's shortfall is expected to have grown even greater.

Day of the Dead

The AIDS deaths, the carnage in Central America, and the distaste for feeding the hungry have all been covered elsewhere, but there's one lasting legacy of Ronald Reagan's presidency that is very much on topic for this website. In 1982, in a move memorably headlined by The Onion as "Congress Allocates $300 Billion to Nation's Rich," President Reagan slashed the top federal income tax rate from 70% to 50%. By 1988, the wealthiest Americans were paying only 28%, the lowest rate since the 1920s, and just two-fifths of what they would have paid a decade earlier.

This redistribution of cash from those at the bottom of the income scale to those at the top - Reagan slashed jobs programs and other social services at the same time - had an immediate and permanent effect on the U.S. income scale. Where the median U.S. household gained a modest $3,400 in after-tax income from 1979 to 1997 (by this point the top income tax rate had crept back up to 39.6%), the average household in the top one percent of the population was $414,000 a year richer.

All this newfound wealth for the wealthy had a dramatic effect on the sports industry. Where the poor will generally waste money on such things as food and shelter (and, apparently, Cadillacs), the rich are far more likely to put their money into tickets to sporting events. In particular, they're more likely to buy up luxury suites and high-priced club seats. And it was the newfound lure of these big-ticket items that would set sports owners salivating for new stadiums, and the public subsidies that would build them. (Reagan also slashed taxes on corporations - from 1981 to 1983, more than a quarter of top U.S. companies paid no taxes at all, despite $50 billion in pretax U.S. profits - further juicing the market for suite sales.)

There's also an argument to be made that the Reagan-era cuts in aid to state and city governments made them more desperate to kowtow to their local corporate bigwigs (the current wave of local-level corporate subsidies first surged under Reagan), but that's enough speaking ill of the dead for one day. Just some things to consider as you head to the ballpark tonight - and here's hoping that some team, somewhere, marks the occasion by halting for one night the incessant "Hey ho, let's go" sound clips from "Blitzkrieg Bop," and replacing them with a more appropriate Ramones song.

June 10, 2004

Shelly and the Jets

On top of yesterday's charges by New York assembly speaker Sheldon Silver that plans for an expanded Javits Convention Center would evade public oversight, other assemblymembers are concerned it could contain a backdoor attempt at authorizing construction of a new Jets football stadium as well. "My view of the Governor�s bill is that it is more stadium-esque than perhaps we are being led to believe," Manhattan Assemblyman Scott Stringer told the New York Observer, noting language that authorizes construction of "adjacent facilities containing a plenary hall, meeting and exhibition space."

Even if that language was interpreted to mean a stadium - staff for Gov. George Pataki, who drafted the legislation, insist it doesn't - the Javits Authority would still need funds to pay off any stadium bonds. And as we explained yesterday, that's a far more difficult matter.

In other New York stadium news:

New York City comptroller William Thompson has questioned the city's proposed $600 million subsidy for the Jets, saying, "I don't know if in the end that we receive enough back to be able to justify that."
A new poll finds that while New York City registered voters favor hosting the Olympics (67%-25%) and expanding the Javits Center (49%-35%), only 37% support using tax dollars to lure the Olympics, and 55% say the Javits expansion will cost too much public money. As for the Jets, local voters oppose a West Side stadium (51%-41%) at all, with a whopping 68% who say it will cost taxpayers too much money.

Take me (way) out to the ballgame

An enterprising Washington Post columnist did a test drive from downtown D.C. to Northern Virginia's proposed baseball stadium site near Dulles Airport, and clocked it at 77 minutes, nearly as long as the trip to Baltimore's Camden Yards. Of course, he wouldn't have an ulterior motives or anything - even if he does write for a D.C. paper and call D.C.'s stadium plan a "a golden opportunity for baseball." And claim that it would "more than pay for itself in new tax revenue." And write that "all that remains now is for Commissioner Bud Selig to stand up to [Orioles owner] Peter Angelos" and give D.C. a team. Okay, maybe a teensy ulterior motive.

BOB's new name

Bank One Ballpark, home of the Arizona Diamondbacks and the only known stadium to get someone shot in the tuchus, is set to get a new name with the coming merger of Bank One with JP Morgan Chase. "It should be called Chase Ballpark, Chase Park or something like that," said Bank One CEO Jamie Dimon. We're just waiting for the banking behemoth to buy naming rights to the San Francisco 49ers' home, so it can be the Chase 'Stick.

Selig stadium-demand tour hits Tampa Bay

Add the Tampa Bay Devil Rays to the list of teams with relatively new stadiums that could be preparing to get back on line to ask for another. During a visit to the Rays' Tropicana Field (built 1990, renovated 1998, total public cost $136 million), MLB overlord Bud Selig proclaimed that the team will "eventually" need a new stadium. "People say, well, new stadiums are not the panacea," said Selig. "They are not the panacea. But there are some cities, for example take Detroit, they couldn't continue in Tiger Stadium. At least [the new stadium] gives them a lot more revenue to be competitive."

Interestingly, Rays owner Vince Naimoli was less enthusiastic about the prospect of a new home, saying only that "I think in the future it is a consideration" and "it's not something which is on our radar screen at the moment." Probably a good plan, seeing as that his team has another 23 years remaining on its lease at the Trop - though that didn't stop the Tigers.

June 09, 2004

More end runs for Jets complex?

New York assembly speaker Sheldon Silver is calling for state hearings into New York Mayor Bloomberg's Hudson Yards redevelopment plan, after the discovery that Gov. George Pataki attempted to attach a "hidden" airport car-rental tax to legislation to fund a $1.4 billion expansion of the Jacob Javits Convention Center. Assembly Democrats also charged that Pataki's bill would reduce oversight of the legislation, by limiting legal challenges and reducing the state comptroller's power to audit the project. "It's bizarre beyond belief," Assemblymember Richard Brodsky, who chairs the committee on state authorities, told the New York Post. "This takes the worst of the state authority abuses we've seen and writes them into statute."

The question of legislative oversight - in plain English, whether the mayor and governor can ram through a multi-billion-dollar redevelopment plan without having to go to the state legislature and city council for approval - has been a hot topic ever since New York deputy mayor Dan Doctoroff announced his end run around the state legislature by funding a $2 billion subway line extension to Hudson Yards via a state development authority. At last Thursday's city council hearing on the $1.4 billion Jets stadium that would be part of the complex, Doctoroff coyly noted that "whether [stadium construction costs] will go through the budget or not is something that we'll determine over the next several months," leading to speculation that he could yet have more tricks up his sleeve.

But finding $300 million apiece in state and city stadium subsidies, as Doctoroff plans to do, without getting state or city legislative approval could be a tough nut to crack, according to development experts we surveyed. One common form of "backdoor borrowing," according to Fiscal Policy Institute finance guru Frank Mauro, is something called "contractual obligation debt," whereby a state authority sells bonds, then contracts with the state to pay them off, avoiding the normal appropriations process. (One example: New York's recent prison construction boom, which was green-lighted by the state even after voters had rejected a bond act.) But even that, says Mauro, would likely require approval of the contract by the legislature. City budget experts concurred that there should be no way to dip into general funds without at the very least going through the council's capital budget process. In his testimony last week, Doctoroff referred to paying off stadium bonds with "other PILOT, rental, and lease payments that the city would otherwise collect" - whether this was a reference to the Battery Park City funds that the city had previously proposed diverting to pay for the convention center expansion (earning a tongue-lashing from Speaker Silver), or something else entirely, is anybody's guess.

In any case, no one is breathing easy, given the track record on prior development deals in the region. As Bettina Damiani of Good Jobs New York told us, before rushing off to a hearing on strengthening the city's minimal reporting standards on corporate subsidy deals: "The state is not known for transparency when it spends our tax dollars."

Judge says "no" to Newark vote

So much for that public referendum on Newark's plan to build an arena for the New Jersey Devils: State Superior Court Judge Donald S. Goldman ruled yesterday that the city doesn't have to hold a public vote on the planned $310 million project, despite 4,600 signatures calling for one. Goldman's ruling indicated that because the city wouldn't technically be incurring debt - in a complicated maneuver, the $210 million public subsidy would be bonded out by Newark's Housing Authority and repaid using lease payments on Newark Airport - no public vote was required. Arena opponents vowed to appeal, and to seek an injuction blocking the sale of bonds until the litigation is resolved.

Cowboys break off stadium talks

The Dallas Cowboys issued a surprise statement Tuesday that they were breaking off talks with Dallas County on a new stadium in Dallas' Fair Park, saying the negotiations "simply haven't been fruitful." County Commissioner Mike Cantrell agreed, but said it was because the team, while asking for $425 million in public funds, was less than forthcoming in providing financial data: "They said, 'You don't need your own economic advisers, because we have done all the studies.' And when we ask for them, we don't get them." The Cowboys say they'll now explore other stadium sites, as well as remodeling their present home at Texas Stadium.

June 08, 2004

Paging all submarine pitchers

"Imagine a battleship gray, 38,000-seat baseball stadium downtown," writes the Virginian-Pilot, "with twin gun turrets on the roof that would shoot fireworks each time the home team hit a home run." Our imagination gets cut off at this point by our screams of horror, but we must just not be as visionary as William Somerindyke Jr. and Jason Osborne, the 26-year-old entrepreneurs behind Norfolk's bid to lure the Montreal Expos. Also in their plan, according to the paper: a Navy fighter jet atop the outfield wall, anchor chains and ship�s bells as decorations, and a retired cruiser or destroyer tied up at a pier beyond the outfield wall.

"We�d like to incorporate as much of the Navy as we can," said Somerindyke, "without getting overly gaudy." I guess that would rule out our suggestion for a possible 7th-inning stretch song by the grounds crew.

June 06, 2004

Twins make yet another stadium pitch

Minneapolis Star Tribune columnist/Twins mouthpiece Sid Hartman reports that team owner Carl Pohlad is still willing to talk about a new publicly funded stadium, no matter what that silly old state legislature thinks. Pohlad's latest offer, according to Hartman, includes $120 million in cash (paid over 30 years), sales and income tax TIFs to pay for another chunk of the stadium cost, and a "sliding scale" for the public to share in the profits from sale of the team. This sounds suspiciously like Pohlad's previous offer.

Step one: Find the sewers

Portland may not know how it would pay for a new baseball stadium to lure the Montreal Expos (or failing that, maybe the Oakland A's), but at least they've hired a guy to figure out where to put it. After looking at four potential stadium sites, Portland architect John Vosmek said confidently, "We know where the water lines are and the sewer lines are." Traffic, he added, "is the main unknown infrastructure item. Traffic is a science, and there's theory involved, too. We're getting very good input." The Oregonian headline on this story: "Portland appears to have leg up in stadium planning process."

Saints shortfall to grow

It turns out that the state of Louisiana's shortfall in payments to the New Orleans Saints, pegged at $7.1 million this year, is expected to grow to $15 million by 2009. The first order of business, says State Senate Finance Committee chair Francis Heitmeier, is to come up with this year's missing cash by July 5: "We owe the $7.1 million; we have to come up with the money. The state of Louisiana cannot default on its contract. If we do, we will not be able to tell any business to come to Louisiana." Gov. Kathleen Blanco now seems resigned to dipping into the state's general fund to help pay off the Saints, after originally being dead-set against the idea.

If you're wondering why the state of Louisiana is paying an NFL team to play in a state-owned facility - usually tenants pay landlords, not the other way around - you're not the only one. "I think it's unfair that when this agreement was renegotiated that there was not a lot more vision about what kind of financial straits this would cause for the state," said State Sen. Kip Holden.

June 04, 2004

Tenth-inning rally for N. Va.?

Final applications to be the new home of the Montreal Expos - yeah, right, "final" - may have been due last month, but that hasn't stopped Northern Virginia from trying to sweeten its pot. The Washington Times' Eric Fisher cites "a source close to the commonwealth's baseball effort" as saying that Virginia is again looking at a possible stadium site in Arlington, after abandoning that plan last year in the face of local opposition.

Fisher also cites Jack Ritchie, part-owner of the targeted site, as vowing not to sell the land at any price, and saying he'll fight any attempt at an eminent domain taking: "There is absolutely no change in my feelings toward baseball there. I made my statements on this last year, and I stick with them 100 percent." This promises to work out almost as well as that last bargaining ploy across the Potomac.

Goliath vs. Goliath

Line of the day about yesterday's city council hearings on the $1.4 billion New York Jets stadium proposal, from Rick Carpiniello of Westchester's Journal News:

"Choosing sides between Cablevision and the politicians who want to bring us the 2012 Olympics, whether New York wants it or not, and the Jets, whether New York wants them or not, is akin to choosing between cockroaches and rats."

Cablevision, of course, is the owner of Madison Square Garden and the Knicks and Rangers, and recently entered the anti-stadium side of the debate as a member of the newly formed New York Association for Better Choices. While they've injected plenty of money into the opposition forces - paying, among other things, for those TV ads that annoy the mayor so - they've also provided an easy target for pro-stadium forces. Speakers at a pre-hearing rally yesterday asked, "Do we want a Cablevision future?" and Jets president Jay Cross quipped during his testimony that he was glad the council "didn't accept Cablevision's offer to hold this overflow hearing in Madison Square Garden." (He then added: "That was a joke.")

There was also much talk of the Garden's $11-million-a-year property tax break (first granted in the 1980s when the teams were threatening to move to New Jersey). As Carpiniello notes: "That might make you hate the Dolans even more, if that's possible, but really it has zilch to do with the Jets' new stadium."

June 03, 2004

Here come the lukewarm Jets

After five hours of the New York city council's hearing on the proposed $1.4 billion New York Jets stadium - at which point the hearing was still going, though only three councilmembers remained and the press table stood empty - here are some of the high points of what we learned, or didn't:

First off, nobody, but nobody, understands Mayor Mike Bloomberg's financing plan, which includes $600 million in state and city money for the stadium, which would be owned by the adjacent Javits Convention Center but leased to the Jets, with revenues to be controlled by ... well, no one knows yet. Likewise, no one seems to know whether the city council or state legislature will get to vote on that $600 million expenditure, which as one speaker pointed out would be greater than the total cost of any football stadium in history. At one point deputy mayor Dan Doctoroff indicated that the city's share of stadium bond payments - about $21 million a year for 30 years - would come out of the general fund, which would seem to require a council appropriation; at another point he said that since "everything west of 11th Avenue" - the stadium and the convention center expansion - would be on state land, it wouldn't involve the council at all.

One thing's for sure: the city and state wouldn't get any direct revenues from the stadium. Instead, the public benefit would come entirely from increased sales and income tax revenues, which Doctoroff - citing an Ernst & Young study commissioned by the Jets - estimated would amount to $74 million a year, more than enough to turn a profit on the stadium bonds. (He also said it was "not tax increment financing," though it was financing using incremental taxes. See why nobody understands this?)

The city's reliance on a report paid for by the entity seeking government aid came under a fair bit of fire at the hearings. When state development chief Charles Gargano insisted that Ernst & Young's numbers are trustworthy because they're a "reputable firm," councilmember Eric Gioia snapped, "Arthur Andersen was a reputable firm at one time as well." University of Chicago economist Allen Sanderson (affectionately known around here as "the helicopter guy"), brought in by the new New York Association for Better Choices to analyze the Ernst & Young study, noted that E&Y's revenue projections included several dubious assumptions, including that the city would draw NHL and NBA all-star games to a facility without an NHL or NBA team (a league requirement), and that they city would get the Super Bowl every five years, though "only three times in the last 42 years has a Super Bowl been held in a cold-weather city."

Convention consultant Paul Sajovec noted other problems with the E&Y study: for one thing, it had credited the stadium with creating 100% of the tax revenues from any conferences that used it as a plenary hall, even if only for an hour or two out of a four-day-long event. (While stadium backers insist that these events wouldn't come to New York without the addition of a large plenary hall, he pointed out that eight of the 13 sample events listed in E&Y's own study had been held at convention centers without plenary halls.) Finally, Sajovec said that a survey he'd conducted of football stadiums in St. Louis, Indianapolis and Atlanta that double as convention center space found that they were used for very few non-sports events - just 11 total last year, "mostly religious assemblies, high school band competitions, and consumer shows."

As for the question of how much the Jets would pay for development rights to the rail yards where the stadium would be built - which, as readers of this website will recall, have been estimated to be worth somewhere between zero and three billion dollars - both Doctoroff and Jets president Jay Cross promised the team would pay "fair market value." Pressed by council speaker Gifford Miller (who, while backing much of the rest of the mayor's Hudson Yards development plan, was vocally skeptical about the stadium subsidy) as to how fair-market value would be determined, Cross answered that the Jets and city would hire independent appraisers. Doctoroff then added that the Jets would be allowed to deduct the $400 million expense of decking over the rail yards - a cost, one should note, that will be paid entirely by state and city taxpayers - prompting this exchange with the council speaker:

Miller: I would take issue perhaps with the notion that you have to take into account the amount of money for the platform. The MTA owns the rights. And it's not the MTA that's putting up the money to do the platform.

Doctoroff: I would think the city and state would want their money back for building the platform before the MTA were entitled to a share.

Miller: That would be great. That would be terrific.

Doctoroff: That's exactly what we're doing by building the New York Sports & Convention Center and getting that $70 million a year in taxes.

Miller: Yeah... I'm not sure we meant it in quite the same way there.

If today's hearing ever finishes, a second hearing is tentatively scheduled for June 14.

June 02, 2004

Pataki to seek finance law change for Jets

It looks like the first shot is about to be fired in the legislative war over New York's proposed $2 billion Jets stadium. Newsday reports that New York Gov. George Pataki will be introducing legislation tomorrow to change the state's public authorities law to allow the city to borrow stadium money through its Transitional Finance Authority, which isn't subject to the city's normal debt ceiling. "It's clear the Pataki administration and the Bloomberg administration do not want legislative bodies involved in this deal," said assemblymember. Richard Brodsky, who chairs the committee that will review Pataki's proposal. "They're going to be disappointed."

The New York city council, meanwhile, will hold its own hearings tomorrow into the plan, though until the city announces how it will pay for its share of the multi-billion-dollar project, it's not clear what - if anything - the council will get to vote on. We'll have a full report here later tomorrow.

D.C. stadium bid irks locals

The Washington Post has revealed why D.C. councilmember Jack Evans backed off of his proposed legislation to acquire land for a city-funded baseball stadium: Evans was "inundated over the Memorial Day weekend by telephone calls and e-mails from city residents opposed to the legislation." Though Evans' amendment was focused solely on one site, the Banneker Overlook in Anacostia, it looks as if opposition is building to the city's stadium plans in general: councilmember Sharon Ambrose, whose district includes all four proposed stadium sites, told the Post, "If at some point we were, by some miracle, to get a baseball team, we could take it back to the community and talk about it," but that "we've got to get the buy-in of the neighbors." That doesn't quite sound like the "move them and we will build" pledge that Evans has been offering to MLB as an enticement to win the Expos lottery.

Seahawks selling naming rights

The Seattle Seahawks are reportedly set to announce a naming-rights deal today with the telecommunications company Qwest to slap their corporate moniker on what has until now been Seahawks Stadium. Though the stadium is owned by the county, the team's lease directs all naming-rights revenue to offset Seahawks owner Paul Allen's maintenance costs, which he's been paying for for out of his own pocket so far.

Qwest, interestingly, recently restructured and remains $17.5 billion in debt, so it's an excellent candidate for the naming-rights curse.

June 01, 2004

D.C. stadium bill hits opposition

Washington, D.C. councilman Jack "We will build them a stadium" Evans is set to introduce a stadium bill today in anticipation of D.C. landing the Montreal Expos, but other city officials sound less than thrilled.

The bill would direct the city's new waterfront development authority to purchase land for a stadium near L'Enfant Plaza - how to actually pay for stadium construction still to be resolved, though the mayor has some ideas. The mayor's office doesn't like it because it doesn't want the waterfront authority involved (Mayor Williams has also expressed a preference for a cheaper site near RFK Stadium); and Sharon Ambrose, the council rep for Evans' proposed stadium site, says she'll oppose it as well, telling the Washington Post, "I'm not going to just, as a legislator, shove something down people's throats. I think a lot of people on the council, Jack being one of them, know that people in Southwest don't want a baseball stadium there."

While it's a far cry from a death knell for D.C.'s Expos bid, this is no doubt exactly the sort of stadium controversy MLB wanted to avoid with its "build it and we will come" edict. It's looking less likely again that MLB will meet its self-imposed deadline of deciding the Expos' fate this July.

LATE NOTE: No sooner had we posted this than word came that Evans was backing off on the L'Enfant Plaza site, citing the "frenzy" over his proposed bill.