March 31, 2006
NYC councilmember "disturbed" by Yanks plan
This just into my e-mail in-box: Queens councilmember Tony Avella, chair of the council zoning and franchises committee, has sent a letter to Michael Bloomberg saying he's "increasingly disturbed" by what he's learning about the New York Yankees stadium plan, and intends to vote against it next week unless changes are made. Concerns outlined by Avella include: the lack of suitable replacements for lost parkland; the need for a commuter rail station to reduce traffic; the Yanks' proposed "community benefits" package, which Avella called "bad public policy" since a handful of Bronx officials would control the money; and the project's convoluted bond financing scheme. "Unless changes are made to the proposal regarding these issues ... I will vote against this application," wrote Avella. "I hope that you will carefully consider my comments."
While Avella is only one vote out of 51 on the council, the letter is interesting for Kremlinological purposes: While it's been rumored that council speaker Christine Quinn has been threatening that "no" votes will be punished by stripping members of rank - an old tradition in the council - if a committee chair feels free to speak out against the Yanks deal, it's a sign that Quinn either doesn't have all her ducks in a row, or isn't as firm a backer of the plan as has been believed. With councilmembers clearly steamed at how they've been treated by the Yankees and the mayor, there's at least a slim chance that next Wednesday's council vote just might be more interesting than anyone expected.
Glimmer of hope for Tiger Stadium?
Detroit development chief George Jackson finally returned Neal Rubin's phone call, and while he was still negative about the proposals he's received to save Tiger Stadium, he did drop one tantalizing hint, saying: "We have something we're looking at now that seems a lot more realistic than what we've seen in the past five years." That's admittedly pretty vague, but depending on what the mystery plan is, maybe we'll finally find out once and for all whether Tigers and Red Wings owner Mike Ilitch has been pulling strings to stop the ballpark from being used by a non-Ilitch-owned sports franchise.
A million here, a million there
With little fanfare, the New York state legislature has stuck several line items in its 2006 capital budget providing subsidies to the state's sports franchises - or would-be sports franchises. The website No Land Grab this week uncovered $33 million in the state education budget - yeah, education budget - for "Atlantic Yards Railway - Nets Project," though the proposed Brooklyn Nets deal has yet to even have an environmental impact study or public hearings.
At the other end of the state, meanwhile, the Rochester Rhinos minor-league soccer team is set to get an additional $12 million in state aid for its stadium project, under an agreement by the legislature and New York Gov. George Pataki. Writes the Rochester Democrat and Chronicle:
So after years of wrangling, the team may end up with a stadium close to what was initially proposed six years ago — a $40 million facility that holds close to 20,000 fans. The difference is that about 78 percent of the cost is coming from taxpayers. The Rhinos originally proposed paying for most of it themselves.
All this as the state faces a budget that "spends too much, reforms too little, leaves the state in the future with financial hurdles that we've already been over and shouldn't have to face again " - that according to Gov. George Pataki, who has threatened to veto items that he considers wasteful spending. Presumably the sports projects, which Pataki has supported, won't get the red-line treatment, though some folks are still trying to convince the governor otherwise.
March 30, 2006
Fremont A's: The plot thickens
Rumors that the Oakland A's could be headed to Fremont are heating up, with co-owner Lew Wolff telling a local men's club he's "quite serious" about exploring the southern East Bay as a stadium site. (As you'll recall, the conspiracy theory goes that the A's would move to Fremont, just outside the San Francisco Giants' territorial limit, then rename themselves the "San Jose A's" to lure well-off fans from Silicon Valley.) The 143-acre site, a plot of undeveloped land controlled by the San Jose-based Cisco Systems, would provide ample room for both a stadium and the large swath of accompanying condos Wolff wants to build alongside it.
It's also served by only a single, overcrowded highway, and miles from the nearest BART station (thanks, Chris, for the map), meaning it'd be unlikely to draw more fans than Wolff's other leading option, a stadium in the Oakland Coliseum parking lot. It's conceivable, though, that Wolff, a real-estate developer before he bought into the A's, might not care: The Oakland site isn't big enough for a housing development, and if moving to Fremont is the price he has to pay for lucrative development rights - Wolff's stated requirement in exchange for building a stadium with private money - then he might be willing to treat the ballclub as a loss leader for his condos.
It's the sort of thing that MLB really should step in to prevent, if not for the sake of East Bay fans - heaven forfend - then for its own interests, given that Wolff would be consigning a franchise to mediocrity, or at best cannibalizing fans from a neighboring ballclub, in order to boost his own non-baseball revenues. But then, Bud Selig hasn't exactly distinguished himself when it comes to discouraging owners from cooking the books - how's that YES Network audit coming, anyway, Bud?
March 28, 2006
It ain't over till it's over
The New York city council held its long-awaited, already-once-delayed public hearing on the Yankees stadium plan today, and was met with a standing-room-only crowd in the main council chambers, with anti-stadium Bronx residents and pro-stadium construction workers bunched on either side of the aisle like the bride's and groom's sides. For those who showed up, a lot of quality butt time was in store, as the land use subcommittee on planning, dispositions and concessions didn't get around to taking public testimony for more than three hours. And a half hour later, subcommittee chair Dan Garodnick sheepishly announced that someone else needed the room, and the entire hearing would have to move across the street to a hearing room that held only about 50 people. By the time things resumed, the entire press corps (yours truly excluded) had gone home.
The preceding three hours had been taken up with testimony by the city parks department, the Yankees, and Bronx borough president Adolfo Carrion, none of whom divulged anything that hadn't been said at previous hearings. The closest thing to excitement came when Yanks president Randy Levine sat down at the witness stand accompanied by former Yankees great Reggie Jackson - and immediately started things off by showing a promo video of Yankees players talking about how much their employer means to the Bronx, a spectacle that several councilmembers, and even Yanks pal Carrion, judged to be "insulting."
While there was plenty of distrust for the Yankees in evidence, though - no one's forgetting this is the franchise that once employed an exec who called local Bronx kids "monkeys," and Bronx rep Helen Diane Foster compared the Yanks' past dealings with its home borough to an "abusive relationship" - what was less clear was what councilmembers expect to ask from the Yankees in exchange for approval of the plan. Both Foster and fellow Bronx councilmember Maria del Carmen Arroyo focused mostly on getting assurances that more money would be available to refurbish other Bronx parks; Manhattan rep Melissa Mark Viverito was the only questioner to ask how much the stadium's tax-exempt bonds would cost the public. (Kei Hayashi of the city's Industrial Development Agency insisted that, as the bonds wouldn't exist without the stadium, making them tax-free wouldn't cost the city anything. Viverito looked perplexed by this response, but didn't pursue the matter further.)
As for what the council will do, we likely won't know until April 5, when both the subcommittee and then the full council will vote on giving land-use approval to the stadium project. But even that won't be the final word: The council still must approve the convoluted financing plan as well, and on April 7 the council finance committee will meet from 9 am to 3 pm to hash that out. Among the items to be explained then: Why the city's infrastructure costs are now up to $160 million in the current plan (as Josh Laird of the city parks department divulged today), up from $135 million previously.
Meanwhile, even that may not be the final say on the Yanks deal. Today's Metro New York has more on the federal parks regulations that I discussed in the Village Voice earlier this month, including this from the man in charge of implementing them:
City Parks Department spokesman Warner Johnston said "a final determination is expected" by May 1."It's entirely unlikely something will be approved by then," said Jack Howard, LWCF manager at the National Park Service. Howard is still waiting on the state's proposal."This is not a rubberstamp process," Howard said. "Some conversions are simple; others can take a year to garner final approval. There could be a lot of public controversy or other things that may come into play that will adversely impact that proposed action."We are aware of what's going on, but there are no shortcuts. We have a responsibility to follow the law."
When Yogi's right, he's right.
Arena notes
A few recent arena developments that didn't warrant their own news items:
- A New Jersey judge has ruled that the city of Newark has the right to redirect rent payments from the Port Authority to the Newark Housing Authority, which plans to use them to pay for a new Devils arena. Opponents say they plan to appeal.
- Pennsylvania Gov. Ed Rendell says he'll announce on Thursday his Plan B for funding a new Pittsburgh Penguins arena, if the preferred method - giving a slots parlor license to a developer who will build an arena with the proceeds - falls through. No details yet, though Rendell said the Penguins would not have to put up "a substantial amount" while Allegheny County Chief Executive Dan Onorato said he hoped taxpayer costs would be "probably minimal." Do I hear "Not me"?
- The Oklahoman reports that New Orleans Hornets owner George Shinn has a "handshake agreement" to sell 49% of the franchise to an Oklahoma City investor group; Shinn's lawyer denied the report, charging that "that story was put out there by Oklahoma investors to probably have somewhat of a chilling effect on the New Orleans investors." The assumption is that the team, currently playing most of its games in Oklahoma City in the wake of Hurricane Katrina, would move there permanently if local investors buy in; but with the team's lease requiring that it play in the New Orleans Arena through 2012 if it's in playable condition, that could be difficult no matter how sweet a deal Oklahoma City throws at them.
Bloomberg: Smells like team spirit
On the eve of the New York city council's sole public hearing on the $1.2 billion Yankees stadium project, here's Mayor Michael Bloomberg explaining why the Yanks and Mets can't share a stadium while Yankee Stadium is renovated or rebuilt:
"They both have their own interests of, you know, team spirit, and sharing stadiums is not something that's done easily."
Not that it's remotely scientific, but New Yorkers voting in Newsday's online poll accompanying the above article disagreed: Of four options, "Yankee Stadium should not be altered at all" is currently the top choice at 35.3%, with another 19.6% saying "It should be built on same hallowed ground." (Total votes cast as of 9 am: 6,604.)
March 27, 2006
No taxes, please, we're Knickerbockers
A month ago I wondered whether Madison Square Garden, owner of the New York Knicks and Rangers, was planning to "pick up its $11-million-a-year property-tax exemption and carry it across the street" to its proposed new home inside the Farley post office. The answer, according to yesterday's Daily News, is "you betcha" - but deputy mayor Dan Doctoroff insists, "Our assumption is that taxes will be paid." (Unlike Doctoroff's position on every other team in New York, which surely has nothing to do with MSG's role in scuttling Doctoroff's proposed Jets stadium.)
Developer Stephen Ross, the former partner of Doctoroff's who's putting together the post office building deal, insists through spokesman Howard Rubenstein (who is also the mouthpiece for Yankees owner George Steinbrenner - in case you're wondering, no, this could not possibly get any more incestuous) that "the Madison Square Garden tax issue is a small component of an overall tax package. With the entire project, $75 million in new property taxes would be put on the city tax rolls." Except, of course, that it wouldn't be on the tax rolls at all, but rather would be siphoned off to pay for a subway line servicing Doctoroff's Hudson Yards development on the West Side.
Confused yet? Tune in next week to see if Deputy Dan is forced to cut off his own subway's nose to spite MSG's face. (If subways had noses, and faceless corporate media empires had faces.)
La la la la we can't hear you
More reports out of Detroit of people who want to keep Tiger Stadium alive for baseball, but are getting turned down. The latest: a mortgage banker named Harry Glans who would like to reduce the stadium to its original dimensions (about 12-15,000 seats) and rent it out to travel youth teams. Writes Detroit News columnist Neal Rubin: "[Glans] picked up the phone and called the mayor's office. Twice. In a shocking development, no one called back." No one at Detroit's economic development agency returned Rubin's phone calls either - if anyone else wants to try, knock yourselves out.
K.C. Star: Vote no, lose your teams
Making up for last week's skeptical look at the economic benefits of stadiums, yesterday's Kansas City Star followed up with an article that began:
Imagine the Portland Royals. Or the Charlotte Royals. What about the Los Angeles Chiefs? Or Anaheim Chiefs?Those are among the cities that have their eyes on Kansas City's major-league teams if Jackson County voters do not approve an April 4 sales-tax measure that would help fund renovations at the Truman Sports Complex.
All that's missing are the sound effects.
The rest of the article is more of the same, with vague rumors of the relocation menace - "San Antonio is proposing a $300 million open-air stadium that would include $200 million in public funding"! (well, one guy is), "Portland and Norfolk even have active organizations dedicated to bringing a big-league team to their communities"! - and wall-to-wall quotes from sports boosters in these other cities, plus one from the head of the Greater Kansas City Sports Commission alleging: "The reality is these two Kansas City treasures will be able to leave at the end of the year, and other cities will want to take them from us." Number of sports business experts asked about the likelihood of either team actually taking flight? Zero. I've said it before, I'll say it again: When you have the media and politicians writing your blackmail notes for you, that makes it a lot easier to play good cop.
March 24, 2006
Consultants: Nats to rake in $200m from new stadium
An economic impact study commissioned by Washington, D.C. CFO Natwar Gandhi projects that the new baseball stadium set to open in 2008 (or maybe 2009) could mean big bucks for the Nationals. No, make that huge bucks: $203 million in gross stadium revenue in its first year alone, and still $190 million a year after the initial excitement wears off. And that's before including $50 million or so in local and national TV revenue.
If accurate, this would mean:
- Whoever ends up buying the team from MLB would be vastly underpaying at $450 million. The only current team with higher annual income is the New York Yankees, who are valued by Forbes at an estimated $950 million.
- The city would pay off its $611 million stadium debt much faster than expected, since sales tax receipts on stadium spending would be higher than previously thought.
- With the Nationals' revenues increasing by $100 million a year over last year at RFK Stadium (when the team, according to the Washington Post, turned a $10 million profit), the team easily could have afforded to pay for a new stadium out of its own pocket - annual bond payments on the stadium are expected to be only $38 million a year, which would still have left a tidy $62 million a year profit.
There are reasons to be skeptical of the figures, though. First off, the report was compiled by Economics Research Associates, the private consultants who produced the questionable economic projections for the Yankees stadium project back in January (and was previously criticized for its overly optimistic assumptions regarding the Dallas Cowboys stadium back in 2004). Second, even team officials themselves found the figures hard to swallow, with Nats president Tony Tavares telling the Post: "Any kind of number north of $200 million that doesn't include TV [revenue] sounds astronomically high to me." Accuracy doesn't get you jobs in the economic consulting game, though - telling people what they want to hear does.
The stadium so nice they approved it twice
The New York Yankees and Mets stadium proposals "got another boost" yesterday, according to amNewYork, when the board of the state-run Empire State Development Corporation approved $70 million apiece in state subsidies for the two projects. This is totally different from when the ESDC board approved the plans back in January, albeit different in some inscrutable bureaucratic way.
In other New York stadium news, Daily News columnist Juan Gonzalez weighed in on the Yankees controversy yesterday, noting how the parkland seizure was approved in a record five days last June and calling the Bronx Democratic machine "a bat boy for Yankee owner George Steinbrenner"; and the website onNYTurf has a cool new interactive map of the proposed Bronx project, including diagrams of how parkland would be moved around and before-and-after images.
March 22, 2006
Selig: An All-Star Game in every pot!
With a referendum on $425 million in public stadium renovation funds just two weeks away, Kansas City Royals owner David Glass today announced that MLB commissioner Bud Selig had promised to award an All-Star Game to Kansas City if the vote is successful. (Which All-Star Game? One "between 2010 and 2015," said Glass: "We're not going to specify a date as yet because we want to see how the schedule unfolds for the renovations.") This will come as news to anyone who missed Selig's pronouncement two years ago that he would henceforth use All-Star Games as a reward for cities that build new stadiums.
Community jeers Yanks' "community benefits" offer
When the New York city council abruptly canceled a public hearing on the $1.2 billion Yankees stadium project earlier this month, some observers - okay, me - wondered if this presaged an October Surprise before the council vote. Conspiracy theorists, take note: Yesterday the Yankees (or someone) leaked to the press details of a "community benefits" plan wherein the team would provide $28 million over 40 years (present value: $10.5 million) for a community "trust fund," plus $100,000 a year for parks maintenance and another $100,000 for "equipment and promotional merchandise" for schools and youth groups (present value: $3 million), in exchange for approval of its plan to build a new stadium on public parkland with the aid of about $420 million in public subsidies.
Critics of the plan were notably not won over by this new promise of Yankeebucks - the Bronx group Save Our Parks is rallying in opposition at City Hall as I type this - noting that the trust fund would be administered by the same Bronx officials who have backed the plan in the first place. "It would be like the fox guarding the henhouse," city councilmember Helen Diane Foster told the New York Times, while community board member Lukas Herbert called it a "slush fund" for the Bronx political machine. Herbert also noted that his community board, which represents the stadium site, had never been consulted about this new agreement - which, to say the least, goes against the whole point of community benefits agreements.
LATE NOTE: Metro NY reports:
[Bronx Borough President Adolfo] Carrion seemed especially proud of a community benefits program that would give out $900,000 annually over the team's 40-year lease. "If you look at the investment in the community every year over 40 years, you're talking about in excess of $50 million."
Anyone who can recreate Carrion's math in multiplying $900,000 by 40 and getting "in excess of $50 million," please contact the Nobel Prize committee immediately.
March 19, 2006
Royals promise $425 million of fun
The Kansas City Royals announced yesterday what taxpayers will get for their money if they approve $425 million in sales-tax subsidies to the Royals and Chiefs on April 4: a "360-degree entertainment atmosphere" with "an abundance of amenities geared toward families, groups and individuals." (Cults and angry mobs will presumably have to make their own fun.) Included are a new food court, a new restaurant, expanded concessions concourses featuring new food stands, and, for the not especially hungry, living quarters for the team's blue-nosed, disturbingly crown-headed mascot.
The Royals also plan on adding 2,500 "fountain seats" in the outfield (around Kauffman Stadium's iconic fountains), which is slightly odd in that most baseball teams these days are looking to reduce capacity to create ticket scarcity, not increase it. Either Royals management is more optimistic about a return to pennant contention than the experts are, or it doesn't understand that increasing supply without increasing demand leads to reduced prices - either way, it's potentially good for Royals fans, I guess.
As for the effect on Kansas City beyond the fountains, the K.C. Star has a good roundup of the likely economic impacts, which sums up to "not as much as people claim." In additional to the usual reasons for pessimism - the substitution effect and the like - is one that's seldom mentioned: Raising sales taxes by 0.375% to pay for the renovations, according to federal data, would take $25 a year out of the pocket of the average Jackson County resident, dampening the local economy. That's something you almost never see addressed by those eager-to-please economic impact consultants.
March 18, 2006
Went to the baseball game, and a mall broke out
Looks like I'm not the only one nonplussed by the new Washington Nationals stadium design. Today's Washington Post, after exhaustive interviews with people shopping at a downtown chain sporting-goods store and a troll through some blogs - Woodstein must be so proud - reports that while some like the glass-and-steel-and-painted-concrete design, others compared it "to a shopping mall, an office building or an airport." (Also, George Will likes it, but Ralph Nader doesn't. Ross Perot was presumably unavailable for comment.)
The most interesting comment is one lifted from the ballparkguys.com discussion board (or "chat room," as the Post calls it):
A http://Ballparkguys.com contributor from the District identified as WebberDC gave the ballpark favorable ratings except for the row of club seats that forced architects to move the top deck higher."The club seat market in DC has been awful," the person wrote. "The model is antiquated. . . . If you eliminate that deck, and consolidate decks 3 and 4, the park is perfect for all users. If you insist on club seats then you could place them in the lower third of the upper deck (note: still a two deck park) with its own concourse for exclusivity."
If you look closely at the sketches, it's actually one level of club seats plus a double deck of luxury suites that have shifted the top deck into the stratosphere, as the Washington City Paper reported last fall. But while eliminating some corporate seats to make for better views for the hoi polloi is certainly an idea I've endorsed before, I can see why it'd be a hard sell: It's tough to tell an incoming owner that they're expected to shell out $450 million just to be Pittsburgh.
March 17, 2006
D.C. development to lag behind stadium
As Washington, D.C. prepares to build the most expensive open-air stadium in history, word comes that one of the alleged benefits of the project won't be up and running until years after the stadium itself opens. The developers planning to create a "ballpark entertainment district" around the new home of the Nationals say that they hope to have the "first phases" done by spring 2009, a year after the (probably optimistic) scheduled opening of the stadium. Since the only real benefit to the city would be from any fan spending outside the stadium (all in-stadium revenues go to the team, and in-stadium taxes go to pay off construction costs), this likely means that the city will end up taking even more of a bath on its $611 million expense.
Meanwhile, another interesting note from the Washington Post:
At the site of the new stadium, near the Navy Yard and South Capitol Street in Southeast, the job of creating a vibrant community promises to be even more challenging because the area has far less infrastructure than the Verizon Center's downtown location.Before condos are built and stores opened, major transportation improvements are necessary, including a $20 million renovation of the Navy Yard Metro station. The D.C. Department of Transportation is about to spend $625 million to expand South Capitol Street and rebuild the Frederick Douglass Bridge. And new street lighting and landscaping are planned to make the neighborhood feel brighter and help attract residents and shoppers, city officials said.
Not that any of this is an inappropriate use of public funds, but ... $625 million? With that kind of infrastructure money being thrown around, it's going to be impossible to tell whether any new development is the result of the stadium, or because of all the money that D.C. is spending on the neighborhood already. Add in the Washington Times' observation that stadium land costs have soared because it's sited in "one of the hottest development areas of the city," and this sounds more and more like the Camden Yards template: Stick a stadium in a neighborhood already ripe for development, then call it a "catalyst." Somebody needs to study up on their false syllogisms.
Re-crunching the numbers on the Yanks and Mets stadiums
Yes, it's that time again: Time to revise the ever-changing subsidy estimates for the New York Mets and Yankees stadium deals. If you're tired of slogging through the details by now, feel free to skip ahead to the totals at the end. For everyone else:
After yet another round of nagging various city agencies, it turns out that the city's original maintenance cost reports for Yankee and Shea Stadiums left out an important detail: The city also spends additional money on upgrading the two parks out of its capital budget. Over the past three years, this has averaged $7.5 million a year for Yankee Stadium, $7 million a year for Shea Stadium, for such items as electrical upgrades, elevator and escalator work, and bringing the two stadiums into compliance with the American Disabilities Act. Since we'd previously calculated $7.5 million a year in net Yankees rent and $3.9 million a year in net Mets rent, this means that the city is on average breaking even on Yankee Stadium, and losing about $3.1 million a year on Shea. Building new stadiums where the teams pay for all maintenance and capital costs but pay no rent, then, shouldn't add any city costs in the case of the Yankees, and should save the city $42.7 million (present value) over the next 30 years in the case of the Mets.
The above numbers may give the teams the benefit of the doubt, for several reasons: Rent payments, in the Yankees' case at least, are on the rise and could soon make Yankee Stadium a net money-maker for the city; some of the capital costs may be non-repeating, especially since it's unlikely that the federal government will pass another Americans with Disabilities Act anytime soon; and new stadiums, if the teams' arguments are correct, would be cheaper to maintain, meaning the Yanks and Mets could still be turning a profit by offering to pay maintenance instead of continuing to pay rent. But these are all unknowns, so for consistency's sake if nothing else, let's continue to assume that future rent and maintenance payments would continue about as they have in recent years.
This is good news, in that it means the city's costs would go down by about $100 million apiece for each new stadium. Before we get to the new totals, though, we need to include revised figures for the enhanced tax-exempt bond subsidies first revealed two weeks ago.
The purpose of tax-exempt bonds is to reduce borrowing costs for a project by having the city, state, and federal governments forgo collecting income tax on profits by bondholders; the bondholders, in turn, agree to accept a lower interest rate on the bonds. The net effect is to shift a bunch of money from the city, state, and federal treasuries to the developers of the project (the bondholders make the same as they would have made on taxable bonds) - which is why the U.S. Congress has made several attempts to rein in the use of tax-exempt bonds for for-profit enterprises like stadiums, which should be able to raise money by traditional channels.
How much is the bond subsidy worth to the Mets and Yanks? There's no way to say for absolute sure, since we'd need to know how many bondholders live in New York state and New York City, not to mention what income-tax bracket they'd be in in the year 2035. But with the help of an economist to be named later, I've come up with reasonable estimates of the lost revenues to each level of government from each stadium:
YANKS: $140 million federal, $14 million state, $4 million city METS: $86 million federal, $9 million state, $2 million city
So what's the damage in total? With no further ado, here's the latest:
YANKEES STADIUM
---------------
CITY:
Land/infrastructure $136 million
Rent rebates $13 million
Net garage ground rent -$43 million
Forgone property taxes $44 million
Forgone construction sales tax $11 million
Forgone mortgage recording tax $11 million
Operational/reserve funds $5 million
Memorabilia sales -$10 million
Tax-exempt bond subsidies $4 million
------------
$171 million
STATE:
Garage construction $70 million
Forgone construction sales tax $11 million
Forgone mortgage recording tax $11 million
Operational/reserve funds $5 million
Tax-exempt bond subsidies $14 million
------------
$111 million
FEDERAL:
Tax-exempt bond subsidies $140 million
YANKEES:
Bond payments* $695 million
Rent rebates -$13 million
Forgone property taxes -$44 million
Operational/reserve funds -$10 million
Revenue-sharing savings** -$136 million
------------
$492 million
MLB:
Revenue-sharing subsidies $136 million
PRIVATE DEVELOPERS:
Garage construction $250 million
-------------------------------------------
TOTAL $1300 million
PUBLIC TOTAL $422 million
METS STADIUM
------------
CITY:
Land/infrastructure $85 million
Rent rebates $13 million
Future maintenance savings -$43 million
Forgone parking revenues $96 million
Forgone property taxes $39 million
Forgone construction sales tax $8 million
Tax-exempt bond subsidies $2 million
------------
$200 million
STATE:
Land/infrastructure $75 million
Forgone construction sales tax $8 million
Tax-exempt bond subsidies $9 million
------------
$92 million
FEDERAL:
Tax-exempt bond subsidies $86 million
METS:
Bond payments* $577 million
Rent rebates -$13 million
Forgone parking revenues -$96 million
Forgone property taxes -$39 million
Revenue-sharing savings** -$92 million
------------
$337 million
MLB:
Revenue-sharing subsidies $92 million
-------------------------------------------
TOTAL $807 million
PUBLIC TOTAL $378 million
*based on weighted midpoint of figures from Bond Buyer
**using lowest allowable revenue-sharing credit (40-year amortization)
(all figures in current dollars, using 6% discount rate)
Some dollars have shifted around, most notably from the city column to the federal one. But the upshot is still the same: The Yankees and Mets would put in roughly the same amount as taxpayers, while reaping all of the new stadium revenues. It's better than the D.C. ripoff, certainly, but still not exactly a reason for applause - especially if you're a baseball fan in Kansas City or Miami whose federal taxes will be helping pay for new homes for your teams' rivals.
March 15, 2006
NYC comptroller questions stadium bonds
As expected, the New York City Industrial Development Agency gave preliminary approval to the city's $1.56 billion in Yankees and Mets stadium bonds yesterday. And not as expected, the city comptroller's office raised the question I asked two weeks ago about whether the bonds would be legal, saying "we must learn in detail the financial terms of the bond transactions before we can make a final determination whether the transactions are prudent ones," and demanding that the IDA supply proof that the IRS will allow tax-exempt bonds to be used for $1.4 billion worth of the project. According to Metro New York, "the IDA is still waiting for this approval."
As more details of the stadium bonds trickle out, we also learn more about just how much the Yanks and Mets owners would be spending on their new stadiums. Most news outlets - including this one - have repeated the teams' line that the Yankees would be paying the $800 million construction cost of their stadium, while the Mets would be paying the $444 million cost of theirs. But that's not strictly accurate. In fact, the IDA would be selling bonds to pay for construction costs - $930 million in the case of the Yankees, and $632 million for the Mets - and the teams would be responsible for making the annual bond payments.
How much will those bond payments come to? Yesterday's Bond Buyer lays out a range of possibilities: Tax-exempt bond payments would amount to between $40 million and $60 million a year over 20 to 30 years for the Yankees, and between $30 million and $45 million for the Mets. Figuring the present value of those payments (using a 6% discount rate, for those who care about such things), and adding in the taxable bonds ($64 million Yanks, $104 million Mets, which should be roughly the present value of the taxable bond payments as well), we get total bond costs of:
YANKEES COST TO PAY OFF $930M IN BONDS: $523 million - $890 million METS COST TO PAY OFF $632M IN BONDS: $448 million - $723 million
Clearly the Yankees in particular stand to get a significant discount off their stated stadium costs thanks to the use of city-sponsored tax-exempt bonds. (And that's before accounting for their cost savings from other tax rebates and revenue-sharing benefits.) With any luck, we'll find out more details on April 7, when the city council finance committee has tentatively scheduled a hearing on the stadium bonds.
In related news, Good Jobs New York will be holding a breakfast forum on Wednesday, March 22, at 9 am on the two stadium projects, at the New York Foundation, Room 2901 of the Empire State Building. Panelists include Bettina Damiani of GJNY, Majora Carter of Sustainable South Bronx, Joyce Hagi of Save Our Parks, and Kate Slevin of the Tri-State Transportation Campaign - RSVP to gjny@goodjobsfirst.org or 212-721-7996 of you plan to attend.
March 14, 2006
New MSG to siphon off city tax dollars?
Talk of building a new Madison Square Garden inside the landmarked Farley Post Office building is making headlines again, with the New York Observer reporting that the real goal is for the developers behind the deal - and for Cablevision, owners of the Garden and the New York Knicks and Rangers - is to clear the way for development of the current MSG site, which was recently rezoned to hold as much as 5 million square feet of office space.
That rezoning, charges Brian Hatch of newyorkgames.org, is key to why the city is backing the arena-in-the-post-office plan. As part of the Hudson Yards redevelopment that was originally to accompany the now-dead New York Jets stadium plan, the MSG parcel was not only upzoned to allow for bigger buildings, but also incorporated into the official Hudson Yards district. This means that any property taxes (really payments in lieu of taxes, but whatever) would not go to the city treasury, but rather to pay off the cost of building a subway line extension through the new district - though as Hatch notes, it's "preposterous that the land above Penn Station - the busiest transit hub in the country - is undevelopable without a subway stop several blocks away."
The upshot is that instead of getting property-tax money to pay for all the services needed by another 5 million square feet of office workers, the city would divert the money to pay for a subway line to encourage development of more office space that would also pay property taxes into the subway fund so as to encourage... phew. This is already sounding as complicated as deputy mayor Dan Doctoroff's last West Side financing scheme. And it has the same drawback, in that all this new office space not only won't help fill the city treasury, it could end up just cannibalizing development from elsewhere in Manhattan. It makes you wonder what Sheldon Silver thinks of all this.
The Farley building, meanwhile, also sits within the Hudson Yards district, so that money would be redirected as well - provided, of course, that Cablevision doesn't demand to take its property-tax exemption with it across the street and pay nothing at all. (Your head hurt yet? Because mine sure does.)
None of this is a done deal yet, mind you, and the preservationists who were hoping the Farley could become a grand public space to replace the long-lost Penn Station - itself demolished to make way for the current MSG and its attendant office towers - are expected to oppose dropping a private sports arena into what was supposed to be the central atrium. As Municipal Art Society president Kent Barwick, himself a supporter of the MSG plan [UPDATE: Actually not - see comments], told the Observer: "We're either getting ready for a very big party or a very big fight."
Baseball at 30,000 feet
The renderings for the new Washington Nationals are out, and they look even more like an airline terminal than the Nats' current home. It's also a good depiction of that upper deck that will be 21 feet higher than at RFK - for a stadium with 15,000 fewer seats.
Bringing out the dead
And in the category of Most Tasteless New Stadium Pitch, we have former Minnesota Twins pitcher Jack Morris, who said at a public memorial service for his former teammate Kirby Puckett: "I know there's a lot of people who publicly don't want to say this right now, but I think they're hoping that the momentum this occasion brings, and the way it brings the community together, will help extend this to the next step that they all want, which is a new stadium and baseball for a long time."
Morris failed to add: "That way Kirby won't have died in vain."
Tiger, Tiger, turning blight
The imminent demise of Tiger Stadium is being declared yet again, with an article in the Detroit News declaring that a decision to demolish the former home of the Tigers could come this summer. "We've given it an honest and long look to redevelop it," Fred Rottach of the Detroit planning department told the News. "Now, the time has come to either keep it or not keep it." Because you can never have enough vacant lots.
The most interesting part of the story is the comments page, where a poster named Steve Thomas writes: "As a potential developer who met with both [the city of Detroit and Tigers execs], I can honestly say that there was NEVER any serious consideration given to any of the proposals for an alternative use of the ball park. Ilitch is afraid of competition for his less-than-successful Comerica Park and has enjoyed milking the city for $400,000 per year to 'maintain' Tiger Stadium."
That annual $400,000 payment, drawn from ticket taxes and never adequately audited to see where it's being spent, runs out this year, which is one reason the city says it needs to demolish the stadium; however, baseball organizer Peter Comstock Riley has offered to pay for maintaining the park in exchange for the right to hold minor-league games there. So far he's been turned down flat.
March 12, 2006
A's hatching Fremont plot?
Mark Purdy of the San Jose Mercury News has the baseball team relocation conspiracy theory to end all conspiracy theories today. It goes like this: Oakland A's owner Lew Wolff declares his intention to move to Fremont, California, which is as far south as you can go in the East Bay without rounding the corner of San Francisco Bay and ending up in Santa Clara County, which is San Francisco Giants country. Then he announces that the team will henceforth be known - shades of Los Angeles de Los Angeles - as the "San Jose A's," thus winning the affections of that otherwise off-limits city. Then, before actually signing the deal with Fremont, Wolff goes to Giants management and says (in Purdy's words), "Look, if I go to Fremont and call the team the San Jose A's, the Giants get nothing. But if you agree to let me actually move the team to San Jose, you'll get some compensation. How about it?"
Could it work? Wolff told Purdy he wouldn't rule any of it out (admittedly, Purdy didn't ask about the last, extortionate step), but that's in keeping with the Reinsdorf Doctrine. The bigger question is whether Fremont can come up with a financial package to make it worth Wolff's while to relocate to the end of the orange line. Given that Fremont city officials are still in the "Gee, we'd love to have a great big baseball team in our little town" stage, and any public stadium financing would likely require a voter referendum (which didn't go over too well for the Giants when they tried it in the South Bay), this should probably be classified as a longshot at this point - even if it is just crazy enough to be believable.
Giants, Jets: Tear the roof off the sucker
The owners of the New York Jets and Giants have fired back at New Jersey Gov. Jon Corzine for suggesting that they put a roof on their planned stadium so that it can host Super Bowls and non-football events. "I will walk away from this project rather than put a roof on it," Giants CEO John Mara told the Newark Star-Ledger editorial board on Friday, saying the estimated $300 million price tag for a roof would make the already $1 billion stadium prohibitively expensive for the teams. No word on whether Mara and Woody Johnson would be able to scrape up the cash to pay their property tax bill.
March 11, 2006
Soccer news, nothing but soccer news
I know the kids love the footy, so here's the latest from the world of soccer stadia:
- The company that owns the energy drink Red Bull has bought the MetroStars with the intent of renaming them Red Bull New York, and officials in New Jersey - where the team actually plays - are none too pleased. "They will not play in our stadium unless they have New Jersey in their name," warned New Jersey Sports and Exposition Authority president George Zoffinger, which is a more substantial threat than it sounds: The team's lease at Giants Stadium expires after this season, and a new $160 million stadium in Harrison, N.J. (half of which will be paid for by the public) isn't expected to be ready until 2008 at the earliest.
- A lobbyist for the city of Sandy, Utah, turns out to have been moonlighting for Real Salt Lake - which is lobbying for public funds for a soccer stadium in Sandy. "I'm not sure how someone can represent all sides and all parties and still keep everybody's interests straight," said county councilmember Mark Crockett, hinting he may call for a criminal investigation. Sounds familiar.
- The owners of the Toronto Maple Leafs stand to make up to C$100 million from advertising in the city's new soccer stadium, after buying the sponsorship rights for a mere C$10 million, according to the Toronto Star. "What you ended up with was a group of professionals at Maple Leaf Sports negotiating with politicians who were under the gun to get a deal done because the stadium had to be built to get the Under-20 tournament," an unnamed "source familiar with the negotiations" told the Star; Maple Leaf Sports VP Tom Anselmi insisted the bargain price "isn't a sweetheart deal."
- Soccer boosters are pushing for new MLS stadiums in Cleveland and Milwaukee, both of which would use tax-increment financing.
- The minor-league Atlanta Silverbacks revealed plans for a 15,000-seat soccer stadium - no financing details available yet, but apparently it will be shaped like a grand piano and built by gorillas.
(Thanks to MC for the links.)
March 10, 2006
No arena funds for Sonics this year
The Washington state legislative session ended yesterday with no action on public subsidies for a new or renovated Seattle Sonics arena, after Gov. Chris Gregoire said she had been unable to reach an agreement with the team on a $200 million financing package. It also didn't help that the Sonics owners balked at a public referendum for an arena deal, according to the Olympian newspaper, because they "not want to wait for a November ballot measure." Now instead they can wait for a new legislative session in 2007.
The Sonics management issued a statement that "we will now need some time to reflect on next steps," which presumably will include re-thinking whether threatening to yank the team out of town was such a bright idea. Seattle Deputy Mayor Tim Ceis, meanwhile, noted unnecessarily: "Primarily the issues [of disagreement] were the financial issues." What, not lack of emotional support?
March 08, 2006
Yankees stadium hearing postponed
Just got word that tomorrow afternoon's New York city council hearing on the Yankees stadium project has been postponed, reportedly at the request of the Bronx council delegation. No rescheduled date has been announced - if I hear anything, I'll post it here.
Tomorrow's Industrial Development Agency hearing at 10 am to discuss the Mets and Yanks stadium bonds is still on; I'll try to get a report from there as well.
LATE NOTE: The New York Sun reports:
The last-minute postponement came after the council's Bronx delegation raised questions with administration officials in a meeting yesterday. "We had several concerns that neither the Parks Department nor the administration could answer," a council member who represents the district where the stadium would be built, Maria del Carmen Arroyo, said. "We thought it was more prudent not to proceed until these concerns were addressed."
LATER NOTE: The hearing has been rescheduled for Tuesday, March 28, at 1 pm, with a likely subcommittee vote to follow that afternoon, and a full council vote on April 5.
D.C. stadium deal done - no, really this time
As expected, the D.C. city council finalized a Washington Nationals stadium lease yesterday, by the same 9-4 vote it approved it by last month. This now clears the way for the sale of the MLB-owned team to private owners, and for the construction of a $600-million-plus stadium near the Anacostia River.
The reaction in the media has mostly been one of relief - the Washington Post story this morning is headlined "At Long Last, a D.C. Stadium Deal" - but while lord knows I'll be glad never to have to sit through watching another D.C. council hearing, there's not much good news here for D.C. or for those concerned about the public cost of private stadium deals. The final deal caps the public cost at $611 million - $271 million more than the plan as it was first reported in September 2004; the team, meanwhile, will be on the hook for only $20 million in parking garage costs. And the Nationals will reap all revenues from the stadium, including parking, concessions, and naming-rights fees on the publicly owned stadium, while the city will collect only a few million dollars a year in rent that won't be nearly enough to pay off the public costs. Coming after the St. Louis Cardinals' agreement to pay two-thirds of the cost of their new stadium, and amid talks for the New York Yankees and Mets to roughly go halfsies on their proposed new homes, the D.C. deal is a throwback to the bad old days of '90s "you build the stadium, we get all the benefits" deals," and seriously ups the ante for stadium negotiations involving teams like the A's, Royals, and Marlins.
To their credit, even the councilmembers who voted for the deal sounded sheepish about what they'd just done. Council chair Linda Cropp declared: "I don't think anyone is happy with this whole piece. But everyone has played a role in making it a little bit better"; during the council debate, Carol Schwartz had griped, "I feel stuck. And I don't like being stuck," and said she wished she could throw the stadium lease "into the ocean." And Kwame Brown, one of three rookie councilmembers elected in 2004 on anti-stadium platforms - all of whom went on to vote for the final stadium deal - declaimed: "This is nothing we should put our chest in the air [about] and say we created the best deal for the residents of the District of Columbia. But we probably couldn't have done any better. It was this or zero." Of course, sometimes zero is still better than the alternative.
March 07, 2006
NJ gov takes second look at Jets, Giants deal
The on-again, off-again deal for a new stadium in New Jersey for the New York Giants and Jets may have hit another speed bump: New Jersey's new governor, Jon Corzine, says he's "scrubbing the numbers" to see if they're a good deal for his state. Among the items Corzine reportedly is examining: Should the teams be required to add a $100 million roof so that the stadium can be used for indoor events? Can the state get increased rent payments in exchange for donating 65 acres of free land to the project? And should the teams be required to pay property tax on the half-million square feet of development they plan to build alongside the stadium, as East Rutherford's mayor insists they should (and is now threatening a lawsuit to enforce)?
The Jets and Giants, as you might expect, say a deal's a deal, but Corzine insists it isn't until he says so. "I don't like breaking deals," he told the Associated Press. "On the other hand, a memorandum of understanding is not a contract. We need to make sure the interests of the public are served as well as what I think is a worthy objective of having the Giants and the Jets here."
Baseball blinks?
The long Washington Nationals stadium saga may be at an end after all. With the council to vote today on finalizing a stadium lease, D.C. CFO Natwar Gandhi has certified that MLB's version of the lease includes a legal "acknowledgement" of the council's $611 million spending cap. More important, Gandhi says that excess stadium tax revenues may be used to bust the cap only with the council's approval - which ain't bloody likely. Of course, it's still a mystery who will pay for cost overruns if and when they come due, but that's apparently a bridge that all parties will cross when they come to it.
So did sanity reign over Reinsdorfism in MLB offices after all? Sounds like it, if you believe the unnamed baseball source quoted by columnist Marc Fisher in this morning's Washington Post: "It was time to declare victory and move on. It was fatigue, and it was a calculation that there was nothing left to be gained. But a lot could be lost, like the whole enchilada."
Barring an unexpected twist, then - and when would that ever happen in D.C.? - it looks like Washington baseball fans will be able to enjoy watching Alfonso Soriano's leaden glove for the foreseeable future. Mayor Anthony Williams, who landed the former Montreal Expos in September 2004 with a then-$440-million stadium pledge, was predictably ecstatic: "The signed lease is the green light we needed to turn this dream into a reality. We have in place a firm cost cap, not just on the construction costs for the ballpark, but for the entire project. We've protected taxpayers and insured that they are never asked to contribute a penny towards the cost of this stadium." Sixty-one billion pennies, on the other hand...
March 06, 2006
Yanks stadium "pollsters": $800m, cheap!
Thanks to a helpful Bronx resident, I now have copies of the "Stadium Plan Frequently Asked Questions" sheet that New York Yankees employees are taking door-to-door in the South Bronx (view front and back), plus the instruction sheet that the Yanks provided to canvassers. The glossy handout includes the usual half-truths, like "The taxpayers of the City of New York are NOT paying the approximate $800 million cost [of a new stadium]" (not exactly), and "Fans attracted by Yankees baseball will spend more time and money in the Bronx" (maybe, but the plan is for them to spend it in the stadium's vast new concessions concourses, not at existing local businesses).
The biggest whoppers, though, come under the heading "Econonic Development" (sic - guess they blew the proofreading budget on Johnny Damon's contract). For starters:
[Yankee Stadium] costs the City of New York millions of dollars a year just to maintain and repair the stadium.
Nuh-uh. Currently the Yankees deduct maintenance costs from their rent payments, but even after that, the city is still making millions of dollars a year in profit from Yankee Stadium. Some city officials have insisted that in the future maintenance will outstrip rent revenues - though maintenance costs have actually remained fairly steady in recent years, while rent has soared - but right now, maintenance isn't costing the city a dime.
Then there's:
It would cost more to renovate the old stadium and make it handicapped accessible than it would be [sic] to build a spectacular, new, state-of-the-art Yankee Stadium.
Again, this flies in the face of not just reason (former Bronx borough president Freddy Ferrer commissioned a study that estimated a $189 million price tag for renovation), but the city's own figures: The city's environmental impact statement estimates $574 million to renovate Yankee Stadium, including providing upgrades demanded by the team, versus at least $800 million for a new stadium - $1.2 billion counting the costs of new parking garages and replacement parkland.
According to the Yankees' instructions, canvassers were to make this "it would cost more to renovate the old stadium" claim before asking residents' opinions of the project. If the Yanks end up releasing the poll results - and they may well not, as this smells like a "push poll" designed to influence opinions in the guise of collecting them - keep that in mind when interpreting the results.
NOTE: For some historical perspective, compare with the flyer that the Detroit Tigers handed out during their own stadium campaign back in 1996.
MLB signs Nationals lease - sorta
With one day to go before the D.C. city council votes on final approval of the Washington Nationals stadium lease, Major League Baseball agreed to the council's lease terms - but with conditions. Among the provisions, according to the Washington Post: one that "calls for excess ballpark tax revenue earmarked for debt service for the bonds to be available for cost overruns."
This, you'll recall, is the loophole that D.C. Mayor Anthony Williams proposed to use to get around the council's $611 million cap on public stadium funds - and which councilmembers quickly savaged as an attempt to evade the council's wish for a hard spending cap. The actual language - "district government non-General Fund funds may be used if required by the bond indenture" - appears to have been written to assure Wall Street bond buyers that the city wouldn't default on its debt if stadium taxes fell short of projections. But Williams has interpreted it as a blank check to use stadium taxes to pay for any future costs as well - presumably on the theory that if he dips into the tax revenues to pay for, say, overruns in land costs, he could then say, "Oops, not enough left now to pay the bondholders," and take additional tax revenues to pay them back.
Several key swing votes on the council indicated last week that this sounded dodgy to them, with Marion Barry in particular threatening "there will be rebellion" if Williams and MLB insisted on using the loophole. The council begins meeting tomorrow morning around 10 or so - tune in to see if Barry sticks to his guns.
March 04, 2006
Yanks, Mets subsidies reach $1.1 billion
With all the trees that have been killed for documentation of the New York Yankees' and Mets' $1.8 billion worth of stadium plans, you'd think there would be no surprises left. You would be wrong. Yesterday, the New York City Industrial Development Agency issued cost/benefit analyses of the bonds that would actually pay for stadium construction, and they contained a bunch of bombshells.
First off is the bonds themselves. Previously the city had indicated it would sell $800 million in bonds for the Yankees, and $444 million for the Mets; that's now up to $930 million and $632 million, respectively, with the extra dough going to cover overruns and financing costs. And while the teams would still be on the hook for repaying the bonds - with the help of all those tax and rent breaks we've discussed previously - there's another surprise: Almost all of the bonds would be tax-exempt, with only a small fraction taxable.
Why does that matter? Because tax-exempt bonds represent a public subsidy - the city, state, and federal governments are absolving bondholders from paying income tax on their earnings, in order to lower the bonds' interest rate, and reduce the teams' costs. I'd previously assumed that the tax-exempt share of the bonds would be limited to about $200 million for each team (more on why in a minute). Upping that to $866 million (Yanks) and $528 million (Mets) would increase the public bond subsidy to an estimated $238 million (Yanks) and $145 million (Mets). Adding those to our existing stadium-subsidy figures, we now get:
- YANKEES: $606 million ($136m in city land/infrastructure funds, $13m in city rent rebates on current stadium, $70m in state garage subsidies, $238m in tax-exempt bond subsidies, $44m in property-tax savings, $22m in sales-tax breaks on construction materials, $22m in forgone mortgage recording tax, $103m in forgone city rent revenues, $11m in operational and reserve funds, less $43m in new city garage revenues and $10m from memorabilia sales from the old stadium)
- METS: $523 million ($85m in city funds, $13m in city rent rebates on current stadium, $75m in state funds, $96m in forgone city parking revenues, $145m in tax-exempt bond subsidies, $39m in property-tax savings, $16m in sales-tax breaks on construction materials, $54m in forgone city rent revenues)
Even if most of the new costs would be borne by the federal government, that's still a whole lotta public smackers.
It also could very well be illegal. As you might recall, Congress outlawed the use of tax-exempt bonds for stadium bonds 20 years ago, for the very reason that it was costing the U.S. treasury bucketloads of money. However, it left a loophole: Tax-exempt bonds could be used if they were repaid using "generally applicable" taxes collected on the stadiums, or payments in lieu of those taxes (PILOTs). The Yanks and Mets plan to take advantage of this loophole by calling their tax-exempt bond payments "payments in lieu of property taxes."
There's a problem, though: They can only make "payments in lieu of" what they would actually be paying in property taxes - they can't just make up a number and then call it a PILOT. This is why the Mets and Yanks have to use some taxable bonds, and why I previously assumed only a small share of the bonds would be tax-exempt.
How big would the PILOTs have to be to pay off the new bond figures? For the Yanks' $866 million, it would be on the order of $60 million a year. By comparison, Madison Square Garden, sitting atop one of the most valuable pieces of real estate on the planet, is currently assessed to pay about $12 million a year in property taxes. (It doesn't pay them, but that's because of yet another sports tax-subsidy deal dating from the 1980s.) Now, it's certainly possible that a baseball stadium, even one in the South Bronx, would be more valuable than the World's Most Famous Arena, but five times as valuable strains credulity. Even if the Yanks get to classify some of their payments as "in lieu of" other things like mortgage recording taxes, this still seems like something that would raise red flags at the IRS - if anyone there is paying attention to the law, that is, and not just George Steinbrenner and Fred Wilpon's bond attorneys.
Other revelations hidden within the new IDA documents:
- The estimated cost of Yankees parking garages has soared, from $235 million in November to $320 million now. While the public's share remains the same - $70 million in state subsidies - this means private garage developers would now be on the hook for a full quarter-billion dollars in costs. Given that the city still hasn't even issued its Request For Proposals for developers to bid on the project, and it looks like it'd be a horrible investment, there's a fair chance the city will end up having to either offer additional incentives or build the garages itself, racking up still more public costs.
- The IDA lists full exemption from mortgage-recording taxes and construction sales taxes as two of the benefits the teams would get - then doesn't say how much these tax breaks would cost the city. Nice "cost/benefit analysis," guys.
San Antonio stadium bill: $230m?
Bexar County Judge Nelson Wolff has announced that he'll pitch a stadium-finance plan next week to lure the Florida Marlins to San Antonio. Wolff estimates that a baseball stadium would cost $300 million to build - which sounds crazy-low to me - and that he'd propose a similar public/private split as was used to build the AT&T Center for the Spurs. Reports the San Antonio Express-News:
The AT&T Center opened in 2002 at a cost of $189 million. Voters in 1999 approved increases in the hotel-occupancy and car-rental taxes to finance the county's $146.5 million share.The Spurs provided the rest of the funding, including $41 million from the arena's naming rights.
If you're good at subtraction, you'll have noticed that aside from naming-rights money - which, though usually counted as a "private" contribution, could just as easily be considered public funds since it's the rights to a public building - the Spurs kicked in all of $1.5 million for their $189 million home.
Wolff went on to say that "although construction of a baseball stadium is more expensive, we are looking at doing something similar percentage-wise." That would put the public's cost for a Marlins stadium at $232.5 million, and that's assuming San Antonio could really get a stadium built for the rock-bottom price of $300 million, which no city has managed to do since Pittsburgh's PNC Park in 2001. Wolff says he hopes to put a bond measure on the November ballot, with a new stadium open by the year 2010, which would either mean a long lame-duckhood for the Marlins in Florida, or a whole lot of time squeezed into a minor-league ballpark with an oddly familiar name.
San Antonio Mayor Phil Hardberger said he's open to the idea so long it's the county, not the city, paying for it, though he's open to paying for road improvements, which would further add to the public's bill. Added Hardberger: "Our doormat has been out for a year or so now, and we are going to welcome the first ones through the door, and it could be the Marlins." That would certainly be appropriate.
March 03, 2006
Threatdown: Kansas City edition
With a public vote on the $575 million Kansas City Chiefs and Royals stadium renovations coming up on April 4, it's time for the two teams to haul out the oblique-move-threat guns. Take it away, Royals VP Mark Gorris:
"If this passes, the Royals are part of Kansas City for 35 years. I don't know what the other alternative would be. We want this to pass."
Yes, not bad - implies the Royals would leave town without ever actually threatening to do so, and nice touch on the dismount where he leaves it up to readers' imaginations what the consequences would be if the renovations are rejected. But let's see what his counterpart across the Truman Sports Complex parking lot, Chiefs president Clark Hunt, has for his entry:
"I think if we do fail we would be looking at a new stadium." ... Last year Clark Hunt said the Chiefs would make staying in the Kansas City area a top priority, but he declined this week to speculate on where a new stadium might be. "We are not even having those types of discussions," he said. "We are counting on the election succeeding."
Wow, it's like they're reading each other's minds. Or Chapter 4.
March 02, 2006
NYC plans to completely raze Yankee Stadium
There's actually nothing new about the above headline - this has been the New York City Parks Department's plan since November, when the proposed "Heritage Field," which would have retained a few thousand seats from the House That Ruth Built, was eliminated to make way for rejiggered ballfields. (The ballfields, in turn, are necessary to replace the existing public parks that would be wiped out for the Yankees' new stadium.) But given the surprised looks I get whenever I mention that the Yanks' $1.2 billion stadium plan includes demolishing the existing 83-year-old stadium, I thought maybe people could use the reminder.
And maybe the Empire State Development Corporation needs the reminder, too. At its hearing today on the Yankees project, the state agency handed out a General Project Plan that included a schematic of the now-abandoned Heritage Field design, albeit with a couple of extra ballfields hastily sketched in about where the left- and right-field bleachers now stand. The ESDC also, for some reason, handed out copies of the city's Notice of Completion of its Draft Environmental Impact Statement, dated last September, even though the final EIS has been done for weeks now. This gave attendees the chance to read such city assertions as that a renovated or rebuilt structure on the current stadium site is unacceptable because it "would not meet several key project objectives," first of which is that "the House that Ruth Built, the 1923 stadium, would be entirely obliterated." Yeah, we wouldn't want that to - heyyyy, waitaminnit...
As for the hearing itself, there were plenty of familiar faces on hand: Construction workers wanted jobs ("My kids have asthma, but I've still got to feed them"), residents wanted to keep their parks ("You're going to dig up the track where I walk - I can't afford a health spa"), and the four ESDC staffers on the dais looked like they wanted to go home and take a nap. The most interesting new twist came when Carlos Alicea of For a Better Bronx began his comments in Spanish, then said to the confused faces before him: "See, this is the problem here," noting that while 61% of the South Bronx is Spanish-speaking, no translators had been provided for the hearing, and the EIS is still not available in Spanish. "This is a travesty," said Alicea, "and you should be ashamed." (Let the record show that the ESDC did not look ashamed.)
The real showdown comes next Thursday, when the city council holds its single solitary public hearing on the project before it votes. (I'm hearing March 22 or April 5 as possible council vote dates.) If you're interested in having a say and can't make it in person, I'm sure the office of councilmember Dan Garodnick, who's chairing, can explain how to submit written testimony.
Marlins "focusing" on San Antonio?
MLB president Bob DuPuy declared yesterday that the Florida Marlins are focusing on San Antonio, Texas as a potential relocation site if South Florida doesn't cough up an additional $100 million or so in relocation cash. Though apparently the Fish would only relocate their worldly, material selves:
Asked [by the Miami Herald] if San Antonio has emerged as the front-runner, DuPuy said, "I would not go that far. All I would say is that right now, that seems to be the temporal focus. I think it's too early to have a front-runner.''
San Antonio would seem to be a weird fit for the Marlins, given that its top bid during the Montreal Expos relocation derby was to have the team split time between a minor-league stadium and Monterrey, Mexico for ten years. It would also be easily baseball's smallest media market, with barely half as many TV households as Miami-Fort Lauderdale. But then, if you're just trying to make headlines back home, it doesn't much matter if you're serious - as Jerry Reinsdorf has said, "a savvy negotiator creates leverage."
D.C. council balks at cap-busting loophole
D.C. Mayor Anthony Williams' gambit to find $20 million in Washington Nationals stadium money under the sofa cushions isn't going over too well at the D.C. city council. Council chair Linda Cropp, who wrote the legislative language that Williams is hoping to exploit, declared yesterday that "I don't think the intent was for cost overruns" and that she'll tell the mayor not to use surplus stadium tax revenue to evade the council's $611 million spending cap; Kwame Brown, another key swing vote on the council, is likewise opposed. Councilmember Marion Barry, who helped broker the last-minute deal to pass a Nats lease in exchange for a spending cap, was, as you might expect, more colorful, telling the Washington Post:
"If there's one thing I said to the mayor, it's that I didn't want any shenanigans, no side deals like this. If he does this, this stadium is dead again. . . . We wanted a cap that was tight. Everyone was confident, so we went with it. If it's not tight, there will be rebellion."
Of course, this is the D.C. council we're talking about here, and Cropp and Barry have both opposed the stadium previously, before they voted for it. Could they just be blowing smoke to placate voters who might not be too pleased with the loophole they handed to Williams? The Washington Times notes:
It is unclear whether the council can do anything to prevent the deal from moving forward. The body will vote Tuesday on a temporary version of the cap legislation, which would extend its life for 225 days and give time for the council to pass it on a permanent basis.But if MLB signs off on the deal, it will have done so Monday, before the council can act."Once a lease is signed, a lease is a lease," Williams said. "It's a contract. You can't authorize people to enter into a contract and then change the law to de-authorize it."
Of course, this is also MLB we're talking about, and signing a lease before getting assurances that it won't have to pay a dime isn't in its nature. Oh, to be a fly on Bob DuPuy's wall this weekend...
Sonics: Democracy too damn slow
Washington Gov. Christine Gregoire and state legislators have agreed to impose a Saturday deadline for proposals to renovate the Seattle Sonics' KeyArena, and some of the likely details are becoming clearer. According to the latest proposal by Rep. Jim "Stadiums Happen" McIntire, a King County voter referendum would be held to decide on two competing plans: one for a $220 million expansion of KeyArena (the Sonics would be asked to chip in $44 million), the other for a simpler $20 million renovation.
Sonics officials reacted coolly - not because they're being asked to pay for one-fifth of the costs, but by the notion of allowing the public decide how to spend public funds. "What we're concerned with is the timing of it, beyond the uncertainty that is inherent in the vote," said Sonics president Wally Walker told the Seattle Times. "If it happens in November, it might be too late." Tell me about it.
March 01, 2006
D.C. mayor: I'll see your $611m and raise you $20m
In case you've been wondering, MLB officials still haven't responded to the Washington Nationals stadium lease passed by the D.C. city council last month - unless you count Huey Long epithets as a response. With the deadline to respond coming up next week, somebody did blink yesterday, though: D.C. Mayor Anthony Williams, who proposed kicking in an additional $20 million in city tax revenue to cover cost overruns.
Needless to say, those on the council who thought they'd passed a $611 million cap on public expenditures were not pleased by Williams' latest gambit. "This is the mushiest cap imaginable," councilmember Jim Graham told the Washington Post. "Here we go - the next loophole we can drive the truck through."
The loophole in question was reportedly inserted by council chair Linda Cropp, who added last-second language allowing that "district government non-General Fund funds may be used if required by the bond indenture." Williams says this means he can use any surplus stadium tax revenue left over after making bond payments to pay for cost overruns; Cropp's not talking; and the D.C. attorney general is still reviewing the legislation. Looks like we could be in for yet another down-to-the-wire drama in D.C. - and potentially yet another hike in the taxpayers' tab.
