December 26, 2006
Landover is burning!
Ten years after the Washington Redskins' FedEx Field was first approved, the Washington Post takes a look back at the project today. Their findings: People who didn't like it then don't like it now - "From the traffic to the noise, the whole gamut, nothing good has come out of it," says Prince George's County resident (and longtime stadium opponent) Freddie Dawkins - and those who liked it then still think it's the bee's knees - "The Redskins stadium ignited a different perspective of the Landover region," said former county executive Wayne Curry.
What about concrete evidence of the effects of the stadium? The stadium brings in an estimated $10 million a year in sales and ticket taxes, which at least would be enough to repay the public's $71 million in expense on the stadium - though given that that money came out of state coffers and a good chunk of spending by Redskins fans likely went elsewhere in Maryland before the team arrived, it's not all a net gain. Meanwhile, the Post notes that there are still "many boarded-up homes, run-down apartments and trash-strewed streets in some neighborhoods" of Landover. But how can you put a price on igniting a new perspective?
Steel costs to affect NYC sports plans?
This one somehow slipped through the weekend update news net: My Village Voice colleague Jarrett Murphy reports that the cost of steel and other construction materials is through the roof in New York City, with one major project (a water filtration plant that's being built in a public park in the Bronx - sound familiar?) seeing its price tag soar from $992 million to $1.896 billion in the past three years.
I've reported on this before - citing the Katrina Effect, among other things - but Murphy notes that the blizzard of new megadevelopment projects in New York will likely throw a new twist into things:
The fact that all those projects (the stadiums, Ratnerland, and Ground Zero) will be going on at basically the same time means that each will increase the costs for every other one, because there are only so many laborers around, and because already scarce construction material will be even harder to come by. Whether those costs hurt the developers or the city depends on how each deal is structured. But if any community goodies are contingent on developers' profits, and inflation was under-estimated when everything got costed out, that pricy copper pipe and rebar might take a bite.
The Yankees, Mets, and Nets have all committed to paying cost overruns on their new facilities, so they should take the hit for rising steel prices there. But there are associated "infrastructure" projects that could see their costs rise, too - the pilings being driven to support the Mets' new stadium, for example, and the Yankees' parking garages, both of which are being paid for by the state. (And in the case of the garages, in part by as-yet-undetermined private developers, which means it could now be even harder to find someone willing to build them without additional public subsidies.)
Also, the affordable-housing component of the Nets project is mostly set to be built as part of the second phase of the project, meaning that a combination of rising steel prices and sinking housing demand could end up jeopardizing what's been sold as the development's main public benefit. The project's estimated cost has already risen from $2.5 billion to $4.2 billion, so it's possible inflation in construction materials has already been factored in - but given the limited amount of info revealed about the project's finances, we may never know.
December 24, 2006
Weekend update: "Santa says we win!"
The stadium watch stops for no lousy caribou stampede:
- The holiday lull meant lots of room in the Washington Post for resident baseball fixture Tom Boswell to get all giddy about the new Washington Nationals stadium, currently under construction near the Anacostia waterfront. On page one of yesterday's edition, there was Boswell reporting how owner Ted Lerner's son Mark told him that the owners will spend $30 million of their own money on such improvements as a bigger scoreboard and more luxurious luxury boxes - a story that the Post headlined "Nationals Owners To Dig Even Deeper," though the team is still putting in less than 20% of the total construction cost, and all the revenues from the new improvements will go to their own pockets. And in the front of the sports section, you had Boswell declaring gleefully that the stadium is "one-third finished: on time, on budget and with a right field grandstand that has risen 10 stories ... Don't look for financing flummoxes, D.C. Council snafus or hazmat nightmares. We're past that now. Santa says we win." And you don't want to mess with the big guy.
- The Pittsburgh Penguins arena deal has only been dead for four days and already the rumors are flying about where they might move to. The manager of Kansas City's tenantless built-on-spec arena exulted that "it's beginning to look a lot like Christmas," Ontario BlackBerry king Jim Balsillie wrote to Mario Lemieux that he's still interested in buying the team (though he claims he wants to keep it in Pittsburgh), and the mayor of Hartford wrote Lemieux that "Hartford is looking for an NHL franchise to be a symbol of the revival of this city." Paper Collar Joe was right!
- It's never too late to wave the move-threat flag, apparently: In a press conference last week, Toronto Blue Jays owner Ted Rogers declared that before he bought the club, "there were Americans looking at buying it and moving it to the United States." None of which was publicly reported at the time, but given that there are recurring rumors of the Jays wanting a new baseball-only home (by 2009, SkyDome will be 20 years old and the seventh-oldest stadium in MLB), you have to figure Rogers is thinking ahead.
- Finally, a Christmas present of a sort, if you're the kind who likes maudlin spectacle: The city of Detroit has announced that fans will have one last chance to go inside Tiger Stadium, likely in late March, before they turn it over to sports memorabilia marketers to cart off the best bits for auction and ready the structure for demolition. "People will be able to go out on the pitcher's mound and take snapshots," Matt Allen, press secretary to Mayor Kwame Kilpatrick, told the Detroit News. Unless anyone has a better idea.
December 22, 2006
Lemieux: I'll take my Pens and go ... somewhere
From today's New York Times:
[Pittsburgh Penguins owner Mario] Lemieux issued a statement yesterday, turning up the heat on Pittsburgh officials by saying the team was no longer for sale and would explore its relocation options.
"After seven years of trying to work out a new arena deal exclusively in Pittsburgh, we need to take into consideration the long-term viability of the team and begin discussions with other cities that may be interested in N.H.L. teams," he said in the statement.
Saber-rattling: check.
Giants, Jets get early Xmas present from NJ
The new New Jersey stadium for the New York Jets and Giants took a major step toward becoming reality this week, as the New Jersey Sports and Exposition Authority signed off on a lease for the land where the structure will be built. Notes Matthew Futterman in the Newark Star-Ledger:
The 14-2 vote essentially clears the way for the teams to move ahead with their plans to break ground on the stadium by the end of June. All that remains is for the team to secure financing for the $1.2 billion stadium and for the plans to pass the New Jersey Meadowlands Commission's environmental review of the project.
The most interesting pieces of the lease announcement, though, don't come until the tail end of Futterman's article. Anthony Scardino, one of the two sports authority commissioners to vote no on the stadium lease, criticized the state for handing over to the teams all non-football parking revenues from the western half of the sports complex, which includes the Meadowlands Racetrack. And while the teams agreed to pay $1.3 million a year in property taxes to the town of East Rutherford, the sports authority committed to paying any property taxes above that figure - an amount that, if the mayor of East Rutherford gets his way, could be ten times what the teams will be paying.
Given that New Jersey Gov. Jon Corzine had previously insisted that the teams needed to work out their tax bill for themselves before the stadium could go forward, this has to be seen as a substantial concession by the state. Not to mention a potentially costly one: If East Rutherford's mayor is correct about the value of the property, either city or state taxpayers will now be on the hook for around $200 million in reduced tax revenues. Just imagine what the appropriate wrapping paper for that would be.
December 20, 2006
Pens' choice loses out on slots license
As Brooklyn's arena plans took a step forward, those of the Pittsburgh Penguins were thrown into turmoil today, as the Pennsylvania Gaming Control Board voted to give the city's slot casino license to Detroit casino operator Don Barden, not Isle of Capri, which had promised to build a hockey arena if it won the license. (Quote of the day, from Barden's CFO Michelle Sherman: "Oh my God, I'm crying, oh my God. I'm overwhelmed. Mr. Barden is the consummate visionary and entrepreneur.")
While Barden has committed to help fund an arena under Gov. Ed Rendell's "Plan B" - essentially, the casino operator kicks in $7.5 million a year, the state about matches it, and the team puts in less than either - the Penguins owners haven't signed on to that plan, and had previously said they'd "evaluate all of our options" once today's vote was done.
First option up is likely to be lots and lots of saber-rattling about moving the team - there are already rumors of Kansas City, Houston, and Portland being interested,, and NHL commissioner Gary Bettman issued a statement today that "the future of this franchise in Pittsburgh is uncertain and the Penguins now will have to explore all other options, including possible relocation. The NHL will support the Penguins in their endeavors." All this because the state of Pennsylvania, in deciding who will get a monopoly on casino gambling in the state's second-largest city, ignored the bid of the guys who would build its hockey team a free arena in favor of the guys who would make the hockey team pay about a quarter of the arena costs. Never play hardball against guys with no teeth.
Silver bells for Nets arena
There will be no repeat of the Miracle on 33rd Street: This afternoon, in a meeting that took all of five minutes, New York state's Public Authorities Control Board voted to approve Bruce Ratner's Atlantic Yards project, including a new Brooklyn basketball arena for the New Jersey Nets. Since the project is being overseen by a state agency that is exempt from city oversight, today's vote was the final governmental approval necessary for the project to move forward.
There had been rumors as recently as yesterday that state assembly speaker Sheldon Silver would replay his role as stopper in last year's New York Jets stadium controversy, blocking the Brooklyn deal at least until his fellow Democrat Eliot Spitzer becomes governor next month. But despite increasing pressure for him to delay the vote, Silver instead rubber-stamped the plan, reportedly in exchange for two concessions: trimming the size of the project's "Miss Brooklyn" office tower so that it's no longer the borough's tallest building, and adding 200 units of affordable (or "affordable") condos. "The changes are positive, but they're small," Brooklyn assemblymember Jim Brennan told the New York Times following the PACB vote.
The battle now turns to the courts, where opponents have filed one lawsuit against the taking of land by eminent domain, and promised to file another against the project's environmental impact statement for being "fatally flawed." The nuances of the Supreme Court's Kelo decision just got much, much more important.
December 19, 2006
D-Day for Penguins
"Wednesday will be a turning point in the franchise's future." That was Pittsburgh Penguins owner Mario Lemieux, intoning darkly about the importance of tomorrow's casino-license vote, which will determine whether Isle of Capri, which has promised to build a new hockey arena if it wins, gets the right to run Pittsburgh's first slots casino.
Until last week, Lemieux was the franchise's "outgoing owner." But all that changed on Friday, when BlackBerry king Jim Balsillie abruptly backed out of his $175 million purchase of the Pens, reportedly because the NHL refused to give him permission to move the team if the arena deal fell through. Balsillie, a Canadian, had previously denied rumors that he was looking to move the club to the Kitchener-Waterloo area of southern Ontario.
Lemieux was so steamed at Balsillie's sudden change of heart that he announced publicly that the businessman wouldn't get his security deposit back. Not that that stopped Lemieux from picking up the move-threat banner himself. "Right now, we own the franchise," declared the one-time savior of the Penguins. "We decide the fate of the franchise. After Wednesday, we will sit down and evaluate all of our options."
December 14, 2006
A billion here, a billion there
Rupert Murdoch's monkeys are at it again:
The Empire State Development Corp. now anticipates the nearly $4 billion Atlantic Yards project will generate $944 million in net tax revenues over the project's first 30 years. -New York Post article, today
Imagine: a $4 billion shot in the arm for Brooklyn - bringing 22,000 new jobs over the next decade, another 5,000 permanent jobs and $5.6 billion in tax revenues over 30 years. -New York Post editorial, today
Atlantic Yards Report theorizes that the $5.6 billion figure just adds up future tax receipts instead of figuring their present value - by my calculations, though, even the present value of $5.6 billion spread over 30 years would be at least $2.6 billion. More likely is that someone in the Post editorial offices has been sampling the funny meatballs.
In other news, ESDC's Jessica Copen reports that the agency hopes to have a new memo available soon that will spell out the revised costs and benefits of the Nets-arena-and-housing-and-office-towers-and-the-kitchen-sink project. Then they'll only have seven presents left to buy!
December 13, 2006
Nets arena to net less in taxes?
More today on the Brooklyn Nets economic impact mystery from Norman Oder's Atlantic Yards Report: It seems that in the revised Atlantic Yards General Project Plan issued last Friday by the state-run Empire State Development corporation, it revised downwards the projected tax revenues from $1.9 billion to $1.4 billion, while also reducing the projected public cost from $545 million to $453 million. (Neither the new or old figures include costs of schools, sanitation, or other services for the several thousand new residents of the apartment towers that would accompany the Nets arena.)
Oder notes that the new projections are for a 30-year period rather than a 40-year period, which could account for some discrepancy. However, he also reports, the ESDC had previously said that the 40-year time span was a "typo"; and further, a shift from a 40 years to 30 years "certainly shouldn't affect revenues from construction, which is expected to take ten years. And it shouldn't affect the average annual number of jobs. But both figures declined significantly."
When Oder's report first surfaced this morning, I e-mailed ESDC spokesperson Jessica Copen to ask about the discrepancy, but she hasn't yet (as of 7:38 pm) responded. Copen's usually good about replying to queries on Atlantic Yards, so either she's out sick today, or the ESDC is still figuring out what its answer will be. I'll report back here as soon as I hear anything.
UPDATE: Copen did reply today, it turns out, to Oder, issuing a brief statement explaining that the new figures were the result of the reduction in the size of the project by 8%. How an 8% cut in size turns into a 33% reduction in net new revenues isn't exactly clear, though Oder does his best to puzzle it out; one hopes it won't take another Freedom of Information Law filing to get the full story behind the new numbers.
December 12, 2006
NYS moves to seize arena land
New York's state Empire State Development Corporation has issued condemnation letters to property owners on the site of Bruce Ratner's proposed Brooklyn Nets arena, the first step in seizing the buildings by eminent domain. (Lame duck ESDC chair Charles Gargano said last week that no eminent domain proceedings were imminent - whoopsie!) The dispute will now head to court - well, actually, it already is in court.
The big question on everyone's minds, meanwhile, is: Will state assembly leader Sheldon Silver ride to the rescue and delay next week's vote of the Public Authorities Control Board on Ratner's Atlantic Yards plan, thus stalling things until new governor Eliot Spitzer, who has generally backed the plan but expressed qualms about the undemocratic process, takes office next month? (The PACB, you'll recall, is the same three-member board that eighty-sixed the Manhattan Jets stadium.) The city councilmember and both state legislators representing the planned arena site (if you count the newly elected state assemblymember who takes office in three weeks) have called on Silver to stop the clock on the project.
Not to be outdone, outgoing Gov. George Pataki is reportedly threatening to deny Silver and his legislative colleagues pay raises if Atlantic Yards and other projects aren't swiftly approved. We'll find out who wins this battle of the wills next Wednesday.
December 08, 2006
Weekend update: Bicoastal edition
Apologies for the sporadicity - sporadiciousness? - of news items here of late, but I've been busy wrapping up work on the new edition of Field of Schemes. (That's University of Nebraska Press/Bison Books, due out in early 2008 - look for it in your grocer's freezer.) To make up for it, here's a heaping helping of mini-news for you to cozy up with over the weekend:
- NBA commissioner David Stern traveled to California this week, where he talked up a plan for a state authority to fund sports projects - though not with the Governator because, he said, "nothing was formed enough to even suggest it." Stern added that the solution to the arena question will "come from the people who will benefit from having a multipurpose arena, and that's really, I'd say, the city, the county and the counties around Sacramento County." This is taking the lead?
- A California state senator, in an attempt to block the San Francisco 49ers' move to Santa Clara, is introducing a bill to block cities or counties from providing subsidies to induce an NFL team to move from within a 100-mile radius. (Similar legislation already applies to car dealerships and big-box stores in the state.) "This will prohibit municipalities from raiding sports teams from neighboring communities," said a spokesperson for Sen. Carole Migden - though given that the bill doesn't apply to baseball, basketball, or hockey, it wouldn't affect, for example, the Oakland A's of Fremont.
- A spokesperson for the San Diego Chargers said that the team plans to "politely decline" any offers to relocate outside of San Diego County. Then he said that if the team doesn't have a ballot measure to fund a stadium in place by next June, it will start looking elsewhere. They sure don't make commitment the way they used to.
- New York's state-run Empire State Development Corporation gave its official approval to the Atlantic Yards project that includes a Brooklyn arena for the New Jersey Nets; because neither the city council nor the state legislature will get to vote on the $4 billion project, this leaves only the New York Jets' old nemesis, the Public Authorities Control Board, plus several lawsuits, standing between the plan and reality. Among the latest additions to the plan: Two 15-story-high billboards that would be illegal under city law, if not for the fact that the ESDC, as a state agency, doesn't have to obey it.
- Bronx Borough President Adolfo Carrion, according to the New York Observer's Matthew Schuerman, "walked out of an interview on Wednesday with News12 when asked hard questions about whether the Parks Department was living up to its promises for the Yankee Stadium project."
- Finally, in news from neither California nor New York, the Orlando Magic signed a four-year deal to rename their arena after their owner's officially legal pyramid scheme. The city of Orlando will get a small cut of the proceeds, but will have to promise to buy a case of Liquid Organic Cleaner every month.
December 07, 2006
NFL approves Jets, Giants funds
NFL owners have approved $300 million in funding for a new stadium for the New York Giants and Jets in New Jersey, ending speculation about whether the league would limit its stadium financing to $150 million per facility, or allow two teams to pool their funding for a single stadium. The NFL calls it a loan, but the teams can effectively pay it back out of revenues that would otherwise have to be shared with the league, so it's really a grant. (Or maybe a groan.)
Now all the two teams have to do is come up with another $900 million, and placate the local officials who are griping about the project's property-tax breaks, and probably a couple of other things I'm forgetting. Then they can get that shiny new toy they've been bugging Santa about.
Speaking of Santa, the Giants/Jets cash, plus $42.5 million for the Kansas City Chiefs, represents the last of the funds allocated to the G-3 loan program launched at the behest of New England Patriots owner Bob Kraft (who also became the first owner to tap it) back in 1999. The NFL says it will come up with a new stadium-funding program, but first they need to come up with a new name. Here's a crazy idea...
