September 25, 2007
Does a rising Dome lift all boats?
Headline on an AP story in today's Kansas City Star:
A year after reopening, Superdome driving city's recovery
Needless to say, I had to click on this when it popped up on Google News - I've spent the last ten years challenging anybody to bring in evidence that stadiums can provide significant economic boosts to their cities, so if this was true, I wanted to see it.
The headline turned out to be based on just two statements, both by parties with an interest in promoting the idea of a New Orleans "rebirth" via dome. First, the AP cited figures, apparently provided by the local tourist board, that "a typical sold-out game puts 2,500 people to work" and that the dome's reopening following a $200 million facelift "provided a needed boost in business to area hotels, restaurants and clubs." Then there was a quote from Doug Thornton, VP of the dome's management company: "Out of this disaster came opportunity, and in hindsight, many would agree it was absolutely the right decision at the right time ... not only for the symbolism, but the economic benefit."
Let's give both these statements the benefit of the doubt, though, and assume that the dome's reopening did provide a boost to local businesses. There's an unstated question here, though, and it's vitally important: compared to what? New Orleans, in case it's slipped your attention, is still a disaster area, with affordable housing an especially dire need after many low-income neighborhoods were virtually wiped off the map by Hurricane Katrina. There are lots of ways the state could have spent $200 million, but the AP story makes no attempt to measure whether these would have generated greater economic benefits than just for a few downtown "hotels, restaurants and clubs."
We can, however, measure the one piece of data provided: those 2,500 game-day jobs. Assuming a generous schedule of 20 events (eight Saints home games, a few college bowl games, and, I dunno, monster trucks?), that translates into about 200 full-time equivalent jobs - meaning that for its $200 million investment, the state is getting about one new job for every $1 million spent. That's a worse ratio than some of the most egregious corporate subsidy deals of our time. Where's the headline trumpeting that?
September 24, 2007
Seattle sues Sonics over lease
Back atchya! The city of Seattle filed suit against the Sonics today, in an attempt to head off the team's arbitration filing and force it to honor the remaining three years of its lease on KeyArena. To press its case, the city has hired attorney Slade Gorton, who as a U.S. Senator is best remembered around these parts for brokering the deal that gave the Mariners an extra $45 million in subsidies once it became clear that Safeco Field was going to go over budget, and the M's said they'd move to Vancouver if they didn't get more cash. Takes one to know one, I guess...
September 23, 2007
Sonics file to break lease; new arena plans afoot?
Seattle Sonics owner Clay Bennett, last heard from when he said he didn't want his move threats to upstage the start of his NBA team's season, is back to playing hardball again: On Friday, Bennett filed for arbitration to get out of his KeyArena lease, and again threatened to ask the NBA for approval to relocate after October 31.
In his arbitration filing (see the PDF here), Bennett repeatedly calls the KeyArena, which was completely rebuilt in 1994, "economically obsolete," which is sports-owner code for "we can't make enough money there." (Indeed, the team's main complaint about the arena is that much of the luxury-seat and naming-rights revenue goes to the city, to pay off the bonds from the last renovation.) The filing states that the team will "make whole" the city by continuing to pay rent through 2010, but should not be bound to play there after this season.
Seattle Mayor Greg Nickels, who has promised to hold the Sonics to their lease, fired back with a statement of his own: "There have always been sensible options available to Mr. Bennett if he wanted to keep the Sonics and Storm at KeyArena. Today's actions make it clear that has never been his intention. My door has been open, is open and remains open to Mr. Bennett, but he has refused to meet. Typically, people acting in good faith engage in a conversation before seeking arbitration."
The Seattle city council previously voted unanimously to refuse any lease buyout offer, believing that a "specific performance" clause in the lease forces the Sonics to remain until 2010. Bennett's arbitration filing insists otherwise, but this is why they pay the arbitrators the big bucks.
And speaking of big bucks, there's a new plan to build a new arena for the Sonics, with an unlikely champion: Chris Van Dyk, the Citizens for More Important Things founder who's been the primary opponent of a new publicly subsidized arena, has joined with Brian Robinson of Save Our Sonics for a new scheme that, they say, can meet the Sonics' demands without slamming taxpayers. As the Seattle Post-Intelligencer describes the plan:
The odd couple's grand plan is built around construction of a huge underground parking facility at the site of outmoded Memorial Stadium. The Seattle School District stadium would then be rebuilt on top of that structure, its outer wall consisting of nicely architectured offices or apartment units that could be leased to help pay off bonds on the entire project.
Parking revenues and a regional transit center, tied into an improved monorail, also would foot part of the bill. By Van Dyk's estimate, such a massive Seattle Center remodel could be accomplished for something in the $1 billion range. He figures the Legislature would kick in the $250 million in tax extensions the Sonics were pursuing for a Renton arena, since that money now would be earmarked for wider use.
He'd like Sonics ownership, whether Clay Bennett or a local buyer, to chip in another $150 million. And if the bond money from office and apartment leases adds up right, voila, the region has solved both its Seattle Center problem and Sonics' conundrum in one fell swoop.
If this sounds suspiciously free-lunchy to you, you're not alone. First off, $250 million in state tax money is still a public subsidy, even if it's a more palatable one when it's for a multi-use project instead of just a Sonics arena. And even if the revenues from apartment and office rentals are enough to pay off the balance of the arena costs - Seattle Deputy Mayor Tim Ceis called the plan's revenue assumptions "pretty unrealistic" - they would still represent a public subsidy, since that's money that the city could otherwise be using on, well, more important things instead of giving it to the Sonics.
In an e-mail to Field of Schemes, Van Dyk doesn't deny that taxpayers will be on the hook for part of the arena, but says the public benefits of the deal would make it worth it. He also notes that, though the P-I didn't mention it, in addition to the Sonics paying $150 million up front he'd have naming rights fees and half of luxury suite revenues go toward paying off the public's share of the new arena - something that's not likely to make Bennett happy, since those moneys are the main reason he wants a new building in the first place.
"It's like making stew, and asking who paid for the carrots, and who paid for the turnips," writes Van Dyk. "At least this way, we diminish what we pay for turnips (I don't like turnips), and get much more out of it. One could argue, we are only paying for the public portions of the entire project - and we are leveraging the Sonics contribution for the rest." Or, one could argue, Van Dyk is agreeing to endorse a (diminished) public subsidy of the Sonics arena, in exchange for getting a share of the boodle to jump-start redevelopment at Seattle Center. For him, it's enough to give the stew a balanced taste. Whether it will appeal to the palates of either Bennett or the city -or, if they get a chance to chime in, Seattle residents - remains to be seen.
September 16, 2007
Harwell scales back Tiger Stadium plan
This snuck past me last week: Hall of Fame broadcaster Ernie Harwell has backed off from his proposal to preserve Tiger Stadium as a 10,000-seat venue for baseball, football, and boxing, and is instead joining forces with the Old Tiger Stadium Conservancy, a group that is pushing to save just 3,000 seats behind home plate, along with the playing field. "We wanted to be consensus builders and this is the best way we can do that," said Harwell's partner Gary Spicer.
The city of Detroit is currently planning to demolish the 95-year-old ballpark in October, though it has yet to find a developer interested in the site. Anyone interested in buying pieces of the body as souvenirs can do so at this site.
September 14, 2007
A's keep Fremont talks on simmer
Oakland A's owner Lew Wolff and his son (and co-owner) Keith Wolff gave another presentation on their proposed Fremont stadium this week, in advance of submitting architectural details to the Fremont city council next Tuesday. (Financial details? What are those?) Wolff pere assured questioners from the city council and chamber of commerce that the proposed site's traffic problems are "not quite as serious as everybody says," and that 18% of fans would walk or take public transit to games, just as at the team's current stadium - notwithstanding that the current stadium can be reached by car via more than one already-overcrowded highway.
None of which is really big news, but I just wanted an excuse to link to the scariest photo ever.
Seattle to Sonics: Stay, just a little bit longer
The Seattle city council voted unanimously on Monday to hold the Sonics to their lease on KeyArena. While Mayor Greg Nickels had already said he had no intention of allowing team owner Clay Bennett to buy his way out of the lease before it expires in 2010, the council vote assures that no buyout will be forthcoming. Just listen to councilmember Sally Clark:
"The council's intent is to keep the Sonics and Storm here and playing in KeyArena through 2010 and longer, if possible. If something magical happens and some deal none of us have thought up arises that would allow for a better outcome, the council can simply come back for a review. We meet every Monday."
Er, um, okay then. But at the very least, it sends a signal that the council doesn't intend to meet Bennett's demands for a new arena to replace the one the city completely rebuilt in 1995. Right, Seattle Times columnist Steve Kelley?
These are the next steps:
- A workable arena plan has to be cobbled together. Without an arena, the Sonics in Seattle are dead.
- Local politicians and business leaders have to continue to voice their support for the team and the arena.
They sure don't make ultimatums the way they used to...
In other Sonics news, Bennett has backed off his plan to ask the NBA for permission to relocate to Oklahoma City on November 1, but only because that's the night of the team's home opener, and he wants the players to "have the stage to themselves as they open the season." Translation: It's never nice to start out the season by being hanged in effigy.
September 06, 2007
Carrion demands info on Yanks garages
Bronx Borough President Adolfo Carrion dropped a minor bombshell today when he sent a staffer to testify that the city hasn't provided enough information on the New York Yankees stadium's $218 million parking garage plan. (In particular, he demanded copies of the draft lease and city feasibility study of the project.) While this is undeniably true, it was a huge surprise coming from Carrion - who not only was such a staunch supporter of the stadium plan that he fired a community board chair for not backing it strongly enough, but actually has an appointee on the board of the Industrial Development Agency, the city agency he was publicly telling off.
On the other hand, though, Carrion did insist on "stipulations" for his endorsement of the stadium plan itself - stipulations that were universally ignored by the Yankees and the city, none of which caused the borough president to speak up in opposition to the $799 million subsidy deal. The IDA board votes on Tuesday; if it endorses the garage plan, it either means Carrion is effectively powerless, or he never seriously intended to block it in the first place.
September 05, 2007
Yankees fund for Bronx more than a year overdue
Anybody remember that $900,000 a year community trust fund that the New York Yankees were supposed to set up for Bronx parks and schools in exchange for $799 million in public stadium subsidies? (And yes, that is the most lopsided Yankees deal since the one involving Bob Sykes.) Geoffrey Croft of NYC Park Advocates did, and called the state attorney general's office to see if the not-for-profit organization to run the fund - which according to the agreement "shall be established upon the commencement of the construction of the Project," i.e., last August - had in fact been set up.
What he discovered, according to today's Daily News:
More than a year later, the required structure has yet to be set up for turning the paper agreement into cash grants - totalling $800,000 a year - for needy community groups, schools, youth and sports teams, and other nonprofit organizations.
The agreement also calls for the Yankees to provide 15,000 free Yankee tickets a year to Bronx youth and sports groups and others, along with sports equipment and promotional merchandise valued at $375,000 a year.
None of that has happened because Bronx elected and political officials haven't set up the required Bronx Community Trust Fund to administer that part of the agreement. Nor have they obtained the proper charitable exempt status from the Internal Revenue Service.
"There have been too many cooks involved in making the soup," one knowledgeable Bronx official said.
The Yankees placed the $800,000 that could have been paid out this year in escrow until the trust is properly established.
Bronx Borough President Adolfo Carrion released a statement that "the Yankee Fund Advisory Panel has recently been created and it is expected that this panel will convene shortly." According to last year's agreement, though, the panel is just a body of members "appointed by the Yankees, the Bronx Borough President and other Bronx elected officials in consultation with and approval from the New York City Council Bronx Delegation" to oversee the actual fund - Carrion's office hadn't responded by the time of this post as to whether the non-profit fund itself has been set up, or whether the panel members have even been approved by all parties. But hey, what's 13 months between friends?
Santa Clara stadium vote pushed back
Plans for that $850 million or so San Francisco 49ers stadium in Santa Clara, which have been on the back burner for much of the year, aren't showing much signs of being front-burnered anytime soon: City officials now say a public vote on the project definitely won't take place during the February presidential primaries. "February is out," city councilmember Dominic Caserta told the San Jose Mercury News. "It could be June, but it could take until November."
Meanwhile, Great America, the theme park operators whose parking lot would be the stadium site, still hasn't decided whether to okay or veto the plans, three months after declaring, "We're opposed to the development at this point in time." "There's really not a timetable at this point," company spokesperson Stacy Frole told the Merc News. "There's been quite a bit of information going back and forth, and we need to take our time and make sure we're analyzing this information." Frole didn't say whether some of that information involves dollar figures.
