October 27, 2007
Gammons vs. Gammons
"The first thing that [team architect] Janet Marie Smith did was knock down this huge, ugly wall that encased the park. Then they added the Monster seats. People complain about it, and all the ads. But you know what? Then they couldn't have players. And people now have really come to embrace it, because the seats don't change. They're still as uncomfortable as they ever were and all that. But the place has the feeling of a new park." -ESPN's Peter Gammons, explaining why renovation of Fenway Park was a good idea, Oct. 22, 2007
"The park is a '53 Fairlane with 457,163 miles. They can't keep patching it. It can't be rebuilt on that swamp. They can't clean it. They'll never be able to easily get you two dogs, two beers and a pretzel." -ESPN's Peter Gammons, explaining why renovation of Fenway Park would be impossible, Nov. 12, 2000
October 26, 2007
Stern: Seattle lacks "heart" for subsidies
NBA commissioner David Stern talked with the media yesterday about teams' new-arena plans, spending most of his time grumping about Seattle voters' opposition to arena subsidies. "I think it's fair to say that there was a very sort of proactive anti Seattle Sonics movement," said Stern, adding that state house speaker Frank Chopp has said the Sonics arena bill "would get out of committee over his strenuous objections, shall we say. So there was no heart whatsoever for assisting the Sonics team."
Stern went on:
We were in consultation with the team that hired a whole new set of lobbyists and PR consultants and arena consultants, did everything right. We'd love to have found the path that would see them staying. But right now it just seems that either they'll be there for the duration of their lease or they won't depending on the outcome of these litigations or some divine inspiration that someone may have with respect to a new arena and a suitable funding for it.
Of course, everyone from Stern to those PR consultants knows what would allow the Sonics to stay: Either cough up the money themselves for a new arena (team owner Clay Bennett was asking that more than $300 million of the $500 million be paid for by the public), or if that's too rich for their blood, stay put in KeyArena, which was just renovated in 1994. The real issue here is that Bennett wants to keep all luxury suite revenues for himself, rather than using them to pay off arena debt, as is the case at KeyArena - but it's just so unseemly for a sports commissioner to say, "I'm sorry, but the city ignored our ransom note. And we didn't even ask for unmarked bills!"
Stern was more upbeat, albeit unspecific, on other arena topics:
- The Orlando Magic are "busily asking me when they can submit their application for an All Star Game, and I thought it was premature before a shovel went into the ground," said Stern . "But they're anxious and they're poised."
- Re: the New Jersey Nets and their planned Brooklyn move: "We got a report on Brooklyn where foundation work necessary to clear the site is in full swing and we're waiting to the end of certain lawsuits that have been decided in their favor but are subject to appeal, and as the appeal time runs out, that's likely to accelerate." (Actually, only one of the two suits filed by Brooklyn arena opponents, challenging the taking of private homes by eminent domain, is on appeal; the other, charging that the state's environmental review process was insufficient, has yet to be ruled on by a lower court.)
- For the Sacramento Kings: "There's a lot going on there. We think we have come up with a notion having to do with the Cal EXPO, California Exposition and Sports Authority, the ability to deal with that, and do something that will be great for the community, require a minimal not require a referendum, and could lead to a path, through a great development that was consistent with the community desires, an arena would rise that would assure the long term presence of the Kings in Sacramento."
- In Las Vegas: "The building that's going on in Las Vegas is incredible. There are still competing sites with different visions. Several expressions of interest, of prospective owners of an NBA franchise in Las Vegas. But it's still at a very early stage, and the committee is just going to continue to watch the situation, watch the building, talk to people, not make any specific plans nor draw any lines in the sand as to what circumstances there would be, under which we would have a team in Las Vegas."
October 24, 2007
Crying Wolff: Rashomon edition
It's all in the spin. Here's how ESPN.com reported on the latest declaration yesterday by Oakland A's co-owner Lew Wolff:
The co-owner of the Oakland Athletics says the team has ruled out remaining in Oakland as it pursues a new ballpark in Fremont, Calif., about 30 miles away.
"We don't want to move. We don't want to start pitting cities against each other, but it's out of the question we'll stay in Oakland," Lew Wolff said Monday after giving an address and answering questions at the Commonwealth Club in San Francisco.
Finally, a sports team owner willing to commit to a city before he's extorted money from it with a move threat, right? But wait - here's how the same story went in the San Francisco Chronicle:
The Oakland Athletics will leave Oakland regardless of whether Fremont approves plans for a new stadium, team co-owner Lew Wolff said Monday.
"We don't want to move. We don't want to start pitting cities against each other, but it's out of the question we'll stay in Oakland," he said after a speech at the Commonwealth Club in San Francisco.
Suddenly we have not a promise but a threat. As columnist Ray Ratto writes in today's Chronicle:
In fact, he said anything was possible except staying in Oakland, an almost clever way of saying, "Support my FisherWolff Baseball Village in Fremont, or you'll never see us again."
Almost clever, that is, because he was trying to reverse the balance of leverage without saying what his leverage is - because he, in his role as the front man for team owner John Fisher, doesn't have any. He has the concept of Fremont, the reality of Oakland, and ... well, nothing. No other city, no other plan, no other scheme.
And how do we know this? Simple. There is no other place for them to go - not Las Vegas, not Portland, not Monterrey, Mexico, nowhere. Fremont is the totality of Wolff's plan, and if the voters or civic leaders balk, he has Oakland. Period.
Given that Wolff's stadium talks with Oakland have been pretty much dead for almost two years now, he potentially gets a win-win here: Fremont officials can read his statement as a commitment to their city, while A's fans can hear the underlying threat and rally around his Fremont stadium plans as necessary to keep the team local. Unless A's fans read Ratto's column, and Fremont officials hear the threat and feel snubbed, in which case it all blows up in his face. But that's gamesmanship for you.
As for real news with any, you know, news to it, Wolff didn't have much, dismissing fan concerns that his planned 30,000-seat stadium would feature traffic nightmares, higher ticket prices, and fewer available seats by saying he hoped those problems would be solved by the time the stadium opens. (Maybe we'll all be using hexadecimal by then and 30,000 seats will really mean 196,608?) He also said he'll be filing an official development application with the city of Fremont in the next two weeks, which hopefully will provide some hint of an inkling how the heck he plans to pay for it.
October 23, 2007
Pittsburgh's annual stadium tax exemption tab: $21m
Pittsburgh controller Tony Pokora issued a report yesterday finding that the Steelers, Penguins, and Pirates save $21 million a year in property taxes by having their facilities be owned by the state, not the private teams. (The teams do own the part of the buildings that matter: the revenue streams.) "The public has to pick that portion up," said Pokora. "The taxpayers of the city and the county are being burdened."
Mayor Luke Ravenstahl dismissed the issue, saying that since the teams don't own the facilities, it's not "something we need to focus on at this point." But some other states do require private entities holding tax-exempt land to pay payments in lieu of property tax (PILOTs) - Yale University, for example, pays 77% of what it would be taxed if it weren't an educational institution. And the New York Yankees and Mets are paying PILOTs on their new stadiums, albeit PILOTs that aren't really PILOTs.
Of course, such niceties aren't likely to make it into the daily newspaper coverage - especially if you're the Centre Daily Times, which headlined its AP story on the report this way:
Controller says Pittsburgh sports teams don't pay property taxes
I'm all for the press being skeptical of politicians' pronouncements, but come on.
October 19, 2007
Public cost of Newark arena nears $400m
With the New Jersey Devils' Prudential Center set to open next week, the city of Newark is pulling out all the stops to make sure that hockey fans (and Bon Jovi fans, since they're the official opening-night act) feel comfortable in the big, scary city. Reports the Newark Star-Ledger:
Newark has posted signs, added lighting and assigned extra police downtown. NJ Transit has assigned scores of yellow-jacketed "ambassadors" at Penn Station and Broad Street Station. And the arena will post train schedules after the event.
Not that any of this is a bad thing - well, arguably some of it - but it does all cost money, driving the public cost of the arena still higher. The Star-Ledger reported on Monday that the public cost will reach $358 million (out of a half-billion-dollar-plus project) once money is found to build a pedestrian walkway over the McCarter Highway, which inconveniently sits between the nearby commuter rail station and the arena site. The city also agreed to build an additional $19 million in parks near the arena as part of the development agreement.
While the paper doesn't give estimates for the cost of the extra police and lighting, urban planner Judith Grant Long has estimated that police, fire, and other services for a sports facility can run between $2 million and $6 million a year. At even a fraction of that rate, it won't take too many years of calming jumpy visitors for the public's arena price tag to top $400 million total. For that kind of money, you'd think they could have just bribed people to visit downtown.
October 16, 2007
Urinal! Getcher urinal!
The Tiger Stadium memorabilia auction has concluded, and the resulting haul is: $192,729. Add in $300,000 from selling pairs of seats from the historic ballpark ($1.7 million paid, less about $1.4 million to get the damn things out of there) and the city of Detroit will rake in about a half-million bucks from slicing up the stadium. The Detroit Free Press declared this a "home run," though given that the St. Louis Cardinals brought in more than $6 million from their own memorabilia sale for the much less historic Busch Stadium, some may disagree. (It also indicates that some people's estimates of a $10 million windfall from selling off bits of Yankee Stadium might be a tad optimistic.)
Some curmudgeons might also point out that it's bad form to be selling off a building before it's even been decided whether to tear it down yet, but who are we to judge?
October 12, 2007
Yanks $288m garage deal is approved
What do you get for a team that has everything? How about $288 million worth of parking garages? The New York City Industrial Development Agency approved the Yankees' three new garages, sporting 3600 spaces, on Tuesday, after a brief kerfuffle in which the Bronx borough president demanded more information about the plan. (Carrion's representative on the board, it turned out, didn't show up until after the vote - then retroactively voted yes.)
The state of New York had already committed a $70 million "capital subsidy" to the garages; the rest will now be funded by tax-exempt city bonds, and paid off by garage revenues. If the revenues fall short - which seems pretty likely - the city will have to pay the shortfall out of its $3.2 million in expected rent payments. As Juan Gonzalez of the New York Daily News explains:
The new garages, the ones with thousands of additional spaces, the ones that will be charging $25 per game for parking, will be required to pay $3.2 million annually in rent to the city.
But that's only after the bond service and expenses are paid.
"If in any year, the project cash flow is insufficient to pay full rent to the city," says the EDC memo, "such rents will be deferred with interest ..."
In other words, after the bondholders get theirs, after all the management fees for the garages and employee salaries and the maintenance and overhead is taken care of, then and only then will city taxpayers see a dime for all the land and financial support given to the new Yankee Stadium garages.
Here's betting we never see a nickel.
If not, since the garage rent payments have previously been counted as a credit against the city's costs on the Yankees project, that's about another $50 million in present value that the city will be out on the stadium deal. Add it to the Steinbrenners' tab.
October 11, 2007
Great America offers to sell to Niners
The owners of Santa Clara's Great America theme park, who have been holding up plans for a San Francisco 49ers stadium in their parking lot, still say they don't like the stadium idea, but are now willing to sell their whole theme park to the team. "When Cedar Fair concluded that an amusement park and the stadium as proposed could not successfully coexist, Cedar Fair offered the city and the 49ers the option of redeveloping the entire parcel," said a statement by Cedar Fair Entertainment Co. How much the theme park would want for its land is unknown - the parcel was assessed at $114 million last year, but as we've seen before, that doesn't necessarily mean anything.
When is a cost overrun not a cost overrun?
We don't usually cover European stadia here - not until our budget request for a team of research interns is met, anyway - but this one seems worth noting: Britain's Olympics authority announced yesterday that its stadium for the 2012 Summer Games will cost 496 million pounds (slightly over $1 billion), not the 280 million pounds ($570 million) that was originally projected. But, says Olympic Delivery Authority chair John Armitt, just because the cost has doubled doesn't mean that the cost has, you know, doubled:
Armitt said the revised figure was "exactly in line with budget", and told a meeting of the London Assembly that it was "grossly misleading" to suggest that the cost of the stadium and other facilities had doubled since 2005. He told the Assembly that the huge increase in the revised figure could be explained by inflation - the bid book was based on 2004 prices - the inclusion of VAT which had been omitted from the original calculations, converting the stadium from its temporary Olympic capacity of 80,000 to its 25,000 permanent capacity, and additional construction costs, including earthworks on the site. "To suggest that costs have doubled from the bid book represents a grossly misleading figure for the public," he said.
So it's just $400 million in expected overruns. Isn't that reassuring?
Harvard prof: Public pays 80% of stadium costs
The written testimony from yesterday's Congressional hearing on stadium funding is now online for download from the subcommittee's website. (Scroll down a bit for the links.) I haven't finished reading through it all myself, but among the highlights are revised figures for total sports subsidies in the U.S., courtesy of our old friend Harvard professor Judith Grant Long, who has painstakingly catalogued all hidden subsidies such as tax breaks and sweetheart lease terms:
Starting with cost figures provided by the sports industry, public funding for the 82 new facilities opened between 1990 and 2006 totals approximately $12 billion. This estimate is based on an average facility price tag of $253 million (in 2006 dollars), an average public subsidy of $144 million, translating to an average public share of facility costs measuring 57 percent.
My research ... shows that these figures ar the tip of the proverbial iceberg. I argue that governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land, infrastructure, as well as the ongoing costs of operations, capital improvements, municipal services, and foregone property taxes.
Adjusting for these omissions, my "full count" estimate of total public funding for these same 82 facilities is $18.5 billion - representing a 55 percent increase over industry figures, of $6.5 billion in uncounted costs. These figures are based on an average of $80 million of uncounted costs for each individual facility, increasing the average public subsidy to $225 million, and the average public share of total costs from 57 to 80 percent.
Now that's a whole mess of cupholders.
October 10, 2007
Congress takes on stadiums, cont'd
For those of you who missed round one of the Congressional hearings on public stadium funding, today is round two, as Rep. Dennis Kucinich's Committee on Oversight and Government Reform Subcommittee on Domestic Policy takes on the question of whether sports facilities "divert public funds from critical public infrastructure." (Otherwise known as the "Did the Twins make the I-35 bridge fall down?" question.) I won't be there this time, but plenty of people I've written about here will, including Minneapolis Federal Reserve VP Art Rolnick, Harvard urban planning professor Judith Grant Long, and Good Jobs New York director Bettina Damiani, as well as hopefully again at least one guy who looks alarmingly like Bud Selig.
The action starts at 2 pm Eastern time, and you can follow along at your computer via webcast on the subcommittee's website.
October 03, 2007
Yankees billed city for souvenirs, bar tabs
Fans of last year's revelation that the New York Yankees billed taxpayers for their own stadium lobbyists (calling them "stadium planning costs") will be excited to read my article in this week's Village Voice, which reveals that the team subsequently submitted receipts for everything from crystal-baseball souvenirs to luxury suite bar tabs in an apparent attempt to max out their rent credits.
If this shows that George Steinbrenner has remarkable, um, chutzpah, city officials deserve equal blame for enabling this behavior. As I write in the Voice:
Mayor Mike Bloomberg has long insisted that his hands were tied by the Giuliani lease. But the latest documents show that Bloomberg's largesse to the Steinbrenner clan has gone far beyond even what was allowed by his predecessor. The original lease provisions allowed the teams to deduct "all [stadium planning] costs and expenses incurred by or on behalf of Tenant during the Credit Period" - defined as from January 1, 2001, through December 31, 2005 - up to a limit of $5 million per calendar year. By the end of 2005, however, the Yankees had only spent down $16 million of their allotted $25 million.
According to the parks department, the team was nonetheless allowed to deduct an additional $9,035,636 from its rent the following year, after the stadium-planning clause had expired. (The Yankees got an additional no-questions-asked $5 million rent break in 2006, as well as similar reductions in 2007 and 2008, courtesy of a clause added by Bloomberg as part of the final stadium deal.) Mayoral spokesman Jason Post says the lease was amended by Bloomberg in 2005 to allow late deductions "because the project was delayed."
Read the full story here.
October 01, 2007
Cal Expo mulls Kings arena
The Sacramento Kings arena plans are back from the dead. On Friday, the board of the California Exposition & State Fair voted to open negotiations with the NBA on building a new arena at the state fairgrounds on its land northeast of downtown.
To fund the arena, explains the Sacramento Bee:
The idea is to lease some of state-owned Cal Expo's 360-acre gold mine of underused land to a developer for building stores, offices and homes. NBA and Cal Expo officials hope such a development could produce enough money to both fund an arena as well as refurbish the fairgrounds. The price tag could easily top $650 million.
Of course, if the Cal Expo land is a "gold mine," one would think it would be so even, or especially, if a large chunk of it didn't need to be devoted to a basketball arena. (Despite what the Newark Star-Ledger misquoted me as saying this morning, there is little evidence that sports facilities make good catalysts for local development.) According to the Bee, state assemblymember Dave Jones, an arena funding critic who serves as an ex officio member of the Cal Expo board, "tried unsuccessfully to get the board to direct staff to specifically look at redevelopment proposals that didn't include an arena, and compare them with one that did."
