November 30, 2007
Rays stadium: The pretty pictures
The Satan-free Tampa Bay Rays rolled out the renderings this week, providing some glimpses of their proposed 35,000-seat, $450 million, sail-roofed waterfront stadium. It's hard to tell much about the design from the limited views made available - nothing of the interior seating bowl, for example - but they do seem to have figured out how to squish a modern stadium into a 10-acre site, albeit by moving a road and filling in part of the bayfront.
As for how it would be paid for, the St. Petersburg Times took a shot at unraveling the finances, concluding (as I did three weeks ago) that while the project wouldn't directly use public tax money, it would use public assets:
City and county property taxes from the Tropicana site would be redirected under a city program already in place into downtown capital projects - in this case, the new stadium.
The money, of course, is not the team's to spend. But without the Rays moving to the waterfront, there would be no money for the city or county or any other taxing authority to spend, either.
In that regard it's not a new tax, but rather the sale of a city asset, [city councilmember Bill] Foster and others said Thursday.
In other words, the city would be paying off the Rays for vacating the Tropicana Dome site and opening it for development by giving the team a cut of the proceeds. How much of a cut? The Rays owners say as much as $300 million - which, given that the entire site is possibly worth only $200 million, could come to more than the entire pie. That seems an awfully high price to pay for banishing indoor baseball, even given recent precedent in that area.
If all goes according to the team's plans, the public will get to weigh in on the project next November in a citywide referendum. Given that, according to a St. Pete Times poll, 57% of city voters favored a new stadium if taxpayers weren't paying for it, and 69% opposed it if they were, a lot could hinge on the semantics of whose money this really is.
November 27, 2007
Tiger Stadium death watch
For those keeping track, the ever-impending demolition of Tiger Stadium has now been pushed back to January or February, according to a mention in the Detroit Free Press. This will make it almost a year and a half since Mayor Kwame Kilpatrick initially planned to raze the historic ballpark - though admittedly, he was delayed a bit by some little qualms about not having any developers interested in doing anything with the site once the stadium was gone. (Fortunately for Kilpatrick, less qualmful heads prevailed.)
Magic arena moves ahead
The Orlando Magic arena plans took two steps forward yesterday, as hotel magnate Harris Rosen dropped his petition drive against using hotel taxes for the project, saying there was insufficient public support; meanwhile, the city council voted unanimously to approve selling $340 million in municipal construction bonds. (The total project cost is estimated at $480 million.) The bonds themselves can't be sold until the city finishes acquiring the land for the arena; a hearing is scheduled for next week on the use of eminent domain to force private landholders to sell.
So far as I can tell, the only money the Magic will be putting in is $50 million in cash, plus $64 million in "upfront lease payments" - or if you prefer to think of it this way, $114 million in cash now in exchange for being excused for paying rent in the future. The team, then, is paying a little more than one-quarter of the construction cost and reaping 100% of arena revenues; the public is paying almost three-quarters and getting bupkis. Feel like signing a petition now?
November 18, 2007
Rays: New stadium will bring cash windfall, rain of puppies
The Tampa Bay Rays owners don't even have a stadium funding plan yet, but they're already insisting that the deal, whatever it is, would be great for the city, issuing a 600-page report saying it would create 2500 jobs, $1 billion in new investment, and more than $20 million a year in new property and sales taxes. Now I know I've heard this one before.
MLS commish: We'll go where the subsidies are
It's been quite the week for blunt subsidy demands: MLS commissioner Don Garber said on Friday that the league will only put an expansion team in Philadelphia if Pennsylvania agrees to a $40 million stadium subsidy. "If that happens, then Philadelphia has an inside track," Garber told reporters. "If it doesn't happen, then Philadelphia can go way down on the list."
Added Garber in an interview with the New York Times of his sales pitch to would-be soccer cities: "We take the model to next city and show how it spurred development and is less expensive; $100 million versus $500 million for a baseball or football stadium." Where have I heard this argument before?
Predators, Nashville agree to $4M a year in lease breaks
The new owners of the Nashville Predators and the city of Nashville have agreed to revisions of the team's Sommet Center lease that the owners insisted were necessary to keep the team in town. I've only skimmed the agreement, but it looks like the big items are that the team owners will get a $750,000 a year rent reduction, a cut of non-hockey revenue, plus a share of any sales tax revenue at the arena exceeding what's currently collected - effectively sales tax increment financing (STIF), which is widely considered even more economically dubious than regular TIFs. (The total resulting transfer of money from the city to the Predators has been estimated to total $4.2 million a year.) The team can also opt out of the lease as soon as 2012 if attendance drops below 14,000 a game, a figure that the team has had a hard time exceeding of late.
The new lease is the result of a months-long shakedown of the city by the new owners, who insisted they'd let out-of-town interests by the team and move it if they didn't get lease concessions from the city. Or, as the editorial board of the Tennessean newspaper puts it:
Nashvillians owe a debt of gratitude to the city and the prospective buyers of the Nashville Predators for the way they have worked out a way to keep the NHL team here. ... The two sides exploring a new lease could have taken adversarial positions in their talks, but the negotiators seemed to be engaged in the pursuit of a common goal. From all accounts, the negotiations were conducted like a joint venture, not a face-off, and the city should benefit from that effort. It would be nice to see that spirit continue as the process moves to the Metro Sports Authority and Metro Council.
These things always go so much more smoothly when everyone's on the same page.
November 14, 2007
Tampa Bay stadium plan leaves much unanswered
More developments, and quite a few open questions, about the recently revealed plan for a new Tampa Bay Rays stadium:
- The 70 acres of land under Tropicana Field, which team owners would want to develop as part of a stadium deal, could be worth as much as $200 million to private developers. It's not clear that all of that money would go to the Rays, though - the city, which leases the land from Pinellas County (and in turn leases the stadium to the Rays) could be looking at some of it to help pay off its $100 million in remaining construction debt on the Trop.
- Even if the Rays owners given all the development money, with the team kicking in $150 million and the state $30 million (in present value), that would still leave about a $70 million funding gap on what's projected to be a $450 million stadium. Where this money would come from, no one knows.
- The city would benefit from development of the Trop site because the land would go back on the property-tax rolls. Of course, if it kept the development rights for itself and told the Rays to go take a long walk off a short pier, it would benefit even more, if you don't count the outrage of all the Rays fans. (Okay, both the Rays fans.)
- Florida Gov. Charlie Crist thinks the whole idea is just peachy, saying today: "I love the idea, from what I've read. It sounds great to me. I envision, sort of - isn't it Giants stadium that;s on the water, too? Where they're playing now is fine, and has served them well. But I think the opportunity to create an ambiance right on the waterfront in St. Petersburg is brilliant. I really do. ... I view, as a significant part of economic development, what sports does for Florida. Whether it's at the college level or the professional level, it's jobs, jobs, jobs for a lot of people. ... I also would be supportive of the one in Miami ... I think it's great. The waterfront in St. Petersburg is glorious, as it is all over the state."
November 12, 2007
When is a tax not a tax?
Seattle Times columnist Blaine Newnham thinks that the best way to resolve the Seattle Sonics standoff is to give the team what it wanted in the first place:
Before Bennett, the Sonics proposed as a way of paying for the remodel of KeyArena that the same tax that paid for a majority of Safeco Field and Qwest Field - a county tax on restaurant meals and rental cars - be extended.
Not added or increased. Just extended.
If anyone can explain why adding future taxes is any less of a tax increase than adding them now, e-mail me. Or better, e-mail Blaine Newnham.
November 11, 2007
Rays float land-rights-for-stadium deal
The Tampa Bay Rays - who got the Devil out of them earlier in the week - revealed Friday that they're actively looking to get a new stadium built in downtown St. Petersburg. The new stadium would be built on the site of the city-owned spring training facility Al Lang Field, would hold 35,000 fans, would cost $450 million, and would be paid for ... well, that's the hazy part:
The Rays will front $150 million, about a third of the cost. They also plan to seek state sales-tax rebates that would amount to $60 million. That measure would require approval from the Legislature. As the plan currently stands, the team doesn't anticipate asking the city to levy any new taxes or divert money from existing funds to the new project.
They hope to draw the biggest share of the necessary revenue from the sale and redevelopment of the current Tropicana Field site, but are unsure what the value of that land might be. Early talks have centered on luring retail outlets that would have a regional appeal compelling enough to draw visitors from surrounding counties.
Let's break this down. The state sales-tax rebate that has been handed out to other Florida sports teams is actually $2 million a year for 30 years, which would only pay off about $30 million in present-day stadium construction expenses, not $60 million. So that would leave about $280 million unaccounted for, much of it apparently to come from development on the Tropicana Field site.
Tropicana Field, though, is owned by Pinellas County (and leased back to the city in a complicated tax dodge), so normally any money from developing that site would go to the county, not the Rays. Add in that Al Lang Field is owned by the city of St. Petersburg, and the Rays are effectively asking to develop two publicly owned parcels and keep the proceeds for themselves - and that's before knowing whether the team would even agree to pay rent to the city on the new park. It's yet another sign that, as I wrote last year, teams are increasingly asking for development rights in lieu of cash, since while they're just as valuable, they don't make for as many nasty headlines.
It's also worth noting that the Al Lang site, as pictured in the St. Pete Times, is way too small to fit a modern major-league baseball facility, even one with only 35,000 seats. Add in that the Rays say they'd realign the field so that home runs to right field would end up in the bay, like at the San Francisco Giants' park (this would also put home plate in the traditional southwest corner, to keep the sun out of batters' eyes), and it's almost inconceivable a stadium could fit on the current site without either taking some adjacent property or building out into the water.
The Rays' leverage to make any demands on taxpayers is limited, given that they have an iron-clad lease holding them to Tropicana Field through 2027 - so if the city says no, it's not like the team can up and threaten to move to Orlando. Certainly no one's a fan of the Trop, which was designed at the height of '80s fixed-dome ugliness - but with the city still $100 million in debt on the place, one would hope that local officials would at least ask the Rays to pay their own way before letting them out of their lease two decades early.
November 09, 2007
Stern to Seattle: If you can't take care of your team, we're not getting you another one
Apparently unsatisfied with the response to his grumbling over Seattleites lacking the "heart" for Sonics arena subsidies, NBA commissioner David Stern upped the ante yesterday, telling reporters in Phoenix:
"I'd love to find a way to keep the team there. Because if the team moves, there's not going to be another team there, not in any conceivable future plan that I could envision, and that would be too bad."
And telling reporters in Oklahoma:
"If the Sonics do move, that would be too bad, because the NBA would be very unlikely to have a team in Seattle again."
Needless to say, Stern would be cutting off his nose to spite his face if he followed through with the threat: Seattle is the nation's 14th-largest media market, which isn't something you leave vacant lightly. Seattle deputy mayor Tim Ceis, who has been one of the most vocal local critics of the Sonics' arena funding demands, certainly seemed in no mood to play Blackmail, replying:
"If his strategy is to increase pressure on the city and state, it's not working very well. He's creating an exact opposite reaction. My suggestion is that Mr. Stern stop with the verbal airballs and talk to us directly instead of taking shots through press conferences.
"We hope he isn't trying to aid and abet Mr. Bennett's strategy for trying to break the lease. We'd like to take him at his word that he wants to keep the team here, but it's hard to believe that with all this verbal nonsense being thrown at us. It's getting a little old."
November 08, 2007
MLB: Marlins should pay less for stadium
Is there some kind of Florida statute that any Marlins stadium deal needs to have a funding gap? With the team's focus now shifting from a downtown location to the site of the Orange Bowl - which hosts its final college football game on Saturday - all eyes have been on using $50 million in city and county money already approved for renovating the Orange Bowl to inside close the $30 million Marlins funding shortfall that's been in place as long as anybody alive can remember. Instead, on Tuesday MLB president Bob DuPuy declared at the baseball owners' meetings that the Marlins should be allowed to put in less of their own money for a stadium at the Orange Bowl site:
"The last thing you want to do is build a brand-new ballpark down there and have the team fail. Everybody recognizes that. The level of contribution the team makes has to be commensurate with what they believe they're going to be able to generate from a new ballpark and be viable."
(Note to readers: "Viable" is a technical sports management term meaning "as profitable as humanly possible.")
This is the first instance I can remember of a team or league responding to a stadium proposal by immediately reducing the amount of private money they were offering. Maybe somebody needs some haggling lessons.
November 07, 2007
Putting Newark on the map
That pricey New Jersey Devils arena in Newark is already paying dividends in terms of the city's public image. Check it out:
In a video segment posted on ESPN.com last week, [hockey commentator Barry] Melrose described the recently opened arena as a "beautiful new building" but added, "Don't go outside if you have a wallet or anything else, because the area around the arena is just horrible."
Melrose later apologized, and told Newark Mayor Cory Booker he'd like to come visit the area and have lunch. So that's gotta be ten bucks in new economic activity the arena has created! Plus tip!
November 04, 2007
Spurs arena spurs little development
Today's San Antonio Express-News takes a look at the neighborhood surrounding the Spurs' now five-year-old AT&T Center, and finds not a whole heckuva lot in the way of economic renaissance:
A new tattoo parlor on Houston Street appears to be the latest investment in the neighborhood. It opened in a stretch of boarded-up buildings in early 2006, said David Leon, the shop's ornately tattooed owner. ... Despite a lot of talk and studies, the neighborhood around Leon's shop hasn't changed much since Nov. 2, 1999, when voters overwhelmingly agreed to subsidize the arena with a venue tax on hotel rooms and car rentals. The team wants to tap into the venue tax again, a move that will be up to voters. The Spurs started with a wish list of $164 million in improvements for the AT&T Center. The county told the team to whittle their proposal to $75 million.
Adds Spurs spokesperson Leo Gomez of the notion of an arena-spawned economic boom: "We know better than that. It hasn't worked in any other community in the country. And it's not going to happen here." Now he tells us.
Bloomberg: I'll nix Knicks tax breaks
On Thursday, New York Mayor Mike Bloomberg declared that he wouldn't allow Cablevision, owners of the Knicks, Rangers, and Liberty, to keep its $10.9 million a year property tax exemption if it moved to a new building across the street. (It's actually up to at least $11.6 million, according to the latest figures from the city Independent Budget Office.) "Not if I'm mayor they won't," said Bloomberg. "Madison Square Garden isn't going to move" - the New York Post inserted "[out of Manhattan]," though the Daily News did not, so your guess is as good as mine if he knows something if he knows something about the on-again, off-again MSG V project - "and there's no reason to justify that." He added: "I've always been opposed to bribing companies to come and to stay."
Two questions: 1. If Mayor Mike is really opposed to the MSG tax break, why doesn't he just eliminate it right now, especially given that it was originally supposed to expire in 1992? 2. Did he really say that last bit with a straight face?
November 02, 2007
Sonics owner asks NBA to okay move
As promised, Seattle Sonics owner Clay Bennett today asked the NBA for permission to move to Oklahoma City. Bennett's press statement (PDF here) actually reads: "Today we notified [NBA] Commissioner [David] Stern that we intend to relocate the Sonics to Oklahoma City if we succeed in the pending litigation with the City, or are able to negotiate an early lease termination, or at the end of the lease term." (He said the Storm WNBA franchise may stay put, though.)
All the qualifications are necessary because Bennett and the city disagree over whether he can be bound to keep the team in Seattle through the end of its lease in 2010. Earlier this week, a Seattle judge ruled that the dispute should be settled in court, not before an arbitrator as Bennett wanted.
Bennett's announcement came just hours after a Seattle investment counselor said he and a group of unnamed investors want to buy the two teams and keep them in Seattle. If that reminds you of something, me too. Heck, me three.
As for what all this means for the Seattle arena battle, probably not a whole heckuva lot, except that the clock is now ticking, even if the deadline is still unclear. Gov. Christine Gregoire said this week she's still working on an arena plan, without getting into specifics. There's a whole lot of staredown left to go in this fight.
UPDATE: The Oklahoman conducted an interview with Bennett on Friday that included the following exchange:
Q: What happens after 2010?
A: We're free to relocate.
Q: Is that the plan?
A: Without a new building, that's the plan.
Q: Is there anything between now and then that can stop the team from relocating or change your mind?
A: If very soon there was a leadership driven, tangible, binding proposal relative to the development of a modern building, and we are able to negotiate acceptable lease terms in that building, we would fully evaluate that. But the timing is running out on that very quickly.
Translation: My door is still open, Seattle, if your wallets are, too.
