November 30, 2008
Yanks swapped suite for city assets
Now that the New York Yankees' new stadium is all but complete, the revelations don't stop coming about the political process that got it built. The latest: According to e-mails by city officials obtained by state assemblymember Richard Brodsky, City Hall gave the team 250 free parking spaces in a taxpayer-built garage, handed over revenues from three new billboards along the Major Deegan Expressway, and lobbied the IRS to approve $940 million in tax-exempt bonds, all to get the Yanks to give the city a free luxury suite - in the left-field corner.
Rough estimate of the value of what the city gave up: $1.6 million a year. Estimated annual cost of a luxury suite down the foul lines at the new stadium: $600,000. That's not exactly a bargain for city taxpayers - not that city taxpayers will be allowed to sit in the thing regardless.
(More on this in my article on the Village Voice blog.)
November 26, 2008
Two New York City councilmembers from Staten Island showed off their sense of humor, or at least their sense of how to get their names into USA Today, yesterday by declaring that now that the federal government is bailing out Citigroup, the Mets' new stadium that the bank owns naming rights to should be renamed "Citi/Taxpayer Field." Newsday columnist Wallace Matthews chimes in with suggestions of "John Q. Taxpayer Field," "Joe Sixpack Park," or ... "Field of Schemes"? Hey, what the?!
Of course, given that the city government is already putting in more than $260 million toward the new stadium, nearly as much as the Mets themselves are after tax breaks and the like, a much simpler solution might be even better: "City Field."
Penguins get side of free land with their arena
When the Pittsburgh Penguins' arena deal was approved, I reported that in addition to about $100 million worth of state subsidies, the team would get development rights to the site of their current home, Mellon Arena. It now turns out that wasn't quite right: What the Pens got are actually development credits, which can be cashed in for land either at the old arena site or at another site adjacent to the new arena. The team is currently looking to buy an acre of land next to its new arena for a hotel - once it's been appraised, sports authority officials told the Pittsburgh Post-Gazette, the Pens will "buy" it out of their $15 million in Monopoly money they got as part of the arena deal.
As I told the Post-Gazette, "Free land is as good as free money," so this definitely counts as an additional subsidy, on top of all the other ones popping up since the arena deal was first announced almost two years ago. For a conclusive total, we'll just have to wait until Judith Grant Long finishes her book.
November 25, 2008
Marlins' new home pushed back to '12
It's official: The Florida Marlins' new stadium is now slated to open in 2012, rather than 2011 as was previously planned. Team president David Samson blamed the lawsuit by former Philadelphia Eagles owner Norman Braman for the delay, telling MLB.com: "This is because of Braman. It's not because of the economy. It's not because of any issues with the [final] documents. It's not because of any of that." We always assumed it was because of Braman - so what's this about the economy, Dave?
The more interesting thing here may be Samson's announcement of the timetable for beginning construction: Team management hopes to have construction contracts ready for a vote of the city and county commissions in January, with groundbreaking to follow in May. Why the four-month delay? Samson didn't say, but I wouldn't be too surprised to hear that the team could need some time to finalize financing, given the current credit crisis.
In any case, pushing the opening back a year means the Marlins will need to stay at Dolphin Stadium (I think that's what it's called this week) for 2011, a year beyond their current lease expires. As expected, that likely won't be a problem: Samson said he's already begun talks with the Dolphins owners about a lease extension. It also means the Marlins will have an extra year to figure out what their new hats will look like.
November 22, 2008
Marlins stadium lawsuit dismissed; opening day pushed back?
Miami-Dade Circuit Judge Jeri Beth Cohen dismissed the last piece of former Philadelphia Eagles owner Norman Braman's lawsuit against the Florida Marlins stadium project on Friday, ruling that it was legal for the city to redirect community redevelopment money to free up funds for the stadium without a public vote. The end of the yearlong legal drama means the Marlins can move ahead with finalizing contracts with the city and county on the $515 million project - expected to be hammered out in the next month or two - and then actually start construction.
That would leave only about 15 months a little more than two years to have the stadium ready for opening day 2011 as originally planned; team president David Samson said he hopes to be able to make an announcement on whether that's doable by the end of the upcoming week. While the Miami Herald reports that "the timing could be critical" as "the team's current lease with former owner H. Wayne Huizenga at Dolphin Stadium expires at the end of the 2010 season," Huizenga has already said he'd consider granting a lease extension beyond 2010, so it shouldn't be a big deal. Or the Marlins could always play for a few weeks at a nearby spring-training facility - it's not like their fans would feel cramped.
Will Mets ever play at "Citi Field"?
Citigroup's week from hell could end up having some collateral damage in the sports world. The New York Post points out that if the struggling bank gets bought out, the New York Mets' new stadium could end up with a different name: "Think 'Goldman Sachs Diamond,' 'Morgan Stanley Stadium' or 'HSBC Field.'" Or the way things are going, maybe "Treasury Department Park."
As for whether the Mets are assured of getting their $20 million a year in naming-rights fees regardless of whether Citi falls, that's not altogether clear. While I told the Post that I assumed Citigroup (or its buyers) wouldn't be able to get out of the deal via anything short of bankruptcy, the Times reports today that "what is not known is if Citi could get out of the agreement through a buyout or escape clause," which sounds like no one outside of the parties involved knows what's in the actual contract. The Mets and Citi both released statements saying they're "committed" to the naming-rights deal, but if it's not written into the contract, there's no guarantee that whoever ends up owning the bank's end of the deal will feel the same.
November 20, 2008
If you needed further proof that development-rights swaps are the flavor of the month in stadium deals, try this on for size: A company in Woodstock, Illinois is offering to build a $12 million, 6500-seat multipurpose stadium in exchange for the rights to dig a gravel mine.
"This isn't the Joliet Jackhammers with a riverboat or the Schaumburg Flyers where they have a mall, where they can come in with tax dollars and subsidize one of these endeavors," Merryman Aggregate LLC project manager Rick Zirk tells the Northwest Herald. "There is just no well to go to." Of course not - that'd be a water mine.
November 19, 2008
The Oakland A's stadium finance plan may be up in the air, but the paperwork is moving forward: The city of Fremont yesterday set a public hearing for December 8 at 6:30 pm at Fremont City Hall, plus opened up a 30-day window for public comments on the plan. "If we get a whole bunch of comments that say this isn't an appropriate plan for the site [environmentally], then the A's would have to regroup," Fremont community development director Jill Keimach. (Brackets courtesy of the Fremont Argus; it will be interesting to see if, say, worries about traffic nightmares count as an "environmental" issue.)
The Argus also notes this at the very end of its article:
As part of the environmental review, an alternative proposal to build the stadium adjacent to the Warm Springs BART station also will be studied.
Although that proposal would provide better BART access and would be farther from a protected wildlife habitat, the team has no rights to the land, and officials from an auto plant near the site oppose any housing development.
Probably nothing to it, but still interesting that they bothered to include it.
November 18, 2008
Economic woes to put Bay Area stadiums on hold?
The San Jose Mercury News reports this morning that new stadiums for the San Francisco 49ers, Oakland Athletics, and San Jose Earthquakes could be delayed or scrapped (the word the Merc News uses is "undercut") thanks to the worldwide economic crisis (the Merc News, throwing caution to the wind on this one, says "free-fall").
The prospects look especially bad for the A's and Quakes, whose owner, real-estate magnate Lew Wolff, has proposed complicated development-rights-for-stadium swaps to avoid having to ask for direct taxpayer cash, which doesn't traditionally fly too well in Northern California. Unfortunately for Wolff, development rights aren't worth much in a climate where nobody's developing anything.
Wolff now says he'll tap naming rights, parking fees, and concessions to fund his proposed $400-million-plus Fremont stadium for the A's. (He said he plans to move ahead with the Quakes' planned $100 million stadium in San Jose as well, though the project could be scaled back to a cheaper model.)
It's almost inconceivable that Wolff could make enough from those sources to pay off his construction costs, though: The $4 million a year naming-rights fee the new A's stadium would collect from Cisco would cover at best maybe $60 million in stadium debt; this means the team would need at least $25 million a year in new parking and concession fees - above what it brings in at the Whatever-It's-Called-These-Days Coliseum - just to break even. It's possible that Wolff could take a loss on stadium costs for a few years in hopes that the real-estate market will pick up down the road and earn him a profit on his housing development plans, but that seems risky - and that's if Fremont officials even approve the plan.
The 49ers' stadium plans aren't beholden to the real-estate market, but they would require public money from the city of Santa Clara, which according to the Merc News is currently "re-examining its financial picture." Unless that picture turns out to be unexpectedly rosy, the stadium talks between the team and the city, scheduled to wrap up in February, could get ugly.
Wolff, meanwhile, remained resolutely upbeat, which seems to be the primary job description for a real-estate developer. "The best building I've done has been in times when I shouldn't be building," he told the Merc News. "We could easily put our plans on hold for two years, but that is the furthest thing from our minds." Except, of course, for thinking about it long enough to make a denial be the first thing out of his mouth. "The best building I've done has been in times when I shouldn't be building," Wolff said. "We could easily put our plans on hold for two years, but that is the furthest thing from our minds."
This just in: Minnesota is building stadiums for rich people
The economy may be in the tank, but the cheap irony bubble is alive and well at the Minneapolis Star-Tribune, where columnist Nick Coleman files this report:
Our billionaires are doing great, and there could be three new Sports Romper Rooms by the end of next year. If your husband lost his job or your wife has to work six days a week to make ends meet, or your kids have to wait for braces, it's OK.
Minneapolis is getting spiffier! The view from the soup lines will be brighter as the hungry and the homeless scan the skyline and see shiny harbingers of good times to come:
On the East, a new football stadium that stands like a beacon of prosperity amid the forlorn campus of the University of Minnesota, hit by hiring freezes and soaring tuition rates but clinging to hope that Tim (8-15) Brewster knows what he is doing or might find out by the time the new $300 million stadium opens; and ...
On the West, a shiny new steam-scented baseball stadium is rising beside the garbage burner, a $500 million gift from the taxpayers of Hennepin County, whose beneficent rulers must have known it would be good to have hundreds of new hotdog vending positions coming onto the job market.
And, still but a dream, there it is: In the heart of the city, where the Metrodome used to be an eyesore, a new $1 billion Zyggi-urat, where the Minnesota Vikings will be able to climb to Valhalla in a modern football temple worthy of the vision of Zygi Wilf.
On a marginally less snarky note, Coleman also notes that the combined net worth of Minneapolis' pro sports teams is at least $10 billion. In particular, banker Carl Pohlad's Twins have risen more than $100 million in value since they got their $387 million taxpayer gift two years ago, and are expected to go another $30 to $50 million higher once their new Target Field opens next year. At this rate, it would have been cheaper for Minnesota just to give Pohlad $150 million in cash - but then, he's not looking for a handout.
Cowboys laugh in face of credit crunch
Just caught up with this news item from last week: The Dallas Cowboys are looking to borrow an extra $350 million to help finance their new stadium. About $224 million of this would go to pay for the inevitable cost overruns; the rest would help buy back some of that auction-rate debt that's been wreaking havoc across the sports industry.
As you may have heard, this isn't exactly the best time to be trying to borrow money. The Cowboys are reportedly trying to woo bankers by pledging just about all revenues from the new stadium as collateral, as well as, well, by being the Cowboys. If that fails, maybe they can sell more souvenir urinals.
November 13, 2008
Penguins arena $31m over budget
As predicted, the Pittsburgh Penguins' new arena set to open in 2010 is running over budget, with a projected price tag now of $321 million, up from $290 million. However, while originally the team and state were to split the first $20 million in extra costs, with the Pens covering any overruns above that, now the team and the public are going to be splitting the entire $31 million evenly; I haven't yet been able to find an explanation for why the state agreed to take on $5.5 million in costs it wasn't obligated to.
Reports the Pittsburgh Post-Gazette with a straight face: "Now that the final project cost has been set at $321 million, the Penguins will be responsible for any overruns above that amount." Fool me once...
Bettman: Money, shmoney, just approve Islanders arena
NHL chief Gary Bettman was hard at work at a sports commissioner's most important job this week: shaking down local governments for arena deals. In this case, it was New York Islanders owner Charles Wang's "Lighthouse Project," which would include a renovated Nassau Coliseum, housing, and a really bad light-rock theme song, though no longer an actual lighthouse.
Bettman told town of Hempstead officials that they should approve the plan despite the fact that Wang hasn't lined up financing for the project: "My guess is they'll get the financing. But let's get the approvals done so they can move forward. For anyone to suggest, 'We're not going to do the approvals; we're going to wait for the financing,' it doesn't work that way. Let's give them the green light, and I'm sure they'll do everything that needs to be done to get it accomplished."
Because that's worked so well everywhere else it's been tried.
Seven Yanks suites remain unsold
Here's another sign that the economy really is affecting sports ticket sales: The New York Yankees still have seven unsold luxury suites at their new stadium; priced at a mere $600,000 apiece, they've been on the market with no takers since August. Team COO Lonn Trost told reporters this week: "There's no getting away from the fact that the world is different than it was, so traffic slows. So you don't have 10 people banging on the door. You may only have two people." Trost said the team is "entertaining proposals from different folks," which sounds suspiciously close to "make us an offer and we'll listen." Maybe the Treasury Department can get involved.
Meanwhile, the demolition (or maybe "pre-demolition") of Yankee and Shea Stadiums continues, with the center-field monuments being relocated to the new Yankees stadium, while at Shea the scoreboard and seats are all gone. It seems likely that most of the heavy work at both stadiums will take place next summer (New York law prohibits big dramatic explosions), which should be lots of fun for fans on their way to ballgames.
November 07, 2008
Yanks to pay $11m in back rent
I wish my landlord moved this slow on late rent payments: New York City comptroller William Thompson today issued his audit of the New York Yankees for "stadium planning" deductions they made to their rent on city-owned Yankee Stadium from 2003 to 2006. (As you may recall, then-Mayor Rudy Giuliani gave the team a $5 million a year expense account for such costs from 2001 through 2005 - and now-Mayor Mike Bloomberg extended it for another three years through 2008.) Among the findings:
- The Yanks owe the city $11,388,155 for "inappropriate deductions," which they've already begun paying back, and are set to complete next spring.
- Of that, more than $9 million is for taking both their 2005 and 2006 deductions in 2005 (as allowed in their lease) - and then taking them both again in 2006 (as extremely not allowed in their lease).
- Another $1 million is for invoices the Yanks submitted twice, including double-paying contractors, and submitting the same receipts two years in a row.
- The team was also dinged for $50,000 in political action committee deductions that it wanted to bill taxpayers for, and $34,328 in meal and travel expenses.
No word, though, about numerous other dubious expenses I reported earlier, including gifts of crystal baseballs and other items and stadium bar tabs during the 2005 postseason. (Which were pretty hefty, if you recall how the Yanks did in the 2005 postseason.) And no word why it took two years for anybody in city government to notice the team claimed a $10 million rent credit in 2005, and then another one in 2006, when they were only allowed $5 million a year. For more on this, see the Village Voice website in an hour or two.
UPDATE: Laura Rivera of the comptroller's office just got back to me, saying, "Only demonstrable planning costs were allowed. Items such as the widely reported crystal baseballs were not included by the Yankees/Parks as items considered to be planning costs." Still not clear on who with the Yankees or the Parks Department disincluded them or how "demonstrable" was defined - they were in the initial pile of receipts submitted by the Yanks, not distinguished from the other expenses - but if I find out, I'll let you know.
Florida Marlins nemesis Norman Braman added another motion to his lawsuit against the team's stadium plans last week, after it was revealed that parking garages could cost $142 million to $171 million to build, rather than the initial $94 million estimate. Braman is seeking new depositions for city officials in the suit, which seems to be puttering to a close after nearly a year in court.
Dynamo: Send money or, um, we'll think of something
The owners of the Houston Dynamo MLS franchise, frustrated by the fact that they haven't gotten public funds yet for their proposed $100 million soccer stadium, reached into the stadium playbook this week and pulled out the old hurry-up offense. "We have a window now up until the end of the year where we can get this thing done despite the economic challenges that exist in the marketplace," team president Oliver Luck said Wednesday. "If it doesn't happen by the end of the year, it's the old saying: A no is bad, a slow no is even worse. If there is no resolution by the end of the year, we'll have to go to plan B, whatever that is."
Duly noted.
Fenway renovations nearing completion
Boston Red Sox execs say the latest round of renovations to Fenway Park - mostly waterproofing, replacing old seats, and adding more upper-deck seats down the first-base line - will bring them close to concluding their multi-year plan to revamp the 94-year-old ballpark, with only small maintenance projects to follow. And they said lots of nice things about staying put for the long haul:
"We are committed to Fenway Park - short-term, middle-term, long-term," team president Larry Lucchino said today as the Red Sox unveiled their winter renovation plans. "We're going to be here. No thought has been, or is being given to a new ballpark."
"There's no reason they couldn't play here for generations to come," project leader Janet Marie Smith said. "There's no reason it should become physically obsolete. It survived the domes and it survived the multipurpose arenas. It’s back again."
November 05, 2008
Another tally of NYC stadium costs
If you somehow don't already have enough to read this morning (not to mention catching up on the latest in holographic journalism technology), the New York Times' Charles Bagli has an extensive rundown of the New York Yankees and Mets stadium costs in today's paper. His totals: $2.6 billion in costs, with $938 million of that coming from city, state, and federal taxpayers. This is slightly lower than my own numbers, which have it at a $2.8 billion total price tag, with the public on the hook for $1.3 billion, but close enough for government work.
November 01, 2008
So how dead, exactly, is the New Jersey Nets' move to Brooklyn? This was the talk of the New York media the last week, kicked off when the Daily News reported that Nets owner Bruce Ratner was in talks with investors about selling the team, which he bought in 2004 to move it to a new Brooklyn arena that he would build (with plenty of government help). A Ratner spokesperson denied the report, but by week's end New Jersey Gov. Jon Corzine had declared he thought there was a good chance of keeping the Nets in his state, while an aide to Brooklyn borough president Marty Markowitz admitted, "I don’t know if we’re going to get the Nets."
The date to watch here could be December 1 - if Ratner hasn't finalized financing for his Atlantic Yards project in Brooklyn by then, Barclays Bank can back out of or renegotiate its $20 million a year naming rights deal for the arena. Without that money, it seems inconceivable that Ratner could make his money back on a $950 million arena - especially when he's already having to lure fans with a no money down ticket plan.
