December 30, 2009
Tiger Stadium scoreboard a fake relic?
There were lots of headlines earlier this week when it was announced that the left-field scoreboard from now-demolished Tiger Stadium had been installed at Wayne State University's home field. According to Wayne State's press release:
The scoreboard, installed in 1961, was originally placed at the 440 mark directly at center field, according to the Detroit Historical Society. It was later moved to far left field after many players complained that it was in the batter's line of sight towards the pitcher.
The City of Detroit and the Detroit Historical Society salvaged over 200 pieces of Tiger Stadium for preservation purposes in October 2007.
Sharp-eyed FoS readers, however, noted that this scoreboard — featuring a complete line score of the game — didn't appear to be the 1961 original. In this 1986 photo, for example, you can clearly see a different board, featuring the inning, player at-bat, ball, strikes, outs, and runs, but no line score.
There was some speculation that the new board might have been installed for the filming of the movie 61* after the Tigers had moved out, but that doesn't look to be the case, either. I've dug through my own photos and come up with this one, from August 14, 1986, showing the old board:
And this one from April 18, 1997 showing the new one, now at Wayne State:
(Click on the photos to enlarge.)
Clearly, the board the Detroit Historical Society preserved and relocated to Wayne State was installed sometime between 1987 and 1997. So while it's still a "Tiger Stadium scoreboard," it's somewhat less of a historic remembrance of the ballpark built in 1912. One hopes at least they got the right flagpole.
UPDATE: Reader Paul Wiederecht dug up this photo on a Japanese language site dated 1996 that shows the old board. So it looks as if Wayne State's "historic" scoreboard is only 12 years old, and only served as the Tigers' scoreboard for three years before the team moved out.
December 29, 2009
Sacramento gets seven pipe dreams proposals for NBA arena
The results of Sacramento Mayor Kevin Johnson's Kings arena fishing expedition are in, and he's managed to net seven new proposals to consider alongside the possibility of an arena at Cal Expo or a renovation of Arco Arena. As promised, downtown railyard developer Thomas Enterprises is one of the applicants, along with a mixed bag of other local development bigwigs (and not-so-bigwigs — two are restaurateurs). Kings blog Sactown Royalty goes so far as to say that five of the seven "might as well be written on papyrus and shoved into a kiln."
The real question here, though, is who's managed to figure out not just where to build an arena, but how to pay for it? Interestingly, according to traces left in Google News' cache, both KCRA and MSNBC previously had the phrase "No specifics were released on possible funding options" in their stories, but it's gone now. We'll know more after Johnson's task force holds a public forum on January 14. Maybe.
December 28, 2009
Wrigley Field to stay Wrigley Field
Fresh off promising a Fenway-style renovation of Wrigley Field, the new owners of the Chicago Cubs continued to go against the sports-owner playbook by saying they don't plan on selling naming rights to the 95-year-old ballpark. "We are not going to take the ivy off the walls and replace it with advertising signage," team marketing officer Wally Hayward told the New York Times.
Or rather, told the Chicago News Cooperative, the non-profit journalism outfit that actually wrote the story, though the Times is where it appeared. As a sign of Journalism of the Future, this article isn't entirely auspicious: It counterposes new owner Tom Ricketts' desire to preserve the ballpark with "an unrelenting need for major repairs at Wrigley that could run to $400 million or more" — without noting that that was the price tag to, according to Ricketts, "basically keep the marquee and store the scoreboard for a year, and tear everything else down." (Ricketts now plans a more modest reno for "significantly less than" $200 million.)
The news cooperative, meanwhile, cites as its source for the $400 million figure "documents reviewed by the Chicago News Cooperative and interviews with people who saw cost estimates during the Cubs' two-and-a-half-year auction process," though they could have gotten the same number by reading nine-month-old copies of the Chicago Tribune. You can take the profit out of journalism, but that doesn't guarantee good reporting. Even if sometimes it works out.
One of the best ways to get the nostalgic fervor going for an old stadium is to have a "last game" there. The New York Giants played their last game in their old New Jersey Meadowlands home, and the NYC press corps did not disappoint with nostalgic references.
Neil Best of Newsday (link here for Newsday subscribers or those willing to pay to register) described yesterday's shellacking of the Giants by the Carolina Panthers as "the most embarrassing of their 283 games there," perhaps overlooking the 1978 Giants/Eagles game where Herm Edwards helped Big Blue snatch deafeat from the jaws of victory in a play Giants fans know as simply "the fumble." The New York Times was a bit more circumspect, with Joe Lapoint suggesting the 41-9 blowout had "the feeling of a funeral" with more than 78,000 moruners attending the ceremony.
It's not actually the last game at Giants Stadium, though as that may be played out on Sunday evening, when the Jets take on the Cincinnati Bengals in a game that is sure to fire up the forces of wistful nostalgia once again. The Bengals, many might recall from previous postings on this site, are draining the coffers of Hamilton County, Ohio, as the cost of financing the team's new "jungle" in the Queen City has caused taxpayers to dip into their pockets more than they were initially led to believe. We'll see how things work out in the Meadowlands when the new sports palace opens up for the Giants and Jets in 2010. Both teams have set seat license fees to stratospheric levels, so New York metro season ticketholders are likely to be a bit poorer in 2010.
While taxpayers tend to fund professional sports complexes in the U.S. as part of our ongoing support of private enterprise, which for some reason does not pass as "socialism," our friends to the north are debating how to get ice rinks built for, shockingly, average people to use for their own events and activities instead of for pro team use. An article today's Globe and Mail says that if a new public rink goes ahead as proposed "it will be one of the few publicly funded arenas to open in Toronto in the last 28 years." Not sure why 28 years is significant, but the construction of a publicly funded facility for something more than spectatorship sounds like an interesting idea.
December 25, 2009
The Times fumbles the season of stadium giving
It's Christmas, so with little else to report — aside from something about some bill the Senate passed — newspapers turn to burning off stories they haven't found room for on newsier days. For the New York Times, that's a long piece by Ken Belson on how cities that built stadiums years ago are seeing fiscal woes now. Belson's lede: "Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets."
It's certainly nice to see the Paper of Record giving this topic attention, even on a day when nobody's going to read it. Unfortunately, though, the actual article is a muddled mix of differing anecdotes. Most of it is devoted to the Cincinnati Bengals situation, where, as reported back in August, reduced sales-tax receipts have left Hamilton County with a $14 million a year shortfall in its stadium payments, with local school systems already having given up funding to help fill the gap. That's certainly dire, but it's not actually taxpayers "again being asked to reach into their pockets" to pay for stadiums — any more than it'd be correct to say your car payments went up just because you lost your job and had to dip into your savings to pay them. Either way it's the same public expense; it's just a matter of which pocket the money is coming from.
The other examples cited, meanwhile, aren't all the best parallels to the Bengals fiasco: Indianapolis and Milwaukee seeing shortfalls in stadium bond funds are similar "dip into savings" deals, but Columbus being asked for increased subsidies for the Blue Jackets is genuinely new expense, as is Glendale considering lease concessions for the Phoenix Coyotes. And New Jersey's mulled ticket surcharge for the Devils is, as discussed here previously, potentially a way to get the team to give the taxpayers money, not the other way around.
The most enlightening part of the article, meanwhile, is probably this snippet buried deep on the jump page:
Compared with the lucrative deals for teams in Baltimore, St. Louis and elsewhere, the Bengals won a particularly lopsided lease.
Bob Bedinghaus, the commissioner who spearheaded the stadium project, said as much in 2000.
"They're an organization that's run by lawyers, and they look for every penny around every corner," he told The Cincinnati Enquirer. "It's going to be a difficult relationship going forward for the next 30 years."
Bedinghaus lost his re-election bid soon after. He now works as the Bengals' director of stadium development.
You know, it might actually be time to do something about that.
December 23, 2009
Timbers release stadium design, construction schedule
Merritt "My Dad Gave Away Your Dad's Tax Money" Paulson still doesn't have a new home for his Portland Beavers minor-league baseball team, but that isn't stopping him from moving ahead with plans to renovate PGE Park as soccer-only. Paulson's Timbers soccer franchise released new renderings this week of how the renovated stadium will look, after a $31 million makeover being paid for by, well, The Oregonian didn't mention it this time, but psst, mostly the taxpayers.
The most interesting bit here may be that they plan to begin construction in January, pause for the baseball season, then finish up next winter. Which certainly leads one to believe that at least some of the renovations could take place while still accommodating baseball. Also, apparently Paulson was definitely lying when he told the Beaverton city council that "if I don't get a baseball deal done, I'm not going to finalize the deal with Portland" — unless he really thinks he's going to finalize a deal with the other Vancouver before the construction crews are set to arrive next month.
White Elephant Watch: Stadiums for sale or lease, cheap
The Wall Street Journal, killing time over the holiday season like the rest of the news world, has a look at some stadiums that are sitting empty after their tenants up and left for newer digs. (The official excuse is "last-minute gift ideas" for "well-heeled holiday shoppers.") Among the highlights:
- The Astrodome: "After plans fell through to convert the facility into a hotel and convention center, there are groups lobbying to turn it into everything from a movie studio to a planetarium."
- The Beijing "Bird's Nest" Olympic stadium: "With annual operating costs of roughly $10 million, the facility was placed under government management in August to curb financial losses."
- San Antonio's Alamodome and Memphis' Pyramid Arena, both of which were abandoned by their anchor tenants before their 13th birthdays.
Or, if a used stadium is too tacky a gift, you could also build your loved one their own for $20 million. It'd be "temporary," but if there's any kind of lesson here, it's that all stadiums are.
December 21, 2009
Ravens snow cleanup team includes prison labor
I'm always on the lookout for offbeat subsidies to sports teams — bridges to nowhere and the like. Well, this is certainly a new one:
The Baltimore Ravens used actual convicts -- 125 inmates and supervisors from the Department of Corrections -- to join the 700 workers at M&T Bank Stadium to clear the building for this afternoon's game with the Bears. ...
The Baltimore Sun reports that the inmates and workers, many of them volunteers, are putting the finishing touches on clearing a record December snowstorm. The area was hit with 21 inches of snow, the most for the month since records started being kept in 1883.
Needless to say, most Baltimore residents don't get the services of state-supplied labor to help dig them out when a storm hits — as one Baltimore Sun reader pointed out. It's also still not clear whether the state (or, I guess, the prisoners) were paid for their labor, despite the efforts of citizen journalists to clear this matter up the best way they know how.
SJ Giants group warns: Bringing A's could blight Oakland
The San Francisco Giants-backed group opposing the Oakland A's potential move to San Jose has issued its list of objections to the project, and while some are typical — traffic impacts, potential losses to city services — one is not: The group is saying San Jose must analyze the negative impact of relocating the A's on the area around Oakland Coliseum. The San Jose Mercury News explains:
As to the matter of urban decay, [attorney Todd] Smith cites as legal precedent a case in Bakersfield in which a state Court of Appeal held that two environmental impact reports for large commercial shopping centers failed to analyze the centers' potential to indirectly cause urban decay in that city's downtown.
In his letter, Smith says the Oakland Coliseum, where the A's now play, is a centerpiece in the city's Coliseum Redevelopment Area Plan. Since the A's use the Coliseum more than any other tenant, their exit would mean the facility could sit empty and unused on at least 81 additional dates.
Under the California Environmental Quality Act authority, Smith said, the potential adverse impact on the redevelopment area must be analyzed in the revised environmental report.
Danielsen said San Jose will give that "careful consideration" — and that, in fact, planners may look to what happened when the Giants left Candlestick Park in 1999 to move to what is now AT&T Park.
I'm not entirely clear whether the report can just indicate, "Yeah, there will be an adverse impact," and then allow the project to go ahead nonetheless — it's certainly typical for EIRs in other places to simply list some negative effects as "no mitigation possible." But it's at least nice that San Jose is required to be neighborly about the effects of its actions.
49ers: We like Oakland better than SF
The San Francisco 49ers situation keeps getting weirder and weirder. In the latest twist, 49ers president Jed York said in an interview Friday (but published yesterday in the San Francisco Chronicle) that if Santa Clara doesn't work out, Oakland would make a better home for the team than San Francisco. The Oakland Coliseum "has the location and the infrastructure. It's right on a freeway, and it has BART access," said York. "At this point, Oakland just makes more sense."
The NFL has already declared its preference for the 49ers and Raiders sharing a stadium, so it would certainly work out from that perspective. As for how fans of the two rival teams would feel about it, the comments on this site probably say it best.
December 20, 2009
State senator charges Nets bonds are illegal
Freddy's Bar, one of the buildings slated for demolition to make way for the new Nets arena in Brooklyn, is installing chains today so that patrons can attach themselves to their barstools if the bulldozers come. But as surprise last-ditch efforts to forestall the Atlantic Yards arena project go, there might be more significance in a state legislator's surprise insistence that the arena bonds sold last week are illegal:
Suggesting that bonds for the Brooklyn arena were issued improperly, state Senator Bill Perkins yesterday asked Governor David Paterson to halt the "master closing" for the project scheduled for Wednesday and to stay condemnation proceedings until "serious questions... are addressed."
Had the bonds been issued by an Empire State Development Corporation (ESDC) subsidiary, they could be repaid via for payments in lieu of taxes (PILOTs), but the issuance would have had to have been approved by the Public Authorities Control Board (PACB), Perkins wrote in a letter. However, in an apparent effort to avoid the PACB, the ESDC created the Brooklyn Arena Local Development Corporation (BALDC), and that murky entity--which issued $511 million in bonds--should not possess a property tax exemption, the letter said.
In English, that seems to mean this: In order to take advantage of the Yankees dodge and use federally subsidized tax-exempt bonds for the arena, the Nets need to claim that their bond payments are really "payments in lieu of property tax." (For reasons that I really can't bear to explain again, tax-free bonds can only be paid off with tax revenue, not private rent payments.) But of course, to be "in lieu of" property tax, the property in question needs to not be charging tax that it otherwise could be.
Since the property is state-owned (or will be, once the private portions are seized by eminent domain), it's been assumed by all involved that it's exempt from property taxes. But as Amy Lavine, a staff attorney at the Albany Law School's Government Law Center, discovered, that's not necessarily so. She described the problem in an interview with Atlantic Yards Report:
"Basically, the LDC is not a public entity," she said. "And it's controlled by different sections of the tax code in New York State. Either ESDC didn't think of the implications of this or they didn't think anyone would notice, because it is rather esoteric. It seems that, under the tax section that applies to the LDC, they're not eligible for exemption from property taxes." (The LDC is subject to ยง420-a of the property tax code.)
According to the recent Court of Appeals decision in Lackawanna LDC v. Krakowski, the LDC leased property to a for-profit manufacturing company and the property was considered taxable, because manufacturing and economic development is not a tax-exempt purpose. Had the Legislature intended a blanket property tax exemption for LDCs, it would have done so expressly, as it has in other contexts, the court said.
And if they're not exempt from property taxes, she said, there's no way to divert property taxes to pay for the arena bonds, via PILOTs (payments in lieu of taxes), and so nothing backing the bonds.
"To go forward, I believe that the process has to start over and ESDC will have to do this properly and get it reviewed by the Public Authorities Control Board and the state Comptroller," she said.
Whether this legal argument is valid, I have no idea — as the one property-tax expert I contacted today remarked, "This is way above my pay grade." That said, major development projects in this city have been scuttled by more unlikely sources, so anything is possible. It'll be very interesting to see if Gov. Paterson responds, and if not, whether Perkins (or local opponents) then throws another lawsuit on the fire.
Newark: If Devils won't pay rent, tax 'em
The New Jersey Nets may or may not relocate temporarily to Newark on their way to Brooklyn, but apparently there could still be an increased ticket tax at that city's Prudential Center. The Newark city council voted last Wednesday to explore a 5% ticket surcharge on all events at the Rock, which would raise an estimated $3.9 million a year for the city treasury.
Teams signing leases on new buildings typically include a clause ruling out such after-the-fact tax increases, precisely because it's such an easy back-door way for local governments to try to recoup some of their costs once concrete has been poured — and indeed, the Devils' lease says it can deduct any ticket taxes from its rent. However, as Joan Whitlow notes in the Newark Star-Ledger, the Devils have been withholding rent for their entire three years at the Prudential Center:
Newark ponied up more than $300 million to build the arena. The Devils have not paid rent for two years, going on three. The first year the team said the arena was not ready in time. Yes, the city was slow on some of its road and infrastructure work, but those things were ready for opening night. The Devils, however, were in charge of arena construction and Newark spent extra on fire patrols and other safety measures because of work the Devils did not get done. In any case, "not finished" certainly didn't apply to the second year's rent.
A ticket tax, then, could at least be a way of breaking the rent deadlock. (And for fans who are worried: Most economists agree that ticket taxes come mostly out of teams' pockets, not fans', since ticket buyers are only willing to pay a certain face value, taxes included.) Given the Newark city council some credit: They learn from their mistakes.
Wizards head for Kansas after all
So the Kansas City Wizards may not be holding out after all: The team announced Thursday night that it was moving ahead with a new stadium in Kansas City, Kansas, with "yellow machines on site" next week, "moving dirt, at our expense." While team president Robb Heineman noted "the formal agreements have yet to be inked," the plan is for the stadium, part of a $400 million development project being undertaken by the Lane4 Property Group, to open in mid-2011.
What apparently broke the logjam, if that's what it was, was that the Wizards got reassurances that bond buyers would be willing to invest in construction bonds for the project. While the breakdown for the arena itself isn't available, the overall development is in line to get $147 million in sales tax revenue (STAR) bonds, which kick back sales taxes collected in the development area to pay off construction bonds — in other words, a STIF, generally considered one of the more dubious of development funding schemes, since any increase in sales-tax receipts likely comes at the expense of sales taxes raised elsewhere. Some of it, no doubt, will be cannibalized from Kansas City, Missouri, since the Wizards will be relocating from there. But they'll have to sell an awful lot of tickets to make up for $147 million in lost tax revenue.
December 17, 2009
Metrodome replacement tagged at $870m
The Metropolitan Sports Facilities Commission today released a report it commissioned on building a new Vikings stadium on the Metrodome site, and the big story was the cost numbers:
- Tearing down the dome and building an all-new building would cost $870 million, which is actually down $84 million from estimates earlier this year, when the labor market was slightly less glutted.
- Keeping a 13,000-seat slab of the existing dome and building new around it came in at $771 million.
- Renovating the dome to add club seats and suites and widen concourses was estimated at $975 million — which sounds nuts to me, but I haven't read the actual report itself, so for all I know they included they'd want to widen the concourses into eastern North Dakota.
City Pages, meanwhile, notes that a new stadium would increase the Vikings' revenues by about $31 million a year — which, given that bonds on an $870 million stadium would cost more than twice that to pay off, implies that the state of Minnesota would be better off just handing the team cash to boost its bottom line and leave the Metrodome alone. For that matter, the Minneapolis Star Tribune notes that Forbes estimates the value of the Vikings franchise at $835 million — meaning the state could afford to buy the team itself and have it stay put in Minneapolis for less than the cost of a new stadium. And as a side benefit, taxpayers would then earn the benefits of the Vikes' $8 million a year in profits.
(Yes, I know that the NFL would never approve such a sale — it's had a "no public ownership" clause since not long after the Green Bay Packers were formed in the 1920s. But that doesn't preclude an arm's length deal — say, the state finding a local buyer willing to take on the team, and sign a long-term lease, in exchange for a cushy state loan and/or lease.)
The Vikings management, meanwhile, released a statement earlier this week attacking the MSFC for trying to "delay a stadium discussion for two years," and saying, "we are moving forward with those leaders who want to resolve this issue in 2010." Apparently it's fine to bite the hand that feeds you if you're displeased that your free lunch is going to be late.
Great America owner sold, 49ers impact unknown
This just in: Cedar Fair, the owner of the Great America amusement park that's suing to stop the 49ers stadium slated for its parking lot in Santa Clara, has been sold to a private investment firm. Asked what this would mean for the stadium battle, an Apollo Global Management spokesperson told the San Jose Mercury News: "No comment. At this point, that's all I'm saying."
Nets-to-Newark deal "all but collapsed"
The Newark Star-Ledger is reporting that the plan to move the Nets to Newark in exchange for concerts going to the Meadowlands has fallen apart.
What appears to have happened: Earlier this week, state senate president Richard Codey introduced a bill to set up a new company, jointly owned by the state and the city of Newark, that would collect a $3-a-ticket tax and redistribute it to both the Izod Center and the Prudential Center. How exactly reshuffling money between the two facilities was supposed to help wasn't clear, but it turns out it doesn't much matter: Newly elected Jersey governor Chris Christie apparently didn't want to be rushed into a decision, so the deal is dead for now.
In any case, with Atlantic Yards construction looking like it's moving ahead — another lawsuit was dismissed yesterday, if you're keeping count — any Nets move would be for two seasons only. Nets execs, for their part, say they "continue to be encouraged" by the idea of an interim move — now they may have to decide if it's worth paying the $7.5 million fee to break their lease and get out of the Meadowlands two years earlier.
December 16, 2009
Santa Clara okays 49ers-sponsored referendum; San Jose Giants fight San Jose A's
It was another action-packed day yesterday in Northern California's South Bay, as the Santa Clara city council resolved its dueling stadium referenda quandary by putting on hold its own ballot measure for a $937 million 49ers stadium, and instead endorsing the ballot initiative being pushed by the 49ers. If the team referendum can't gather enough signatures by March, the council would still have the option of putting its own measure up for vote.
In addition to enabling the 49ers to avoid any legal challenges to the vote on environmental-oversight grounds — as stadium site landholder Great America is trying to do in its lawsuit — the team-sponsored ballot item is seen as being worded more favorably to (duh) the team, with no mention of several pieces of the financing, including $330 million in bonds that would be sold by the stadium authority and hopefully repaid by the team. There were also some complaints about the title of the initiative: The Santa Clara Stadium Taxpayer Protection and Economic Progress Act. "I don't think the city should defer to allow an advocacy piece to go before the voters," said Will Kennedy, one of two councilmembers to vote against the measure.
Meanwhile, the possible relocation of the Oakland A's to nearby San Jose got an unexpected opponent yesterday: the San Jose Giants minor-league baseball team, which is helping form a group called Stand Up For San Jose to oppose using public funds for a new stadium. While they make some good points — including that land and infrastructure costs weren't included in the city's economic impact study — it's worth noting that the San Jose Giants, in addition to being in line to be displaced by the A's, are also one-quarter owned by the San Francisco Giants, who are trying to avoid losing control of the San Jose market. Looks like we could be in for another elephant-fight-by-proxy.
Ruckus Miami: Grooms to design Marlins HR sculpture
I'm an unabashed fan of artist Red Grooms — his subway car you can walk through was a favorite of mine as a kid — so I can't help but like the idea of him designing a giant moving sculpture of pelicans and seagulls that will be activated every time a Florida Marlins player hits a homerun at the team's new stadium. Even if it will cost a staggering $2.5 million. In public money.
The role, after all, of the Miami-Dade County Art in Public Places Trust is to fund art in public places. The bigger question here would be: Does a baseball stadium, even a publicly owned one, count as a "public place" if you have to buy a Marlins ticket in order to get in?
Wizards still holding out for more public money
Disproving the notion that it's not news if nothing happens, the Kansas City Business Journal has an article this week noting that there's been no notable progress toward beginning construction on a new 18,500-seat stadium for the Kansas City Wizards. Of course, that's going to happen when your team CEO declares, "Unless the world falls apart, we will break ground this year," and it's almost the end of the year. And the world hasn't fallen apart. (Not yet, anyway.)
What's the holdup? Apparently, even though the Kansas Department of Commerce offered developer Lane4 $229.5 million in sales-tax kickbacks, cash, and other tax breaks for the $400 million project (which includes offices and other development in addition to the stadium) in October, Lane4 is griping that the state has capped the total subsidy at that level, which means it can't get as low an interest rate as it would like. So far, the state isn't budging — though it did offer to pay more of the subsidy up front — so we have a stalemate.
Meanwhile, there's still that plan for a new stadium in the other Kansas City waiting in the wings. It must be nice to have more than one date to the prom — you get a nicer corsage that way.
December 15, 2009
Nets bonds are sold, beating IRS deadline
Any thoughts that disinterested bond buyers might yet torpedo the Brooklyn Nets arena evaporated today, as a state development corporation sold $511 million in tax-exempt bonds today for the project. (The headline about "in two hours" slightly disingenuous; as I understand it, bond-selling is a drawn-out process that only becomes finalized once you have a buyer, so it's a bit like saying Roy Halladay traded in only two hours.) The press release indicates that the bonds sold at 6.48%, which is actually lower than team owner Bruce Ratner (who'll actually be paying off the bonds) was hoping for. It looks like Ratner saved himself a Devin Harris after all.
The bond sale means that the project will meet the December 31 IRS deadline for sale of the tax-free bonds, and presumably construction, or at least land clearing, could follow soon thereafter. In fact, Atlantic Yards Report notes that the city has already announced traffic changes to accommodate the beginnings of infrastructure work. The first of many, if the project is now becoming a reality.
December 14, 2009
Ex-Oilers owner levies move threat for old times' sake
The Edmonton Oilers won't survive long in Edmonton without a new arena, according to ... um, the former owner of the Edmonton Oilers:
The future of the Oilers franchise won't be secure in Edmonton unless a new arena is built, says former Oilers owner Cal Nichols, an adviser on the new downtown arena proposal.
"If we in this city don't do something, who in this city is going to want to own that team and keep it here?" Nichols asks.
Presumably current Oilers owner Daryl Katz would, since he only bought the team last year, and didn't wait around for a new arena to be approved before sealing the deal. But Nichols' comments ignore an even more basic question: If you were the owner of the Oilers and wanted out of Edmonton, where would you go? The Edmonton Journal cites Forbes figures showing that the Oilers are 19th out of 30 NHL teams in revenue, but given the number of hockey franchises already struggling in their current cities, and the dearth of new cities ripe for relocation, 19th out of 30 in a Canadian hockey hotbed might not sound so bad, new arena or no.
San Diego poll: No public money for Chargers
The San Diego Chargers public-money-for-a-stadium campaign got off to a shaky start last week, as a TV news poll found almost 3-to-1 opposition to spending any taxpayer dollars on a new football stadium. This isn't unusual for early in a public-funding campaign, but the depth of opposition is a bit notable — if nothing else, Chargers ownership is going to need to start saving up to meet the 100-1 rule.
Oakland considering stimulus funding for A's
Largely lost in the to-do about Oakland's bid to keep the A's was this from the East Bay Express:
The City of Oakland would not spend any public money on constructing a new ballpark in Jack London Square for the Oakland A's, but would assemble land and provide infrastructure and parking for the stadium, Mayor Ron Dellums said at a City Hall press conference this afternoon. Dellums and city staffers said the city would use redevelopment funds to acquire property, and not the city's debt-ridden general fund, and hoped to obtain more federal stimulus money for infrastructure if the project goes forward.
As we've seen before, land and infrastructure and parking can add up to a hefty chunk of change, especially in downtown locations like Oakland is considering, where land costs for both the stadium and accompanying garages are likely to be high. Also, add this to the list of sports projects seeking federal stimulus subsidies — not that stadium building doesn't create construction jobs, but if you're going to put people to work just to get them work, you'd kind of hope they'd have a bit more public benefit.
Finally, if you had any doubt that stadium-chasing is a phenomenon that affects local elected officials across the political spectrum, the fact that friggin' Ron Dellums is advocating public spending on behalf of a private sports team should make things eminently clear.
Nets bonds inch closer to sale
With 17 shopping days to go, the Atlantic Yards Nets arena bonds still haven't been sold, as bond issuers and buyers continue to haggle over the price. Bloomberg News speculates that $500 million in tax-free bonds could go for an interest rate of 7%, based on similarly rated bonds recently issued in Texas — this would qualify as worse than Bruce Ratner hoped, but better than he feared.
Meanwhile, the $147 million in taxable bonds that will accompany the tax-free bonds — trust me, you don't want to know why, but if you really need to, start here — have been assigned junk-bond status, which, Atlantic Yards Report notes, could carry interest rates as high as 14%. The interesting twist here is that the rumored buyer for these bonds is Nets soon-to-be co-owner Mikhail Prokhorov. Because Prokhorov would own 45% of the arena corporation that would be paying off the bonds to himself, he'd effectively be earning a 7.7% rate on his money — though given that, according to his deal with Ratner, he gets to take title to the whole arena if it defaults on the bonds, you could argue that he's effectively covered his risk in other ways.
I can't tell if this is brilliantly creative finance or a scam — but given the players involved here, that's probably about right.
December 11, 2009
More shots fired in 49ers stadium war
Speaking of Bay Area bidding wars, San Francisco responded to this week's activity in Santa Clara by issuing new renderings of its own planned 49ers stadium yesterday (coming on the heels of last month's new renderings).
"These illustrations not only show how dramatic a new stadium could be for San Francisco, but they also show how this entire project is going to completely rejuvenate an entire community," Mayor Gavin Newsom told a press conference. First FoS reader to find the rejuvenation in the illustrations wins a free prize!
Meanwhile, NBC Sports football blogger Mike Florio cites a "league source" as telling him that the NFL would prefer that the 49ers and the Raiders share a stadium, since one would be cheaper to build than two. That source wouldn't be the NFL commissioner ten months ago, would it?
Oakland tosses hat(s) in ring for A's
With media gab about the Oakland A's moving to San Jose reaching a fever pitch, the team's incumbent hometown grabbed some headlines of its own today, offering three new potential stadium sites (or four, depending on whether you count the existing Oakland Coliseum site) for the team's consideration. "We went to the MLB and said 'We want the A's in Oakland,' and we're comfortable with all of these sites," Oakland planning director Eric Angstadt told the San Francisco Business Times. Added planning commissioner Doug Boxer: "We are now in the game. We're in the mix."
The new sites: Howard Terminal at the Port of Oakland; Jack London Square North, not far from an earlier site considered by the A's; and Victory Court, just south of Lake Merritt.
Note, incidentally, that Angstadt said "MLB" and not "the A's." That's because Oakland is less concerned here with swaying A's owner Lew Wolff, who has stated his preference to move to San Jose, than with influencing MLB's A's relocation commission, which is scheduled to issue its report to commissioner Bud Selig next month. The real question the task force will be addressing is whether MLB will force the Giants to give up territorial rights to San Jose (and if so, how much Wolff would have to reimburse them in exchange), but given that part of its mission was stated to be evaluating "the prospects of obtaining a ballpark" in Oakland, city officials have to feel like it's not a bad time to put themselves out as a willing dance partner.
Depending on what the report says, then, the A's could be headed to San Jose, a new site in Oakland — or a bidding war between the two. Now, which one do you think Selig would like to see, hmm?
Chargers bait-and-switch: Oh, yeah, we want money, too
After years of saying they'd build a new stadium with no public money, just free land, San Diego Chargers officials did a public about-face yesterday, saying when they said "no" they actually meant "some." "It's almost certainly going to involve some sort of taxpayer money," with team stadium czar Mark Fabiani told a local chamber of commerce, adding that it was better to get this out on the table now rather than during a voter referendum campaign: "We have no interest in spending hundreds of thousands of dollars, even into the millions, on this site, and then finding out that nobody wants to support it."
To be fair, some form of public funding has been on the table for a while: In addition to the free land, the Chargers had talked up kicking back property tax money to help pay for stadium construction. Still, it's worth noting that in a post to this very website, Fabiani argued that renovating the Chargers' current home of Qualcomm Stadium wasn't feasible because in San Diego "there is no public funding for stadium improvements" and "there is simply no way to privately finance such a renovation." It's 6 am in San Diego right now, but I have an email in to Fabiani; I'll post a followup here if he gets back with an explanation of how this jibes with his new stance.
UPDATE: Fabiani replied to my email (still not even 7 am in San Diego!), though he didn't respond directly to my question of whether it still makes sense to argue against Qualcomm renovations because they'd need public funds, instead writing: "No one, so far as I know, has expressed any interest in renovating Qualcomm." On the switch to a public subsidy demand, Fabiani said this was because San Diego's proposed stadium site wouldn't include land for additional development, as the team was previously seeking; as for the type of public subsidies that would be required, he wrote that that's "the subject of a CCDC-sponsored study by stadium finance expert Mitchell Zeits," and so "too soon to say."
Fabiani added that voters would need to "agree that an investment downtown will result in significant returns for taxpayers elsewhere" such as reusing the Qualcomm site to "generate hundreds of millions of dollars of revenue" for the city. Hey, I remember that one!
December 09, 2009
Santa Clara 49ers stadium takes one step forward, one back
As expected, the Santa Clara city council approved its environmental report on a proposed San Francisco 49ers stadium last night, setting June 8 as the date for a public vote on the measure. As not expected:
- The owners of Great America, the amusement park whose parking lot would be the site of the new stadium, sued the city to block the deal, saying Santa Clara had invalidated the environmental review process by entering into a binding agreement to back the project before the environmental report was done. The legal brief released yesterday by Cedar Fair goes on to state: "As the California Supreme Court has recognized, when a city reaches a binding, detailed agreement with a private developer and publicly commits resources and governmental prestige to that project, the city's reservation of CEQA review until a later, final approval stage is unlikely to convince public observers that the agency fully considered the project's environmental consequences."
- Santa Clarans for Economic Progress, the Astroturf group funded by the 49ers that was behind last month's pro-stadium mailing, announced that it would start gathering petition signatures to get its own initative on the June ballot. A petition-backed initiative would have the advantage of not being subject to environmental review rules — meaning it could give the 49ers an end run around the Cedar Fair lawsuit. No word just yet on what happens if both measures make the ballot, and one wins and one loses.
December 08, 2009
NFL stadium-grubbing notes from all over
I don't know if it's something in the water or the holiday spirit or what, but the last couple of days has seen a rash of attempts to drum up support for NFL stadium deals on pretty flimsy pretexts:
- NFL commissioner Roger Goodell reiterated his henchman's statement from a couple of months ago, insisting that Dolphin Stadium need upgrades if it's going to host more Super Bowls after this year. No word on who would pay for any renovations — which could reportedly include a partial roof to protect fans from rain and/or moving seats closer to the field — but the South Florida Sun-Sentinel did report ominously that South Florida Super Bowl Host Committee Chairman Rodney "said it will be up to the community, which is bidding for the 2014 Super Bowl, to determine the importance of hosting the NFL's championship game."
- The Los Angeles Times reports that the NFL's decision over the weekend to try to eliminate some revenue-sharing payments to low-revenue teams could be "the jab that knocks them to the canvas in the next two or three seasons" and prompts them to relocate to, say, Los Angeles. Given that this will at most amount to a few million dollars a year per team and will likely be overturned in the next collective bargaining agreement, if not sooner than that by a union challenge, this seems a bit of an overstatement.
- A survey of 550 Minnesota residents found that they were more likely to say it was important to keep the Vikings in town when the team was winning, as it is now. Though the Minneapolis Star Tribune reported this as "When Vikings win, drumbeat for new stadium beats faster," it doesn't look like the poll actually asked whether respondents wanted a new stadium; and, in fact, a higher percentage of residents said this year that the Metrodome is an acceptable home for the Vikings than in past seasons when the team was losing.
In other NFL stadium news, the Santa Clara city council is expected to vote tonight to set a 49ers stadium vote for next June. Starting tomorrow: Six months of new pretexts!
UPDATE: But first, the owners of Great America, whose parking lot the 49ers stadium would be built in, are suing the city to void the deal! The fun never stops!
December 07, 2009
One sports subsidy leaves, one enters
The good news: The New England Patriots parking-lot footbridge is no longer getting federal stimulus money. The less-good news: This is not because anyone thought better of the idea, but rather because it wasn't expected to be "shovel-ready" by the February deadline. And it still may get state economic development money.
Meanwhile, the city of Glendale may be stepping up to the plate instead, as it's reportedly considering seeking stimulus money for the Jobing.com Arena, home of the Phoenix Coyotes (at least for the moment). No word on exactly what would get funded by the money — the Phoenix Business Journal helpfully says "financing and job creation." And even if Glendale gets the benefit from that, given that it's simultaneously exploring ways to bail out the Coyotes, it could end up little more than a passthrough.
Blue Jackets bailout: What would taxpayers get?
It must be nice to be a sports team owner. If you're a normal person facing bankruptcy, it's not all that likely that the mayor of your town will hire a special consultant just to figure out how to give you enough money to keep you afloat. But if you're the owner of, say, the Columbus Blue Jackets, that's exactly what you get:
John Rosenberger, the former executive director of Capitol South Community Urban Redevelopment Corp., will lead an effort to shore up the finances of the Columbus Blue Jackets by reworking the hockey team's relationship with arena owners, Mayor Michael B. Coleman announced. ...
A report issued last month by the chamber listed about two dozen options -- the most likely involving public money -- to resolve structural problems with the lease that have contributed to the Blue Jackets' estimated losses of $12 million a year.
Leaving aside whether an NHL franchise really falls into the category of "too big to fail," the prospect of a Blue Jackets bailout raises some other familiar concerns. For one thing, is there a risk of moral hazard if sports teams can go into arena projects with unworkable finances, figuring, "Hey, if we're losing money once the place is built, we can always get the government to renegotiate our lease later"?
A bigger question now, though, might be: What, if anything, will Columbus get in exchange for any money it pours into the Blue Jackets' coffers? If the team doesn't have money to spare, the next most likely thing is equity — if the U.S. can become part-owner of AIG and General Motors, there's no reason Columbus can't demand a share of the Blue Jackets in exchange for any bailout money. And unlike the federal government, they already have plenty of experience in such things...
December 04, 2009
Nets naming-rights deal cut in half
Remember that record-breaking $20 million a year naming-rights deal that Barclays Bank signed for the New Jersey Nets' new Brooklyn arena almost three years ago? Turns out the real number is only a little over $10 million. The New York Observer's Eliot Brown, who pored over the 772-page arena financing document released last week by Goldman Sachs, reports:
According to documents related to the arena's financing that were released Thursday, Barclays will pay $10 million a year to the arena's owner for the 20-year deal. Looking solely at this, it would seem to make it a half-off discount, but there are a number of other untold fees paid directly to the Nets as part of the naming rights, according to the documents. Forest City Ratner declined to provide those numbers, and a spokesman for Barclays declined to comment. ...
Whatever the fees paid directly to the team, it's hard to think that they're twice $10 million a year. After all, a consultant's study attached to the documents refers repeatedly to the transaction as a $200 million naming rights deal, and uses that number as a basis of comparison for other naming rights deals.
If there was indeed a revision, it came either at the end of 2008 or earlier this year. The original 2007 contract expired at the end of 2008, but was extended after Barclays and Mr. Ratner's firm, Forest City Ratner, renegotiated. At that time, new terms were not released, though Barclays released a statement saying it was "unwavering in its commitment" to the project. The financial documents released now say the deal was again amended in August 2009.
This only makes the Brooklyn arena deal look worse for developer and Nets owner Bruce Ratner, who's already had to agree to sell off a large share of the team and arena to raise capital, and is looking at possibly $60 million a year in bond payments, plus up-front cash costs.
The Goldman Sachs documents (downloadable here after an annoying registration requirement also reveal that using the arena for hockey is still on the table, notwithstanding that the latest arena design would be too small for the NHL: "The New York Islanders could potentially become a tenant of the proposed arena as well... If built as planned, the arena would need to be retrofitted to accommodate the ice-making abilities the NHL requires for its franchises." In other words, more money to add to the arena's already $1.1 billion price tag.
Meanwhile, Ratner got more bad news yesterday, albeit in an oblique form: A New York state court yesterday ruled that the state can't use eminent domain to take property for an expansion of Columbia University, stating the declaration that the land was blighted was unconstitutional because the state had "failed to adopt, retain or promulgate any regulation or written standard for the finding of blight." While it's unlikely this will be enough to overturn last month's eminent domain approval for Atlantic Yards, it certainly casts some uncertainty on the project right when Ratner and friends are trying to obtain bond insurance, set interest rates, and sell bonds, all processes that shudder at uncertainty. You know that's what Matthew Brinkerhoff, lawyer for the Atlantic Yards opponents, was thinking when he declared yesterday, "If I was involved in the bond sale, I would be looking at this decision and it would concern me, in a way that is very unexpected." Was that the sound of a few extra basis points I just heard?
December 03, 2009
Bills in Toronto: Shopkeepers moan, Canadians yawn
The Buffalo Bills are playing the second in their series of five "home" games in Toronto tonight, which means it's time for the New York Times to dust off the perennial story about how losing a team is bad for local businesses. Writes Times reporter Ken Belson:
There is no accurate tally of the money spent in the days leading up to Bills home games, but one thing is clear. The team's decision to play eight home games in Toronto over five years hurts an array of local businesses.
"It stinks," said Amy Morgan, the owner of Tailgaters Bar & Grill, which makes about 70 percent of its monthly sales on game days, when 10 workers are employed. "They're taking revenue away."
Belson goes on to note the number of lost hotel room rentals to visiting teams, and the "thousands" of out-of-town visitors (ironically, many of them from Toronto) that normally come to Buffalo on game days. He makes no mention, though, of the fact that presumably most local Bills fans are still spending their money in town this weekend — though it's more likely dispersed at sports bars and restaurants throughout the city rather than in the few stadium-side businesses Belson spoke to. But then, you really can't expect much economic rigor from an article with lines like: "Based on huge piles of empty cans strewn across parking lots near the stadium, beer sales also take a hit when the Buffalo area loses a game."
Meanwhile, the Buffalo News reports on what should be a bigger story: Despite assumptions that Toronto is a burgeoning market that could ultimately lure the Bills to relocate, there are plenty of cheap tickets still available for tonight's game, and one Canadian columnist has called it "a sports marketing disaster of epic proportions." Whether this is a function of Canadian dispassion for the NFL or the gimmicky nature of hosting one Bills game a year — Toronto Sun columnist Ken Fidlin called it "like renting somebody else's kids just so you can enjoy Christmas morning" — isn't entirely clear, but it'd seem a topic more worthy of the Paper of Record's time than counting beer cans.
Maple Leaf Gardens to get stimulus money to become supermarket-athletic center
The Canadian government has announced it's contributing $20 million in stimulus money toward a $60 million reconstruction of Toronto's Maple Leaf Gardens that's either a "revitalization" or a "bittersweet" "extreme makeover," depending on which paper you read. The 78-year-old Gardens, abandoned by the eponymous Maple Leafs in 1999, will get a Loblaws grocery store installed on the ground floor where the hockey ice used to be, while a new rink (plus volleyball and basketball courts) will be constructed up near the roof for use by Ryerson University, which is funding $20 million more of the project. Another $20 million needs to be raised by March 2011 to begin construction, or else the federal money gets withdrawn.
L.A. Threat Watch: NFL cities hitting "panic button"
A nice rundown by San Diego Union-Tribune columnist Tim Sullivan of how the approval of a new NFL-ready stadium in Industry, California is helping NFL teams in other cities leverage new stadium demands of their own:
Every city with an NFL tenant and without an ironclad lease is feeling intensifying pressure from Ed Roski's City of Industry initiative. Every team within range of an escape clause has been wielding newfound leverage since October, when Gov. Arnold Schwarzenneger signed a bill exempting Roski's project from the California Environmental Quality Act. ...
The threat of extortion is always implicit in professional sports. Any business owner has a right to maximize revenue and to seek concessions from the landlord, rights that are obviously accentuated when that business is immensely popular and limited to 32 outlets in 50 states. Still, the shortcut granted Roski has caused a discernible shift in the balance of power, providing NFL owners a tangible relocation threat at a time when public financing is deeply problematic.
"It's not a coincidence," said David Carter, executive director of USC's Marshall School of Business. "I think it's a combination of the economic environment and the political realities that cities are facing right now (and) the Southern California option that is very real."
Sullivan goes on to note that Roski still faces some potentially steep hurdles in acquiring a team: He's part-owner of a casino, a big no-no with sports leagues, and wants to be majority owner of whatever team relocates (and, let's not forget, pay for it with development rights, not cash). Still, that hasn't stopped San Diego Mayor Jerry Sanders from suddenly devoting attention to building a new stadium for the Chargers, or the Florida Times-Union from running an editorial begging fans to buy tickets to Jacksonville Jaguars games because "Los Angeles doesn't have a pro football team and doesn't need one, but Jacksonville does."
Noting that the Chargers haven't explicitly threatened to move to Industry, Sullivan rightly proclaims one of the rules of stadium politics to be: "You don't need to announce a threat that is already perceived." Still, there are always ways of hinting...
December 02, 2009
Number crunchers: World Cup, NFL stadiums not all they're cracked up to be
It's about time somebody used superpowered statistical analysis for something other than crazy-ass attacks on attempts to reduce carbon emissions. And so, welcome the new book Soccernomics, which according to AP says that building stadiums for soccer's World Cup, as South Africa has been doing amid protests, is unlikely to ever pay back its public costs:
There'll be no economic bonanza, according to Stefan Szymanski, and if experience matches the last World Cup in Germany, spending by visitors will be much less than the South African government shelled out preparing for the tournament.
"The next World Cup will not be an airplane dropping dollars on South Africa," authors Stefan Szymanski and Simon Kuper write in their new book "Soccernomics." ...
"The problem for South Africa is that they have to spend quite a lot to build stadiums," Szymanski said in a telephone interview from London. "Germany could afford this, and it had stadiums anyway. But South Africa is a nation that can ill afford to fritter away a few billion on white elephants."
Meanwhile, the University of Minnesota blog Smart Politics has analyzed the records of NFL teams before and after getting new stadiums to see if Vikings owner Zygi Wilf is right when he argues that a new stadium is necessary for his team to be successful on the field. Their verdict:
Overall, these 22 NFL teams compiled a .462 winning percentage (747 wins, 869 losses, 22 ties) across the five respective years before their new stadiums were built.
In the five seasons after the new stadiums opened, these teams notched a slightly better record, but only four games over .500. With 829 wins, 825 losses and 17 ties, the first five years brought these 22 franchises a collective winning percentage of just .501 in the first five years in their new respective facilities.
Hey, that reminds me of something...
Kennesaw State to build stadium for women's pro soccer team
On the spectrum of high-risk sports deals, building a stadium for an expansion team in a one-year-old women's soccer league that's only signing a five-year lease has to be considered on the wrong end. On the bright side, Kennesaw State University's stadium for the Atlanta Beat will cost only $16.5 million, and is being funded substantially by two anonymous private donations, along with student fees and venue revenues. And at least the Beat won't have to struggle along anymore in their outmoded three-year-old stadium.
December 01, 2009
Nets arena bonds squeak through
Another shoe drops for the Atlantic Yards arena project: Bond rating agency Moody's has given an investment-grade rating to the bonds for the Nets' planned Brooklyn arena. It looks like Nets owner Bruce Ratner paid a high price for the rating, though, cutting the amount of tax-free bonds from $600 million to $500 million, and accepting a rating of Baa3, Moody's lowest level above junk bonds.
The next question is what this means for the bonds' interest rate, and the team's bottom line — each added percentage point of new interest will cost the Nets owners $5 million a year — something that could be answered when the Empire State Development Corporation makes its initial bond offering, as soon as tomorrow. The lowered amount of bonds also means a growing funding gap that must be filled by Ratner and his soon-to-be partner Mikhail Prokhorov: already at $100 million or so, it's now looking closer to $300 million. Prokhorov is a pretty rich guy, and clearly he stands to get lots of intangible publicity benefits from entering the NBA owner's club, but you still have to wonder how much cash he (or Ratner) will be willing to throw at this deal before the investment starts to look like a money pit.
If nothing else, this could get interesting once the inevitable cost overruns show up. The ESDC has said it has "no expectation" of issuing additional public bonds for the project, but admitted it's possible. Paging Richard Brodsky!
