April 30, 2010
Orioles, Indians mull stadium refits
The New York Times' Ken Belson has been busy on the stadium beat; today he has a profile of how Janet Marie Smith has been re-hired by the Baltimore Orioles to help spruce up Camden Yards, the stadium whose design she helped oversee 20 years ago. (And which helped set off the whole retro trend that kick-start the stadium-building craze of the last 20 years.)
The most interesting bit, though, may be an aside about the kinds of rethinking that tenants of '90s-era stadiums are considering as they see their honeymoon periods disappearing in the rear-view mirror:
The club levels at Camden Yards will get a second look because the corporate appetite for expensive suites has diminished. It hasn't helped that the Orioles last had a winning record in 1997 and drew their smallest crowd ever at Camden Yards earlier this season.
The Orioles are not the only team thinking about makeovers. The Cleveland Indians, who opened Progressive Field in 1994 (it was Jacobs Field then), are among the 10 teams looking at ways to revive their parks, said Earl Santee, a senior principal at Populous, the architectural firm that designed Camden Yards, PNC Park in Pittsburgh, Coors Field and other retro stadiums.
This has been an issue I've been wondering about for a long time: What do modern stadiums that are designed for the luxury market do when that market evaporates? In olden times, it was easy enough to just rejigger ticket prices, but today's class distinctions are cemented in concrete and steel — you can't easily take just one chunk of glassed-in seats with their own restaurant and private entrance and turn them back over to the great unwashed.
Cleveland is going to be an interesting test case for this, as it has that vertical wall of club seats separating its lower deck from its upper. I'd love to see the recent generation of class-segregated stadiums retrofitted for more egalitarian uses, but it's going to be a challenge.
April 29, 2010
Latest Vikings stadium idea: Let cities fight over us
Looks like the Minnesota Vikings have figured out how they plan to get a stadium bill through the legislature with almost no time left on the clock: punt it to the cities.
A stadium bill garnering bipartisan support is expected to be introduced next week at the state Capitol. It gives cities and counties the option to vie for the team, potentially pitting municipalities against one another for the right to call themselves the home of the purple and gold.
"We're planning on rolling something out next week," co-sponsor Sen. Julie Rosen, R-Fairmont, said Wednesday.
The bill includes two major options, including rebuilding on the site of the Metrodome using taxes currently being raised for the Minneapolis Convention Center. The second option, while not site specific, would pre-authorize a menu of local taxes and set up a stadium commission. If it passed, any local government could select from that tax menu to put together a financing package with the team and seek approval from the commission.
The upside for the Vikes: The Minnesota legislature has shown itself to be amenable to stadium funding plans that don't require any state money. The drawback: They'd still need to find a municipality to play along. The St. Paul Pioneer Press says the likely bill is focused on "'user' taxes, those aimed at businesses that would benefit from a new stadium — such as hotels and car rentals — and the people who use them," but it's going to be tough to piece together $700 million from those alone. And a sports memorabilia tax seems like it'd run afoul of Gov. Tim Pawlenty, who wants to avoid any new state taxes.
The chief state senate advocate of a Vikings deal, meanwhile, tells the Minneapolis Star Tribune that he's almost out of time to get a stadium bill ready, and still hasn't started lining up support. This could end up even more of a nail-biting finish than the last Vikings game
Pittsburgh report recommends razing Mellon Arena
There's a brewing preservation mini-controversy in Pittsburgh, where the Penguins want to raze their old home, Mellon Arena, and replace it with housing, offices, stores, and restaurants, while preservationists want to gut it and turn it into ... housing, offices, stores, and restaurants. A city economic impact report says that demolition would be the better option, but an architect who wants to save the arena calls the analysis "incomplete."
Without even attempting to determine who's right here, I'd just like to say that having been to the hollowed-out remnants of the Montreal Forum, it's hard for me to get too excited about the prospect of saving only the shell of an arena. Especially if it involves plastic fans.
Sacramento council okays Kings land swap (again)
The Sacramento Kings three-way land swap deal took another baby step forward on Tuesday, as the Sacramento city council voted to sign an exclusive negotiating agreement with the developers behind the plan. Next up: a whole lot more negotiating, since nobody's exactly figured out yet who'd be paying what to whom.
And, of course there's also Cal Expo, which would be swapping out its current land as part of the deal, and which is now publicly disagreeing with the proposed developers over how much that land is worth. There's a whole lotta baseball left to be played...
Tampa paper: Rays threaten to leave St. Pete (two weeks ago)!
What is it with the Tampa Tribune and old news? From today's paper comes word that the Tampa Bay Rays ownership would be perfectly happy to leave St. Petersburg for elsewhere in the Tampa Bay region:
City Council member Leslie Curran put the question to a test at a recent public meeting. Spotting Rays vice president Michael Kalt in the audience, Curran invited him to the podium and asked him point-blank: "Do you want to stay in St. Petersburg?''
"I don't think that's a question we are prepared to answer at the moment,'' Kalt said. "We want stay in the Tampa Bay area. We haven't ruled out any locations.''
Only two problems with this breaking story: First off, the Rays owners have made it eminently clear in the past that they'd rather go north from St. Pete. Second, Kalt's headline-making statement actually happened two weeks ago, as the Trib itself reported at the time.
The quality of Tampa journalism aside, Kalt's statement is an indication that the legal battle over the team's lease at Tropicana Field is only likely to escalate as the Rays increasingly look elsewhere. This could end up as big of a mess as the A's situation.
Oakland: We really really really want to keep A's
Not be outdone by San Jose, the city of Oakland looks ready to throw everything it has at keeping the A's in town, starting with economic impact studies:
The study, commissioned by the nonprofit group Let's Go Oakland, claims that building a new 36,000-seat, $500 million baseball-only stadium in the city's Jack London Square area immediately would create 1,661 new construction jobs in Oakland while also generating about $2.6 billion in total economic activity for the city over the next 30 years.
"We really need and want the A's to stay in Oakland," said City Council President Jane Brunner. "The real reason we need to have the Oakland A's is for economic development."
Ah, "economic activity," the last refuge of the economic development consultant. As I've discussed here previously, this just adds up all the money changing hands in your city, regardless of who's spending it and who's receiving it — so that if the A's double ticket prices, that's not a horrible ripoff of Oakland fans, but rather a wonderful boost to "economic activity," notwithstanding that the people actually receiving the bulk of the cash (the A's owners and players) don't live in town.
I've only begun to dig into the report itself, but it looks like the more meaningful economic projections — actual fiscal impact to city tax revenues — are reserved for the final chapter, where a new stadium is estimated to generate $19.8 million a year in added city taxes, for a total 30-year present value of $273.7 million. The problem here: A chunk of those tax revenues (sales taxes, parking taxes) would be in part cannibalized from other places (if locals spend more on A's parking, they have less to spend elsewhere in town), while the biggest chunk, taxes from increased property values, is awfully speculative, given past problems with tax-increment financing districts.
(And yes, before anyone writes in: There's some argument that Oakland has more to gain than the average city, given that a lot of fans come from neighboring municipalities. But that only reduces the cannibalization problem, it doesn't eliminate it.)
As for job creation, actual permanent jobs created would be in the 1,000 range — meaning that if Oakland were expected to kick in even 20% of the stadium cost, its per-job cost would be above the craptacular $100,000 mark. Council president Brunner might want to come up with a better "real reason" — maybe something about wanting Oakland fans to be able to see Brett Anderson before he blows out his elbow. Oops, too late!
April 28, 2010
Devils arena creates development, except for the actual development part
Ken Belson, the New York Times' favorite rose-colored sports business reporter, has an article today headlined "Devils' Move Paying Off for Team, and Newark." For the team, no duh — after all, the Devils got $358 million in public money to help build the place. As for the city, Belson's evidence comes down to this single paragraph:
The additional foot traffic has helped generate nearly $15 million in economic activity and helped created 708 jobs in Newark, on top of the 1,400 people who work in the arena when there are events. Marriott plans to break ground on a new hotel in September. Several housing developments and a park across from the arena are planned. A few sports bars will open on a street adjacent to the arena.
Belson doesn't give a source on the job-creation stats, but presumably they come from an economic impact report by the city, and we all know how unreliable those numbers can be. As for the rest, I last walked the area around the Newark arena the summer before last, and I described what I saw at the time (for a magazine that subsequently folded before my article ran) as:
The building is surrounded on three sides by parking lots, on the fourth by vacant storefronts. A large "Going Out of Business" sign looms across the street, advertising a furniture store that's been forced out after 85 years when the city took its building under the threat of eminent domain. Jack Stoecker, co-owner of the Green Street Cafe adjacent to one of the parking lots, says, "Hockey nights I'm sold out"; a block away from the arena on Market Street, meanwhile, merchants say they seldom see spillover business from fans, who prefer to go straight from their cars to the game.
That was pre-economic collapse, though it's certainly possible that, as Belson concludes, "the real gauge of the arena's success will coming in the next few years, as the economy recovers." Still, "too soon to tell" is a far cry from that cheery headline.
Oilers plan "open house" for arena comments
Edmonton Oilers owner Daryl Katz is soliciting public comments on his $1.4 billion arena development plan ... not on who should pay for it, mind you, or whether it should be built at all. But if you want to comment on the "conceptual images" of the project, there will be an open house next Thursday, May 6, at the Art Gallery of Alberta.
Now, pretty pictures are cheap, and usually meaningless — just ask folks in Brooklyn. But it's certainly a good way to get headlines, and to get people talking about your plans without worrying over niggling details like finding $1.4 billion.
As for the funding, Katz VP Bob Black said yesterday that more details would be available "in the not too distant future." One can only hope it'll involve lots of prop comedy.
As expected, the plan to fund a Minnesota Vikings stadium through "racinos" (that's slot machines at race tracks) is going nowhere, with the state house overwhelmingly rejecting an amendment that would have tacked on a racino provision to an unrelated agriculture and veterans bill.
"This issue is not going away," bill sponsor Rep. Tom Hackbarth, told the Minneapolis Star Tribune. But it sure looks like the bill is, at least for now.
In other Vikes news, team stadium czar Lester Bagley now says they'd be okay with a non-retractable roof if that'd help get a stadium funding bill passed. Bagley told the St. Cloud Times: "Only in Minnesota: The Twins wanted a roof and didn't get one. The Vikings didn't want one, and they're going to get one." Actually, no roof at all for the Vikings would be even cheaper — but Bagley didn't offer to go along with anything as crazy as that.
April 27, 2010
San Jose A's land costs hit $72m and rising
MLB commissioner Bud Selig's Oakland A's relocation task force still hasn't issued its recommendations, but that's not stopping the city of San Jose from buying up land for an A's stadium, if a move to San Jose is approved (and the A's owners can afford whatever payoff MLB deems necessary for the San Francisco Giants' territorial rights). The city has already spent $24 million assembling about half of the 14-acre site, and the total cost, including new roads and infrastructure, is now expected to exceed $72 million.
Notes the San Jose Mercury News:
San Jose must contend with private property owners hoping for a bonanza in a down market. Others may not want to sell, raising the unpleasant prospect that the city's redevelopment agency might ultimately have to seize their land. And it is still unclear where the agency will find all the money the ballpark site and roadwork are expected to demand.
The Merc News describes the current landowners as "homes, mom-and-pop businesses and a gas supply company that sits roughly where center field is envisioned." Asked if the city would use eminent domain to seize property, John Weis of the city's redevelopment agency demurred: "We are going to negotiate the property acquisitions."
The city is planning to buy up the property whether the stadium happens or not; if not, it plans to build retail space, offices, and possibly housing. To replace the current retail space, offices, and housing. That should be an interesting eminent domain hearing...
Trib's Rays story an instant replay
Thanks to the excellent Noah Pransky of Tampa's WTSP-TV, whose Shadow of the Stadium blog notes that that Sunday Tampa Tribune piece I went off on yesterday was actually a Thursday Tampa Tribune piece that that Trib reprinted on Sunday. On the front page.
Writes Pransky: "Never in my life have I seen a newspaper reprint a cover story from Thursday's paper on the cover of its Sunday paper. Not even my high school paper - desperate for material when Mr. Maddon wasn't cracking jokes over the loudspeaker - would re-print stories."
Pransky also takes the opportunity to re-link to his own post from last Thursday conveniently listing all the recent Trib articles arguing for a new stadium. Looks like the paper is trying to relive its old days of the Buccaneers stadium battle, when the Trib's managing editor (according to one of his staffers at the time), declared, "Our coverage of the stadium will be limited to finding solutions for it to be built."
Who's to blame (or credit) for Cowboys' Arlington move?
The Dallas Morning News has a long editorial (or maybe a column? hard to say, as online it's unsigned) today asking why the Cowboys built their stadium in Arlington instead of Dallas. (This prompted by Cowboys owner Jerry Jones recounting how he spurned Dallas after Mayor Laura Miller patted him on the knee.) Among the questions posed:
Was the loss of Cowboys Stadium a failure of leadership or was a Fair Park location a fantasy that had no chance of becoming reality, particularly with Jones shopping for the best deal available? ...
Where was the council? Where were the opposition leaders who gleefully blocked Miller on other issues?
Of course, who really knows if a stadium could have been built in Dallas? Fair Park was too small for what towers over Arlington.
All fine questions, but missing is one big one: Would Dallas have been better off if it had built a stadium instead of Arlington? After all, Arlington had to kick in $325 million and displace local businesses to make way for the Cowboys' new digs; Dallas residents, meanwhile, still get to go to the games, but are spared the expense. Arlington presumably gets some added tax revenues as a result of the stadium, but it's still a worthwhile question: Did Dallas win by losing? If so, maybe that knee-pat, if it really happened, wasn't so inexplicable after all.
April 26, 2010
Rays stadium financing: Could the team turn a profit?
The Tampa Tribune had a long piece yesterday running down everything that's wrong with the Rays' Tropicana Field, including that the skyboxes have obstructed views of the roof and that the food concessionnaire is crappy. (This may be the first-ever suggestion that a team should build a new stadium just to get out of a concessions contract. Tim Naehring and the chef's salad controversy notwithstanding.) But the more interesting tidbit is one that's almost brushed over in the article:
Without the amenities and attractions found at modern ballparks, the Tampa Bay Rays are missing out on a potential $40 million in additional revenue, experts said.
If true, that would be a hugely significant statement: Since the annual cost of paying off a new stadium has been estimated at around $30 million, that would mean the Rays could actually pay for a new stadium themselves without any public money at all. Yes, it would be a lot of work to go through just to get a net profit amounting to less than it would cost just to re-sign Carl Crawford, but a profit is a profit — and asking the public for $10 million or so is likely to be much more attainable than an entire $30 million.
The question, then, is: Is it true? The Trib never says which "experts" supplied that $40 million a year number, but let's look at the numbers to see if they make sense. According to Forbes, the Rays brought in about $156 million in revenue last year (and, not incidentally, turned and estimated $15.7 million profit). To add $40 million a year would essentially mean turning them into the St. Louis Cardinals ($195 million in revenue). If anyone reading this thinks that Tampa Bay has the same market potential as baseball-mad St. Louis — which, let's not forget, is currently in the honeymoon of its own new stadium — I've got a bridge to sell you.
Now, there's one important caveat on the Forbes figures: They're after revenue sharing, which the Cardinals pay into, and the Rays currently draw from. Normally, increasing revenues by $40 million would mean you'd lose about a third to revenue-sharing "taxes." (Depending on where you fell in the revenue spectrum; the formula is mind-numbingly complex.) Thanks to the Yankees loophole, however, the Cardinals can deduct their $16 million annual cost of their stadium bonds before paying revenue sharing. Some quick algebra (okay, not so quick — it's been a long time since 9th grade) shows that the Cardinals are likely bringing in around $50 million more than the Rays in order to end up with $40 million more net.
So let's be conservative and say that bringing in an extra $40 million a year in gross revenue would be the equivalent of just reaching the next revenue rung down from the Cardinals — say, the one occupied by the Washington Nationals ($184 million), Colorado Rockies ($183 million), or Texas Rangers( $180 million). Is that feasible? Maybe — Tampa Bay is a smaller media market than D.C. or Dallas, but larger than Denver. Though it also has 13% unemployment, which isn't really a great sign for prospective fan spending.
To sum up: If everything broke right, a new Rays stadium might bring in enough money for the team to turn a profit on it, barely. The only way for the Rays to get a windfall, then, would be to have the public pay for it — and even then (since they'd lose their stadium deduction), about a third of the new revenue would get siphoned off by MLB revenue sharing. So taxpayers are effectively being asked to foot the bill for $30 million in annual stadium subsidies, so that the Rays can get maybe $20-30 million more a year in net revenues.
In even simpler words: The Rays wouldn't make money on the stadium. They'd make money on the subsidy. And that, in a nutshell, is what's driving the new-stadium game: not obsolete stadiums, but the desire for public cash.
Meadowlands stadium slammed for pillars, grey decor
More reviews are coming in on the New York Giants' and Jets' $1.6 billion new stadium, and glowing they ain't:
- The New York Post reports that the end zone sections have numerous seats obstructed by pillars, with one Jets season-ticket holder calling this "a joke" and a stadium architect noting that pillars were very unusual in modern stadiums. (Though obstructed views are less so.) The stadium's designer insisted that the columns were necessary to bring the upper deck closer to the field, which is certainly a legitimate goal, and that the obstructed seats were never intended to be sold. Why the teams bothered to put in seats there in the first place, though, is unclear.
- A Giants season ticket holder who got to walk through the place this weekend calls it "UNIMPRESSIVE" (caps in original), griping: "Everything is grey. The outside is grey, the floors are grey, the escalators are grey, the paint everywhere is grey, the signs are grey, the bathrooms are grey, the barriers are grey and every seat is grey." His other complaints, in declining order of seriousness (my judgment): The upper deck is farther from the field, the escalators are poorly placed, and it was windy.
If you want to check the place out for yourself without waiting for football season, you'd better like Bon Jovi or the Eagles. Or maybe next Friday's Mexico-Ecuador soccer game is a better bet, if you don't mind the Bon Jovi-sized prices.
Vikings subsidy demand totals $64 per ticket
With only three weeks left in the state legislative session, the Minnesota Vikings owners still haven't specified exactly how much their proposed new stadium would cost, or who would pay for it — team president Mark Wilf said on Friday that "this is something the Legislature will be talking to the public about in the very near future. The public has a right to know, and soon they will know."
State senator John Marty, meanwhile, has come up with a clever way to put the likely stadium costs in perspective:
In February the Vikings' head lobbyist, Lester Bagley, told Finance & Commerce newspaper that the cost to taxpayers to cover principal and interest on the bonds would be $42 million annually for 30 years.
Let's put this into terms to which we can relate. Do the math. Bagley wants taxpayers to subsidize each of the 65,000 seats at every Vikings home game to the tune of over $64 per ticket.
That is $64 of taxpayer money for each ticket, at every game -- including preseason. For 30 years!
As explaining big numbers goes, that certainly trumps the three pennies meme.
49ers stadium has poll lead; Great America seeks rent cut
The first major polls are out in the runup to the June 8 vote in Santa Clara on a San Francisco 49ers stadium, and so far, the ayes have it: The stadium referendum leads 52% to 36%, with 11% undecided. (Or as San Jose Mercury News reporter Howard Mintz puts it, the Niners have "a substantial fourth-quarter political lead" — journalists just can't resist a cheap sports metaphor.)
Likely voters are less inclined to support the plan than occasional voters, however, and 63% of respondents said they are at least "somewhat worried" about the cost to taxpayers. Roughly equal numbers of Democrats and Republicans support the stadium proposal, if you care about such things.
Stadium opponents note that neither the ballot question (which is apparently what was read by pollsters) nor 49ers campaign materials mention the public costs of the project; Santa Clara Plays Fair activist Chris Koltermann told KGO-TV: "I went through all the 49er campaign materials and came up with a list of 15 fictional statements including 'no impact on general fund.' That's not true and 'no costs to residents,' that's not true."
Meanwhile, Cedar Fair, owners of the Great America amusement park that would lose a parking lot to the 49ers stadium, added to its lawsuit against the project a new demand that the city eliminate its $5.3 million guaranteed rent if a stadium is built:
"We believe it is essential that any proposed resolution include a realignment of the economic interests of the city and Cedar Fair," Geoffrey Etnire, an attorney for the company, wrote in a letter to City Manager Jennifer Sparacino. "The city must be prepared to accept some of the risk that the revenues and profitability of Great America will be reduced."
Reading between the lines, it sounds like Cedar Fair would accept a rent that fluctuated with its revenues. That could still represent a multi-million-dollar hit to the Santa Clara city budget, though.
As for what Cedar Fair will do if its pleas for a rent break are ignored, that's unclear. Santa Clara Mayor Patricia Mahan, asked on Friday whether she'd consider lowering the amusement park's rent, replied: "No. We have a contract. A contract is a contract."
April 23, 2010
With four weeks to go, Vikings stadium talk heats up
With that May 17 deadline approaching, the Minnesota Vikings stadium rumor mill is kicking into full gear. Among today's highlights:
- Vikings execs are lobbying the local business community, which the St. Paul Pioneer Press theorizes could "provide a seawall against what is likely to be a wave of anti-tax criticisms opposing publicly funded stadiums." Of course, businesses have their own anti-tax criticisms: Minnesota Chamber of Commerce president David Olson says, "It's going to be pretty hard to find a tax we're going to like."
- At least one state representative is warning that the Vikings will move after next year if there's no new stadium deal in place.
- Some guy in a cowboy hat has been dropping in on legislators, posing for photos and signing autographs for them.
A Vikings stadium bill still seems unlikely this session, but getting people talking about it is certainly the first step. State senator John Marty told the Minneapolis Star Tribune, "I'm all of a sudden becoming very concerned" — and he'd be the one to know.
Miami audit no longer threatens Marlins stadium opening
So much for that SEC audit that was holding up the sale of bonds for the Florida Marlins parking garages: It was wrapped up late Wednesday. That means that Miami can move ahead with selling garage bonds now, and then get on with construction.
Whether the Marlins' stadium will be ready on time is still an open question: The Miami Herald notes that garage construction time estimates range from 18 to 24 months, which means "Miami will have to scramble to meet the deadline."
Since the city is on the hook for cost overruns, and there have already been a bunch of those, it's definitely worth worrying about rush charges right about now.
April 22, 2010
Miami audit threatens Marlins stadium opening
Whuh-oh. The Florida Marlins' new stadium — or at least its parking garages — might not be ready for opening day 2012 as planned, as an SEC audit of the city's books could delay a planned May bond sale for the garages:
On the hook for $75 million worth of parking sites around the new Little Havana landmark -- a mixture of garages and surface lots totaling just under 6,000 spaces -- the city hoped to sell bonds by May 10.
Now the city is looking at May 24, at the earliest.
If the new stadium isn't ready, presumably the Marlins could play some games at their old home stadium (I honestly couldn't remember what it's officially called this week), or run shuttle buses, or something. Or MLB could just schedule the team for a long road trip the start of April, just in case.
Meanwhile, the Miami Herald notes that the Marlins will ultimately pay off the garage bonds by buying almost all of the parking spaces for $10 a pop, though it notes that this "could be a boon to the ballclub," which could "resell the spaces for any price the team wishes for its 81 home games, playoffs or events outside the season." Of course, that also means the Marlins take on the risk that nobody comes to the games — but that could never happen.
Industry NFL stadium in holding pattern
As if things weren't going badly enough for Ed Roski's City of Industry stadium plan, what with two other L.A. football stadium plans rumored to be in the works, today's Whittier Daily News has an article all but saying that the Roski plan has stalled:
Lawsuits against the project, the Great Recession, and now labor issues with the NFL's players have slowed Roski's project. The two biggest problems - the economy and the NFL's labor strife - have become larger concerns since Roski's 2008 announcement, said David Carter, executive director of the USC Sports Business Institute.
"The complications that have arisen are beyond his control," said Carter, who has consulted for Roski in the past. Roski is also chairman of the Board of Trustees of USC.
Existing owners don't know what their finances are, as a new labor deal could change how much players and team owners split, experts said. And until that is sorted out - which could take a year or so, some predict - a team won't move to L.A.
To make matters worse, getting loans is tough. And sponsors and advertisers have retooled their budgets, investing less on professional sports, experts said.
Concludes Carter: "The music may not have stopped, but it's pretty slow."
Atlantic Yards opponent takes $3m to vacate site
That whole Zimbabwe sanctions thing notwithstanding, the path to construction of the Nets' new arena in Brooklyn seems to be getting smoother of late. First, Freddy's Bar, which has been a main gathering point for arena opponents and even installed chains last year so patrons could help it resist eviction, announced it was moving to a new location, though owners promised to continue to fight the project. And then yesterday, Develop Don't Destroy Brooklyn leader Dan Goldstein agreed to take $3 million from developer Forest City Ratner in exchange for vacating his condo apartment by May 7.
Though the New York Times wrote that Goldstein also agreed to a "highly modified form of the gag agreement that Forest City had initially imposed on those it bought out," and quoted him as saying he's no longer allowed to "actively oppose the project," Goldstein himself released a statement that said he only agreed to no longer call himself a "spokesman" for DDDb:
For nearly 3 hours of talks mediated by Judge Gerges I refused to accept any kind of gag order. I would not have taken any amount of money to do that, and I did not.
I did agree to give up my title as "DDDB spokesman", but that's just a title. And I did agree to remove my name from one outstanding lawsuit which remains in court despite that. Otherwise I can do and say whatever else I want, and my agreement explicitly states that I have maintained my First Amendment rights.
Atlantic Yards Report notes that about one-quarter of Goldstein's windfall will go to attorney fees, and that "given that he did more than anyone [to fight the project], it's hard to fault his decision," though it does note that by withdrawing from the lawsuit against the eminent domain seizures, Goldstein weakens that effort's slim chance of success.
More broadly, coming on top of Freddy's relocation announcement, AYR notes that Goldstein's buyout deal is "an acknowledgment by a vocal opponent of the inevitability of the arena."
April 20, 2010
Oilers owner pitches arena plan, funding still hazy
Edmonton Oilers owner Daryl Katz officially filed his application yesterday for a $1.4 billion arena-and-development proposal, but didn't provide any more specifics about the most contentious issue, which is who's going to pay for it, and how.
According to the Globe and Mail, this is intentional, or at the very least convenient:
The team is staying tight-lipped, however, on whether it expects the city to pay for the rink — which observers say will smooth the way for the proposal and keep it from becoming a divisive issue in a municipal election this fall. ...
With few details available, no architectural renderings, no funding proposal and a mayor's race that lacks a serious challenger to incumbent Stephen Mandel, observers don't see how the arena proposal could become an election issue.
"The question is, will there be enough information by the time people vote? I doubt it very much … [otherwise] it will turn into a political football and you'd hate to do that before a civic election," said Chaldeans Mensah, a political scientist at Grant MacEwan University in Edmonton.
In other words, expect Edmonton Mayor Stephen Mandel to keep kicking the can down the road in terms of arena funding, at least until he's safely back in office. A QMI Agency wire service report indicates that city review of the application could take more than a year, which would do the trick quite nicely. So long as nobody notices in the interim that the pretty pictures don't come with loonies to pay for them.
April 19, 2010
Rays stadium funding options: Hey, let's put on a show!
In a pleasant followup to the last time the Tampa Tribune took an extended look at the Tampa Bay Rays' stadium demands, yesterday reporter Michael Sasso examined how the hell anyone expects to pay for the thing.
Sasso's overall conclusion: "Hillsborough or Pinellas County likely would have to scrape together funding from numerous sources to cover the roughly $30 million annual cost of a new ballpark. And with 13 percent unemployment in the area, no one is sure that should be a priority." Some of the "likely funding sources," according to Sasso's talks with local electeds:
- Unlike in Orlando or Miami, hotel taxes wouldn't bring in much money in the Tampa Bay area, at most $5 million a year.
- A sales-tax hike would generate far more money, but Hillsborough County is already considering a 1% sales-tax increase for light rail and other transportation projects. (Not mentioned in the Trib article: The economy-dampening effects of sales-tax hikes.)
- Tax increment financing could be used to siphon off new property taxes and divert it to paying off stadium bonds — Tampa already uses TIFs to generate $15 million a year to pay off the Tampa Convention Center. Sasso adds, "Property values are so low they could rebound significantly when the economy improves," though presumably the local governments were hoping to use that money to start paying for services again, not to pay off a new stadium.
This is all way early in the running-stuff-up-the-flagpole process, clearly, but it sure looks like the Rays, if anything, face an even more uphill battle piecing together funding as finding a stadium site. At this rate, we could well still be at this in 2027.
Yankee Stadium Gate 2 balconies saved, headed somewhere
Yankee Stadium's Gate 2 may be rubble, but the campaign to save it did have one lasting effect: The New York City Parks Department has salvaged three vintage balconies and plans to display them somewhere, possibly in the public park that is supposed to open on the old stadium site late next year.
Apparently, Parks has planned on trying to save the balconies (which are not from the stadium's "1923 opening" as the Daily News claims; the left-field grandstand wasn't built until 1928) all along, but didn't announce it, Parks planning official Josh Laird wrote to preservationist Michael Hagan, "because it was unclear if the balconies would survive the [demolition] process and we did not wish to raise false hopes."
So there will be at least one fragment of the original Yankee Stadium that the public will be able to see and touch. That is, without going to Derek Jeter's house.
April 16, 2010
Let a thousand L.A. stadium plans bloom!
What's better than a stadium plan with no team and no clear funding source? That'd be two of them, of course! According to today's Los Angeles Times:
[Los Angeles businessmen Casey Wasserman and Tim Leiweke] are investigating the possibility of building a stadium behind Staples Center, where the West Hall of the Los Angeles Convention Center now sits, with the idea of replacing that convention space elsewhere in the general area.
The Times rightly observes that "it's hard enough to build one stadium in the L.A. area, and there aren't going to be two," so any Wasserman/Leiweke plan would be in direct competition with Ed Roski's City of Industry plan, which has government approval but no team and no funding source beyond stadium revenues — which will be tough for Roski to come up with on top of paying top dollar to acquire a team.
And that's without even getting into the other other Los Angeles NFL stadium plan. Isn't this where we came in?
Vikings stadium plan: What's the rush, where's the money, what about the spending cap?
The excellent Jay Weiner of the excellent MinnPost has an overview of outstanding questions about the now-stumbling-forward Minnesota Vikings stadium plan — excellently titled "New Vikings stadium: About a zillion questions to be asked, but we only have room for 13 of them." And I only have room for three of the 13, but some of the highlights include:
2. What's the rush?
Yes, the Vikings lease expires after the 2011 season. But the Twins played in the Dome for a number of years on a year-to-year basis. And who in state government is performing thoughtful due diligence on the real possibility of the team moving to Los Angeles? ... This "Los Angeles threat" should be vetted.
4. How much is this stadium going to really cost?
The Star Tribune story uses a $698 million figure. We're hearing the conversations have the price as much as $100 million higher? What is it going to cost? Does that include related infrastructure?
8. What about the $10 million cap on Minneapolis sports facilities funding?
In 1997, the voters of Minneapolis said that any city contributions that exceed $10 million to a sports facility must be approved by a referendum. How does that affect — if at all — any effort to use Convention Center money to fund a Vikings stadium?
All worthwhile questions, as are the other ten. Let's hope someone in the Minnesota state legislature knows how to read things on the series of tubes.
April 15, 2010
MN legislators, Vikings brainstorm stadium funding ideas
As predicted, with just a few weeks to go in its 2010 session, the Minnesota state legislature has started throwing Vikings stadium funding ideas at the wall, and seeing if any of them stick. Yesterday about 20 legislators shot the shit (ed. note: not the technical legal term) with Vikings owner Zygi Wilf in a private meeting, and according to the Minneapolis Star Tribune and KSTP-TV, discussed such ideas as:
- Building a cheaper, $698 million stadium (which apparently would look like a cross between a greenhouse and an IHOP) whose bond payments would be paid off for the first ten years by the Vikings, and for the rest of the bond term (presumably either another 20 or 30 years, though the Star Trib doesn't say) by Minneapolis entertainment taxes currently being used to pay off the Minneapolis Convention Center.
- Same cheaper stadium, this time paid for with a seven-county tax on hotel stays, a sports-memorabilia tax and a rental-car tax, plus $233 million from the Vikings.
- Use the excess $2 million generated by the Hennepin County's 0.15% sales tax hike for the Twins' new stadium, which is currently being wasted by being poured into the county's general fund.
So far the local reaction appears to be mostly outrage from those whose constituents would be hit up to pay for the stadium: Minneapolis Mayor R.T. Rybak griped that his city shouldn't have to pay all the public costs of a stadium, as in the first plan; Hennepin County Commissioner Mark Stenglein called it "kind of egregious" to think of asking for the Twins stadium tax excess. Minnesota Gov. Tim Pawlenty summed up the prospects of a stadium bill passing this session as "unlikely but possible." That seems about right, but I'll still take the under.
April 14, 2010
Pacers threaten move unless city picks up $15m/year arena tab
Apparently the Phoenix Coyotes aren't the only team demanding to be paid by their landlords for the privilege of having them play in their town: The owners of the Indiana Pacers have informed Indianapolis' Capital Improvement Board that they want the city to pick up the $15 million a year cost of operating Conseco Fieldhouse — or else. Or else what?
On Tuesday, Pacers Sports & Entertainment President Jim Morris said if a deal isn't inked by June 30, Simon would have to start searching for other solutions, and nothing would be off the table.
"We've been having conversations with the Ballard administration for two years," Morris said, "and we're now at the point where we need to wrap this up in the next 30, 40 days."
If that doesn't happen, he said, "[owner] Herb [Simon] would have to look at all of his options."
Including moving the team?
"Herb would look at all of his options," Morris repeated.
Morris did stress to the Indianapolis Star that "we do not want the team to move," but that's a typical sports owner non-threat threat, as we called it in the book. This is clearly a shot fired across Indianapolis' bow, with the intent of getting headlines like ... well, like the one that the Indy Star ran on its story.
The Pacers, you may recall, received Conseco Fieldhouse courtesy of local taxpayers in 1999, keeping all arena revenues while paying all of $1 a year in rent to play in the new facility — the one thing they did agree to pay for was operations costs, now estimated to run about $15 million a year. The team was smart enough to negotiate a lease opt-out clause for itself, though, one that it's now threatening to invoke to get out of the lease if it isn't renegotiated to reduce the Pacers' costs to, well, zero, or thereabouts. Morris griped to the Star that despite the Pacers playing rent-free and keeping all revenues, "the losses have been really substantial and the only chance we have is to be able to use all the resources that are generated here to operate the basketball team."
The stadium board, meanwhile, is running a deficit that hit $47 million last year. And at the same time as the Pacers are demanding lease breaks, they're asking for new upgrades, including, per the Star, "a new scoreboard, floors, furniture, kitchen equipment, wireless Internet and other amenities."
While move threats are a standard part of the sports owner playbook, it's worth asking where the Pacers could possibly go: Before the Seattle Sonics moved to Oklahoma City two years ago, they weren't exactly besieged with tempting offers. Kansas City has an arena but no reason to agree to an Indy-type sweetheart lease; Las Vegas has lots of talk about arenas, but that's about it. It takes a lot of damn gall to demand rent breaks when you're not paying rent, and threaten to move when you have nowhere to go — but if you're an NBA team, you can probably just swing by the league offices and fill up at their gall fountain.
Prokhorov's Zimbabwe ties: Violation or loophole?
More on prospective Nets owner Mikhail Prokhorov's Zimbabwegate: International sanctions expert Usha Haley tells the Village Voice (okay, tells me) that despite the Russian billionaire's denials that he's had direct business dealings with associates of Zimbabwean dictator Robert Mugabe, she's still convinced that he's in violation of U.S. sanctions: "They have been working with Zimbabwe's officials that have been banned by the U.S. government — there's no doubt about that." In South Africa under apartheid rule, she notes, her research found that most international sanctions had little impact on companies' behavior, precisely because they were able to maintain business as usual via arm's-length agreements: "They erected facades, putting all kinds of administrative barricades between themselves and their operations in South Africa. In spirit, they violated these sanctions. And that's what I'm saying is happening with Prokhorov — except it looks like the trail is hotter with Prokhorov."
Whether the violation is of the spirit or the letter of the law, however, remains unclear. SW Radio Africa reports that "Prokhorov, through his Renaissance Capital investment bank, snapped up a significant shareholding in the government owned Commercial Bank of Zimbabwe Holdings in 2007." However, it adds:
The saving grace for Prokhorov, as exiled investment banker Gilbert Muponda explains, is that CBZ Holdings is not on the US targeted sanctions list. This is despite its key role in the sourcing of funds that sustained the oppressive Mugabe regime. Current Reserve Bank governor Gideon Gono ran the bank as Chief Executive for several years, earning a reputation as Mugabe's personal banker. Muponda told us that CBZ was now the country's biggest bank in terms of deposits, largely owing to help and support from the central bank chief and former boss, Gono.
(Thanks to Atlantic Yards Report for the link.)
The big question here is what the U.S. Treasury Department, which has jurisdiction over sanctions law, will do, and they ain't talking. Though they do have a really impressive list of things they can do to sanctions violators, if they want.
Reinsdorf in, Ice Edge out in Coyotes lease vote
The Glendale city council held its vote last night on the two competing lease proposals by prospective owners of the Phoenix Coyotes, and the result was a dramatic one: The council unanimously approved the bid of Chicago White Sox owner Jerry Reinsdorf, while rejecting by a 5-1 vote the proposal by Ice Edge Holdings.
Reinsdorf is still a long way from taking control of the bankrupt, league-owned hockey franchise, however. Last night's votes were technically just on "memorandums of understanding"; an actual lease still has to be drawn up and approved by the council and Reinsdorf. The NHL also needs to agree on a sale price with Reinsdorf, who will be helped out by a promise of $65 million in taxpayer dollars that he can use toward the team's purchase price. (He'd also receive up to $100 million in public money over the next five years to cover losses, and be guaranteed a set sale price if he then decided to bail on the team. However, he would not get a pony.)
So the big question is: Why? I'm 2,000 miles from Phoenix, and the press coverage has been singularly mute on any reasons the council may have given for its blessing of the Reinsdorf bid. (The Arizona Republic, the state's paper of record, only managed to run eleven sentences on the council vote.) An AP story gave one hint, reporting that "vice mayor Manny Martinez questioned whether Ice Edge actually had the capital available," something we've heard concerns about before. Or there's always the Phoenix New Times' conspiracy theory, which is that Glendale City Manager Ed Beasley is steering the process to Reinsdorf to help out Beasley's friend (and Reinsdorf's arena lobbyist), former state legislator and ex-weatherman (no, not that kind) John Kaites.
In any case, even if the NHL and the council sign off on Reinsdorf's purchase, it will still likely face additional legal hurdles. The conservative Goldwater Institute (yes, named for that Goldwater) has already threatened to sue to block the deal, under state laws requiring a public benefit from any subsidy agreements. Goldwater lawyer Carrie Ann Sitren told the Globe and Mail that Reinsdorf "really seems to have insulated himself completely from any financial liability," noting that Reinsdorf will have operating losses covered by the public for five years, after which he's free to sell the team or move it. Sitren indicated that any suit would likely come after a lease deal is finalized, which likely won't happen until the NHL approves the team's sale to Reinsdorf, which is expected (but not required) by the end of June.
The only thing for sure right now, then, is no home games in Saskatoon for the Coyotes. Not until 2015, anyway.
County approves Dynamo stadium deal
The Harris County commission yesterday voted to approve the Houston Dynamo's proposal for a $95 million stadium, $35 million of which will be paid for by the city and county.
With the Houston city council having approved its end of the deal last week, the project will now move ahead toward an April 2012 opening ... unless it doesn't. The city and county still needs to create a tax-increment financing district around the stadium to funnel new tax revenues into repaying the public costs, among other things. All signs are that the remaining measures will be approved without incident, but in stadium deals as in baseball, it ain't over till it's over.
April 13, 2010
Twins stadium opens, Wrigley improvements unveiled, Rays and Yanks bicker over Trop
Baseball opening day was last week, but with half the teams starting the season on the road, yesterday marked first games at several stadiums, including something old and something new, plus a non-first-game at something that its tenants are outspokenly blue about:
- The Minnesota Twins debuted their new $522 million Target Field (of which $387 million is being paid for by county taxpayers), and goggling fans described the new place as "intense and extreme" and "how baseball is supposed to be played." (The Twins had been indoors at the Metrodome since moving out of Metropolitan Stadium in 1982.) The Mankato Free Press calls it "ultra-intimate" and says the "second deck of the left-field seats hovers so cozily over the field that it's remindful of a Fenway Park Green Monster seat view &mdash minus the stiff cost." From my vantage point watching on TV, this looked like more than a bit of an exaggeration — the upper decks are set back fairly far and stacked relatively high, and the "party deck" in the left-field corner looks like a bit of an obtrusive eyesore (kind of a cross between San Diego's Western Metal Supply building and Citi Field's glassed-in Acela Club) — but it certainly is outdoors. If any FoS readers were there, I'd welcome hearing your thoughts in the comments section.
- Wrigley Field held its 97th season opener (the 95th for the Cubs; the first two were for the Chicago Whales of the long-ago Federal League), and debuted the first of the offseason renovations that new owner Tom Ricketts has planned. The most talked-about improvements seemed to be to the bathrooms: "Clean, dry, toilet paper, it was very nice," said one female fan, while a male fan noted: "Much nicer, much cleaner, and I'm glad they kept the tradition of the troughs, but they do have some private urinals if you're into that kind of thing." Other changes include a spruced up back of the scoreboard and large banners of Cubs players adorning the front of the stadium. No glowing Toyota ad in the bleachers yet, though. (No, it wasn't recalled.)
- The Tampa Bay Rays actually had their home opener last week, but the Yankees' first series of the year there sparked a war of words over Tropicana Field, starting when Yanks catcher Jorge Posada griped "it's not a baseball stadium" after a ball hit a catwalk and was ruled a single. (Note to Jorge: If stadium-specific ground rules aren't baseball, then what are all these for?) Rays manager Joe Maddon shot back: "Tell them we're trying to get a new yard ourselves. If they want to contribute in any way, we'll take it. ... We'll take all kinds of donations; any major-league team that wants to contribute to the new ballpark, we'd be happy to accept." Added Maddon: "We could just build it on Jeter's property out there." Maddon tactfully failed to mention that the Rays, along with 28 other major-league teams, are already helping pay for the Yanks' own new stadium.
Great America owners file new suit against 49ers stadium
One San Francisco 49ers stadium lawsuit leaves, one enters: Great America amusement park owners Cedar Fair, fresh off their sale to new investors falling through, have again sued the city of Santa Clara, charging that its environmental impact review for the stadium project is insufficient. (The stadium would be built atop what's currently a Great America parking lot.)
Cedar Fair already has one suit pending against the city, charging that it violated state law by signing a binding agreement to build the stadium before EIR was complete. Yesterday was the deadline for filing a direct EIR challenge, and the San Jose Mercury News speculates that the new suit "may be another tactic to jump start negotiations with city and 49ers officials." Undoubtedly, but given how long these negotiations are going on, it certainly holds the threat of delaying the project, if nothing else.
Unlike the citizen lawsuit that was kicked out of court last week, this suit does not seek to challenge the June 8 voter referendum on the 49ers deal, which will still go forward. If it passes, then we can expect to see both Cedar Fair and the Niners gearing up their lawyers.
April 12, 2010
Glendale outlines Coyotes bailout offers
The city of Glendale, as promised, released its proposed lease deals with the two prospective buyers of the Phoenix Coyotes on Friday, with a final council vote set for tomorrow. You can read the Arizona Republic summary of the proposals, or go right to the source by downloading the memorandums of understanding themselves (Jerry Reinsdorf's here, and Ice Edge Holdings' here; neither is more than four pages long).
Both bidders had previously indicated that they'd want a payoff from Glendale in exchange for keeping the Coyotes in town, and both leases provide for that:
- In Reinsdorf's case, this would include a city-created "community facilities district" that would generate $65 million in unspecified "revenues" (including, but no doubt not limited to, parking fees at Coyotes games) to be used to help defray Reinsdorf's purchase price, as well as $25 million a year to offset any losses the Coyotes accrues on Reinsdorf's watch (capped at $100 million over seven years). Reinsdorf could sell the team after five years, at which point Glendale would have to find a buyer willing to pay him $103 million, his initial investment — in effect guaranteeing that Reinsdorf would come out of the deal with his annual operating losses covered and his investment intact.
- Ice Edge would get a CFD as well that would take over control of arena parking, but in its case it would get only $7.5 million a year in parking fees, $5 million a year to offset losses, and $2 million a year from a ticket tax on all arena events. The MOU explicitly states that the city would have to supply enough cash to the CFD to make all of these payments, in the event that parking fees were insufficient.
Not included in the MOUs: where this CFD money is supposed to come from, though sales and business taxes are considered likely.
There are already reports that the NHL prefers Reinsdorf's bid, and it looks like Glendale does too, considering how much sweeter his deal would be. But then, he's a guy who knows how to use leverage.
Meanwhile, I'd love to provide more info on tomorrow night's council hearing, but all I can find on the Glendale council website is this.
Would-be Nets owner Prokhorov charged with Zimbabwe sanctions-busting
Just when you thought the relocation of the New Jersey Nets to Brooklyn was all but a done deal, here comes another Shyamalanesque twist: New Jersey Congressmember Bill Pascrell Jr. has asked the Treasury Department to investigate would-be Nets owner (and arena investor) Mikhail Prokhorov's business dealing with the government of Zimbabwe, and whether they violate U.S. sanctions against that nation.
At issue appears to be an economic summit that Prokhorov's investment bank, Renaissance Capital, sponsored in February in cooperation with Zimbabwe's government, which is run by the increasingly violent and dictatorial Robert Mugabe. Executive order 13391, issued in 2003 by President George W. Bush, prohibits "anyone in the United States" as well as "U.S. branches and representative offices of foreign companies" from conducting transactions with anyone who has "undermin[ed] democratic institutions" in Zimbabwe.
Whether this directly applies to Prokhorov — who isn't a U.S. citizen or resident, and whose dealings with Zimbabwe came via his non-U.S. business interests, may not matter: Recall that the Nets arena's naming-rights deal with Barclays Bank almost blew up over the bank's ties to South African apartheid, among other things, and that the new Jets and Giants stadium is still without a naming-rights sponsor after its initial partner turned out to have
The immediate question is whether the NBA will put the Nets sale on hold — or should I say, further on hold — while the Treasury Department determines whether to investigate. Given that the NBA already dismissed Pascrell's charges once as not worthy of consideration, maybe not; on the other hand, the last thing NBA commissioner David Stern has to want is to have Capitol Hill reading about his league in the same sentence as African dictators. And as I've noted many times before, stranger things have killed development deals in this town.
Texas Stadium got blowed up real good yesterday. Pushing the plunger: This kid, who won the contest to do so by writing an essay about his campaign to help feed the homeless. One hopes he won't have to now start feeding them cheese-like food products.
Oilers, Edmonton mayor still seeking arena
Long article in yesterday's Globe and Mail about the Edmonton Oilers arena campaign. It's worth reading for yourself if you have a specific interest in the Oilers situation or just want a primer on how sports facility squabbles usually go (pro: It'll revitalize downtown! con: It's a money pit!), but for those on a tighter schedule, highlights include:
- A city report estimated that it would cost $250 million to renovate the Oilers' current home of Rexall Place. (Renovate it into what, the article doesn't say — though since the arena's operator described the plan at the time as a "gutting and starting over," we're probably not just talking spiffed-up concessions stands.) The report was commissioned by Mayor Stephen Mandel, the Globe and Mail helpfully points out, "the same year his re-election campaign received a $15,000 donation from [Oilers owner Daryl] Katz's company."
- Mandel says that Katz "absolutely" would put in some unspecified amount of money toward a new arena.
- Oilers arena lobbyist Bob Black points to Columbus, Ohio as a city where the impact of a downtown arena "has been undeniably positive." Notwithstanding the bit where the Blue Jackets are now seeking a taxpayer-funded lease bailout.
- City councillor Tony Caterina counters that Katz's entire planned $1.1 billion development that would include an arena would only generate $14 million a year in taxes, while arena bonds would cost $30 million a year. "Right there," says Caterina, "the numbers don't work."
- Black says, "We're caught between a rock and a hard place, so we've got to come up with some solutions.: He insists, though, that that's "not a threat to move the team. It's simply a reflection of the need to put the Edmonton Oilers on a solid foundation financially."
There's no indication yet when an arena plan could come to a vote, either in the council or a public referendum.
April 09, 2010
Coyotes lease proposals out today; vote Tuesday
The Glendale city council plans to release proposed lease deals with prospective Phoenix Coyotes owners Jerry Reinsdorf and Ice Edge Holdings later today. The council will then vote on the leases (technically "memorandums of understanding") on Tuesday, giving the public four whole days in which to read the language and respond. (The council itself got a peek at the language last Tuesday, giving them seven whole days to read and digest it.)
The lease language, you'll recall, is now key to the team's future, ever since the two bidders revealed that they'd only keep the team in town if supplied with major subsidies by the cash-strapped city. As for what form those subsidies would take, we've had a few hints in advance of today's official release:
- The Arizona Republic reports that while Ice Edge won't immediately seek to schedule five home games a year in Saskatoon, as it had previously requested, it would seek to revisit that plan if "revenue stayed low."
- Reinsdorf is seeking an option to create a "community-facilities district" that can levy special property assessments to fund infrastructure improvements, which here would presumably be construed to mean shoring up the Coyotes' penalty-killing infrastructure. Even the council apparently doesn't have details on this one; Reinsdorf would only negotiate such a district if he decided he needed one later on. Which he would presumably have leverage to demand, if he's going ahead with an insistence on an out clause in the lease if revenues aren't up to par.
Meanwhile, Ice Edge is already griping about the lease concessions not being enough, and threatening to pull out of the bidding entirely. "We believe that Glendale is playing a dangerous game of poker," ice Edge CEO Daryl Jones told CanWest News Service. "At the end of the day, Ice Edge doesn't have to own this team, or any team. We make investments with the objective in generating an appropriate return. While we have become very passionate about supporting the fine hockey fans of Phoenix, a bad deal is a bad deal, and no amount of brinkmanship will lead us into signing a bad deal."
We'll see if the same holds true for the Glendale city council.
Block that meme: When big is small
First line of a New York Times story today by Ken Belson on the new Jets and Giants stadium:
If the trend in baseball stadiums is intimacy, in football, it is grandeur.
I've railed against this before (including the last time Belson proferred it), but let's just put a stake in this right now: New baseball stadiums are not generally more intimate than the ones they replace. Do they have fewer seats? Yes. Is there less foul territory, putting the front rows of the lower deck closer to the action? Yes. But by any normal definition of intimacy — which is to say, fans in general being closer to the game — new baseball stadiums ain't it: With wider legroom and expanded luxury seating, the average seat is usually farther from the field than in older stadiums — and that's even with new stadiums typically having fewer seats.
Now, there are certainly benefits to having more legroom, especially if you're a fan of the taller persuasion. But for all new baseball stadium's attributes, "intimacy" is simply not one of them, no matter how much MLB PR flacks and their enablers in the media try to push it. A better word for the spacious concourses, upgraded video screens, and ubiquitous cupholders they offer might be ... grandeur?
NBA: No Nets sale until land is in hand
The NBA Board of Governors announced yesterday that it will likely postpone next week's scheduled vote on Mikhail Prokhorov as new majority owner of the New Jersey Nets until the state of New York has acquired all the land for the team's planned Brooklyn arena. "The Board will vote on Mr. Prokhorov's purchase of the Nets once a firm date is set for the State of New York to take full possession of the arena site, which the team expects to occur in the near future," said league official Joel Litvin.
For those scoring at home, there's still one lawsuit pending against state seizure by eminent domain of several properties, charging that the Atlantic Yards development plan has changed so much since 2006 that the state's original eminent domain justification is no longer valid. Oral arguments take place Monday morning; check Atlantic Yards Report for up-to-the-minute reports.
April 08, 2010
Vikings stadium bill to be unveiled soon?
That Minnesota Vikings lobbyist might have been wrong after all: The Minneapolis Star Tribune reports that state senate taxes committee chair Tom Bakk says a Vikings stadium bill is "pretty much drafted" and that there's "plenty of time" to pass it before the Legislature adjourns in mid-May.
Of course, as the Vikings (and the Twins) found in past years, there's a big difference between getting a bill up for debate and getting one passed — especially since as of this writing, still no one is exactly sure how on earth it would be paid for. And then there's that little public poll thing as well. But if nothing else, it looks like we may well have an entertaining May ahead of us.
The Houston city council unanimously approved spending $17.5 million on land and infrastructure for a new Dynamo soccer stadium yesterday. The vote leaves the seemingly endless Dynamo stadium campaign just a vote by the county commission (which would chip in a similar amount) away from approval, which could come as early as Tuesday.
If all goes according to plan, the Dynamo will break ground on a $60 million (not counting land and infrastructure) stadium this fall, with it set to open in 2011 — which sounds crazy ambitious, but then, soccer stadiums aren't nearly as complex to build as, say, baseball stadiums. Though this won't be soccer-only, interestingly: The Texas Southern University football team will also play there.
As for whether this is a good deal for Houston, that's harder to say at this point. The Houston Chronicle cited Mayor Annise Parker as arguing that "the stadium is a better deal than Minute Maid Park, the Toyota Center and Reliant Stadium because neither the city nor the county will have to pay for the stadium itself" — which is true, but that's not the same as arguing that it's a good deal. Then, too, there's the question of whether the Dynamo will pay rent or share any stadium revenues with their public landlord, or whether the whole public ownership of the stadium thing is just a way of getting out of paying property taxes.
Probably the best way to sum this up is: MLS still isn't popular enough to command the sort of leverage that other sports do, and their stadiums are cheaper to build, so at worst the public loss isn't as bad as throwing it down a hole on baseball or football. Which is, I suppose, what the mayor was saying, just not in so many words.
April 07, 2010
Opening day Rays fans support, oppose new stadium
With the Tampa Bay Rays playing their home opener last night, the St. Petersburg Times reported that fans at Tropicana Field "had clear thoughts on what they want, and don't want, to see happen." Those clear thoughts included:
- If the Rays have a good year, it "could start a domino effect" for a new stadium.
- "If we win it all, it's still not going to make the Trop the Taj Mahal."
- "To build a whole new stadium when this one is perfectly fine does not make sense to me, fiscally."
Those are clear individually, I suppose, though it's hard to say what they add up to. And they're certainly clearer than the statements by Rays owner Stuart Sternberg, who ignored Noah Pransky's call to be more directly involved in the stadium process; asked whether he'd support options for a possible move to Hillsborough County included in the ABC Coalition report, Sternberg replied: "I didn't disagree with much of what they said in the report," adding, "I don't expect to be mouthing off or anything. We'll take it day by day."
ESPN's Rob Neyer, meanwhile, noting that the Rays' lease lasts through 2027, says he doesn't expect them to still be playing there then, "but what happens between now and then, I'm having a hard time seeing." Him and Sternberg both, I imagine.
April 06, 2010
Tax-deductible seats and the juicing of ticket prices
Just noticed the op-ed in yesterday's New York Times arguing that the tax deductibility of luxury boxes has ruined baseball:
Over the last two decades, the average ticket price for a Chicago Cubs game has increased 265 percent, more than four times the inflation rate. Add in parking, concessions and souvenirs, and a family trip to one of this week's opening day games could easily cost a few hundred dollars.
There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.
These deductions have led to higher ticket prices in two ways. On the demand side, they have fueled competition for scarce seats, with business taxpayers bidding in part with dollars they save through the deductions.
On the supply side, the large number of businesses bidding for expensive seats has driven the expansion of luxury skyboxes and a reduction in overall seats in new ballparks.
It's an issue I've raised before, and Joanna and I noted it way back in the first edition of our book. The deductibility of sports tickets has bounced around a bit — it's currently at 50% of the face value of tickets — but it remains a huge incentive for corporations to pay more than they otherwise would for tickets, driving up prices overall — and helping spur teams to demand new stadiums with more luxury seating that they can sell to the artifically inflated corporate market.
The op-ed authors, Duke law professor Richard Schmalbeck and Rutgers business professor Jay Soled, argue that while it would be ideal to eliminate the business-entertainment deduction for sports tickets entirely, probably a more feasible reform would be to cap the deduction at $50 per seat. That wouldn't end the juicing of ticket prices, but it would at least blunt it somewhat.
Rays stadium coalition to open mouth; uncertain whether anything will come out
The ABC Coalition pushing for a new Tampa Bay Rays stadium is scheduled to speak before the Hillsborough County Commission on May 19, which could mean a repeat of its appearance before the Pinellas County Commission last month, in which the city of St. Petersburg threatened to sue if the coalition said anything that could be construed as interfering with the team's lease on Tropicana Field.
St. Pete city attorney John Wolfe says he's set to take action if the coalition engages in "tortious interference," but wouldn't say where he'd draw the line. Whether he objects to the coalition's testimony "depends on what they say," Wolfe told the Tampa Tribune.
Meanwhile, WTSP-TV reporter Noah Pransky makes a good point on his "Shadow of the Stadium" blog about the media debate so far (and no, I'm not just calling it a good point because he links to this site):
And just as I predicted back in the ABC Coalition's infancy, columnists and editorial boards are jumping on municipalities to act. But where's the pressure on the Rays to come back to the table with ideas (or even a fair request) of their own? ...
The time is now for the Rays to step up to bat and contribute more than their disappointment to the process. And fellow journalists, instead of penning editorials that encourage elected officials to work with the Rays (since there's proof they ARE trying), maybe we should be pushing the Rays' officials to work with them.
Of course, if the Rays wanted to go public with their stadium campaign, they wouldn't have left it to the ABC Coalition (which consists mostly of local business leaders — picked, ironically, by the city of St. Pete, which is now threatening to sue them if they talk about stadiums anywhere but their city) to carry their water for them. But you'd think that local newspapers might consider it their business to point this out — or then again, maybe not.
49ers stadium lawsuit bounced, vote to proceed
So much for that lawsuit to block a June vote on the San Francisco 49ers' planned stadium in Santa Clara: A county judge yesterday dismissed the suit, saying the plaintiff lacked "clear and convincing evidence" that the ballot language was misleading. The June 8 vote will now presumably go ahead, as will all the 49ers' campaign spending.
(UPDATE: The San Francisco Chronicle's John Cote notes that while a 49ers-aligned attorney testified yesterday that the lawsuit's claim of a $114 million stadium subsidy — which is not mentioned in the ballot language — was "plucked out of thin air," the figure in fact appears in the 49ers' own documents.)
In related news, the sale of Cedar Fair, the amusement park company that controls the proposed site of the 49ers stadium and which has opposed it on and off, has fallen through, apparently because the new investors weren't happy with Cedar Fair's revenues. What this means for the stadium deal is uncertain, but then, what the now-aborted sale meant for it was uncertain, too.
April 02, 2010
Winnipeg stadium deal: Return of the "groan"?
Manitoba announced a new deal for a stadium for the Winnipeg Blue Bombers CFL franchise on Wednesday, which stands out from the old one announced last year in that it's much, much more confusing. Under the old plan, the province was going to kick in $15 million toward a $115 million stadium; under the new one, it will add a $90 million loan to be paid back by developer David Asper, who will be on the hook for only $10 million in up-front costs.
Now, here's where it gets complicated: The Blue Bombers are owned by the province, and Asper will get control of the team (and the stadium) if he repays the loan in full. If he can't repay it, though — which depends on his success in tearing down the team's old stadium and building an upscale mall in its place — then the province keeps the team, and diverts the mall's property taxes out of the general fund to pay off the stadium costs (yes, still another TIF).
As some Manitoba officials point out, this could be a heads-I-win-tails-you-lose situation for Asper, who is effectively taking no risk: Either he ends up with a successful mall and a free football franchise, or a less successful mall, no team, and next to no stadium debt. The Globe and Mail reports:
"The province is crossing its fingers and hoping it will be repaid," said Conservative Opposition Leader Hugh McFadyen. "There's no obligation to repay, which means it's not a loan; it's a $90-million grant."
Or as Pennsylvania state representative Thomas Petrone famously said of one of the original TIF deals, for new stadiums for Philadelphia and Pittsburgh's NFL and MLB teams: "It's not a grant. It's not a loan. It's a groan."
Can Santa Clara stadium opponents avoid Arlington activists' fate?
The San Jose Mercury News has a nice profile today of the opposition to the San Francisco 49ers stadium plan in Santa Clara (including a photo of frequent FoS reader and commenter Chris Koltermann). The article compares the Santa Clara battle to the similarly funding-deprived opposition to the Dallas Cowboys stadium in Arlington, but notes that opposition to public subsidies is much stronger in California, adding:
Arlington's [stadium activist Wayne] Norred says the "No" side has an advantage in Santa Clara that wasn't a factor in the Cowboys' campaign: Two City Council members, William Kennedy and Jamie McLeod, oppose the project. Arlington's City Council was 9-0 in favor of the Cowboys deal.
"That shows a crack in the city's political structure on the thing," he said. "If they are moonbats, you have a problem. But if they are reasonable people, that helps."
Speaking of the Cowboys stadium, its price tag has now officially hit $1.2 billion. This isn't a problem for Arlington, since the team covers cost overruns, and shouldn't be in Santa Clara, since the 49ers have promised the same (though there's still the nagging question about revenue shortfalls). But it is an indication of how stadiums on paper never quite match up to actually existing ones.
April 01, 2010
New Fenway renovation plans announced!
Happy April 1, everybody.
