July 30, 2010
Coyotes buyers might be broke after all
When we last left the saga of the Phoenix Coyotes last month, on-again off-again suitors Ice Edge Holdings had just delivered proof that they had the cash to purchase the team. So, what are the latest developments?
The group of Canadian and American investors was required to show Glendale proof of its financing last month in order to negotiate exclusively with the city and work on a detailed lease for the Coyotes to play at city-owned Jobing.com Arena.
At the deadline, Glendale said Ice Edge had submitted "some of the required financial information." City officials declined public records requests for more detail.
But on Monday, city spokeswoman Julie Frisoni revealed that Ice Edge has failed to submit some of the required documents, five weeks past the deadline.
Dear lord, this may never end.
For now, at least, Jerry Reinsdorf hasn't re-entered the bidding, but given the number of times he and Ice Edge have each jumped into and out of the Coyotes sale process over the last year and change, you should never rule anything out. Meanwhile, Winnipeg hockey fans are trying to decide how excited to get about the prospect that no viable Arizona buyer will be found, and the NHL will relocate the team back to its original hometown, as it threatened earlier this year.
Given the levels of public subsidies that would be required to keep the team in Glendale, that might ultimately be best for all concerned — except for the remaining Coyotes fans, obviously, especially those who don't pay Glendale taxes.
Jacksonville giving Jaguars $4m bailout on naming-rights deal
Yet another example of stadium subsidies that keep on giving: When the Jacksonville Jaguars agreed to a $16.6 million, five-year naming rights deal with EverBank for their home stadium this week, apparently one key sticking point was that the team really wanted to hold out for more money. So instead, the city of Jacksonville agreed to forgo its 25% cut of the take so that the deal could go through.
Why exactly the city — which still must give final approval of the deal at a council meeting next month — went along with this is a bit unclear. A spokesperson for Mayor John Peyton said, "We believe it is of the utmost importance to do everything we can to ensure the long-term viability of the franchise in Jacksonville"; council president Jack Webb added, "I think we all kind of agreed that given the economic circumstances, let's suck it up for the short term for the good of the city over the long term."
Of course, there's no guarantee that having a naming-rights deal keeps the Jaguars in town, so effectively the city has just handed over $4 million in taxpayer money — it will come out of the city's stadium maintenance fund — as a good-will gesture. It's like taking candy from a baby...
D.C. United starts beating Baltimore drum
There's been much chatter this week about a possible D.C. United move to Baltimore, with team president Kevin Payne telling the Washington Post it's "potentially a fairly clean deal because there is a developer, there is available land and there's the Maryland Stadium Authority."
It's also pretty premature, as the stadium authority's economic feasibility study isn't even due out until September. And at last word, the mayor of Baltimore still had no idea how a soccer-only stadium would be paid for. So think of the United-to-Baltimore rumors as more of a preview for the coming fall entertainment season.
July 29, 2010
Rays stadium talks put off till November
At least the city of St. Petersburg and the Tampa Bay Rays agree on one thing: They'll be putting off any stadium talks until November, after the conclusion of the World Series. This follows the last week's debacle in which St. Pete Mayor Bill Foster offered to allow discussion of stadium sites just north of his city limits, and the Rays responded with a metaphorical raised middle finger.
This will give both sides time to prepare for what could be an ugly November. City attorney John Wolfe has already talked about getting court injunctions to prevent the Rays from negotiating stadium deals with other cities (something that's prohibited in their lease), and additional court battles could ensue over how much the team would have to pay the city for breaking its lease early.
"I'm not looking forward to the fall," Wolfe told the St. Petersburg Times. "I'm not sure what they're going to do. I don't know what their real plan is." Wanna bet it'll include sending Selig back to town at some point — maybe for the postseason if the Rays get there as expected — to make his usual vague threats?
San Jose agrees to stadium vote delay
As predicted yesterday, San Jose Mayor Chuck Reed has agreed not to put an Oakland A's stadium vote on the November ballot, conceding to MLB's demand that any referendum wait for the league's relocation commission to first issue its ruling on whether the team can move there. A vote could now happen in the spring, or later, depending on when the issue of territorial rights to San Jose is hashed out.
Reed defended his "vote first, ask questions later" gambit as "a way to help get the process moving, to try to get them to act more quickly," while city council member Sam Liccardo called MLB commissioner Bud Selig's offer to pay the cost of a spring vote "the first indication that the league is inching closer to a decision on territorial rights." Whatever makes your glasses look half-full, guys.
The San Jose Mercury News' Mark Purdy, meanwhile, reports on several rumors flying around about the MLB negotiations now underway:
One thread is that Selig has been working with the bankers who loaned the Giants money to build AT&T Park, making sure their obligations will be met if the A's move. Another thread is that Giants' owner Bill Neukom is threatening to have his team's sponsors sue MLB if the A's move. (The Giants themselves can't sue baseball because it's forbidden under MLB's antitrust exemption, so Neukom must find surrogates.) Yet another thread has MLB threatening to contract the A's out of existence and pay off Wolff.
Concludes Purdy: "None of these threads may be true. All may be true. But until there's a resolution, the crazy ride will continue." As Brian Pinhead was fond of saying: "One thing's for sure — no one knows."
July 28, 2010
MLB offers to pay for San Jose A's referendum if it's delayed
Apparently Bud Selig really doesn't want San Jose jumping the gun and holding an Oakland A's stadium vote before MLB has decided if the team can move there. Yesterday league officials told San Jose Mayor Chuck Reed that they'd pay the $1 million-plus cost of holding a special election next spring, if the city agrees to put it off until after MLB's relocation task force has finished its report.
Reed hinted yesterday that he'd be amenable to such a plan, saying, "I want to think about it, and talk to [A's owner] Lew Wolff, and he and I and [MLB president] Bob DuPuy will talk again." The San Francisco Chronicle's political gossipmongers Matier and Ross say they expect an announcement today that San Jose is putting off the stadium vote.
So, it seems like this whole kerfuffle will likely go down as a bit of gamesmanship to push the A's situation to a conclusion, though from here it's hard to say exactly who's behind the game: Reed, who was apparently frustrated that an August 3 deadline for putting a stadium on the November ballot was nearing, and DuPuy was on vacation and not returning his phone calls? Maybe Wolff, who yesterday again expressed frustration with the slow pace of MLB's decision-making process, saying, "It's been 16 months, and I have 130 employees who need to know where they are headed"? We probably won't know the full story until DuPuy writes his tell-all book about what's really going on inside those meetings (or email exchanges, or Farmville chat sessions or however they're exchanging ultimatums these days) between Wolff and San Francisco Giants owner Bill Neukom.
Rays to St. Pete mayor: Our way or the skyway
So much for that minor olive branch from St. Petersburg Mayor Bill Foster, offering to let the Tampa Bay Rays consider sites just north of his city. After a meeting with Foster yesterday, Rays president Matt Silverman fired back yesterday with a terse "thanks, but no thanks":
To secure the long-term future of the Rays here, any search for a new ballpark site needs to explore all of the Tampa Bay region. This is what we repeated to Mayor Foster today. We thanked him for his gesture, and we conveyed to him again that we will consider sites in St. Petersburg and Gateway when we are considering all potential sites in Tampa Bay.
Our organization is singularly focused on the pennant race at hand. Come November, we will work to formulate a process for a ballpark site search with the City of St. Petersburg and Pinellas County.
That's not unexpected — the Rays management clearly wants to at least consider a move to Tampa, if nothing else to increase their chances of finding some government body that'll pay for the stadium — but it indicates that this battle is likely to turn even uglier, with the possibility of lawsuits coming into play. St. Pete city council chair Leslie Curran declared herself "extremely disappointed by the [Rays'] response," adding, "The Rays need to focus on St. Petersburg and exhaust all those opportunities." Looks like there's gonna be a gumfight.
July 26, 2010
Tales of city mismanagement: How the St. Louis Rams won their sweetheart lease
Tim Sullivan's column in Saturday's San Diego Union-Tribune was dedicated to an important but too-often overlooked topic: how city governments really need some professional help in negotiating stadium deals.
Writes Sullivan:
The one voice we most need to hear is dispassionate and discerning, tactical and tough, more measured than "whatever it takes," less defiant than "over my dead body," and carefully positioned in nobody's pocket. Someone able to joust with the National Football League across a quasi-level bargaining table.
At least one stadium expert agrees, telling Sullivan that "I think it's pretty clear looking back at history that city officials typically get rings run around them by teams," and adding by way of examples:
"That state-of-the-art clause the Rams have, they were just throwing stuff in there and they were amazed when St. Louis actually went for it. When Washington, D.C., was sitting down with the Major League Baseball Relocation committee, (the city) said they were thinking in terms of two-thirds public, one-third private (funding). (White Sox owner) Jerry Reinsdorf said, 'We were thinking more three-thirds, no-thirds.'"
Okay, in case you haven't figured it out yet, that's me that Sullivan is quoting. But while the three-thirds/no-thirds story has been reported here before, the bit about the Rams' surprise success at getting lease concessions from St. Louis comes from an interview I recently conducted with Jim Nagourney, a now-retired sports facility manager and consultant who was in the room when it happened.
Nagourney was working as an ad marketer for Anaheim Stadium, he explains, when he was hired away by the Rams as a consultant on their relocation plans. "I went to a meeting in Los Angeles one morning. We had a whiteboard, and we're putting stuff down [to demand from cities]. And some of the stuff, I said, 'Guys, some of this is crazy.' And John Shaw, who was president of the Rams at the time — brilliant, brilliant guy — said, 'They can always say no, let's ask for it.'"
The result, he says, was "probably the most scandalous deal in the country," one that notoriously included a clause requiring the team's new stadium to remain "state-of-the-art," or else the team could break its lease and leave. ("That was John," says Nagourney of the state-of-the-art clause.) "The city was poorly represented — the city is always poorly represented," says Nagourney. "And John Shaw was a brilliant negotiator. And we put in all of these ridiculous things, and the city didn't have the sense to say no to any of them."
The reason this dynamic happens, over and over, is simple, says Nagourney: "A city attorney is not going to know where the money really is. They're not going to understand advertising, they're not going to understand concessions — just a whole range of issues that the team officials intimately understand. They know where the dollars are, and the municipal attorneys do not." On top of that, he says, city officials get "stars in their eyes. It's their first time dealing with celebrities. They're just so enamored with the fact that 'I'm dealing with people who get their name on Page Six.'"
Add in perks like free luxury suites and the promise players showing up at political appearances, says Nagourney, and "they just lose all sense of proportion."
So, Sullivan is dead right that cities could use negotiating assistance in stadium deals. The problem is that the very reasons why they're lousy negotiators are the same ones keeping them from seeking help in the first place.
Tiger Stadium gone, but ballplayers are back
The attempt to save Tiger Stadium as an amateur baseball field may have failed, but the site of the historic ballpark is currently in use ... as an amateur baseball field:
Every Sunday, people from the city and suburbs come to chop weeds, mow the outfield lawn and pick up trash.
And play a little baseball.
This group has no formal name. They are folks from everyday walks of life who love baseball -- and Tiger Stadium.
They've made the field playable, and if the city stays out of their way, they've got goals of doing more. They want to get rid of the high weeds where the grand stands used to stand guard, and they want to bring in seating and permanent bases.
"I just think it would be nice if there were a little ballpark until a larger project comes along," said David Merser of St. Clair Shores.
Which, the way things are going, could be forever.
July 23, 2010
Selig "disappointed" San Jose moving ahead on A's without him
Okay, so much for my theory that Bud Selig secretly gave San Jose the go-ahead to move ahead with a stadium vote in order to pressure the Oakland A's and San Francisco Giants into reaching a territorial rights settlement. Selig responded to the news of the potential San Jose referendum today by saying he was "surprised and disappointed" that Mayor Chuck Reed wants to set a November vote on a stadium plan, stating, "We were not part of the process and had no knowledge that a decision to proceed with the election had been made. A ballot referendum is premature."
Unless, of course, Selig just wants everyone to think he doesn't want San Jose to have a vote. But then, the Giants owners would probably know he knows they know he knows...
San Jose mayor: Damn the MLB report, full speed ahead on A's deal
Some people just can't be patient: San Jose Mayor Chuck Reed said yesterday that he'll ask the city council to put an Oakland A's stadium referendum on the November ballot at its August 3 meeting even if MLB's long-delayed A's relocation committee hasn't reported back by then on whether the A's would be allowed to move to San Jose.
While there's certainly nothing stopped San Jose from voting on a stadium before a move is approved, this could get tricky. The finances of any deal are likely to change depending on what settlement the A's and San Francisco Giants can reach over territorial rights to San Jose. And while the finances of the stadium construction are more or less set (the team pays for the stadium, the city pays for land and infrastructure), so far as I know no lease terms have been discussed — leaving open the possibility that the city could be asked for lease concessions if needed to fill any funding gap created by the A's having to pay reparations to the Giants.
Interestingly, MLB seemed to send a signal that it wants San Jose to move ahead with its plan, if you assume that the "highly placed baseball source" cited by the San Jose Mercury News was an intentional leak:
But even as Reed and other city leaders have fretted that time was growing short for MLB to revoke the Giants' territorial rights, one highly placed baseball source told the Mercury News the league was unlikely to wade into the issue without ironclad assurances the plan could go forward.
"Part of the problem is, [A's owner] Lew [Wolff] doesn't have San Jose sewn up. It's not like there's a stadium ready to be built," said this person, who refused to be identified because he isn't authorized to speak for the league.
"If there was an approval, that could make a difference. It's hard to say, 'OK, Lew, you can have it,' and then have them go through the voting process and end up losing."
So maybe Bud Selig's new plan is to have San Jose up the ante by approving a stadium, then use that as leverage to get Wolff and Giants owner Bill Neukom to hash out a territorial rights settlement? Could be, unless the high-ranking baseball source is just this guy.
Katz Group: Oilers are gone in 2014 without new arena
Edmonton Oilers owner Daryl Katz told the Edmonton city council on Wednesday that he'd contribute $100 million toward a new arena and $100 million toward surrounding development if the $1.4-billion-dollar project is approved. Katz also apologized for making the process difficult, and promised that any new arena would be owned by the city.
According to SLAM! columnist Terry Jones, though, Katz's henchmen were less conciliatory:
The Katz Group told council that under no circumstances would the Edmonton Oilers play in Rexall Place, especially a renovated Rexall Place, when their lease runs out in 2014.
The Katz Group also made it quite clear that there was no way they would be party to any plan where Northlands has anything to do with running a new downtown arena, period.
The Katz Group intends to be a big player in that business not just here but in Hamilton and elsewhere, and run it themselves. ...
It was also made quite clear that while the City of Edmonton would "own" the building, Katz wants all the income from all the events held in the building.
Or as Edmonton councillor Tony Caterina put it: "To my mind, you're telling us if you don't get what you want, you're not staying. You want us to put in the money and you want all the revenues."
Councillors also asked Katz Group VP Bob Black why the team couldn't just build an arena themselves, and were told: "Four were built in Canada with private funding, three of those failed shortly after they were built and the developers of those buildings lost both the buildings and the teams."
So let's get this straight: Because the Oilers have lost "several million dollars" (according to the team CFO) in each of the last two years, the city of Edmonton should build them a $450 million arena that would be a money-loser for any private entity, and let Katz keep all the revenues. That seems a bit like killing mosquitoes with a laser gun — without even the side benefit of fighting malaria.
St. Pete mayor's plan would only give Rays a little rope
The invaluable Noah Pransky has dug into St. Petersburg Mayor Bill Foster's offer to let the Tampa Bay Rays move outside city limits, and finds that it's not actually that much of a concession: There are only two new sites Foster would allow the Rays to consider, and both are barely beyond the city line.
That's not likely to make the Rays happy, since their goal looks to be to set up a bidding war among the cities and counties on either side of the bay, the better to find somebody, anybody, who has some cash to pay for a stadium.
Meanwhile, Pransky also reports that the Rays have given $50,000 to a group promoting light rail in Hillsborough County. If they get a rail line allowing Tampa fans to get to downtown St. Pete, does this mean we can forget about all this new stadium nonsense?
San Diego columnist: If Chargers won't threaten move, I'll do it for them
Sports columnists carrying water for sports teams' stadium plans are nothing new, but it takes a special level of chutzpah to pull off what the San Diego Union-Tribune's Nick Canepa did on Wednesday:
Throughout their choppy, meandering eight-year voyage to discover welcome land for a new football stadium, the Chargers have fired no shots across bows and issued no threats. Nor have they asked for clearance at other ports, such as L.A.
The ultimatum, that they will find somewhere else to dock, has been provided courtesy of the media and those who see an NFL pirate under every shovel of dirt.
But, clearly, this is a passage nearing its conclusion, even if no destination has been clearly determined. My gut is that, if the efforts to get a downtown stadium built fail, this is it.
Follow the bouncing logic: 1) The Chargers haven't issued any move threats. 2) That's just media speculation. 3) I, a member of the media, speculate that they're going to move.
To top it off, Chargers stadium czar Mark Fabiani then asserts: "I defy anybody to look at this process and identify a threat by us. But, the reality is, after eight years and $10 million spent cycling through site after site, we’re not left with a lot of alternatives." Which may not be a direct threat, but it's certainly a non-threat threat.
UPDATE: I emailed Fabiani to ask what the Chargers would do if the downtown San Diego site falls through; he said, "We would try to revisit our options in Escondido although recently the site has been talked about as a new home for the Padres minor league team." And if that failed, "you'd have to sit back and take a long, hard look at where you are" and whether anything "might turn downtown into a success if you waited a couple of years." So, no threats there, for the record.
July 21, 2010
St. Pete mayor to okay Rays move outside city limits
Stop the presses! Somebody has blinked in the standoff between the Tampa Bay Rays and the city of St. Petersburg, and it's St. Pete Mayor Bill Foster:
Mayor Bill Foster is proposing changes to the city's contract with the Tampa Bay Rays that would allow the club, for the first time, to explore alternate sites to downtown's Tropicana Field.
Foster said the amended agreement would permit the Rays to consider a stadium anywhere in St. Petersburg and the "greater Gateway area," which would include land outside city limits.
This is a minor blink, to be sure — Foster has essentially shifted from "only in St. Pete" to "only near St. Pete" — but it's a blink nonetheless, and it's not entirely clear what's in it for the mayor, who gives up a piece of leverage (the lease clause prohibiting the Rays from talking to any neighboring cities or counties) for nothing. Possibilities: 1) Foster was getting pressure from other local electeds to not be an obstructionist in getting a new stadium deal done; or 2) he figured it was better to throw a carrot to the Rays to at least talk about staying on his side of the bay, to head off talk about a move to Tampa. (Not that the Rays took the bait yet — team execs so far have had no comment.)
In any case, even though it's a potential stadium's site that has gotten all the media attention, the real issue, as Noah Pransky points out, is how to pay for one. And there they're still pretty much nowhere.
Wolff to Selig: How long, o lord?
That Lew Wolff letter making eyes at San Jose may be of unknown provenance (see comments), but the Oakland A's owner has emerged with some fresh quotes making clear his feelings about his team's future home. From today's San Jose Mercury News:
"Baseball appointed a committee 16 months ago to check out if there are opportunities we missed in Oakland or Fremont," he said. "I'm still waiting for the results."
The committee appointed by Commissioner Bud Selig will recommend whether the A's should move to San Jose or stay in Oakland.
As for specific proposals from the city of Oakland, Wolff added, "I have not heard word one of any detailed plan. I was asked to sit back and let them do their work. Well, 16 months later I haven't seen any results. Maybe Oakland has and they're not telling me. I don't know why they're hiding it."
The Merc News somehow interprets this as re-opening the door a crack for an Oakland stadium bid, but my tea-leaf reader says it's just Wolff trying yet again to put some pressure on Selig's committee to release its report already so everybody can get on with their lives. Which, Wolff no doubt knows, isn't going to happen until he's cut a deal with San Francisco Giants owner Bill Neukom on the cost of territorial rights to San Jose — which is no doubt why Wolff's allies have been publicly bashing Neukom in an attempt to get him to come down in price.
Meanwhile, the A's relocation battle has taken to the Oakland Coliseum bleachers, as a fan there tells the Merc News he was kicked out of a game earlier this year for holding a sign that read "Wolff lied. He never tried." City attorney John Russo responded by ordering the Oakland police not to assist in ejecting any A's fans for displaying anti-ownership signs. On second thought, maybe it's best if Selig's committee takes its time — this whole mess is getting too much fun to watch.
July 19, 2010
Blue Jackets president: Casino tax would make great bailout cash
Columbus Blue Jackets president Mike Priest announced Friday that the "most viable solution" to his team's demand for a public bailout of its operating losses was to hand over revenues from a proposed tax on new downtown casinos to the team. "It wouldn't require any other money being used," Priest told the Columbus Dispatch. "But it's up to the public sector to decide how it wants to use that money."
That "wouldn't require any other money" is likely directed at Columbus Mayor Michael Coleman, who's said his only condition is that general fund revenues wouldn't be used. A casino tax, though, would otherwise likely go into the general fund, so it amounts to a city expense either way. (This is an excellent example of why subsidies are subsidies regardless of what public revenue source is used for them — once tax money is collected, it all ends up in the same place eventually.) It's also still unclear how much money a casino tax would generate, given that the casinos themselves don't start opening for another two years.
In any case, though, it seems like the tone of the discussion is now on how to bail out the Blue Jackets, not whether to do so — Priest remarked that he's pleased "the momentum has really picked up." And you only need to look one state over at Indianapolis to see what that can lead to.
Oilers arena financing plan includes ticket tax, some Katz bucks
The Edmonton city council is scheduled to discuss Daryl Katz' proposal for a new Oilers arena again on Wednesday, and Katz kicked things off by saying he'll contribute $100 million after all, after initially promising to and then changing his mind and saying the money would go towards surrounding commercial development. In a letter to the council dated June 29 but only made public last week, Katz now says the $100 million will go toward the arena, which should make Mayor Stephen Mandel happy, if nothing else.
Of course, $100 million is still only a quarter the estimated cost of a new $400 million (or so) arena, and the rest of the cash will need to come from somewhere. Mandel's office released a report last Thursday calling for a "balanced funding model" — by which they mean, according to the Edmonton Journal, a mix of "ticket surcharge revenues, a community revitalization levy, contribution from team owner Daryl Katz, funding from other levels of government, and transferring current operating grants to cover debt servicing costs." In particular, a $5 ticket surcharge could pay for $110 million to $135 million in arena costs, the report projected.
Edmonton city councillors were mixed in their comments to the CBC on a ticket tax:
"It's not any different than some of the user fees that we, as a city, use on some of our facilities," Coun. Jane Batty said.
But Coun. Kim Krushell wondered if people would be willing to pay extra for their Oilers tickets.
"I'm not sure whether the market will bear that or not," she said. "But I'm certainly willing to look at anything, although $5 does seem a bit on the high side."
Actually, any economist will tell you that ticket taxes mostly don't raise ticket prices, for exactly the reason Krushell mentions: If teams and concert promoters are already charging as much as the market will bear, they'll have to lower prices to account for the new tax if they want to keep selling tickets. So in the end, ticket taxes mostly come out of the pockets of team owners and other event promoters. (Before anyone writes in about price elasticity: No, not 100% out of the owner's pockets. But close enough, given that the marginal cost of selling an extra ticket is darn near zero.)
That still leaves about $200 million to be paid for by various forms of public money, though, which should make for an interesting council hearing on Wednesday. Also interesting to watch for: Will the council kick the can down the road again to avoid the issue until after the November elections? And how will Katz' Hamilton gambit play to the councillors? Stay tuned.
July 16, 2010
Vegas developers: Build it, and NBA team will come
In one of the weirdest arena campaign moves ever, the CEO of a development group hoping to build an NBA arena in Las Vegas said this week that "we have an NBA team under contract" to move to Vegas — but only if the city approves a tax-increment financing district to kick back property taxes in the surrounding area to help pay off arena construction costs.
The arena plan is scheduled to be discussed at an August 4 county commission hearing, but meanwhile, everyone wants to know: Really? An NBA team? Which one? The Las Vegas Sun briefly mentioned that the Detroit Pistons are for sale, leading to an immediate denunciation of any such thing by the team's current owners. And Sacramento Kings owner Joe Maloof says it's not him, either.
NBC Sports asked around among team execs at the Summer League currently underway in Las Vegas, and came to the conclusion that the development group "got a 'we agree to have a serious conversation with you if you get your arena built' rather than any kind of agreement to sell." Which would explain NBA officials' statement yesterday that they "categorically deny" that any such contract is in place.
In any case, though, expect Las Vegas to show up in lots of stories about NBA teams seeking subsidies for the next few months, whether it's in Detroit, Sacramento, Indianapolis, or wherever. Maybe if they play their cards right, Las Vegas can even be the new Kansas City!
Wolff to fans: Sorry, East Bay stadiums didn't work out
Oakland A's owner Lew Wolff issued a public letter to fans on the team's website on Wednesday, saying he wanted to "offer some information that I believe may be of interest to you." The information in question: a long defense of the team's stated desire to move out of Oakland, preferably to a new stadium in San Jose.
Wolff's argument, once you strip out all the bits about GM Billy Beane being a "top individual in [his] profession" and how the A's almost made it to the World Series in 2006:
- We tried to build a new stadium in Oakland or Fremont, but that didn't work.
- "We fully recognize that our efforts to secure a competitive venue must be privately financed."
- In Oakland or Fremont, a privately financed stadium would have required "residential entitlements" — or as they're better known, development rights to build condos. However, "under current economic conditions, the residential entitlement concept has been rendered unavailable due to the prolonged recession and sharp decline in demand for residential housing." Translation: Nobody in their right mind wants to build condos in California right now.
- The San Francisco Giants' AT&T Park is really beautiful. And (mostly) privately financed. And "within walking distance to millions of square feet of commercial office space, extensive residential accommodations and huge amounts of hotel and convention facilities." There's no place to build anything like that in Oakland.
The clear implication, though Wolff doesn't explicitly mention the city by name, is that San Jose could offer room for AT&T-style development nearby. How that'd take the place of the revenue Wolff was hoping to get from condos, though, isn't clear, since all he'd be getting would be 14 acres of land on which to build a stadium. (Also not ever specified: Why or whether the A's would be better off financially in a new stadium, especially if they'd have to foot the construction bill themselves.)
And, of course, there's still the question of how much money Wolff would need to pay off the Giants for invading their MLB-sanctioned "territory." MLB commissioner Bud Selig promised this week that his blue-ribbon commission would issue its report on the matter "soon," but he's been saying that for a year and a half now, only strengthening speculation that the report won't come out until the Giants and A's have agreed on a price.
Selig did, at least, say that the threat of folding the A's (or the Tampa Bay Rays, if their stadium campaign falls through) is off the table, saying "we have moved past" the threat of contraction. The threat of relocation, though, is always in play.
George Steinbrenner's lifetime of stadium-grubbing
As the George Steinbrenner hagiography train rolls on, yesterday brought new reminders that The Boss holds a special place in the pantheon of stadium extortion practitioners.
First, from New York Times columnist Jim Dwyer's recounting of Steinbrenner's impact on New York:
"He calls up the next day," Edward I. Koch said Tuesday, remembering the end of a long negotiation in 1987 that had concluded — or so Mr. Koch thought — with a firm deal to extend the Yankees' lease on the old stadium. Mr. Koch, then the mayor, had no interest in sports but wanted to make sure that the Yankees did not leave, and so the city agreed to improve parking and road access if the team would sign an extension of its lease.
The mayor was relieved to have the haggling and threats brought to an end. One provision that would continue from the old deal was the city's 10 percent share of cable television revenue.
"He said, 'I need two weeks to decide' on an option on some obscure matter that really didn't affect the city, and we didn't care which option he chose," Mr. Koch said. "So fine. It didn't matter to the city which one he chose. We had shaken hands."
Two weeks later, the phone rang. "He called and said he was not going to sign the contract, that the options were not acceptable," Mr. Koch said. "The reason, we found out, was that in the two-week period, he had negotiated an increase in his cable television contract from $50 million to $500 million, and he didn't want the city to get 10 percent of $500 million."
And even before his arrival in New York, reports Roldo Bartimole in the Cleveland Leader, Steinbrenner was already lobbying for public stadium subsidies, authoring a report that helped lead to Cleveland Browns owner Art Modell getting taxpayer-funded improvements to Cleveland Stadium, writing: "We recognize that these improvements would be costly but they would result in a stadium facility of which both the city and tenants could be proud. The involvement of private management and capital would relieve the taxpayer of the burden — present and future — and, at the same time, assure them of a first class facility."
Adds Bartimole: "Steinbrenner and Modell also were partners in a tennis resort development in Ft. Lauderdale at the time. No conflict, right?"
Finally, South Bronx residents protested at the new Yankee Stadium yesterday, calling on the Yankees to show proof that they've actually donated millions of dollars to local community groups, as Steinbrenner and his team execs promised during the run-up to the city council's stadium vote but have never documented since. More in my Village Voice article.
Stadium economic impact claims: The legend continues
Another week, another passel of underdocumented articles claiming the economic benefits of building sports stadiums. First, from Sunday's Delaware County Daily Times:
For many [Chester] city residents, the epicenter of this revival is the freshly completed stadium of Major League Soccer's newest franchise, the Philadelphia Union. ...
A Local 845 carpenter, [Kyle] DeGraphenreed said the Union's home, PPL Park, will provide tremendous economic impact, first and foremost by bringing tons of jobs to the city. Chester residents obtained 260 of the 491 "game-day" positions offered during a recent career fair at the stadium.
"The reality is jobs will bring money for the people, and crime will go down," he said. "Crime will go down."
The change is already evident to DeGraphenreed. City businesses have put up new signs, dilapidated housing has been torn down and new developments and homes are being erected.
DeGraphenreed said he recently had to put his car in reverse when he drove past a new apartment complex on Third Street.
"When did that get built? I was amazed at how fast they were building stuff, cleaning stuff up," he said. "I'm like, wow they are really serious about turning this whole thing around."
So to recap: There's a citywide redevelopment plan that's replacing old buildings with new ones — back in the day this used to be known as "urban renewal," but somehow that term ended up with bad associations — and 260 local residents got game-day jobs. Each MLS team plays 15 home games in a year, so that means the game-day jobs are the equivalent of about 15 full-time jobs — at hot-dog vendor wages. If that's all it takes to bring down crime, the city should have skipped building a stadium and just hired a couple of dozen municipal hot-dog vendors.
And, of course, the most notable recent trend in Chester, aside from city businesses putting up new signs, is a shooting spree that left the city under a dusk-to-dawn curfew. But crime will come down soon. Surely tomorrow.
On to San Diego, where the Regional Economic Development Corp. has issued a glowing report on the city's return on investment from building the Padres' Petco Park:
Through sales, property and hotel occupancy taxes, the city will receive a 7.6 percent return, far ahead of the 1.7 percent first projected by promoters, said the report, developed for the EDC by Conventions, Sports & Leisure International, a research and consulting firm in Texas.
Though the report calls this "return on investment," the reality is actually far murkier: The taxes in question are for a "ballpark development area" that was drawn around the new stadium, within which a large number of hotels and other development has since been built. But there are two factors that aren't taken into account by the study: the "but-for" question (the Gaslight District was actually starting to draw development interest even before the Padres landed there, one of the reasons the team chose it for their stadium site), and the substitution effect, wherein at least some of the tax revenue now being generated around the stadium would have been generated elsewhere in the city otherwise (if fans had spent their entertainment dollars on something else — like, say, Padres tickets at their old ballpark).
To give the San Diego Union-Tribune credit, it does cite critics of the study, including Vladimir Kogan, author of an upcoming book on San Diego's fiscal crisis, who says, "This report is largely useless because it combines the economic impact of the ballpark with the convention center expansion that took place over the same period." But the headline is still the official line: "Ballpark's 7.6% return tops forecasts."
Sports economist Mark Rosentraub, meanwhile, is quoted as saying that even if some tax revenues were just relocated, Petco Park is a success because it's "a model of how you can use a stadium to rebuild an entire neighborhood." Not mentioned in the article: Rosentraub served as a paid consultant to MLB and the Padres during the campaign for the new stadium.
July 13, 2010
George Steinbrenner finally kicks the bucket
As everyone has probably heard by now (it was the lead item on Google News last I checked, beating out BP's latest attempt to cap the oil spill), New York Yankees owner George Steinbrenner died this morning of a heart attack. Most of the coverage so far has talked about the seven championships the Yankees won during his tenure and his "bluster"; less attention has been given to his role in the debacle that is New Yankee Stadium.
I've posted some of my own favorite memories of Steinbrenner's Yankee tenure elsewhere. Meanwhile, to honor The Boss's 30-year campaign to get public stadium cash, let's take a trip down memory lane with some choice quotes from June 1998, when Steinbrenner absolutely, positively had to have a new stadium in Manhattan, or else:
George Steinbrenner last night blasted City Council Speaker Peter Vallone and ominously hinted that the Yankees would consider a New Jersey home if they don't get what they want in New York.
The Boss attacked Vallone's bid for a voter referendum on a Bombers' stadium, saying it is "bringing us dangerously close" to leaving town. ...
"Politics has driven more teams from New York City than any of us care to remember, most recently the football Giants and Jets to New Jersey," Steinbrenner said. ...
"I do not want to move the Yankees from New York," Steinbrenner said, "but I must warn: He [Vallone] is bringing us dangerously close."
To recap: Vallone's referendum got knocked off the ballot, but the city council refused to fund the Manhattan stadium plan, which swiftly died. The Yankees somehow managed to keep from moving to New Jersey, and it took another decade, and another mayor, before Steinbrenner got his new building.
Steinbrenner is survived by his children Hank, Hal, Jessica, and Jennifer, $1.2 billion in public subsidies for his new stadium, and a big hole in the ground where promised parks were supposed to be by now.
July 12, 2010
Indy to pay Pacers $33m over three years for no damn reason
It's a couple of weeks late, but the Indiana Pacers have obtained their boodle: The city of Indianapolis has agreed to pay the Pacers $10 million a year for the next three years (plus $3.5 million for a new ribbon ad board, among other things) to play at Conseco Fieldhouse, the taxpayer-funded arena that the team plays at rent-free and keeps all revenues from. That's less than the full $15 million in annual operating costs — the Pacers' only arena-related expense — that the team owners said they wanted the city to cover, but not a whole heck of a lot less, especially considering that the Pacers' lease isn't actually up yet.
In exchange, the city gets a commitment by the Pacers to stay in town ... for three years. After that, the team could break its lease and leave town with a smaller penalty, which would dwindle to zero by 2019, the year that their lease is actually set to expire. I don't think the Indianapolis Star used my quote, but what I told their reporter was something along the lines of "This is a pretty crappy payoff for $30 million in government subsidies."
For its part, Deadspin, with its classic understatement, called the deal "the worst of all taxpayer-funded bailouts," "a ransom, plain and simple," and "a blatant cash grab by the Pacers, taking millions of dollars just to agree to live up to the terms of the deal they happily signed."
None of which I'd argue with, though I would take issue with Deadspin's contention that "Indianapolis needs the Pacers more than the Pacers need Indianapolis," given that there aren't a heck of a lot of cities with NBA-ready arenas, and certainly not with Indianapolis' fan base. It seems like the city's Capital Improvement Board caved to a major local business player — which may be partly explained by the fact that the CIB's president is a former aide to this guy.
The CIB still needs to vote to cough up the dough, which it plans to pull out of its operating budget. Yes, that's the same operating budget that ran out of money last year and had to be propped up with a $27 million state loan; with this in mind, at least one state representative says he wants to block the Pacers deal. Best of luck with that: The Pacers may not be able to beat anyone in the NBA Central, but they're unstoppable when going one-on-one with Indianapolis elected officials.
Rays stadium wars, day 22: Can't we all just get along?
It had been three whole days since anybody tried to throw out any ideas to resolve the Tampa Bay Rays stadium non-crisis, so thankfully on Friday the Tampa Bay Partnership stepped up to the plate to offer to broker talks between the team and Tampa Bay government agencies over the team's future home.
"The city of St. Petersburg and Pinellas County played a pivotal role in bringing the Rays to Tampa Bay, and now our region must pull together in a collaborative, inclusive and transparent way to ensure that the Rays remain and prosper here," wrote Partnership leaders Gary Sasso and Stuart Rogel.
So, what exactly is this group? It's a public-private marketing, public planning, and lobbying group that's led by local business leaders: Sasso runs a local corporate law firm, and Tampa Tribune publisher John Schueler is the group's vice-chair. What they can contribute to the debate isn't all that clear — St. Petersburg Mayor Bill Foster says he'll only talk about plans that keep the Rays in his city, and team officials wouldn't comment at all — but hey, at least they got their name on the telly.
How to split a hair, Sacramento department
The Sacramento Press headline is "Arena plan moving forward," but there are few new details on the Kings land-swap plan. To me, the most interesting bit is what it reveals about sports-facility salesmanship:
"The city and the state are not in a position to invest anything into these properties," [developer Gerry Kamilos] said. "The idea is to have the private sector come in and provide the capital to increase the value of those properties that both the city and state would benefit from."
Financing is proposed to come from land sales, parking fees, lease revenue, special districts to collect sales and property taxes from the properties, and bond proceeds generated by setting up tax increment districts, refinance districts and bond districts, Kamilos said.
So let's see: Sale of public land, special sales- and property-tax districts, tax increment financing (which is basically another form of property-tax kickbacks) — yeah, there's no way any of that could be construed as the city and state "investing anything" in the project.
Now, Kamilos would no doubt say that he doesn't mean no public involvement at all — the city and state just aren't going to directly pour any cash into developments at that site. But that's not how most readers are going to take it when they see "no city and state investment."
In fact, this has become one of the standards of the stadium-grubbers' handbook: Claim that you won't need public money, then look for ways to use public money. And this tactic becomes much easier when the journalists reporting your statements are too credulous, lazy, or financially illiterate to call you on it.
July 07, 2010
Field of Schemes, now with less paper!
For all I know this has been out for months now — my publisher, he never writes, he never calls — but I just noticed that Field of Schemes (the book) is now available for Kindle and whatever the heck eBook format B&N uses.
I myself only read books in formats that don't require batteries, so I can't vouch for the reading experience of these digital versions. But if you've been waiting to pick up Field of Schemes until you can read it on your two-way wrist radio, well, wait no longer!
Oilers' talks with Hamilton get curiouser and curiouser
Edmonton Oilers owner Daryl Katz' game of footsie with Hamilton, Ontario has continued over the past week, though it remains hard to say where it's all headed. Recent developments, in rough order of importance:
- The Hamilton Spectator reports that Katz is working on a memorandum of understanding with the city to get exclusive rights to bring an NHL team there for four years, at which point, if no team had materialized, he would pay the city of Hamilton $1 million. (Which, even in newly appreciated Canadian dollars, would be pretty much chump change.)
- Oilers president Patrick LaForge, however, notes that NHL bylaws prohibit owning an interest in more than one team. And while that would seem to imply a threat to move (or sell) the Oilers, he says that's not in the works either, and that Katz only wants to manage the arena in Hamilton, not put an NHL team there.
- NHL commissioner Bill Daly insists that Katz won't be working to help Hamilton get a new NHL franchise, either. Hamilton city council member Bob Bratina, meanwhile, who was in on the talks with Katz, says his proposal wasn't actually anything formal, adding: "Frankly, the whole thing is very obscure, lacks detail and in some cases doesn’t make sense."
- At least one Edmonton city councillor notes that the timing of all these rumors — sorry, rumours — is pretty convenient, given that Katz is in the middle of a currently stalled new-arena negotiation process in Edmonton.
- LaForge admits that the timing of the Hamilton talks was, and this is a direct quote, "shitty." Edmonton city councillors are now, and this is in my own words, pissy, with councillor Ben Henderson warning, "There are all kinds of people who were fully on board with the arena two or three months ago, who are now asking all kinds of questions."
- The Hamilton Tiger-Cats, meanwhile, are moving ahead with plans for a new stadium, for which they say they'll pay "in excess of $74,000,000.00." The breakdown, however, is only $15 million in cash, plus $3 million a year in operating costs for ten years (which is present dollars is closer to $20 million than $30 million), $10 million in "transition costs," and $14 million "to bring two Grey Cup Games to Hamilton as soon as possible." So the vast majority of the cost of a new football stadium would still need to be raised elsewhere. A decision needs to be made by tomorrow if the new stadium will have a shot at hosting part of the 2015 Pan Am Games.
So where does all that leave us? About where we were last week: Either Katz is trying to increase pressure on Edmonton to approve his arena plans, or he wants to grab control of the Tiger-Cats' new stadium (or the TiCats themselves), or he just really, really likes running arenas. And as for the "shitty" timing, it's equally hard to say whether that's a genuinely ham-fisted move or just a cover story for the fact that he meant to do all this to up the ante on either an Edmonton arena, a Hamilton stadium, or both. It's so hard to tell the difference between incompetence and malfeasance...
July 06, 2010
Red Wings owner pondering Pistons purchase?
While we're on the rumor front, there's one out of Detroit that Red Wings owner Mike Ilitch is considering buying the Pistons and the Palace of Auburn Hills as part of a scheme to get a new arena for the Wings. The upshot, as George Malik writes at MLive.com, is that Ilitches' events company would add revenues, while "essentially freeing up the Palace to hold concerts on an almost exclusive basis while encouraging investors to fund a follow-on arena which would both succeed Joe Louis Arena and see most of its use as the home facility for both the Detroit Pistons and Detroit Red Wings."
The basic notion should be familiar — it's the same one that Newark and the state of New Jersey agreed to earlier this year, in sending the Nets to room (temporarily) with the Devils while the Meadowlands focuses on concerts. The idea is that by giving one venue monopoly control over concerts, they get to charge more, while sports teams cut costs by sharing a single home.
Whether the savings would be enough to make the math pencil out is dubious: Bill Shea of Crain's Detroit Business notes that buying the Pistons and arena then building a new home for the sports teams would have "a cost approaching $1 billion," which is an awful lot to spend just to gain some leverage over Bruce Springsteen. Shea also notes that the plan would "likely will include co-investors and some level of public financing," which may be the whole point of the exercise: Would Detroit be more likely to fund a new arena if it meant not just keeping the Red Wings in town, but getting the Pistons back from the suburbs? Hard to say at this early stage, but as seen previously, it's just the sort of maneuver that Ilitch excels at.
Rays stadium wars, day 16: Rumors, rumors everywhere
I've been off on an extended holiday weekend, but fortunately for stadium news junkies, Noah Pransky's Shadow of the Stadium blog has been keeping up on the latest in the Tampa Bay Rays stadium battle. Among the recent developments:
- The Tourist Development Commission of Pinellas County — for those not up on Florida Gulf Coast geography, that's the St. Pete side of the bay — is drafting a plan to use $70 million in hotel tax money to help build a new Rays stadium starting in 2015. (The 1% hotel tax surcharge is being used to pay off Tropicana Field currently, so won't be available until then.) If the TDC approves the plan, the county commission would then need to approve spending the tax money on a stadium — and, of course, the Rays would need to okay a Pinellas County stadium, not to mention come up with close to $500 million in additional funding.
- The St. Petersburg Times notes that lots of other baseball stadiums have rail stations nearby, but Tropicana Field doesn't, largely because Tampa Bay has just about the worst mass transit of anywhere in the U.S. A 1% Pinellas County sales tax for public improvements expires in 2020, and if renewed could be used to build a rail station near a new Rays stadium — something that would first require building a rail line in the first place, something that voters could decide as soon as 2011, though even then it might not connect to Tampa, defeating much of the purpose for the Rays as far as luring fans from across the bay.
- Meanwhile, a former Congressional candidate has started a website called Bases Loaded Orlando to lure the Rays to that city, according to Pransky (though he doesn't provide a link, and Google can't seem to find it).
Add it all up, and you get ... not much solid, but it keeps the Rays stadium debate in the papers, which is important for a team that's taking the long view in terms of what gets done and when. It's a strategy that's worked before, for the Minnesota Twins and Florida Marlins among others: Keep enough balls in the air, and one of them might eventually fall where you want it to.
