September 30, 2010
Reports of Hamilton stadium's death greatly exaggerated
Stop the presses! The Hamilton Tiger-Cats and the city of Hamilton have done what was thought to be impossible: agreed on a site for a new stadium. Yesterday the two warring factions announced an agreement in principle to build a new stadium on railyards in Hamilton's west end, with the Tiger-Cats to chip in toward the land's purchase price to build "an entertainment/sports precinct."
Now all they need to do s figure out how to pay for it. Even with cash from the federal government for using the stadium for the 2015 Pan Am Games, there is by all accounts a $25-50 million shortfall, plus the cost of buying and remediating the stadium land itself. (The Tiger-Cats owners apparently are only interested in helping pay for land that they can develop themselves.) And that's for what Hamilton city manager Chris Murray calls a "utilitarian" stadium seating 22,000, which is 3,000 fewer seats than the CFL normally requires.
The Hamilton Spectator also reports that the TiCats are "proposing to manage the stadium for the city while using revenue from naming rights and ticket surcharges to offset operating costs." Which might not be that great a deal — depending on how the revenues from the place works, Hamilton may be better off running the place itself (or hiring an independent arena manager) and keeping the revenues. But compared to many U.S. stadium deals, where the private tenant just naturally assumes that naming rights money to a publicly funded stadium is theirs to begin with, this is at least a better starting point for talks. It truly is another country.
Falcons stadium talks still ongoing
If you were wondering whether the Atlanta Falcons still want a new stadium, the answer is: You betcha.
"We're meeting about every three weeks with the Falcons," Georgia World Congress Center Executive Director Frank Poe told the Chronicle. "One of the key position points for them is really understanding when. When is that point in time that they need to have a new facility available for them. They're working through their own decision processes to reach that point."
Poe said that the Georgia Dome could be upgraded for $400 million, or a new stadium (presumably open-air) built for $800 million. An extension of the hotel/motel taxes that are being used to pay off the Georgia Dome (through 2018) could help pay some of the cost of a new stadium — though given that the Dome cost only $214 million when it was built way back in 1992 (my god, Designing Women was still on the air!), not a whole heck of a lot of it.
Who's to blame for Rays' low attendance?
On Tuesday, Tampa Bay Rays stars David Price and Evan Longoria called the team's low attendance in the midst of a pennant race "embarrassing" — the team sold only 12,446 tickets to Monday night's potential playoff clincher — setting off a media frenzy over the team's poor ticket sales.
Mostly, Price and Longoria have been raked over the coals for dissing their own fans: Yahoo! Sports' David Brown called it "stupid" and "ignorant" (and, for good measure, "entitled, spoiled, narrow-minded and short-sighted"). CBS Sports' Ray Ratto wrote that "criticizing the customers for not being more numerous is a big idea that almost never goes well" and "if the fans don't come, it's because the team didn't do enough to convince them to come, not the other way around." And ESPN's Buster Olney compared it to a bagel store owner complaining that his customers aren't buying enough bagels, an analogy that would perhaps go over better if Tampa Bay were known for its bagels.
Ratto, among others, points to the horrible economy (especially horrible in Tampa Bay) as one reason why attendance is low. (Not that it's all that low: Bleacher Report's Jeff Leadbetter notes that ticket sales are down just 0.3% from last year, and with attendance falling across all of baseball, the Rays actually moved up from 11th in the league to 9th this year.) ESPN's Rob Neyer cites the ubiquity of cheap big-screen TVs (Rays TV ratings, he notes, are "way, way up" this year). Another issue, of course, is that "clinching a playoff spot" might just not be the most exciting reason to turn up to a ballgame on a Monday night against the lackluster Baltimore Orioles, especially when it's been clear for a month now that both the Rays and the New York Yankees are going to make the postseason out of the A.L. East. So Longoria and Price might just as well have blamed the wild card for destroying the excitement of pennant races — but then, dissing fans is one thing, calling out the commissioner is another.
Or, it could also be that Rays fans just can't get excited about the playoffs when ownership is asking them to pay $100 to join a Playoff Access Club to get dibs on buying postseason tickets. Mentioning that, though, would really be biting the hand that signs their paychecks.
In the wake of last week's Cal Expo vote to reject a land swap to help fund a Sacramento Kings arena, NBA arena czar John Moag issued an email Tuesday saying the league is done with its arena efforts in that city:
"On the heels of the disappointing — but not surprising — action (or inaction) of the state and Cal Expo board, it is fair to say that the NBA has ceased its activities on the Sacramento arena front. However, we will continue to monitor and respond to the activities and options of others that might reasonably ensure the competitiveness and viability of the Kings' franchise."
Reading between the lines, that certainly sounds like the NBA is trying to send a signal that it's open to relocating the franchise — Moag didn't say "ensure the competitiveness and viability of the Kings' franchise in Sacramento," after all. Though it could also easily be a signal meant to push the Sacremento city council — which will meet October 26 to consider whatever new plan developer Gerry Kamilos can cobble together by then — to approve a new arena. Or maybe Moag is just counting on Sacramento falling victim to one of the classic blunders.
Interestingly, Mayor Kevin Johnson has raised the possibility of renovating Arco Arena as a possibility, but Kings management says they're not interested: "Refurbishing the current Arco Arena is not an option," Kings president of business operations Matina Kolokotronis told the Sacramento Bee. "We need a new facility that can compete within the NBA. Our facility is one of the oldest in the league. We will continue to look at alternative arena solutions in Sacramento."
September 27, 2010
Today in Yankee Stadium conclusion-jumping
The New York Yankees wrapped up their home schedule yesterday, which means it's time for journalists in search of a news hook to write their looks back at the second season of the team's new stadium. Today's contestants:
- Attendance is up 1.2% over the new stadium's first year, reports the Associated Press, aided by price cuts to the crazy-expensive seats on the field level that went empty much of the team's inaugural season. Of course, the Yankees also won the World Series in the interim as well. And the kicker: Not only is attendance still down from the old Yankee Stadium, which held more fans, but: "The Yankees had 15 sellouts this year, up from seven last season but down from 58 in old Yankee Stadium's final season." It's a feature, not a bug.
- After all the hoohah about the new stadium being a homer haven, the AP reports that "Yankee Stadium wasn't that much of a home run haven this year," with 223 homers hit compared to 237 last year. That's the wrong way to make the comparison, though — half of that difference could just be because Derek Jeter stopped hitting, with the Year of the Pitcher accounting for the rest. What you really want to do is see how the same players performed in Faux Yankee Stadium compared to other ballparks, which you can do by looking at the Yanks' home/road splits: 115 HR at home (in 81 games) vs. 81 on the road (in 75 games); last year it was 136 HR at home (in 81 games) vs. 108 on the road (in 81 games). If you can tell the difference, you have better glasses than me.
- Crain's New York reports that stores around the new stadium have failed to capitalize on events there, according to, um ... the head of the local Business Improvement District. (Hi, Cary!) He notes that local stores need to do a better job of stocking merchandise for one-shot events like boxing matches, and while acknowledging that the new stadium is stocked with its own in-house stores, "The stadium can accommodate 70,000 people. They can't all fit into the Hard Rock Cafe." Seventy thousand? Not since 1942.
September 25, 2010
Kings arena land swap voted down by Cal Expo
And you can stick a fork in the Sacramento Kings' three-way land swap plan: One week after a state consultant said it would be a bad deal for Cal Expo, the Cal Expo board yesterday voted to reject the plan.
A spokesperson for Sacramento Mayor Kevin Johnson called the vote a "significant setback," which is mayorese for "pining for the fjords." Developers Gerry Kamilos and David Taylor say they're pursuing other options for arena funding — but without the cash from selling off the Cal Expo land, it's hard to see where the money would come from. (This is, of course, why the Cal Expo board voted it down: They'd have been the ones filling the Kings' financing hole, by giving up valuable development rights they could otherwise keep themselves.)
The question now being raised is whether the Kings will immediately file for relocation, but that would be problematic as well, since they'd need a place to relocate to. Kansas City has an arena, but a building manager with economic disincentives to offering a sweetheart lease; Las Vegas has that whole gambling thing; San Jose and Anaheim have hockey teams that would balk at turning over huge chunks of arena revenues to the Kings.
Not that it's impossible for the Kings to move eventually — never say never — but it seems more likely that this whole mess will drag on for a few more years as the Kings owner hold out hope of yet another Sacramento arena plan rising from the ashes. Just like, you know, last time.
September 22, 2010
Selig does what Selig does on Rays stadium
MLB commissioner Bud Selig was on hand Monday at New Yankee Stadium to see George Steinbrenner get frozen in carbonite, and since the Tampa Bay Rays were the opponent, took the opportunity to say a few words about that team's quest for a new stadium of their own:
"It is a great franchise, they have run it beautifully, but there is no question they need a new stadium. And I'll talk to [principal owner Stuart Sternberg] about that in the future."
On the subject of where in the Tampa Bay area the stadium should go, however, he demurred:
"That I will leave to the locals. I know what I think in my mind, but I'm not going to get involved in those discussions."
All of which is just as you'd expect Selig to say, given his record in this regard. Though the "I know what I think in my mind" bit is a new twist: Either he's trying to subtly signal that he has a preference that should be catered to (but without his getting caught up in the legal battles with St. Pete), or it was just a slip of the tongue. We'll know more the next time Sternberg speaks and we can see if he uses "we need to have a site that MLB will approve of" as a bargaining chip...
September 20, 2010
Minnesota gov candidate: Wooooooooooo Vikings stadium!
Minnesota gubernatorial candidate Tom Horner has gone from touting a long-failed plan to fund a Vikings football stadium with slot machines at race tracks (racinos!) to a more politically promising exercise: Standing outside Vikings games surrounded by fans and declaring his love for the team and its new stadium plans.
"This is another issue where it really comes down to leadership," said Horner as a large crowd of fans streamed by him heading into the Metrodome for the Vikings first home game of the season. "We can save the Vikings, we can build a new stadium.
"We can do it in a way that says to all taxpayers, we'll be fair," he added. "If you don't want to pay for a Vikings stadium, my plan says you don't have to do it. We'll protect education, we’ll protect health care, we'll protect infrastructure." ...
"If you want a Vikings stadium, I need your vote on November 2," Horner yelled to the fans. "And the last message -- Skol Vikings!" The crowd gathered around him roared its approval.
At least one fan remained skeptical, holding a sign reading "No Welfare for Billionaires — Fund Social Services Not Stadiums" and noting that Horner's former public-relations firm has contracts with the Vikings to push for a new stadium. Horner insists that if he becomes governor, the fact that he'd be getting lobbied by his former business partner wouldn't play into his stadium decision at all. Which, to be fair, is probably true, since it's hard to picture Horner being influenced more than he is already.
Giants, Jets host city: We'd like our property taxes now
Hey, remember how the town of East Rutherford was threatening to charge the New York Jets and Giants property tax on their new stadium, way back when the building was first approved in 2006? Well, East Rutherford Mayor James Cassella has stopped issuing threats and started issuing invoices:
The New Jersey town of East Rutherford has sent the Giants a $745,000 bill for taxes on a practice complex built on the same site as the stadium. The community plans to levy taxes on the stadium next year if it's successful collecting them on the training facilities, Mayor James Cassella said.
"We believe the new stadium built for the Jets and Giants and the training facility should be taxable," Cassella told the state's Local Finance Board at a meeting in Trenton today. "For some reason, they believe they shouldn't have to pay taxes on a private development."
The teams insist that the state's payments in lieu of property taxes take care of any tax bill that East Rutherford is due; Cassella disagrees, saying the stadium can be taxed like any other privately owned building. Meanwhile, I haven't been immediately able to track down what happened to the clause in the team's originally proposed lease that would have forced the New Jersey Sports and Exposition Authority to pay any added tax bill for the teams. If it's still in place, that would be bad news for New Jersey taxpayers — especially considering that the Authority is already flat broke. Gee, thanks, new stadium lease!
Sports bubble watch: NFL fans would rather watch on TV
It's not just the New York Giants and Jets: Attendance is down across the NFL, with average game attendance projected to fall to its lowest level since 1998.
While the media have been quick to blame easy access to big-screen TVs, there's another factor that just might be at work here: The average price of an NFL ticket is now $252. With prices like that — and economic figures like these — you might expect increasing numbers of fans to stay home even if the alternative were listening to the game broadcast on their crystal radio sets.
With sellouts diminishing, Senator Sherrod Brown (D-Ohio) has asked the NFL to reconsider its rules blacking out games with unsold tickets, but so far his plea has fallen on deaf ears. Instead, the NFL has focused on making going to a game more like watching on TV. Only with an extra $252 price tag. Sign me up!
September 17, 2010
Louisville TIF generating next to no arena money
Back in 2000, economic-subsidy expert Greg LeRoy of Good Jobs First said this to me about tax-increment financing, in which new tax money from a development is earmarked to pay off the development's bond costs:
"TIFs are among the most problematic kinds of subsidies in America today. Right now we're in the middle of this giant real estate boom, but real estate markets are cyclical. During the crash in real estate values in the early '90s, some places got caught in the downdraft, and the increment evaporated. And you've got a situation where a liability that was supposed to be taken care of by the TIF is now eating the lunch of the general fund."
From Wednesday's Louisville Courier-Journal:
Paying for the KFC Yum! Center depends on more people spending money downtown, but the plan to use rising sales tax revenues to cover part of the arena debt failed to produce a single penny last year....
And if sales tax projections continue to lag, Metro Government could have to come up with an extra $3.3 million to cover arena costs as early as 2012....
Without any of the $4.5 million in projected sales tax revenues, the project received just $678,000 worth of tax rebates last year — nearly all of it from property taxes.
Now, the KFC Yum! Center — yes, that really is its name — doesn't even open until next month, so it's possible things will look better in coming years. Still, you can't say Louisville wasn't warned.
Consultant: Kings arena swap would be bad deal for state
The Sacramento Kings owners' hopes for a three-way land swap with the state and city for a new arena took a major hit this week, as a state consultant reported that the deal isn't in the best interest of the Cal Expo state fair. Under the plan, Cal Expo would give up its 350-acre site and get a smaller parcel on the site of the Kings' current home, Arco Arena; consultant Andrew Plescia noted that it'd be more worthwhile to just sell off a section of the current site to developers to pay for upgrades to Cal Expo.
Developer Gerry Kamilos said he's still not giving up on the land swap plan, offering a revised financial plan that he insists would eliminate a $108 million funding gap that Plescia identified as a result of "revenue sources [that] are likely to be lower than projected." Cal Expo General Manager Norb Bartosik noted that the new Kamilos plan is "significantly different" from the old, and the Cal Expo board needs to discuss whether to continue to study the plan or drop it altogether
Kings owner Gavin Maloof, meanwhile, is keeping a stiff upper lip, telling reporters, "We have to continue to work hard to try and find a solution." Maybe involving even bigger banners.
September 14, 2010
Sports bubble watch: Fans priced out by PSLs say they won't be back
The New York Jets, it turns out, had the same problem in their home opener last night as the Giants did the previous day: several thousand empty seats, all in the pricey sections that require fans to shell out for personal seat licenses to buy tickets.
Harvey Araton in today's New York Times, though, looks not at the empty seats, but at the people who aren't sitting in them:
In [Judy] Staubo's case, after making a quick decision not to pay $20,000 for each of the family's six seats in 2008, she did initially agree to buy four seats in the upper deck that carried a $1,000 P.S.L.
"They sent me my assignment — the last four seats in the last section," she said. "I said, 'Wow, what a slap in the face.' All those years, all that loyalty, and what they were telling me was, 'You don't matter.' And I said, 'O.K., I’m out.'"
Now, in free-market fundamentalist terms, this is all well and good: Previously a spot on the Giants' season-ticket list was something that longtime fans hoarded and newbies had to endure a decades-long waitlist to get; now, anyone with sufficient cash can buy their way to the lower level, and the team gets to reap the proceeds. It all works perfectly — so long as you believe that the most sensible way to decide who gets to see a football game (or see it from the same atmospheric layer is based on who has the most capital to invest up-front in ticket rights.
One who disagreed with this notion, Giants fan Lou Palma, told Araton he not only gave up his seats but refused a ticket to the home opener on general principle:
"I will not go," Palma said. His only contact with the Giants will continue to be e-mails to officials that contain insights and opinions they won’t want to hear.
"I sent a column in The Times that talked about libraries closing in Camden while the taxpayers are stuck with the debt on the old stadium," Palma said. "I got back an e-mail from the vice president of marketing. He said, 'Take me off your e-mail list.'"
It's not quite talking about a revolution, but there does seem to be a growing anger at sports teams for inaccessible ticket prices. The question is whether consumer outrage will grow to the point where those empty blocks of seats force teams to adjust their pricing structure. Probably not — but it has already hit the non-football Eagles.
Harper: Quebec arena funding? Me? Certainement non!
Canadian Prime Minister Stephen Harper backpedaled more furiously away from the growing Quebec arena controversy yesterday, reiterating that the federal government can't afford to build a new arena, especially when it'd really mean funding new buildings for franchises across Canada:
Harper said Monday he wants to "be clear" about his view on the matter, noting that his government has received "demands for new infrastructure for NHL and CFL teams" from across the country.
"Our position has been clear," the prime minister said.
"We're all fans of professional sports. We know they're important to our communities, but professional sports are first and foremost the responsibility of the private sector, and if there is to be any role for the federal government, first of all, that role would have to be equitable across the country, treat everybody the same. And it also has to be affordable, recognizing that this country is going to be moving into a period of fiscal restraint."
National Post columnist Don Martin (no, not that one) says that Harper was forced to speak out by an upcoming "caucus meeting tomorrow to face MPs privately blistering with unusually harsh feedback from their ridings, particularly in his party's Western Canada base." Martin insists that funding a Quebec arena is unsellable outside of Quebec, and that Harper must reject the idea or face political doom.
Harper didn't outright slam the door yesterday, though, and the Edmonton Journal's David Staples floats one way that Harper could provide arena funding without it looking like arena funding: Set up a special "infrastructure fund" that local governments could use for anything from transportation projects to sewer upgrades to (cough, cough, mumble) hockey arenas, and then leave it up to the cities to decide what to spend the money on. A similar federal program in 1993, notes Staples, ended up providing $15 million for adding luxury boxes to the Oilers' Rexall Place.
Of course, $15 million is a lot less than the $180 million that Quebec arena backers are demanding. And if the controversy over using stimulus money for stadiums in the U.S. is any precedent, it's not like Harper would be able to duck the Quebec arena debate entirely. He might be able to fob it off on local Quebec politicians, though, which from his perspective could be just as good.
September 13, 2010
Canadians line up to oppose, support Quebec arena funding
And the Quebec hockey arena debate surges on unabated:
- The head of the Canadian Olympic committee wants the arena funded, because he thinks it'll help a future Winter Olympics bid.
- Conservative MP Maxime Bernier broke with his fellow Quebec Conservatives and opposed the arena plan, saying while he too dreams of the NHL returning to Quebec City, "dreaming does not make the hard financial reality go away."
- Edmonton Oilers president Kevin Lowe endorsed the Quebec arena plan. Acknowledging that some might see this as self-serving since his team is looking for arena funding as well, Lowe said, "People have got to get off that."
- The Sun newspaper chain that prominent Liberal MP Bob Rae had endorsed federal subsidies for a Quebec arena, so long as other cities get funding as well. However, Liberal blogger Jeff Jedras, who knows Rae on Facebook, reports that in fact Rae's position is "You can't just dole out money to a commercial arena in Quebec without understanding the implications for the rest of the country." Jedras also notes that the Sun is owned by the guy who wants to buy a Quebec NHL team but wants somebody other than him to pay for an arena.
- Lots of other economists and columnists are lining up against the arena funding plan, to which Edmonton Journal columnist David Staples replies that "I'm not enamoured with the new orthodoxy that no public money should ever go into these facilities." Of course, there's a big difference between "any" public money — even I don't oppose the public ever spending anything on stadiums and arenas, so long as they get something of equal value in return — and "all" public money, as would be the case in Quebec.
Giants open new stadium before 5,000 empty seats
The New York Giants home opener at New Meadowlands Stadium yesterday wasn't blacked out, but it wasn't sold out, either:
One mezzanine section right at the 50-yard line - $12,500 PSL, $500 game ticket - and one section at around the 5-yard line - $7,500 PSL, $400 game ticket - had just a handful of fans in them. There was an entire row in a section in the corner of the end zone on the mezzanine level that was empty.
Directly behind the Giants bench, one section of the Coaches Club - $20,000 PSL, $700 game ticket - looked like it was pretty well sold out, but the sections next to it had some good seats still available. And it's not like the seats were empty because the fans escaped the rain and remained in the cozy club lounges.
The Giants announced the paid attendance at 77,245. That means about 5,200 tickets were unsold: club seat PSLs, suite tickets and seats that were once designated to comply with the Americans With Disabilities Act that are now available as regular seats.
Club seats and suites don't apply to the NFL's blackout rules, but the fact that so many remained empty indicates that we're heading toward another New Yankee Stadium situation, where cheap seats sell out but the pricier ones go wanting. I'll leave it to economists smarter than me to explain why this would be a rational pricing strategy, but it sure seems like it's the new trend, in New York sports edifices, anyway.
We'll see how things go tonight for the Jets when they stage their own home opener at the Meadowlands — reportedly they've sold out their non-premium seats, but that's not the same as having all the seats filled.
September 10, 2010
Yankees parking garages nearing default on bonds
When New York Daily News columnist Juan Gonzalez reported back in June that the parking garages at the new Yankee Stadium were losing money and could cause the garage operator to skip rent payments to the city, city Economic Development Corporation spokesperson David Lombino wrote to Gonzalez (and to me):
When the bonds were issued, an independent analysis found that typical parking demand would eventually generate enough revenue to cover bond expenses, rent and PILOT. Last year, occupancy was lower than the analysis predicted. As the economy improves, we can expect that occupancy would improve. So far this year, there are more vehicles using the parking lots (through April), and if occupancy returns to typical historical levels in line with the independent analysis, revenues will increase and based on these assumptions the lots will generate enough revenue to cover bond expenses, and to begin paying rent and PILOT. That could be as soon as this year.
Or not. Gonzalez writes in today's News that the garages are on the verge of defaulting on their bonds, with the nonprofit Bronx Parking Development warning bondholders that it has "insufficient funds" to make a $6.8 million payment due October 1. The problem: Too many Yankees fans are taking the train to the game, or parking at the nearby Gateway Center mall where rates are much cheaper.
If the garages do default, that wouldn't mean the city would be on the hook for the whole cost of the garages — whoever bought the bonds would be the ones holding the bag. But it would mean the city would lose out on expected rent payments ($2.3 million a year according to my figures, $3.2 per Gonzalez; not sure if that's a typo or if the number has in fact changed). And one bond lawyer told Gonzalez he's worried default would "spook investors" against future city development bond sales, which could raise borrowing costs for the city on future projects.
Either way, it's not good news, even if it does validate the concerns of those of us who warned that the garage finances looked dubious in the first place. Whether it means that "parking rates at the stadium will rise sharply next year," as Gonzalez predicts, remains to be seen; it'd seem like that'd drive even more fans to go park at the mall and only undercut the garage revenues, but desperate times lead to all sorts of odd pricing behaviors.
Canada PM Harper: If we buy Quebec an arena, everyone will want one
Even as Quebec elected officials were donning Quebec Nordiques jerseys to push for government funding of an arena that could lead to the return of an NHL team to that city, Canadian Prime Minister Stephen Harper edged away from committing to provide federal money for an arena, as local officials have requested. The problem, he says, is that it would risk opening the floodgates:
"You know, in terms of financing any of these things going forward, we're going to have to respect the precedents we had in the past and be sure any treatment we're prepared to give to one major city we're prepared to give to all," he said. "Obviously we'll be looking at our options in that context."
Beyond funding the Quebec City arena, Harper is facing questions about whether he will provide money to build a new stadium for the Saskatchewan Roughriders.
"Whatever we do in these two cities, we have to be prepared to do everywhere," Harper said. "Ultimately, professional sports teams themselves have to be sound business propositions."
That's all pretty vague and noncommittal, obviously, but the simplest way of reading the tea leaves is that Harper wants to find a way to keep his Quebec MPs happy, but is wary of busting the budget to do so. Some observers have suggested that he could allow provinces to take federal infrastructure money that they're already set to receive and use it for sports facilities; that would leave the provinces short of money for actual infrastructure, but at least it'd make it their problem, not his.
In any case, if Harper does move ahead with some sort of subsidy plan, it would make for a huge shift in Canadian sports stadium financing, which has traditionally relied mostly on private money. This is one that bears watching closely, on both sides of the border.
September 08, 2010
Times fumbles ball on Giants Stadium debt
I've beaten up on New York Times sportswriter Ken Belson plenty before in this space, in large part because of his failure to fully investigate the rosy economic claims of stadium boosters. So you'd think it'd be good news that today Belson tackles the troublesome fiscal legacy of New York-area sports stadiums:
It's the gift that keeps on taking. The old Giants Stadium, demolished to make way for New Meadowlands Stadium, still carries about $110 million in debt, or nearly $13 for every New Jersey resident, even though it is now a parking lot.
The financial hole was dug over decades by politicians who passed along the cost of building and fixing the stadium, and it is getting deeper. With the razing of the old stadium and the Giantsand the Jets moving into their splashy new home next door, a big source of revenue to pay down the debt has shriveled.
New Jerseyans are hardly alone in paying for stadiums that no longer exist. Residents of Seattle's King County owe more than $80 million for the Kingdome, which was razed in 2000. The story has been similar in Indianapolis and Philadelphia. In Houston, Kansas City, Mo., Memphis and Pittsburgh, residents are paying for stadiums and arenas that were abandoned by the teams they were built for.
And so on. Only one problem: Whether the debt on an old stadium is paid off before it's demolished doesn't matter one whit. While "Whattaya mean, we're still paying for that pile of rubble?!?" is a natural reaction, it doesn't make much economic sense. Stadium debt is, when you come down to it, a bookkeeping measure — the construction expense is sunk the moment you sign the contract to build the thing. The rest is just a matter of (in a manner of speaking) what kind of mortgage your municipality wants to take out.
If the state of New Jersey had chosen to pay off Giants Stadium by selling 20-year bonds, in other words, it still would have represented the same expense to the public — but since the bonds would have been retired faster, suddenly it wouldn't make Belson's hall of shame. That's nonsensical. If cities shifted to paying for their stadiums with suitcases full of twenties, would that make them better deals?
The problem with tearing down stadiums early isn't the debt, it's the revenues that you're giving up by allowing teams to move into new buildings with sweetheart leases. As Belson notes late in his piece, the old Giants Stadium generated about $20 million a year for the state; at the new one, the Jets and Giants supply only $6.3 million a year in lease payments. That's a real cost, and one that could have been avoided if the state hadn't agreed to rent public land to the teams so they could build a new stadium and get out from their Giants Stadium lease.
The real scandal here isn't how debt service is financed, but rather that cities and states are tearing down perfectly functional stadiums just so that teams can stop paying rent, costing taxpayers millions. Now there's a headline I'd like to see in the Times.
Quebec offers to pay 45% of arena, asks Ottawa to match it
The huddling is over, and Quebec officials have emerged with a challenge: We'll put up $180 million towards a new $400 million Quebec City hockey arena, if the federal government matches our pledge.
Or maybe, if you read the Toronto Sun instead of TSN, the province of Quebec will put up $180 million, the city of Quebec will put up $50 million, and the feds would put up "the remaining $130 million." Which adds up to ... $360 million? Man, I hate Canadian math.
In any case, despite the happy talk from Quebec City's mayor ("It's major for us — there are now two partners out of three"), this presumably throws the ball back into the court of the federal government, which has previously demurred on getting involved in arena funding. Which is understandable, given that other cities are already lining up to be next should Ottawa open the arena-funding spigot.
My favorite line from this entire thing, meanwhile, comes from Postmedia News:
The firm Ernst & Young put together a business plan for a new arena and stressed the project would be viable but only if the construction costs are not taken into account.
There you have it in a nutshell, ladies and gentlemen: New sports facilities are viable business investments — so long as you're not the one paying for them.
Wolff hires architect to design A's stadium they already designed last month
Oakland A's owner Lew Wolff may still be steamed at the slow pace of MLB's decision-making on whether he can move his team to San Jose, but he still knows how to make headlines. Witness the news stories today on Wolff hiring the firm 360 Architecture to design the San Jose stadium that he doesn't even know if he'll get to build.
Admittedly, it's big news, because 360 has previously only designed football stadiums (the New Meadowlands Stadium) and basketball/hockey arenas (the Sprint Center in Kansas City), and before this no one would have known what a San Jose stadium would look like or who would design it ... er, wait a minute.
It's an interesting design, anyway, though at first glance those double-decked outfield grandstands seem to make it too large for the under-40,000-seat stadium that Wolff has talked about. There also doesn't seem to be much in the way of a luxury-suite/club-seat level, which would potentially make for better views from the upper deck (a la Pittsburgh's PNC Park), though it's really hard to tell much from a rendering.
Wolff also has hired 360 to design his new San Jose Earthquakes stadium, whenever he gets around to building that. Shoot first, figure out the finances later, that's his motto.
Stadium demolition porn alert: "House of Steinbrenner" airs Sept. 21
For those who haven't gotten enough of images of the demolition of Yankee Stadium, Barbara Kopple's documentary "The House of Steinbrenner" debuts Tuesday, Sept. 21 on ESPN, and promises previously unseen footage of this spring's carnage. Writes Richard Sandomir in the New York Times:
Kopple said that she received access from the city to film the stadium's destruction, which the rest of the news media had to observe from rooftops and the subway platform.
She shot the upper deck being torn down, the seats being removed and Derek Jeter's locker being taken apart — and the emotion of longtime team employees like Debbie Nicolosi as a beloved stadium died to give life to one that cost more than a billion dollars to build.
According to Sandomir, these are the only parts of the film worth watching. If you like, you know, that sort of thing.
September 07, 2010
Quebec officials huddling today on new NHL arena
Federal government, schmederal government: Regardless of Canada's statement that it won't kick in federal funds toward a new Quebec arena (unless maybe it does), the project to replace the 61-year-old Quebec Coliseum and attempt to lure a new NHL team to replace the Nordiques looks to be moving full steam ahead. Quebec Premier Jean Charest and Quebec City Mayor Régis Labeaume
are set to meet today to discuss a new arena that would be built with the help of $400 million in public funds from the province.
It's not clear how much the entire arena would cost (though previous reports had $400 million as the total tab), or whether the provincial money would come out of an existing pot or need new taxes to generate it, though it's possible that some of it could be a passthrough of federal funds that Treasury official Stockwell Day hinted at last week.
Also not clear: Would a new arena necessarily lead to a new NHL team? The QMI news service writes that "NHL commissioner Gary Bettman said in August any hopes for the Nordiques's return rests in the city completing the project," but Bettman was actually even more circumspect than that, responding to a question about a potential new Quebec team: "Is Quebec City going to have a new arena? Because I can't even begin to think about a team back in Quebec City until there's going to be a new arena."
In other words: Build it, and then we'll talk. Maybe. So long as your prospective owner isn't on my shit list.
September 01, 2010
Jets put more single-game tickets on sale with Opening Day blackout looming
The fallout from the New York Jets PSL pricing mishap continues: The team just put on sale 2,000 upper-deck seats for next week's opening-day game that became available after ticketholders there decided to upgrade to lower-deck seats after the team slashed the prices of personal seat licenses for those seats in June.
All of which wouldn't be of concern to anyone outside the Jets ticket office, except that, of course, the NFL requires TV blackouts of games with unsold seats remaining, which means Jets fans will remain on edge until a sellout is officially certified. And it could be an issue for upcoming games as well: The Jets have about 16,000 unsold seats total available right now, though the lack of a PSL requirement might make the $105-and-up price tag attractive to single-game buyers.
Jets officials, meanwhile, continue to insist that they'll be sold out for the season, and that PSL sales are now "nearly complete." Which may be true, but they're cutting it awful close — though I guess cutting it close is the best way to make sure you're squeezing every available dollar out of your fan base, rather than setting prices low enough to sell out easily and leaving cash on the table.
Hamilton mulling third site for Tiger-Cats stadium
See, I told you that Hamilton Tiger-Cats stadium deadline wasn't really a deadline:
Hamilton city council held a special meeting Tuesday and voted 13-2 to look at a new possible compromise location in the city's west end.
"We are acutely aware that this new direction may be (the) last opportunity to kick-start a stadium in Hamilton," Pan Am Games Organizing Committee chief executive officer Ian Troop said in a statement. "Our venue development work for the stadium is hard up against an immovable deadline for test events in 2014. It is critical to have the City of Hamilton and the Tiger-Cats committing to a co-operative partnership with a concrete plan presented to city council on Sept. 14."
The "compromise" location is one that emerged in the last week or so: the so-called Longwood site in Hamilton's west end, which Ticats owner Bob Young praised in a letter to Hamilton Mayor Fred Eisenberger on Monday as meeting "the essential sports stadium requirements."
Eisenberger told the National Post that he's "not confident at all" that a deal will be struck in the next two weeks, and that "there's going to have to be an awful lot of work done . . . nobody should jump to the conclusion that this is a slam drunk." (Sic — unless that's some Canadianism I haven't heard.) The big question appears to be how "concrete" the plan will need to be by then to make the Pan Am Games folks happy; if "we've agreed to focus on the new site, but don't know how much it'll cost or how it'll be paid for" is enough, clearly that's easier to accomplish in two weeks than an actual fleshed-out plan.
