October 29, 2010
Yankees garages hike fees 50% to stave off default
I didn't believe it back in September, but it looks like it's for real: The money-losing parking garages built to accompany the New York Yankees' new stadium are going to attempt to avoid defaulting on their bond payments by hiking parking fees by 50%, reports the New York Daily News' Juan Gonzalez. Starting next April, self-parking will be $35, while valet parking will be $45.
Of course, it's introductory economics that you can only make money by raising prices if the market will bear it, and as Gonzalez notes, that's unlikely to happen in this case:
Somehow, Mayor Bloomberg's economic experts never envisioned when they arranged the new Yankee Stadium deal that so many fans would shun the new overpriced garages. More fans are taking the subway or Metro-North to the games or parking at the much cheaper Gateway Shopping Mall several blocks south of the stadium than anyone predicted.
The new rates will only accelerate that flight.
Remember, the Yankees reached the playoffs this year, yet only about 60% of the parking system was filled on an average day.
So the city, and its private garage developer partners, ended up building a parking garage that can't possibly pay for itself at the kind of parking rates that people are willing to pay. Wow, who could possibly have seen that coming?
Edmonton arena: Is it hot or not?
That "public consultation" on a new Edmonton Oilers arena is coming up in a couple of weeks, and the city has kicked things off with an online survey — because what's more democratic than an online poll? Edmonton residents might have a hard time filling out the poll, though, if their main concern is the use of public money: The questions on whether an arena should be built are separated from those about how to pay for one, even those like "Do you think a new downtown arena should be built in Edmonton?" where the answer might reasonably depend on who's paying for it.
In short, this looks less like a genuine attempt at public input than a kind of electronic push poll, designed to get residents thinking about the arena question in the ways that proponents want them to (not whether one should get built, but how). And non-residents, too, for that matter, given that on the Internet, no polling company knows that you're a non-Canadian dog. We should get a better sense of the real public mood once the arena "open houses" start on November 9.
October 27, 2010
Memphis Chamber: Grizzlies arena is Grrrr-eat!
The Greater Memphis Chamber of Commerce has issued a study claiming to show that the public construction of the FedExForum ten years ago to lure the Grizzlies from Vancouver has been a huge windfall for the city of Memphis. As My Fox Memphis reported the story:
The construction of the FedExForum was hotly debated ten years ago but with its opening, came an NBA basketball team, countless college hoops games, and more than 100 special events every year.
The Memphis Chamber commissioned a study that said all of that combines for an annual $223 million revenue generating impact.
"I think that settles the argument of whether of not it was going to be too costly for our community to attract an NBA team here," said John Moore with the Memphis Chamber.
Uh, yeah, actually not. First off, that $223 million in annual "revenue generating impact" is actually economic activity — the sum total of all dollars spent in and around the Forum each year, including "the impact of all spending by the Memphis Grizzlies, by the operation of the FedExForum, and all visitor spending, as it flows through the Shelby County economy" — meaning that a big chunk of it is the Grizzlies' $67 million player payroll, even if Zach Randolph never spends a dime of his salary in Shelby County. The actual city and county tax revenues generated by the Forum are far less: $5.3 million a year, or less than a third of the annual cost of paying off the Forum's $250 million in construction debt.
Reading the report itself, it also doesn't appear that the Chamber accounted for the substitution effect, meaning that much of that $5.3 million in new tax money may just be cannibalized from other spending that would have taken place in Memphis even without a basketball arena. There's also no discussion of the opportunity cost of missing out on what else could have been done with $250 million in public bonds — the Chamber estimates that the total number of jobs created by the project is 1,534, which comes to more than $150,000 per new job, which on the economic impact scale is somewhere between "dismal" and "vomitous." At that rate, the city would have been better off selling bonds to hire more schoolteachers, or just cutting everybody's taxes by $10 million a year.
On second thought, maybe the study really does settle the argument of whether the arena was too costly. Just not the way Moore meant it.
Baseball writer Bill Shannon died tragically in a house fire at his New Jersey home yesterday morning, at the age of 69. Shannon was best known around New York as an official scorer for the Mets and Yankees, but I knew of him first and foremost as the co-author of the masterful book The Ballparks, which I got at around age 10 and continue to refer to on a regular basis, though its spine is now held together with tape. It's no exaggeration to say that Field of Schemes, and fieldofschemes.com, wouldn't exist without my learning from Shannon an appreciation of the long history of the places where baseball has been played.
Here's a sample from Shannon's preface, written in 1975, that's stuck with me ever since I first read it as a young fan. The story has changed since then, but the sense of critical perspective — the insight — remains true:
Governmental involvement in America's architecture appears inevitably to produce uninspired uniformity and dulling sameness. It has largely done so with ballparks. To justify huge public expenditures, public officials created the oval or circular "all-purpose" ballpark, which theoretically caters to all outdoor sporting needs in the community. In reality, it generally caters to none well and to all with mediocrity. Publicly financed activity has given us ballparks without personalities.
In large measure, this is what this book is about — the personalities of ballparks. Despite the best efforts of planners, even today's newest parks still have their own small idiosyncracies, weather factors, hitting backgrounds, playing surfaces, and wind currents, all varying slightly.
Without doubt the best of the governmental plans for ballparks is New York's reconstruction of Yankee Stadium. It will leave us with a great sports landmark structurally mauled somewhat beyond need in our view. But some Yankee Stadium is better than none, and that seemed to be the alternative choice.
My condolences go out to Shannon's family, his friends, and all who knew him from the press box. This has been just an awful year for people dying too young.
October 25, 2010
Could a sports profit tax help recoup stadium costs?
This ran last week, but it just crossed my radar now: South Florida Sun-Sentinel sports columnist Dave Hyde suggests that if sports teams want public money for stadiums, we should tax their profits to pay for it:
And why not institute a tax on sports team's profits? Say 10 percent. Instead of the Marlins making $100 million over the the last four years, they'd make $90 million. They'd re-pay the free money they got. They'd be a better citizens.
The Dolphins want to go after public money? Fine. Isn't it about time the public went after the profits from sports teams made from public money?
Sounds great, but I suspect it's totally unworkable. Even if a special sports-profits tax proved legal, I don't see how you'd enforce it: There's be nothing to stop the Marlins owners from starting the South Florida Flange and Grommet Company as a wholly owned spinoff, shifting all their profits there, and thus evading the tax. You could conceivably get around this by taxing all sports revenues, but then teams would scream bloody murder that the taxman is taking away dollars needed to re-sign Dan Uggla or whomever.
The better way to accomplish a tax on sports profits is to put it in the stadium lease: If you want public money, agree to share any resulting profits with the taxpayers. On the few instances elected officials have had the chutzpah to suggest this, though, team owners have roundly rejected it: It would require them to open their books, it would prevent them from re-signing Dan Uggla, etc.
More to the point, though: If the whole goal is to boost your profits at public expense, it defeats the purpose if you have to turn around and give the money back through taxes. Looked at that way, it's a bit like responding to a bank robber by saying, "Gosh, that won't leave us with much money. Wouldn't it make you feel like a better citizen if you deposited your boodle in our bank?"
Edmonton to hold informationless sessions on Oilers arena
"Public gets say on downtown arena" reads the headline in yesterday's Edmonton Sun. You mean, like, a public referendum? Get real:
Run by city officials, a consultation campaign will launch Oct. 28 with a website, www.edmonton.ca/downtownarena. That will be followed with four open house meetings.
Each three-and-a-half hour meeting will feature information presentations followed by facilitated discussion groups involving attendees.
City officials hope to gather citizens' concerns and ideas for the form, function and financing of a downtown arena.
As to whether to build a downtown arena at all will be on the table don't hold your breath. Also, it's hard to know what those discussion groups will be discussing, as the Oilers management says it won't have financial details of its arena plan ready by then:
"Discussions (with City Council) have not reached the point where we can offer definitive details on how that framework may be structured," said Bob Black, executive vice-president of the Katz Group. "However, we remain confident that we can put a funding framework in place where the city's contribution results in neither a need for an increase in property tax rates nor a reallocation of existing infrastructure dollars."
So, let's see, discuss first, provide information later? This is likely to work out just as well as in the mother country.
Stern: We'll contract teams! Just you watch us!
Of more significance was Stern confirming a report by CBSSports.com that the option of contraction will indeed be on the negotiating table. Small market teams such as the Thunder are typically the first on the contraction chopping block. Stern, however, said at this point he's "not spending a lot of time" on a contraction strategy and added that fans of small-market teams shouldn't be worried.
I should hope he's not spending a lot of time on it, because as I covered for the Village Voice way back in 2001 when MLB tried it, the contraction gambit is almost certainly a bluff. It's not as simple as calling up a few teams and disinviting them to the upcoming season — the NBA would have to collect money to buy back the franchises, and then would almost certainly face antitrust lawsuits from the cities that were left suddenly bereft of franchises. And that's without even getting into the problem that the players union would come after Stern with an elephant gun.
The players union, of course, is the intended target of this threat, as the league prepares for a 2011 contract renegotiation that's almost certain to turn into a lockout. So is Stern's concurrent threat to cut player salaries by one-third. ("There's a swing of somewhere in the neighborhood of $750 [million] to $800 million that we would like to change," declared Stern, adding: "That's our story and we're sticking with it.") Unlike certain other people, Stern understands that at the negotiating table, you start by asking for the moon and let the other side bargain you down to a few major asteroids.
October 21, 2010
Dolphins roof tax demand: It's back!
This may be a terrible time to raise private money for a new football stadium, but apparently it's never a bad time to ask for public funds:
It may not be a blitz yet, but the Miami Dolphins have started a political ground game to fund a massive stadium redo with public dollars.
The team confirmed this week it hired a polling firm to gauge support in Miami-Dade for improving the stadium -- work the team says is needed to make the venue more appealing to large events such as the Super Bowl and World Cup soccer.
This is a revival of the $250 million renovation plan Dolphins execs floated in January, then unfloated in March once local hotel owners balked at funding the plan with a hike in the hotel tax. There's no indication yet where the public money would now come from or how much would be needed, but apparently the umbrella is still in play, albeit really grainy.
So far, the revived Dolphins campaign seems mostly limited to meeting with local elected officials and telephone push polls to convince Miami citizens of the need to put their tax money into a privately owned and operated facility. According to the Miami Herald:
Michelle Niemeyer, a Miami lawyer and member of the Cocoanut Grove Village Council, said she was polled in late September on the question of public dollars and the Dolphins' stadium. Niemeyer said the caller's script seemed designed to persuade her that spending taxes on the facility was a good idea.
"I was informed at one point that the owner of the Dolphins has paid 100 percent of the cost of the stadium and then [I was] asked something like, 'Do you believe that's fair when most stadiums around the country are supported at least in part by tax dollars?'" Niemeyer wrote in an e-mail. "I know they pointed out that the source of funding would be the tourist tax and that it wouldn't decrease funding for services."
49ers: No Santa Clara stadium until labor battle's settled
The San Jose A's project isn't the only South Bay stadium plan running into trouble this week: San Francisco 49ers officials announced yesterday that it won't be able to raise private money for its planned Santa Clara stadium until the NFL's labor situation is resolved. According to a team statement:
Until there is a new collective bargaining agreement that embraces the realities of NFL economics today, the Santa Clara stadium project won't attract the required funding from either the NFL clubs or the financial markets. Since the financing plan needs to be in place several years before the stadium opens, the planned 2014 opening date may be delayed by a year.
So, is this just a shot across the bow of the players' union — agree to givebacks, or you'll make the 49ers cry! — or a genuine sign that the Santa Clara project's financing is in real trouble? There are some hints in a statement from an official for Goldman Sachs, the vampire squid investment bank hired by the Niners to arrange private financing, who told the San Jose Mercury News, "In order for the project to become reality, we need the participation of the league in the funding." The NFL, in turn, issued a statement saying that the "current economics of the NFL and the uncertainty of our labor situation" make it impossible for it to invest in stadiums, and that "We are working hard to reach an agreement with the players union that will provide the resources once again for significant capital investments by the league in projects such as a new Bay Area stadium."
What this all sounds like is that the 49ers have no hope of raising the money for a stadium just via private investors — no real surprise given the nearly $1 billion price tag, and anyway the team has said this before — but that the NFL isn't going to reinstitute its league-funded loan program for new stadiums unless it can fund it with givebacks from the union. Which means what we have is a standoff, one that likely won't be resolved until after a work stoppage that wipes out part or all of the 2011 season. And then the NFL would have to arrange to reinstitute the loan program, and Goldman would have to line up private investors in what's projected to be a still dismal economic climate ... at this rate, 2015 could be optimistic.
October 15, 2010
San Jose short of cash for A's stadium land
A new snag has arisen in the Oakland A's plans to move to San Jose: The city redevelopment agency that was supposed to buy land for the stadium site is flat broke.
A's owner Lew Wolff brushed off any concerns about this news, noting comfortingly that "there isn't a redevelopment agency or city or federal or state government that isn't in some form of disarray at this point," and promising vaguely that "whatever issues we run into, we will figure out how to get them done." The San Jose Mercury News interprets this as a potential offer by Wolff to buy the land himself, but there's little evidence for that, beyond Wolff's penchant for asserting that stuff will work out in the end somehow.
To be fair, the estimated $20 million price tag would be a drop in the bucket compared to the $461 million cost of building a stadium, as Wolff vaguely assures everyone he'll be able to do, just as soon as MLB makes its decision on San Jose territorial rights (read: once Wolff and San Francisco Giants owner Bill Neukom agree on an indemnification price). Though there's also the added complication that, the Merc News reports, one of the remaining parcels is owned by AT&T, which sponsors the Giants' ballpark "and has said its land is not for sale."
Remind me again why everyone thinks a San Jose stadium is a done deal once MLB signs off on it, aside from the fact that Wolff says it is? Isn't that what he said about Fremont, too?
October 13, 2010
Tiger-Cats stadium deadline pushed back to February
I know I've said that stadium deadlines are made to be broken, but the one in the Hamilton Tiger-Cats stadium standoff is getting ridiculous:
The City of Hamilton and the Ticats have been given yet another deadline extension as they attempt to craft a business plan for a new stadium, which is slated to be used as a soccer venue during the 2015 Pan Am Games. The Ticats have said it is crucial they get a new home — to replace the aging Ivor Wynne Stadium — if they are to remain in the city.
Ian Troop, the head of the Toronto 2015 Pan Am Games organizing committee, had earlier said the city and Ticats needed to have a firm business plan for the stadium in place by this week. But considering the progress being made, Troop is now willing to set a new "absolute and final deadline" of Feb. 1, 2011.
"Progress being made" notwithstanding, the time is needed, writes the Montreal Gazette, to fill a "huge budget shortfall" that remains for the $166 million stadium plan: In addition to a $30 million gap in construction costs, no one has offered to pay the cost of buying land for the stadium (the Ticats owners say they'd buy land around it for development, which isn't the same thing). And no one knows how much that land will cost — just one of a lot of unanswered questions about the stadium proposal.
I'd like to hope that they'll all be answered by February, but sadly, history tells us otherwise.
October 12, 2010
Edmonton mayor trying to kick-start Oilers talks again
The push for a new Edmonton Oilers arena suddenly "has a lot more momentum," according to Edmonton Journal writer David Staples, by which he seems to mean that the mayor is talking about it again. And again:
I asked [Mayor Stephen] Mandel about the impact of [Oilers owner Daryl] Katz finally appearing before the public and in front of city council. "He said he's going to put $200 million in. It's a big impact, $100 million into the arena and $100 million into the development. And knowing development, you can get about five-to-one, so you know that you can develop about $600 million of ancillary product there, and you get about $1.5 million dollars (in taxes) per ($100 million in development), that's nine million dollars, and that creates a CRL of about $130 million.
"He puts in about $100 million, you should be able to raise about $500 million from capital markets, from the banks. So you look at that, that $100 million to me was as important as the investment in the arena, because you take that money, and you say $100 million produces $500 million."
It goes on and on like that, in an article that is effectively an extended soapbox for Mandel (who just happens to be running for re-election next month). Number of independent analysts cited on Mandel's proposal — actually, number of people other than Mandel cited in the article at all — is zero. (Among other things, it'd be nice to know whether the city council remains skeptical.) So a more honest headline would have been: "Mandel's Arena Plan Gains Momentum, According To Mandel."
Rumors and the report of rumors in California NFL stadiums
Lots of news today among the various California locales considering new or renovated NFL stadiums — though actually, "news" might be pushing it. Here, you decide for yourself:
- Majestic Realty, the developers who want to build an NFL stadium in the City of Industry, now say they'll redesign their stadium to be able to fit World Cup soccer there. "Because we're building a new stadium, we could incorporate anything FIFA could want," Majestic stadium architect Dan Meis told the Associated Press. Or to put it another way: This is still vaportecture for now anyway, but we can change it round if you like.
- The Oakland Raiders are talking to city officials about a new stadium on the site of the Oakland Coliseum that would be, according to team CEO Amy Trask, "an anchor for, or a catalyst for, an urban redevelopment that provides economic stimulus for the whole region." From the sound of it, this is code for "ballpark village," but Trask didn't provide specifics.
- NFL commissioner Roger Goodell chimed in that he's concerned about low attendance at Raiders games, and that he'd like the Raiders and San Francisco 49ers to consider a shared stadium. (Oakland claims it can build an $880 million stadium with no public money, though it apparently doesn't count property and hotel taxes as public money.) He also said that the NFL needs to do a better job selling the stadium experience compared to staying at home and watching on HD TVs,, and specifically cited how great it is to watch in person at ... a Raiders game: "It's a great experience being there feeling that passion and excitement. It's something you don't get at home." (Make your own joke about how "at home, it's more crowded.")
- The city of Pasadena, meanwhile, actually made real news, approving a $152 million renovation of the Rose Bowl to take place over the next three football offseasons. The Pasadena Star News reports that "the project is expected to generate enough revenue to cover the debt service 1.475 times," though it doesn't provide details of whether this is via a more lucrative lease with UCLA or higher ticket prices or added tax revenues or what. The project would also be subsidized by the use of federal stimulus bonds, so taxpayers across the U.S. will each be tossing in a few cents for the Rose Bowl's newly widened access tunnels.
October 11, 2010
Forbes: Twins earned extra $70m at Target Field
The first guesstimates are in on how much additional money the Minnesota Twins raked in from Target Field, and they're pretty substantial: Sports economist Andy Zimbalist ballparks it at $50 million, while Forbes magazine — which has a pretty good track record in these matters — says it's more like $70 million.
Where's the money coming from? Team Marketing Report estimates that the average expense per ticket at Target Field, including concessions purchases, is about $51.75, vs about $41.40 at the Metrodome last year. (TMR's estimates are pretty fudgy — does every family of four really buy two team caps? — but are close enough for this kind of comparison.) The Twins drew 3,223,640 fans this year, vs. 2,416,237 last year. That'd be enough to bring in about $64 million in new spending, and that's before accounting for things like increased ad signage and not having to share money with its state landlords, like it had to do under its old lease.
Now, at this point your first thought might be: If the Twins are raking in so much money, couldn't they have built the damn thing themselves, instead of sticking local shoppers with a sales tax hike? Maybe, but keep in mind that stadium honeymoons typically don't last that long these days — 5-7 years at best, two or three if your team is lousy — and most of that new money (almost two-thirds, by my reckoning) comes from increased attendance, not increased ticket prices, so the bottom line might look very different a decade from now. Also, it's not clear whether the Forbes and Zimbalist numbers include the extra cash the Twins will have to kick into the league's revenue-sharing plan, which could knock down their windfall by about a third.
To really establish whether Target Field could have paid for itself, we'd need to see the Twins' books. Anybody have any friends at the Twins' insurance company?
Selig reportedly tells Rays: No "investments" in St. Pete
ESPN's Howard Bryant reports, somewhat confusingly:
According to sources, baseball commissioner Bud Selig has instructed Rays management not to make significant financial investments in the area until attendance indicators improve, suggesting the team could be investing in potential relocation sites.
So what are "significant financial investments in the area," exactly? It's not like the Rays are planning on building a new stadium on their own anytime soon, or a hotel shaped like a devil ray or anything else. Does Selig mean they shouldn't do any upgrades of Tropicana Field? And why on earth would "attendance indicators" (is this different from "attendance"?) improve at a stadium that the team isn't maintaining and is disparaging as obsolete, in a city that the commissioner of baseball is suggesting they should leave?
Noah Pransky speculates that this might be why the Rays aren't spending much on billboard ads, which is as good a theory as any. But it still seems like cutting off your nose to spite your face — even when you have a pennant-winning team, you still have to spend money to make money.
Tennis club rejects condo plan for Forest Hills Stadium
Forest Hills Stadium won't be torn down to build condos after all, at least not yet. Members of the West Side Tennis Club voted 123-123 on Thursday night to reject a proposal to sell the former U.S. Open stadium to developer Cord Meyer for $8 million or so. (A two-thirds vote in favor was required for the sale to go through.)
What will happen next to the 1923 stadium is entirely up in the air. "We're going to be exploring other options; that's all we can do," club president Kenneth J. Parker told the New York Times, while admitting no other options have been formally proposed as of yet.
Preservationists have proposed landmarking the structure (which would potentially open up the possibility of getting historic rehabilitation tax credits, a la Fenway Park). Other suggestions include playing a pre-Open exhibition tournament at the stadium, as other Grand Slam cities do, or making it the permanent summer home of the New York Philharmonic. Or they could just try to get Talking Heads to reunite.
October 06, 2010
Selig "concerned" by Rays attendance
MLB commissioner Bud Selig talking about the "viability" of Tampa Bay as a baseball market on ESPN Radio yesterday (via Noah Pransky):
"The average Major-League club in this year drew 2,436,000 people. And so, for those clubs that are winning whose average is consistently below that, you always have to wonder why and there has to be concern."
So presumably Selig will be talking next about how the San Diego Padres and Cincinnati Reds need new stadiums?
Detroit arena could cost $500m, require public money
As expected, the news that Mike Ilitch has the lead in buying the Detroit Pistons has led to a full-on media frenzy. Among the highlights:
- A new downtown arena to host both the Pistons and Ilitch's Red Wings would cost $500 million or more, sports consultant Marc Ganis tells the Detroit News. Ganis added, "It's next to impossible to do that without some taxpayer help."
- Detroit Free Press sports columnist Michael Rosenberg writes that the whole reason Ilitch wants the Pistons and their Auburn Hills arena is to have a threat to move the Pistons to the suburbs, in order to be able to squeeze Detroit for money for a new arena. Detroit Mayor Dave Bing nonetheless declared himself "elated" at the prospect of Ilitch owning the Pistons, which either means he doesn't think he's really going to be blackmailed for a new arena, or he's looking forward to it.
- Getting a third pro sports team to play downtown could bolster Detroit's image as an "urban adult entertainment destination," says University of Michigan professor Christopher Leinberger, who notes that the city already "boasts the third largest walkable concentration of casinos in the country, behind only Las Vegas and Atlantic City," and "has the nation's third largest number of live theater seats, trailing only New York City and Houston." (Houston?) Not to mention the other "adult entertainment" options available across the bridge in Windsor.
The virtues of making Detroit into the next Las Vegas aside, the arena battle looks like it has the potential to get really ugly really fast if Ilitch wins his bid. I'll make sure I don't have any other plans for November...
Mesa Cubs deal: Vote first, ask questions later
Remember that Chicago Cubs spring-training stadium the team is trying to get built in Mesa, Arizona, the one that featured an abortive plan to tax all the other Arizona spring-training teams to pay for it? It's still alive, with Mesa now talking about using a combination of existing funds, selling off city-owned land, and an increase in the hotel tax to raise $99 million in construction costs.
The hotel tax hike requires voter approval, and in advance of the November 2 referendum, the Goldwater Institute — which has already gone after the proposed Phoenix Coyotes lease concessions — has been raising questions about the plan, last week with an Arizona Republic op-ed noting that the proposition authorizes spending "greater than $1.5 million" without any spending cap, and this week noting that it's unclear how much the Cubs would provide, beyond "benefits to be determined."
But, you know, what could possibly go wrong if Mesa voters delivered a blank check before all the ink was dry on the stadium agreement? It's not like anything like this has ever happened before, right?
Wannabe Quebec owner: I'll chip in for arena, maybe
Well, that didn't take long: No, the NHL still hasn't blinked in its demand for a $400 million arena as a condition of reviving the Quebec Nordiques, but it looks like the team's prospective owner may have:
Quebecor CEO Pierre Karl Peladeau made an about-face in Ottawa Tuesday, saying he could participate in the financing of an amphitheatre in Quebec City to bring a professional hockey team to the provincial capital.
When asked as to whether he'd changed his mind after earlier refusing to finance an arena, Peladeau said Tuesday he is "open" to the idea of participating in building a new multi-purpose arena in Quebec City, welcoming both sporting and cultural events.
Now, Peladeau didn't put a price tag on how much he'd be willing to commit to the project — or what he'd want in return. And it's possible that he's just trying to kick-start arena talks that are otherwise generating headlines like this. But hey, it's better than nothing, which was what Peladeau was offering last week.
October 05, 2010
Ilitch opens 30-day window to buy Pistons, arena
And away we go: Crain's Detroit is reporting that Detroit Pistons owner Karen Davidson has opened negotiations to sell the team to Detroit Red Wings and Tigers owner Mike Ilitch. The Detroit Free Press says the two sides have agreed to an exclusive 30-day bargaining period, after which the sale could be reopened to other bidders.
Assuming the two sides work out a deal — and that's not at all certain, as Crain's previously estimated there's about a $100 million gap between what Davidson wants and what she's likely to be offered — then it will almost certainly launch a long battle over whether to build a new downtown arena for the Red Wings and Pistons, and who'd pay for it. Already, Detroit city council president Charles Pugh declared his town open for subsidy business:
Asked whether a tax incentive would be included in a pitch to bring the Pistons downtown, Council President Charles Pugh said, "I am open to whatever we have to do in the scope of the law.
"This could be the tipping point for our city. We need hope."
On the other hand, council president pro tem Gary Brown said, "It's going to be difficult to do this stadium with public dollars. There is no appetite for tax relief, even for this." Still, it's probably best not to put anything past Ilitch, given that this is the kind of fight he's won before.
A's GM Beane on stadium decision: Soon, maybe?
Is the Oakland A's endless wait for a resolution of its stadium decision almost over? That's what A's GM Billy Beane said yesterday, according to a Contra Costa Times headline ("Oakland A's GM Billy Beane expects word from MLB on recommended stadium site soon"), but the accompanying story was less certain:
"I think we're going to be playing in a new stadium at some point here soon," said Beane, also a minority owner in the club. "I have no inside [information]. The only thing we've been told is that [the report will come] sooner than later. I know that's pretty ambiguous, but we anticipate it being sooner than later, and hopefully very soon."
Okay, that's not "expects," that's "hopes for." For once, MLB.com actually had the more honest headline: "Beane being cautious with A's uncertain future."
Given that MLB commissioner Bud Selig said way back in March that his three-man A's relocation commission was "reasonably close" to done, it seems inconceivable that the delay is about anything other than waiting for the A's and San Francisco Giants to hammer out an agreement about who would pay what to whom if the A's were to move to San Jose.
Meanwhile, Beane had the rare distinction of actually coming up with a new reason for a team to claim it needs a new stadium. To wit:
The Coliseum has been a deterrent for several free agents in recent years, according to Beane, and he tried to convince one that at least the playing surface is among the best in baseball thanks to groundskeeper Clay Wood.
"He said, 'You're right ... until August.' I didn't have an answer for him," Beane said of the mess the field becomes after the Raiders begin play.
Everyone who thinks that the reason the A's can't sign free agents, other than pitchers with bum arms, is because of the condition of the outfield grass, raise your hand. Though it's at least more plausible than the chef's salad gambit.
Quebec rallies for NHL, but arena fund gap remains
As promised, about 60,000 Quebecois turned out for a "Blue March" on Saturday calling for a new NHL team for the city, to replace the decade-and-a-half-gone Nordiques. "The images that will be sent all across Canada, all across America, are the living proof that the Nordiques are back," said former Nordiques coach Michel Bergeron, to cheers.
Given that the NHL has said there won't be a new Nordiques without a new arena, though, they won't be back until that hurdle is cleared — which means finding $180 million in funding to go along with the $220 million promised by Quebec City and Quebec province. And that's still slow going:
The sale of seat licences, or rights to buy seats in the arena, had raised $12 million as of mid-September. And the figures in an analysis commissioned by the project's promoters suggest that a 20-year contract for naming rights would bring in another $10 million.
Even Parti Quebecois leader Pauline Marois, one of the politicians who joined Saturday's parade, said the private sector needs to do more. And it's well short of the mostly private investment suggested by Harper's "first and foremost" remark.
But even the promoters' analysis shows that the arena wouldn't be profitable, so significant private investment in it is unlikely.
And polls show that, in the rest of Quebec as well as of Canada, public opinion strongly opposes subsidies for NHL teams.
So basically, we have a standoff, where everyone wants a new team, but nobody's eager to pay the NHL's $400 million ransom. We'll see if the NHL's price comes down as some of its less successful teams get more desperate for a new home, but I wouldn't hold your breath.
October 04, 2010
Ratner's green-cards-for-arena-development-funds swap raises eyebrows
Even on a normal day, Norman Oder's Atlantic Yards Report is a cornucopia of information about the Brooklyn Nets arena project, often more than you really want to know in one sitting. Today, however, Oder was en fuego, reporting on the growing controversy over Nets owner Bruce Ratner's plans to raise money for construction by offering green cards to Chinese investors, which he first broke news of last week.
Today's highlights:
- A representative of the New York firm engaged to market the investments — which, under the two-decade-old EB-5 program, which indeed offers green cards to foreign nationals who invest in the U.S. — claimed that the Barclays Center is "the most significant project in the city and state of New York in the last 20 years" and "generates well in excess of 10,000 jobs for years to come," neither of which is exactly true. The investment marketing also makes liberal use of NBA logos and Nets player photos, despite the money officially being for infrastructure on the site, not the arena itself.
- A translation of the official Chinese website for the project reveals that, according to Oder, "immigrant investors must put in $538,000 and, after five years, get the full return of the $500,000 principal and green cards for the entire family. There's no financial gain." (It's for this reason that EB-5 has been criticized as "buying green cards.") Though the pitch does also promise signed basketballs to all takers.
- Finally, Brooklyn Borough President Marty Markowitz, who had been schedule to make the China marketing trip with Ratner, pulled out this afternoon after criticism from both AYR and the New York Post.
While the whole mess mostly sheds light on the weirdness of U.S. immigration law — raise your hand if you had any idea that any foreigner with half a million dollars to throw around could buy their way out of waiting for resident alien status — it does indicate that Ratner and his partner Mikhail Prokhorov are looking for creative ways to find cheap money to finance development of the Atlantic Yards site. Whether that's because they're short of cash, or they just figure you can never have enough money, is anyone's guess.
October 01, 2010
Rays not the only team with attendance woes
With all the brouhaha over the Tampa Bay Rays' poor attendance during a pennant race, it's worth noting that they're not the only team with this problem.
The San Diego Padres faced off against the Chicago Cubs last night in their final home game, a virtual must-win in their race for either the NL West pennant or the NL wild card — and attendance was a mere 28,576, barely two-thirds of capacity. The Padres, despite a highly touted six-year-old ballpark, now sit in 18th place for attendance among MLB teams, just four slots ahead of those "embarrassing" Rays.
This isn't to pick on the Padres — the Cincinnati Reds, to take another example of a team in a pennant race with a nearly new stadium, are drawing even worse. But it is a sign that the Rays' trouble drawing fans is likely more a function of market size and the horrible economy than some particular failing of the Tampa Bay fan base or their home stadium.
After all, the four teams playing in the oldest remaining MLB stadiums — the Boston Red Sox, Chicago Cubs, Los Angeles Dodgers, and Los Angeles Angels — are all in the top eight teams in attendance this season, though none will make the playoffs. If you want to put fannies in the seats, the most important step, especially in down economic times, is to put your team in a place with lots of fannies.
