November 30, 2010
D.C. councilman: Let's build a $2B Redskins stadium! With laser turrets!
If you've been missing D.C. councilperson Jack Evans, sponsor of stadium bills for the Washington Nationals (approved) and D.C. United (not yet), heeeeeee's baaaaaaack:
D.C. Council member Jack Evans, D-Ward 2, says Fedex Field, the Washington Redskins' home for the past 13 years, is steadily aging and will soon be ready for a replacement. He points to RFK Stadium, the team's former home until they left in 1997, as a prime location for a new, state-of-the-art facility -- and not just to host the gridiron.
WTOP reports, entirely with a straight face, that Evans wants to spend $2-3 billion to replace RFK with a 110,000-seat retractable-roofed stadium that could host the NFL, the World Cup, and the Olympics. But then, the news radio station also wrote with a straight face that bit about a 13-year-old stadium being "steadily aging" — which may be technically true, but it's not generally what people mean by "aging."
Of course, most of this is likely about sucking up to Redskins fans in the District by making a public play to get the team back within city limits. DCist sums it up nicely:
Look, FedEx isn't the greatest stadium in the world, but for what it was designed for -- to cram as many Redskins fans as possible into one space for games -- it still works fairly well. There are several stadiums in the NFL that are older and less appealing than FedEx (see: Oakland-Alameda County Coliseum). And as far as Evans' assertions about the World Cup and the Olympics go: the chances of us being a host for the former wouldn't really improve with a new stadium; the latter is, with all due respect to the Councilmember, a pretty massive pipe dream.
The Redskins still assert that they'll stick at FedEx until at least 2027 when their lease expires, and it's difficult not to believe them -- at least until politicians stop using the idea of a new stadium in D.C. as a political miracle waiting to happen (where is that $2-3 billion dollars coming from, Councilmember?), rather than pushing forward an actual plan that might be feasible.
Cardinals accused of stiffing St. Louis on profit-sharing
Out of St. Louis, a cautionary tale about the ever-popular gambit of requiring that taxpayers get a share of the sale of a sports team in exchange for granting stadium subsidies. (This was most recently proposed, and rejected, for the Florida Marlins deal.) The Cardinals agreed to a profit-sharing arrangement as part of their stadium deal back in 2003, but the reality isn't quite working out that way, according to the St. Louis Post-Dispatch:
The Cardinals also agreed to give the city a cut of profits made if any portion of the team was sold.
Then, last year, owners sold a sizeable chunk of the Cardinals — more than 13 percent. Now, a group of anti-public-stadium advocates is alleging that the team owes the city hundreds of thousands of dollars.
And, despite another multimillion-dollar budget gap anticipated for the coming year, the city isn't checking into it. City officials acknowledge that they have never really kept tabs on the agreement.
In fact, the Cardinals owners have sold about 17% of their shares since the new stadium opened, but in each case reported to the city that "there were no Ballpark-Related profits ... arising from such transfer." And city officials apparently took them at their word, with the Post-Dispatch reporting: "Several city officials, including Barb Geisman, the former deputy mayor for development, said there was no reason to double-check. They trust the Cardinals."
Longtime Coalition Against Public Funding for Stadiums activist Fred Lindecke, who first raised questions about the profit-sharing clause (until he complained, the city wasn't even releasing the sale affidavits it received from the Cards), wonders reasonably enough on what planet this could be true: "They were so desperate for money, they were willing to sell their ownership percentage for nothing more than the team was worth in 2002? That contradicts all logic. Even someone who's having their home foreclosed tries to get as much as he can."
Forbes, for what it's worth, has the Cardinals as worth $488 million in 2010, up 80% from its $271 million value in 2002. Even at that rate, the total amount owed to the city would be only about $2 million, if I'm doing the math right. Still, it's not exactly money that the city can afford to be turning down these days.
In space, no one can hear you boo
Just when it was looking like a terminally slow news day: SPACE STADIUM!
Placed inside a half-kilometer crater, the Stadium of International Lunar Olympics would be round, with space for 100,000 spectators. It would use digital lighting to project field markers. On the tower, there would be a huge hotel, restaurants and a Jeff Bridges-lookalike in space suit, watching people killing each other.
No word yet on how much such a stadium would cost, what its marginal revenue impact would be on the lunar economy, or how long it will be before the Cincinnati Bengals demand their own algae-driven life-support system.
November 26, 2010
Bengals reject ticket surcharges to repay public stadium debt
The never-ending quest to bail out the Hamilton County stadium fund has circled back around to ticket surcharges again: Hamilton County Administrator Patrick Thompson has proposed an additional ticket tax of between 1.8 percent and 3.9 percent on Bengals and Reds tickets, plus property tax hikes to help fill an expected $130 million shortfall over the next five years.
Only one problem: The Bengals say they won't go along with a ticket tax, rightly understanding that it would cut into their ability to jack up ticket prices as high as the market would otherwise bear. And both teams have the right to veto any ticket surcharges under their godawful stadium leases, so don't hold your breath waiting for this one to happen.
Dallas Morning News on lockout impact: Whatever you say, NFLPA
This week's award for the worst stenography journalism goes to the Dallas Morning News, for its report on how an NFL lockout would affect the local economy:
The NFL Players Association contends that its members and team owners shouldn't be the only ones worried about a possible lockout next year if they can't settle on a labor contract.
The NFLPA sent letters to Texas Gov. Rick Perry and Dallas Mayor Tom Leppert reminding them that cancellation of the 2011 football season could cost $160 million in "lost jobs and revenue" for the region.
In addition, a group called Don't Mess With Success — described as a "diverse coalition of football fans, small businesses, community leaders and other associations" — sent a letter to Arlington City Manager Jim Holgersson warning about a $140 million economic hit to the region from canceling the season.
Number of economists consulted for comment for the story: zero. Accordingly, the article never discusses the possibility that in the case of an NFL lockout, sports fans in Dallas might, you know, find something else in Dallas to spend their money on. This is the well-known "substitution effect" — possibly best exemplified by the fact that when baseball went on strike in 1994, movie rentals and comedy clubs saw their business skyrocket. But finding that out would require a five-minute Google search, which is a lot to ask of newspaper writers.
Canadian sports subsidies less likely after Harper kills Edmonton Expo
The prospect of Canadian federal subsidies for stadium and arena projects got murkier again this week. Though Prime Minister Stephen Harper still officially remains mum on the possibility, professional tea leaf readers agreed that Harper's decision to reject federal funding of Edmonton's plans for a 2017 Expo sends a signal that he won't, as previously tea-leaf-read, come up with some kind of subsidy plan to placate Quebec hockey advocates, and then more money to placate those in other Canadian cities who'd be jealous if Quebec got money and they didn't.
As a result, all the Canadian sports teams with their hands out are scrambling to come up with new funding strategies, or at least new attempts at spin:
- Quebec City Mayor Regis Labeaume immediately declared that he's "always said I have a plan B" and "will implement that plan if necessary." He didn't say what the plan B was, though, and said he still hoped for federal funding for a new hockey arena.
- Saskatchewan provincial cabinet minister Ken Cheveldayoff insisted that "I don't think there's any parallels that can be drawn" between the Edmonton Expo plans and his province's plans for a new Roughriders stadium in Regina, and that he still hopes for about $100 million in federal funding. Saskatchewan is asking for money from the federal P3 Canada Fund, which subsidies public-private partnerships — but which also specifically excludes "facilities used primarily by professional athletes." To get around this, the province is arguing that it would be building a $431 million domed stadium primarily as a "community recreation and entertainment facility," and that the Roughriders playing there wouldn't be its primary use.
Now word yet that I can find on how the Harper move is likely to affect the Edmonton Oilers and Winnipeg Blue Bombers funding battles, but I'm sure that's coming soon.
November 23, 2010
Tax-exempt Wrigley bonds could be tough nut to crack
In all the hubbub over Wrigley Field, one thing I haven't address is whether Chicago Cubs owner Tom Ricketts' plan would use federally tax-exempt bonds, like the last Cubs stadium renovation subsidy plan.
Chicago Tribune business writer Ameet Sachdev asserts that it would use tax-exempt bonds, citing former Congressional Budget Office bond expert Dennis Zimmerman and, um, me to point out how this represents a federal subsidy. (My moment of fame, for those who can't be bothered to click through, comes via a quote: "Kansas City Royals fans would no doubt not be pleased to learn that their tax dollars are going to help make the New York Yankees even richer.") But Sachdev doesn't actually establish whether the Ricketts plan would actually be eligible for tax-exempt bonds.
So let's try to figure this out ourselves. The tax-exempt bond law is fiendishly complex, but the main rule we're interested here is that the bonds can only be paid off by "generally applicable taxes," not special fees. This was meant to prevent developers from just borrowing cities' ability to raise cheap money by offering to pay off the bonds with rent — something that would be great for the developers and no skin off the cities' noses, but would — and did, prior to the 1986 Tax Reform Act — lead to a gazillion private projects getting undeserved federal tax breaks. Instead, the bonds have to be paid off using taxes that everyone pays (or, if you're the Yankees or Mets, rent money that you put in a box with "TAX MUNNY" scribbled on it) in order to be legal.
So, does the amusement tax Ricketts would be using to pay off his bonds qualify as "generally applicable"? Let's check the definition in the IRS regs:
A generally applicable tax is an enforced contribution exacted pursuant to legislative authority in the exercise of the taxing power that is imposed and collected for the purpose of raising revenue to be used for governmental purposes. A generally applicable tax must have a uniform tax rate that is applied to all persons of the same classification in the appropriate jurisdiction and a generally applicable manner of determination and collection.
So far, so good: The amusement tax is "for governmental purposes" and is "applied to all persons" who are selling tickets in Cook County. So it's considered public money, not private money, and thus eligible to be used to pay off tax-exempt bonds.
That's assuming, though, that the only revenue stream being used to pay off the bonds is the amusement tax. That's what Ricketts has implied he wants, certainly, but it comes with its own problems: Nobody knows how much that added tax money will amount to (since no one knows how much Cubs ticket sales would go up in a renovated Wrigley), and no bond buyer in their right mind is going to buy bonds without a consistent revenue stream. You could get around this by having the Cubs promise to pay a certain amount per year no matter what the amusement tax amounts to — but that kind of dedicated payment is explicitly verboten under IRS rules.
The only way around this, then, is for the city and state to promise to pay off the bonds, with one tax revenue stream or another, and just hope that the new Cubs revenue is enough to do the trick. If not, then tax-exempt bonds would seemingly go out the window. Unless Ricketts knows some other Stupid Bond Lawyer Tricks that I'm not aware of.
Star Tribune drums up phony Vikings deadline
Minnesota maybe-governor-elect Mark Dayton said yesterday that he's discussed a new Vikings stadium with legislative leaders, though he said, "We talked about the stadium bill in general. We didn't get to any specific agreements or deals."
This was enough, though, to make for headlines in the Minneapolis Star Tribune, not to mention one whopper of a paragraph:
Dayton's comments were some of his strongest on a new Vikings stadium, an issue that is likely to again face legislators starting in January. The team, which has played at the Metrodome in downtown Minneapolis since the early 1980s, has said it will not renew its lease there when it expires at the end of next season.
I'm sure team officials did say that, but be serious: Even if a new stadium were approved tomorrow, there's no way it would be ready for 2012. So the Vikings are going to need to play somewhere then, and it's likely to be at the Metrodome — it's sure not going to be L.A.
There comes a point where responsible journalists need to call bullshit on obviously misleading statements. Or at least to point out that the lease standoff is really over how much rent the Vikings will pay, not a hard-and-fast deadline.
November 22, 2010
Wrigley battle now about whether it's "tottering"
I don't know if it was intentional or not, but somehow Chicago Cubs owner Tom Ricketts' pledge to keep the team at Wrigley Field has — by way of his demand for $200 million or so in public money for renovations to the place — turned into a raging debate over whether to tear the 96-year-old ballpark down. First you had Reason writer Steve Chapman's argument for razing Wrigley, which also appeared as a Chicago Tribune op-ed; that led to sports blog replies that Wrigley is hardly falling down, and that if you really can't go to a baseball game without super-wide concourses, then you hate baseball. (It's worth noting that, with the Cubs continually drawing high attendance figures despite lousy teams and sky-high ticket prices, most fans don't seem to mind the narrow concourses.)
James Warren of the Chicago News Cooperative, meanwhile — the New York Times-affiliated non-profit that's previously shown itself willing to parrot Ricketts' claims without checking his facts — wrote that Ricketts' problem is that he didn't "grease the political skids better" and credited him with being "too candid by half" in not overtly threatening to leave town if public funding isn't approved. Warren then added insult to injury by saying that he really wishes "cramped, tottering Wrigley should be replaced, just like Yankee Stadium."
Then there's Chicago Tribune sportswriter Paul Sullivan, who counters:
I spend a lot of time at Wrigley from April through September, with an occasional appearance in October, and have been in every nook and cranny of the ballpark.
Yes, it's cramped. Yes, it's antiquated. Yes, the visitors' clubhouse is probably smaller than Tom Ricketts' closet.
But "falling apart"? Hardly.
Again, there's no way of knowing whether Ricketts envisioned all this when he floated his demand for public funding for renovations. But he certainly can't be displeased that the conversation has turned so quickly from whether the Cubs are deserving of public subsidies to whether he'll be shackled to a rusty girder.
Oilers to Edmontonians: Vote 'yes' on arena, or don't vote
Remember that push poll that the Edmonton Oilers management was conducting on its new-arena plans? It just got even pushier: Team CEO Patrick LaForge has been robocalling 350,000 Edmonton-area households asking them to press 1 if they support a new downtown arena, and 2 if they don't. Then, according to Oilers spokesperson Allan Watt: "All of the people who pressed 1 got a call back that said, 'You've pressed 1, so now you should go to the website and fill out the questionnaire or call 311 if you don't have a computer.'"
That's right: The Oilers are conducting an online questionnaire — already unscientific enough — where they're openly trying to skew who's being polled. Watt defended this practice by saying that nothing would be done with the results of the survey, though even then the "push" element works (in that potential supporters of the arena are directed to a team-sponsored survey that presents the arena plan in as friendly a light as possible). And anyway, it's not true, according to Edmonton Journal columnist Paula Simons, who writes that "the results of that formal questionnaire are supposed to be turned over to city council in January, as a way for councillors to measure public support for the idea of using city funds to pay for the arena."
Meanwhile, in other public input news, the Oilers have reportedly "refined" their arena plan after input from those community meetings that were first announced last month. Most of the changes, though, seem more in terms of spin than substantive: playing up green elements (a popular move these days), "positioning" the arena as more integrated with downtown, and selling it as being able to be used for more than just hockey. The big questions — like how the hell this thing will be paid for — remain unaddressed.
November 19, 2010
Sacramento arena plans only mostly dead
Two months after the NBA stuck a fork in its Sacramento Kings arena lobbying efforts, Mayor Kevin Johnson isn't taking "dead" for an answer:
The mayor is calling on developers once again to come up with proposals to replace aging Arco Arena — or "tweak" plans they previously proposed — and submit them to a task force Johnson is reconvening.
Johnson's task force will meet today, one year after the mayor first commissioned the group to act as community liaison for ideas on how to get an arena built. ...
Johnson said this week that he will ask the task force to review any proposals submitted by the end of the year. The group will likely conduct a public hearing in late December or early January in which development teams will present their plans, Johnson said.
The mayor said he wants the task force's recommendation to go to the City Council early next year.
So, basically, this is a fishing expedition to see if anyone can come up with a more viable plan than the three-way land swap that was shot down by Cal Expo in September. Expect lots of far-fetched financing ideas, heated public rhetoric, and speculation that the team will move back to Kansas City if an arena deal isn't done for real this time — oh, look, there's one now.
November 18, 2010
Winnipeg "Plan B": Asper out, new stadium still in
So it took more than the promised four or five days, but it looks like the solution to developer David Asper's $45-million-over-budget stadium plan for the Winnipeg Blue Bombers is to keep the stadium plan, but ditch Asper. The Winnipeg Free Press reports today that "officials are now looking at a 'Plan B' that would see the redevelopment of the Canad Inns Stadium site by investors other than Asper."
Details are still extremely sketchy, but the rest of the deal sounds like it remains very similar to the original plan: The current stadium site would be turned over to redevelopment, and property taxes kicked back to pay for construction of the new stadium. (Yes, that's a TIF. And no, nobody's saying where the tax money would come from to pay for services to the new development, which is what property taxes are usually used for.) The only difference is that Asper was originally going to try to pay off the stadium debt himself in exchange for gaining control of the team; Manitoba Premier Greg Selinger now says that the Blue Bombers will remain community-owned.
As for how much this will all cost, no details on that yet, either. And there's still always the possibility that the federal government will come up with its own national sports-facility-funding plan, to placate Quebec hockey arena boosters. Asper may be gone, but the controversies are only just beginning.
Cutting off Wrigley's nose to spite Cubs' face
Steve Chapman, writing in the libertarian magazine Reason today, argues that if it's going to cost taxpayers $300 million to renovate Wrigley Field, maybe Wrigley Field should be torn down:
Wrigley is attractive and charming in many ways, but it's like driving a vintage car: After a while, the novelty is not enough to justify the antiquated design. The ivy-covered walls and manually operated scoreboard have to be balanced against the cramped concourses, primitive restrooms, modest kitchen facilities, and obstructed views. ...
A new park would rid the Cubs of their maintenance headaches, while providing them better ways to relieve fans of cash — lots of luxury boxes, better dining, new shops, and diversions.
It would allow the team to hire better players and pamper them in style. The architect could lovingly re-create the treasured features of the existing stadium, while omitting the shortcomings.
Only one problem: A new stadium would almost certainly cost even more than renovating Wrigley. So that luxury box money would either need to be diverted from pampering players to pay off stadium debt, or (more likely) Cubs owner Tom Ricketts would still be asking for hundreds of millions of dollars in public subsidies to pay for a new place.
Chapman's error is in buying Ricketts' argument that renovations are necessary because Wrigley costs $10 million a year to maintain. Even if you accept that a redone stadium would have cheaper maintenance costs (not at all a sure thing, given that it would have more stuff in it that would need to be maintained), even $10 million a year in savings wouldn't be enough to pay for $200-300 million in renovation costs — it would be cheaper, in other words, for Chicago taxpayers to just take over maintaining Wrigley than to pay Ricketts to rebuild it. The fight here isn't over whether a Wrigley reno is a good idea — Ricketts, notably, hasn't shared any details of what it would mean for the team's finances — but over whether the public should hand over hundreds of millions of dollars to make it happen.
We've been through all this before, of course, with Fenway Park, which 11 years ago was similarly declared obsolete and in need of replacing with a modernized replacement. In the end, thanks to both a new owner and the concerted efforts of Boston activists — who, among other things, conducted an architectural charrette to come up with ideas for ways to increase revenues at Fenway, helping originate such innovations as the Green Monster seats — Fenway was saved and received a widely popular renovation, with very little public subsidies. (It did receive federal historic preservation credits, which are available generally to anyone rehabbing historic structures.) On the face of it, the Wrigley reno looks like a similar plan. But if Ricketts says he can't do it without public money, the proper response isn't necessarily "tear it down," but rather "okay, if it's cheaper to keep maintaining the old unrenovated place, then just do that."
NFL actually shuns "elements" for Super Bowls
Political blogger Kyle Wingfield ("The Atlanta Journal-Constitution's 30-something conservative" — when he turns 40 does he have to quit, or just get a new tagline?) notes some curious history to the NFL's statements on the Atlanta Falcons stadium dispute: Namely, whereas last week commissioner Roger Goodell declared that the Falcons need a new open-air stadium because the Super Bowl was "meant to be played in the elements," back in 1989 the initial push that got the Georgia Dome built was in part because, as then-Atlanta Super Bowl committee chair Norman Braman put it, "No dome, no Super Bowl."
Furthermore, notes Wingfield, even when the NFL has a choice, it steers clear of those pesky elements:
Twice the Super Bowl has been played in a stadium with a retractable roof. On neither occasion was the roof kept open for the game. (During one of them it was raining, but rain must represent the wrong kind of "elements" for championship football.) Three of the next four Super Bowls, the only future games whose sites have been determined so far, will be played in stadiums with roofs.
Wingfield's reasonable conclusion: "It's fairly obvious that the NFL's 'elements' talk is all about boosting the Falcons' bid for a new home." What, league commissioners changing their arguments depending on the situation? I can't imagine that happening.
November 16, 2010
The day in Wrigley Field subsidy scrounging
The last 24 hours has been a bit of a whirlwind for Chicago Cubs owner Tom Ricketts' plan to pay for $200 million in Wrigley Field renovations by having the state and city kick back any future increased amusement taxes to the team. (It's really a ticket tax, but Chicago insists on calling it an amusement tax, a term that, my Baseball Prospectus colleague Marc Normandin notes, always makes him "picture someone coming up next to you to collect when you're enjoying yourself too much.") To recap:
- Both Mayor Richard Daley and Gov. Pat Quinn came out against the Ricketts plan, Daley because he doesn't want to saddle future mayors with lost tax revenues (ironically, given his own past funding proclivities), Quinn because Ricketts told legislative leaders about it before his announcement, but not him. "Apparently, they don't think I'm as important as some others," said Quinn. "Well, I'll show them." (Okay, I made the "I'll show them" part up.)
- The Windy City Watch blog revealed that Ricketts' dad Joe is the backer of a group called Taxpayers Against Earmarks, and says in a video on the group's website that "I think it's a crime for our elected officials to borrow money today, to spend money today and push the repayment of that loan out into the future on people who are not even born yet." (A spokesperson for the group later told the Huffington Post that it only cares about federal spending, not state spending.)
- Ricketts held a news conference at Wrigley this morning, trotting out local business and construction union leaders to support the plan. Chicagoland Chamber of Commerce President Jerry Roper declared: "I say to those of you who are concerned about this, 'Get behind it. We need projects like this. We need visionaries like the Ricketts [family] who are willing to put their money on the line.'" (The Chicago Sun-Times transcript didn't indicate whether "their money" came with an air asterisk.)
- Ricketts also revealed some more details of the renovation plan, which includes moving back-office facilities to neighboring properties and using the space for expanded concessions concourses. (Sound familiar?) He also indicated that he doesn't plan to live up to the Tribune Company's promise to build out the so-called "Triangle Building" next to Wrigley with private funds in exchange for having been allowed by the city to expand Wrigley's bleachers — "The family had nothing to do with the prior legislation," said Ricketts PR flack Lissa Druss Christman — which is sure to win lots of friends on the Chicago city council. Not.
- MLB.com ran a story headlined "Wrigley renovation plan earns locals' support," because the mayor and governor don't count as locals.
- Something called Chicago Breaking Business (which makes me think of what happens when your Chicago business fails to pay off the protection racket) has a much more accurate headline: "Confusion reigns over Ricketts' Wrigley request." House Speaker Michael Madigan, it noted, told reporters this afternoon that Ricketts had withdrawn the amusement-tax rebate plan, a statement that a Ricketts spokesperson immediately denied, insisting, "Nothing has changed, and we are hard at work."
The odds on any of this going anywhere legislatively in the next few weeks seem slim, given that Illinois faces a budget deficit of approximately a bazillion dollars. That said, for running-stuff-up-the-flagpole purposes, it seems to have worked fine: State Senate President John Cullerton said he's open to other funding ideas, and Ricketts said the same thing, so expect a discussion to follow not of whether to fund Wrigley renovations, but how. And amidst all the hoopla, everyone seems to have forgotten that Ricketts promised last year that he wouldn't seek public money for Wrigley, so on that count, it's all working according to plan. Bwahahaha!
Rogers: Ricketts deserves Wrigley reno money because, well, just because
Chicago Tribune sports columnist Phil Rogers has chimed in on the notion of kicking back $200 million in tax money to the Cubs so his employer's former baseball team can renovate Wrigley Field, and he thinks it's a spiffy idea. Why? Near as I can summarize it:
- The White Sox, Bears, Bulls, and Blackhawks all got public money, so "why shouldn't the Cubs get their share?" (In logic, this is known as the "But all the other kids have got one!" fallacy.)
- Cubs owner Tom Ricketts doesn't just do what's "popular with their fans," like signing free agents or hiring Cubs legend Ryne Sandberg to be manager.
- "Rather than simply pledge allegiance to a continued stay in Arizona, they explored a move of spring-training operations to Florida."
- Wrigley Field costs $10 million in maintenance each offseason, and in a renovated Wrigley "that money — along with the proceeds from new or improved revenue streams — to be shifted into baseball operations."
Nowhere in the article, you'll notice, is anything supporting the subhead: "Investment in a solid sports team is a solid one for a city" (unless you count Ricketts' assertion that spending public money on Wrigley would be "a no-brainer"). But when it's a matter of giving taxpayer money to an unconventional owner bold enough to shake down Arizona for spring-training money, just so he can increase his player payroll (and/or profits), who's going to quibble over economic details?
SD columnist: If you build it, Super Bowls won't come
San Diego Union-Tribune columnist Tim Sullivan, who I've cited (and has cited me) before, picks up the issue of Roger Goodell's attempted Super Bowl extortion plot today and runs with it:
As San Diego wrestles with the question of how much to prostrate itself for the preservation of pro football, Atlanta's experience ought to be instructional. The notion that building a new playpen for the Chargers will ensure multiple Super Bowls in reasonably short order is neither guaranteed nor probable. Too many other cities are chasing that plum to expect that the NFL would confer special status on any second-tier market, however wondrous the weather. ...
Nailing down a couple of Super Bowls would be nice, but protecting the taxpayers should be paramount. Much as pro franchises are prized, a city must be prepared to say no when a team's demands become excessive.
Exactly where that point falls is subjective. But when an 18-year-old stadium is too old, we're probably in the ballpark.
My only gripe: Sullivan stole my line about the Georgia Dome being "older than Miley Cyrus." Dude.
UPDATE: Sullivan just emailed to inform me that he actually came up with the Miley Cyrus comparison independently. Apologies to him for any aspersions cast, and you know what this means: It's not plagiarism, it's a meme.
Yankees' purchase of Scranton affiliate a "losing proposition" for taxpayers?
The excellent River Avenue Blues has a report on the proposed sale of the publicly owned Scranton/Wilkes-Barre Yankees to the parent franchise in the Bronx and Mandalay Entertainment, a deal that's so complicated that it's surprising the infield fly rule doesn't come into play. As RAB sums it up:
- Lackawanna County, which owns the franchise, would sell it to the Yankees and Mandalay for $14.6 million. However, the county would then be required to put that entire amount into stadium renovations — including tearing down and replacing the entire upper deck — while the state of Pennsylvania would chip in another $20 million. (Another $5.4 million in renovations would be paid for by ... it's not exactly clear.)
- The Yankees would agree to a 30-year lease on their stadium, keeping all stadium revenues and paying $750,000 a year in rent. (They'd also pay $4 per each fan for attendance over 320,000 a year, which at current rates could amount to another few hundred thousand a year.) Without seeing the current lease, it's hard to say how much of a sweetheart deal that is, but it won't come anywhere near paying off $34.6 million in public expense.
- The Yankees can still pull their franchise out of Scranton, with Lackawanna County only having the right to buy back the team for "fair market value," which is likely to be way more than $14.6 million.
- Luzerne County, which helped pay to purchase the team back in 1986, is suing Lackawanna for a share of the sale proceeds; Lackawanna is countersuing for its own baseball expenses. Half the sale money will be held in escrow until all this is worked out.
Given this whole mess, you really have to wonder whether Scranton wouldn't have been better off keeping ownership of the franchise — there would be the threat the Yankees would move, yes, but minor-league franchises are easy to come by, and the Yanks have a built-in incentive to stay, given that Scranton is the nearest available AAA city to New York. (The whole reason they moved their top minor-league affiliate there from Columbus, Ohio in 2006.) RAB declares that "the deal is looking more and more like a losing proposition for the taxpayers of Pennsylvania," which seems a fair assessment: In the best-case scenario, the county loses an asset and is barely made whole on the purchase price by added rent, while the state throws $20 million down a hole. The Yankees, meanwhile, end up with a new stadium for perhaps a million dollars a year in added rent, but get all the revenues from new suites and such — and can still walk if things don't go well. Can't anybody here play this stadium negotiation game?
November 15, 2010
Goodell to Atlanta: No Super Bowl without new stadium
I was asked by a reporter on Friday whether, given the economy and its effects on public treasuries, the push for taxpayer financing for stadiums and arenas wasn't in the process of fizzling. It's a question I get a lot lately, and I always have to patiently explain: What, you think just because banks were failing during the Depression that people stopped trying to rob them?
If you need evidence, look no further than Atlanta, where the Falcons are continuing their drive to replace the 18-year-old Georgia Dome on the grounds that, well, it's 18 years old, and other newer stadiums are newer. Just listen to NFL commissioner Roger Goodell explaining on Thursday that he'd be happy to let Atlanta host a Super Bowl, just as soon as it does something about that embarrassing stadium that's older than Miley Cyrus, fer chrissakes:
"I think this is a great community," the NFL commissioner said. "But as I mentioned to the people earlier today, the competition for the Super Bowl is really at an all-time high, in a large part because of the new stadiums.
"The provisions that they have for a new stadium in this great community, I think that's a pretty powerful force. We have a history of going back to communities when they have those new stadiums."
Backers of the new-stadium plan say that it "won't cost taxpayers because it will be paid for visitors through the hotel/motel taxes," according to the Atlanta Journal-Constitution. Though, of course, there's still the opportunity cost: If you don't raise hotel/motel taxes for a stadium, you can do it for something else; or don't raise them, and allow your local hotels and motels to be more competitive and draw more visitors. The AJC also claims that when Atlanta hosted the Super Bowl in 2000, it "had a reported economic impact of of $292 million," though other estimates show the city actually losing money.
Noah Pransky at Shadow of the Stadium notes that Goodell's statement is a classic "non-threat threat," in the fine tradition of the Vercotti Brothers. Pransky also observes that if the Georgia Dome is being marked for death now, Raymond James Stadium in Tampa could be next:
It seems from the arguments put forth that the Falcons aren't worried about losing money on their billion-dollar franchise, but simply think they deserve to make more because other teams in the league are making more...
Furthermore, one can only wonder if Goodell will imply Tampa needs a new stadium down the road if it wants to host another Super Bowl. Raymond James Stadium, after all, has 7,000 fewer seats than the Georgia Dome. It opened in 1998, six years after the Georgia Dome, and it will be paid off on Jan. 1, 2027, also six years after the Georgia Dome.
Goodell's exact words on this subject on Thursday: "The bar has been raised because you're getting great facilities around the country in great communities." In other words, every new stadium that opens is an argument for building more new stadiums. Now there's a business model — at least until you reach the stadium event horizon.
November 12, 2010
Wolff: Selig should okay San Jose A's move "for good of baseball"
Athletics Nation has posted a long three-part interview with Oakland A's owner Lew Wolff on multiple issues, including his new stadium plans. Among the highlights:
- Asked when a decision will be reached by MLB's relocation commission, Wolff sounded frustrated, as always: "I wish I could give you a finite answer on that. There is actually no reason in the world that any of us can come up with that either the Giants or the baseball Commissioner should not approve us to move 50/60 miles away to San Jose so A's can get a new ballpark. The Commissioner ... is not the kind of person, for reasons that I don't know even though we are very close, that gives you a firm date on anything until he is absolutely ready to do so. So I feel embarrassed that I can't answer the question to say, 'By the end of November...' but I can't."
- Wolff hinted that he hasn't been directly negotiating a territorial rights buyout with the Giants, saying, "I haven't heard much from the Giants either, not that they need to," and adding: "So this really boils down to the commissioner deciding, which he has the power to do, whether or not he will grant our request to share the Bay Area two-team market as the other three two-team markets in MLB all do." He also reiterated several times that the former A's owners handed over San Jose rights to the Giants for nothing "for the good of baseball," and that handing them back to the A's would likewise be for the good of baseball. Reading between the lines, this appears to be: "We're not going to haggle over the price, so it's up to Bud to force an agreement down the Giants' throats"; given Selig's proclivities for avoiding internecine conflict, good luck with that one.
- Wolff ruled out staying in a new stadium in Oakland, insisting: "We have exhausted every option in Oakland. And you'd think within the last two years that somebody from Oakland would pick up the phone and say 'here's a finite plan that you missed and that we wish to discuss with you.' I haven't heard one word." As if in answer, yesterday the Bay Citizen profiled plans continuing for Oakland stadium proposals by Jack London Square and near Lake Merritt Channel — whether you consider them viable options or not, they are "finite plans."
- He reiterated the "nobody wants to play on our grass" argument, asserting: "We have lost players in past years who would rather take a bit less money and play in a modern venue in a stronger market," and citing Rafael Furcal and Adrian Beltre as specific examples. (Though in Beltre's case, at least, indications are that he signed with Boston mostly to play in a pennant race and juice his batting numbers to earn a better subsequent contract in free agency.)
- "We are, I believe, the only team in baseball to share our ballpark with another professional sports team." When the interviewer points out the Florida Marlins, Wolff replies, "No, I think they just play there by themselves. I think it is a football stadium, but they play there without a team there." That stadium would be the facility until recently known as "Dolphins Stadium," where the Miami Dolphins play — they may be going through a rough patch, but "unprofessional" is kind of harsh.
- On moving the team if San Jose falls through: "John Fisher and I don't want to own a team outside of the Bay Area or outside of California. So if the Commissioner says to us, 'Sorry I can't do anything for you.' Then I don't know what we'll do. We have not measured those options." Wolff also reiterated the claim that he's "never once threatened a move to another city," though that hasn't stopped his media proxies from doing so on his behalf.
In related news, Wolff told the San Jose Mercury News that he can have a San Jose Earthquakes stadium built by 2012, or maybe 2013, once he actually starts building one, if he does. "We're taking every step toward a building permit that we can," he said. "I don't want to overdo it. These are very difficult times." In other words, don't hold you breath there, either.
November 11, 2010
Cubs owner demands $200m in tax kickbacks for Wrigley reno
So remember when Chicago Cubs owner Tom Ricketts was promising to stay put at a renovated Wrigley Field for the long term? Apparently that didn't mean he wasn't going to threaten to leave unless he got public money for his renovation plans:
The owner of the Chicago Cubs is asking the state to help finance more than $200 million in renovations at Wrigley Field that will ensure the team stays at the historic ballpark for the next 35 years.
The Ricketts family, which purchased the team last year from Tribune Co. in a deal valued at $845 million, has pledged that the project will not be financed by new taxes or an increase in existing taxes.
The family's plan calls for the Illinois Sports Facilities Authority, which owns U.S. Cellular Field, to float up to $300 million in bonds. The bonds will be paid over 35 years through amusement taxes that Wrigley Field customers already pay.
In 2009, the Cubs paid $16.1 million in amusement taxes to the City of Chicago and Cook County through the 12 percent levy on each ticket, the team said. The city and county will be guaranteed this amount for the duration of the bonds. Growth in amusement taxes beyond $16.1 million — through increased ticket sales or prices — will be redirected to pay the bonds. The family says the incremental growth in the tax will cover the bonds.
The Ricketts plan, announced this afternoon in an email to season ticket holders, is actually a pretty clever twist on tax increment financing, with ticket taxes taking the place of the more usual property or sales taxes that would be kicked back to the team's owner. But it's still a loss of public money — just the same as it would be a loss to your landlord if you told him you wanted to buy a new big-screen TV, and pay for it by him agreeing never to raise your rent again. And as such, it means Ricketts is going back on his vow that he had "no plans" to seek public funds for a Wrigley renovation.
As for whether he'll be successful, that's another story: Gov. Pat Quinn, who'd have to sign any Wrigley funding bill, responded to Ricketts' announcement by saying it was "news to me," and huffing, "They can present anything, I suppose, to the [sports facilities] authority, but I think it'd be important to touch base with the governor before they do." Add in that Illinois is facing a $15 billion budget deficit and that Ricketts doesn't really have any other options for the Cubs — even if you could move them to, say, Portland, they'd lose most of their value outside of the North Side of Chicago — and you'd like to think that bailing out sports teams will be low on the legislative agenda this fall.
Still, crazier things have happened, and it's entirely possible this is just an attempt by Ricketts to get "stadium money for Cubs" on the legislative agenda in hopes that it'll be approved one of these years. Stay tuned.
Tiger-Cats stadium plan now has hotel, $53m in red ink
After promising an announcement yesterday to provide details of a plan to build a hotel, conference center centre, and townhouses alongside their perpetually planned new stadium, the Hamilton Tiger-Cats owners announced ... that they plan to build a hotel, conference centre, and townhouses. Any other details, if they were supplied, didn't make it into the Canadian media coverage.
In any case, the prime holdup in the Ticats stadium saga remains, which is that $30-million-plus-whatever-the-stadium-land-costs funding gap in the project. Local elected officials, to their credit, seem to be mostly keeping their eyes on the prize:
"Pretty pictures don't excite me anymore," said city councillor Brad Clark. "I need to know where the money is."
Echoed fellow councillor Russ Powers: "Where's the beef?"
And another member of city council, Terry Whitehead, added: "Is it smoke and mirrors?"
Hamilton Mayor-elect Bob Bratina, meanwhile, said he hoped that "excitement" over the development plans announced yesterday would convince either public or private sources to cough up enough money to fill the funding gap, which he estimated at $53 million. And if that doesn't work, maybe the Ticats could pay some Canadians to act excited for them.
November 10, 2010
Kings not for sale to Seattle, says Maloof
Microsoft CEO Steve Ballmer cashed out $1.3 billion in shares last week, leading to rampant speculation of all sorts of things: Either he hates the Windows Phone, or he's looking to buy a basketball team for Seattle, as he'd expressed interest in previously.
Sacramento Kings owner Joe Maloof immediately denied that Ballmer, or anyone else, was targeting his team, saying he's "never met Mr. Ballmer, we've had no contact with him and the team is not for sale." No denials yet from the owners of the Memphis Grizzlies, the Milwaukee Bucks, or the Baltimore Claws.
Of course, there's another obstacle to bringing the NBA back to Seattle, which is that the city would still need to come up with at least $150 million to meet Ballmer's (and the NBA's) demand for renovations to KeyArena. Not to mention that NBA commissioner David Stern is busy using the league's struggling franchises as a contraction threat against the players union. So while you shouldn't rule out the Ballmer Option entirely — people with billion-dollar checking accounts don't grow on trees, much as it may seem otherwise — you probably don't want to hold your breath, either.
November 09, 2010
Columnist praises nonexistent L.A. stadium as not a "dump"
Speaking of stadium pushes that never die, AEG must be doing a full-court press on L.A-area sportswriters to get behind their imaginary downtown football stadium, because now we have L.A. Times columnist T.J. Simers chiming in with an entire column saying it would be the best thing since sliced bread.
Simers' reasons? AEG built the Staples Center, and everybody loves that, right? Also, "Philip Anschutz is the NFL's kind of guy." And "The Coliseum, Rose Bowl and Dodger Stadium are dumps." Nothing, needless to say, about how an NFL stadium would be paid for, which matches well with AEG's own lack of specifics about the project.
On the other hand, we do have a YouTube video about how a downtown stadium would lead to riots. I guess that's what passes for news analysis in these days of citizen journalism.
WSJ: "End of an era" for stadium building
The Wall Street Journal ran a piece over the weekend looking at the state of stadium financing, and concluding that:
- "From New York to Florida to Arizona, some taxpayers are opposing agreements to fund baseball projects after a decadeslong boom in publicly financed ballparks."
- This can be seen in Mesa, Arizona, where, although a new spring training for the Chicago Cubs was voted in last week, "nearly 40% of voters objected to building the park by selling city-owned farmland and raising hotel taxes."
- "Even as some baseball projects go forward, often after delays and on smaller scales, the push back marks the end of an era."
Not to take anything away from stadium opponents in Mesa, but: This is supposed to be a sign of a trend? Stadium votes winning by slim margins have a long and storied history (as do stadium votes losing, but the stadium getting built anyhow) — it's the stadium referendum that wins by a landslide that's the oddity. And stadiums facing "delays" are nothing new either, as witness the decade-long sagas around new stadiums for the Minnesota Twins and Florida Marlins that began in the mid-1990s.
Certainly, the horrible economy (and in particular its effects on state budgets) is hurting attempts to get sports facilities built, but stadium campaigns have hardly ground to a halt. As someone who speculated in 2003 about the tide beginning to turn against stadium deals — something I credited, in part, to local governments then mired in red ink — I know better than anyone that you can't stop the push for publicly subsidized stadiums, you can only hope to contain it.
November 05, 2010
AEG promises L.A. stadium by 2015 Super Bowl
The battle for supremacy in Los Angeles-area NFL vaportecture continues, with AEG honcho Tim Leiweke insisting that his company's nonexistent stadium would be ready in time to host the 2015 Super Bowl. Unlike Ed Roski's City of Industry stadium plan, which despite being first out of the gate now has a targeted completion date of um, we'll get back to you on that.
Leiweke admits that nothing's going to happen on the stadium front until after next season's all-but-certain NFL lockout — as he put it, "there's no team and no league that's going to vote and approve a transfer for at least a year, and probably longer." So figure starting serious work on luring a team and getting construction approval in early 2012 at best, and that gives AEG three years tops to get the thing approved, financed, and built to be ready for February 2015. Sounds crazy short to me, but presumably Leiweke is counting on that fact that nobody ever remembers promised opening dates.
Winnipeg stadium over budget, out of cash
The $115 million plan for a new Winnipeg Blue Bombers football stadium — already saddled with a controversial public "loan" to developer David Asper that could turn out to be more of a grant — has new problems. Namely, that that $115 million price tag has turned into $160 million, and nobody has a clue where the extra money will come from:
Sources say the price is more than $160 million and the stakeholders are now huddling to determine what comes next. The project will require extra money or the design could be altered to make the stadium fit the $115-million budget used to put together the existing funding package. There is concern the project is in danger of being scrapped altogether.
Asper agreed to pay for all cost overruns, but now says overruns should be calculated only after the "final price" is determined. (This is reminiscent of the time the Seattle Mariners owners insisted that they didn't have to pay for cost overruns on Safeco Field because they were not overruns, but rather "unanticipated capital expenditures"; the team lost in court.) If the final cost estimate — which, mind you, is being made by Asper's own development firm, Creswin Properties — comes in at more than $115 million, Asper tells the Winnipeg Free Press, "choices will have to be made."
Winnipeg Mayor Sam Katz says he and Manitoba Premier Greg Selinger will make a decision on how to proceed in the next four or five days. This could get very ugly very fast.
November 04, 2010
Does Giants' win affect San Jose A's calculus?
"Experts: Giants' World Series success could boost chances for A's move to San Jose" was the headline in yesterday's San Jose Mercury News. It's certainly a provocative premise: How, exactly, would the Giants' on-field success affect the long-running off-field soap opera around A's owner Lew Wolff's attempts to relocate, and Giants' ownership's insistance that they won't give up the South Bay rights they got from the A's two decades ago without a fight, or at least a substantial cash settlement?
Unfortunately, the promised "experts" turn out to be a single expert who actually espouses the promised point of view. And who is that masked man?
"To the extent that the commissioner's office would be concerned about the Giants' financial well-being if the A's were allowed to move to San Jose," said Andrew Zimbalist, a Smith College economist and baseball expert, "that concern would by allayed given the success the Giants have had."
Zimbalist estimates the Giants will net from $13 million to $16 million from their share of ticket sales and concessions for the postseason and World Series.
"The owners want (a team) to be as economically successful as it can be," said Zimbalist of the A's proposed move.
"And I think fundamentally that is what Selig is looking at -- if he thinks it's a plus economically."
Zimbalist actually has some props in this department — he wrote a whole book about Selig, after all — so I'd be inclined to think he knows what he's talking about. That said, it's a fairly bizarre argument: The issue in the San Jose move is over what marginal revenue loss there would be to the Giants as the result of an A's move, and that doesn't change regardless of whether the Giants are filthy rich or desperately poor — if the A's relocation would cost the Giants (pulling a number out of the air) $5 million a year, that's still $5 million a year. Moreover, it would be weird for MLB to make a long-term decision based on a one-year income bump from the Series win, unless Selig thinks that Edgar Renteria is going to do this every year.
The article also notes that the A's relocation committee report that Selig commissioned 20 months ago is likely to be performing "an analysis of what kind of fan base shift might occur should the A's move to San Jose." Actually, it's pretty likely that that analysis is long since done — Zimbalist himself did one for the New Jersey Nets' move to Brooklyn in a third the time, though admittedly he took some shortcuts — but it won't be released until the Giants and A's owners have negotiated an acceptable settlement behind closed doors. Maybe it'd help if Wolff agrees to start wearing bowties.
November 03, 2010
Mesa voters approve blank check for Cubs spring-training field
Only one big stadium referendum this year, in Mesa, Arizona, where voters decisively approved spending $99 million on a new spring training stadium for the Chicago Cubs:
The city will provide up to $99 million to construct the complex two miles southwest of the Cubs' current facility at Hohokam Park. Any additional funds and upkeep of the new park will be financed by the Cubs, who plan to develop a shopping and entertainment area near the ballpark. ...
Mesa's funding will come, in large part, from the sale of undeveloped city land.
The referendum actually approves spending "more than $1.5 million" on a Cubs facility, and critics have warned that the final price tag could be higher than $99 million. The Cubs have promised that won't be the case, but that's currently a non-binding agreement. And they still haven't agreed on how much rent they'll pay yet. All this will presumably be hammered out in future negotiations between the team and the city of Mesa.
Assuming it goes forward, the Cubs say they'll build a shopping center called "Wrigleyville West," which according to CSN Chicago will "attempt to recreate the atmosphere surrounding Clark and Addison with shops, bars and restaurants." Only in the desert. And without all the actual people who live in Wrigleyville. Why does this sound like it should really be in Vegas?
November 01, 2010
Goodell: Niners stadium funds must come from players' hides
Echoing what San Francisco 49ers officials said two weeks ago, NFL commissioner Roger Goodell this weekend all but said that there will be no new stadium in Santa Clara until a new labor agreement is reached:
"It's the CBA. That's what (investors) are concerned about," Goodell said on the eve of the 49ers' game against the Broncos at Wembley Stadium. "They want to make sure that the CBA is something that will allow them to finance a stadium. And that's challenging in this environment." ...
"And then you add the economy on top of that, it's a difficult environment to get a stadium built," Goodell said. ...
"I think (new stadiums) are great for the fans, but the financing no longer comes from the public sector," he said. "A lot of these stadiums are being moved to privately run facilities. And that's fine. It's a transition. But that transition is changing the economics for the owners."
And why exactly would the NFL commissioner be publicly pooh-poohing a stadium plan that the 49ers have been working feverishly on for years? Because the intended audience isn't the city of Santa Clara, which already signed off on $444 million in stadium subsidies back in June, so doesn't need any more convincing. Rather, it's the players union, which is being served notice that owners are planning to cry poverty, despite record profits, by claiming that if owners are going to be asked to build privately financed stadiums, players will have to kick back some of their salaries to make it happen. (And no, I'm not sure how Goodell got away with calling a stadium getting $444 million in taxpayer money "privately financed" — but at the risk of blaming the messenger, that's modern journalism for you.)
In other words, Goodell's statement is a bargaining tactic, so there's no reason to believe the 49ers stadium plan is any more (or less) endangered than it was a few months ago, although that was pretty endangered to begin with. The real upshot seems to be that there will be no action on a new 49ers stadium — and possibly other stadiums, including one for the Minnesota Vikings and whatever may or may not get built in L.A., until the league has finished using the stadium issue as a bludgeon with which to smack around the union at the negotiating table. So depending on how long the anticipated 2011 lockout goes on, we could be in for a long hiatus.
