January 31, 2011
Competing bill would redirect Dolphins roof tax to convention center
The Miami Dolphins' roof-subsidy demands, already facing opposition in the press and from elected officials in Broward County (which would be asked to help pay for the thing, even though it's across the county line in Dade), got another kick in the chops yesterday:
Stuart Blumberg, co-chairman of a Miami Beach committee spearheading the center renovation design, said two state senators have agreed to sponsor a bill that would help fund the center renovation through a hotel tax increase while excluding the Dolphins from any of the money raised.
Blumberg said his proposal, sponsored by Sens. Mike Bennett, R-Bradenton, and Rene Garcia, R-Miami, would allow Miami-Dade commissioners to increase a hotel tax, the region's convention development tax, from 3 percent to 4 percent. All the funds raised by the increase would go to the center's renovation, Blumberg said.
Blumberg's bill might not pass either, of course (it still doesn't have a House sponsor), but if nothing else it could siphon off support from hotel operators for the Dolphins bill, which the team was hoping it could piggyback on the convention center renovation, something the hotels actually want. If you're scoring at home, it might be time to downgrade the Dolphins' renovation plans from "doubtful" to "questionable."
January 30, 2011
Businesses on Super Bowl week: Nobody goes there, it's too crowded
The other day i mentioned a St. Louis restaurateur located near the Rams stadium who says he closes on Sundays rather than have his customers fight their way through game-day traffic. Today's Fort Worth Star-Telegram gives a more detailed look at the mixed feelings local businesses have over the flood of humanity that accompanies football games, then disappears the rest of the year. Key paragraphs:
Just south of Cowboys Stadium, Bill Testa, managing partner of the 54-year-old Candlelite Inn restaurant along Division Street, has pre-sold his lot to a parking vendor. It is already sold out, according to Parkwhiz.com.
Testa has catered some Cowboys games and believes that his restaurant could actually see an uptick in customers because of the lane closures. Yet there's a small "For Sale by Owner" sign outside the restaurant entrance, an indication that Testa would like to move the Arlington institution to a new location.
"It's hard for my longtime customers to get here when a game is going on," Testa said. "And many of my customers that used to live around here have moved away. They live in Southlake or south Arlington or Mansfield.
"If I could sell the place tomorrow, I would. But I would move somewhere else in Arlington. I've had tire-kickers, but nobody can get financing in this economy."
Which is pretty much what Phil Porter found, only at the macro level.
Bengals want $43.6m more in stadium upgrades
Remember how, after offering up $7.4 million in additional rent to help out Hamilton County's empty stadium fund, the Cincinnati Bengals demanded $30 million in lease breaks and a new scoreboard? Well, now it turns out they also want a total of $43.6 million in stadium upgrades, according to records obtained by the Cincinnati Enquirer.
Hamilton County officials say they can't afford it; the Bengals retort that this is just normal maintenance. Though their arguments don't exactly back up that contention:
Dornette added the scoreboard isn't a team want — it's a need. The Bengals scoreboard, for example, is not high definition. The Bengals are stuck with the equivalent of an analog TV in a digital age, they say.
Other stadiums, including the rival Steelers, for example, feature high definition scoreboards.
The Bengals are, of course, the team that famously included "holographic replay systems" among the items that the state-of-the-art clause in their lease requires them to get once other teams have them. So at least they can argue that they've established "Because all the other kids have them!" as a precedent.
January 28, 2011
Lightning seeking $40m in public cash for arena upgrades
So here's how my day is going so far: I finally finish posting this morning's stadium news updates, then get a call from a Minneapolis Public Radio reporter wanting to set up a live appearance for me to talk about the ongoing Vikings stadium controversy. (It'll be airing next Wednesday between 10 and 11 am CST, for those who want to tune in.) One of the questions asked is whether we're really going to be tearing down 1990s-era stadiums like Camden Yards to build new ones only 20-30 years later; I allow that what's probably more likely is teams demanding major publicly funded upgrades, a la the Kansas City Royals and Chiefs with their 30-something stadiums a few years back.
I return to my computer, and an email from a reader alerts me to this news item:
The Tampa Bay Lightning plans to announce roughly $40 million in renovations to the St. Pete Times Forum that the team hopes will significantly improve the hockey game and concert-going experience.
Documents obtained from Hillsborough County indicate that the team's new owners want to get reimbursed for much of the work with tourist taxes.
The original deal for building the St. Pete Times Forum — in 1996 — included a provision for paying for future improvements with tax money, but apparently the Lightning owners want more than was provided then, so they're looking to get added subsidies in exchange for a lease extension. Yet another example of how arena deals can be the gift that keeps on giving, if the people negotiating the lease from the public side are clueless enough.
Meanwhile, I'm looking forward to hearing how "replacing all of the seats within the arena with new blue ones to match the team's new colors" (one of the new reno list items) would represent a "significant upgrade" to the concert experience. Unless they plan on requiring Justin Bieber to dye his hair blue and white to match.
Harper on Quebec arena funding: Wait for it...
So much for Plan B: The administration of Canadian Prime Minister Stephen Harper now says it will consider federal funding for a Quebec hockey arena — but it wants to hear more details first.
"My Quebec caucus colleagues and I support the amphitheatre project and the door is not closed with the federal government, far from it," Harper's political minister for Quebec City, Josee Verner, said yesterday. (She was speaking in French, which is presumably why she said "amphitheatre.")
Harper, you will remember, said just last month that no federal funds would be forthcoming. The change of heart was apparently sparked by Quebecor owner Pierre Karl Peladeau's promise of "tens of millions of dollars" towards an arena.However, Verner added that the government needs to see details of Peladeau's plan before it can move forward: "We do not have everything we need."
In the meantime, Quebec City officials plan to spend the next six to nine months evaluating the projected $400 million arena cost. Can you say, "Stall until the threat of an election is over"?
Downtown L.A. NFL stadium: How would the bonds work?
Bill Boyarsky of L.A. Observed has an interesting take on how an AEG stadium in downtown Los Angeles could be financed:
Several years ago, the city's Convention Center and Exhibition Authority borrowed $450 million through the sale of tax-exempt revenue bonds to build an addition to the convention center, West Hall. It's the green building you pass on the Harbor Freeway. The city leased the convention center from the authority and is paying off the bonds with city funds. In the current budget, $48.8 million is set aside for the yearly payment of this debt, which is now down to $445 million. It will take 30 more years to repay it, city officials said.
Under the NFL stadium proposals that have been aired in the press, the $350 million bond issue for the football facility would probably be added to the convention center authority's existing $445 million debt, bringing total indebtedness to $795 million. This would boost debt repayment, or service, payments by $25 million or possibly $30 million a year, officials said. In other words, more than $70 million a year would come from the city treasury to repay the combined debt of the convention center and the football stadium.
Now, AEG has previously promised it would pay off the $350 million in new convention center bonds. However, it's questionable whether this would be legal: If a private entity pays for public bonds, that converts them into private activity bonds, which aren't tax-exempt. (And before anyone asks, the Yankees loophole is closed now.)
The only way around this would be to argue that no more than 10% of the bond proceeds were for the benefit of a private party; I guess if you squint you can pretend that tearing down a convention center hall and then rebuilding it is for the benefit of the public convention center, not the football stadium that the hall would be moved for. That'd be up to the IRS, though, and as we've seen before, they're sometimes willing to bend the law for the right people.
Mondale checks out ammo plant as Vikings stadium site
The polluted ammo plant site in Arden Hills is in the news again as a prospective Minnesota Vikings stadium site, with Minnesota stadium chief Ted Mondale meeting with local officials yesterday. The site still comes with no ideas for how to pay for the thing, and as history has shown, until that happens it's best not to get too worked up about where exactly the building will go.
Still, the occasion provided a golden opportunity for local pols to mouth off about what a wonderful economic catalyst a football stadium would be. Per the Minneapolis Star Tribune:
[Ramsey County commissioners Tony] Bennett and [Rafael] Ortega, chair of the County Board's facilities committee, say putting a stadium on the site would kick-start development on an eyesore of a property that doesn't contribute to tax rolls. They say that there's plenty of room for other development, such as hotels and shops, and that with a few nearby road upgrades, the site would be easily accessible.
Hands up, all you hotel and shop owners who are dying to locate near a football stadium that's open ten days a year and dark the other 355. As a St. Louis restaurateur told me a couple of years back: "I am a five-minute walk from the stadium, and I am closed on Sunday. The games start at noon, so there's a very short window beforehand, and a lot of people tailgate. After the game, people tend to move on and go home, and the few people left are primarily intoxicated, loud people, which is not a prime business model."
January 26, 2011
Sacramento city council calls do-over on arena bids
I have been sadly neglecting the activities of the Sacramento Kings arena task force since their public hearing earlier this month — if going around in circles can be said to be an activity. The latest developments:
- On Friday, the mayoral task force picked the ICON-David Taylor team as its best bet to get an arena built. That would be the team, you'll recall, that won't even have a "conceptual approach" for "identifying strategies to finance an integrated arena and regional transit center" until April. Though given some of the past plans that have been floated in Sacramento, you'll forgive the task force if they preferred one that admits up front that it doesn't know what it's doing.
- The Sacramento city council responded last night by tossing the task force recommendation, and instead asking that all four developers come back in two weeks with more specific financial information. Assistant City Manager John Dangberg, in the words of the Sacramento Bee, responded that "a key element would be determining what financial investment the Kings owners would be willing to make in a new facility" — which, you know, no duh.
It looks like everyone will now reconvene in another two weeks to determine whether anybody knows enough about anything to say which plan makes the most sense, or is even a plan. In the meantime, expect lots of talk about the looming March 1 deadline for teams to notify the NBA if they want to relocate this fall — even if the relocation options aren't all that great right now.
Introducing "The Payoff Pitch"
Just a note that starting today, I'm going to be writing a semiweekly (that's the every-two-weeks one, right?) biweekly column titled "The Payoff Pitch" for my old friends at Baseball Prospectus. The topic will be all things baseball and economic; it's subscription-only (though there may be a few freebies here and there), but subs are just $39.95 for the year, which gets you 26 of my columns plus a zillion other articles on all things baseball. First up: An in-depth look at what's the deal with the Oakland A's never-ending San Jose move plans?
Also on the A's front: Newballpark.org notes that the Oakland Tribune reported recently that two player agents say players are spurning Oakland because their team sucks, not because the Coliseum sucks, as team execs have insisted. Maybe that'll be the topic of my next column.
Canadian "P3" sports-subsidy plan won't die
The issue of Canadian federal subsidies for sports facilities just won't die, no matter how many times PM Stephen Harper tries to stick a stake in it. The latest gambit involves P3, the government development fund for public-private projects that was previously floated as a funding source for a Saskatchewan Roughriders stadium, notwithstanding the fact that it's explicitly forbidden from being used for private sports facilities.
Still, Canadian Finance Minister Jim Flaherty said last week that P3 "will see if there’s a financing model that could be used for stadiums or other arenas." This immediately led to headlines like "Government plans to spend $1-billion on Canadian arenas, stadiums," which led to further headlines like Arena funding trial balloon whacked like a pinata." As Andrew Mayeda writes at Postmedia News, using P3 for pro sports wouldn't be just a minor policy change:
According to a previously "secret" memo prepared by the Department of Finance, federal funding would be an "extremely rare" exception to the government's sports-funding practice, which has tended to focus on amateur, rather than professional, sports facilities. When that pattern has been broken, it has generally been to fund facilities associated with a big amateur event, such as the Commonwealth Games.
In the story I wrote about the memo, I didn't get a chance to mention a group of tables put together by Finance officials for the minister. They lay out the construction costs and funding arrangements, if any, for the arenas that host the NHL's six Canadian teams: the Montreal Canadiens, Ottawa Senators, Toronto Maple Leafs, Calgary Flames, Edmonton Oilers and Vancouver Canucks. Of those teams, only Ottawa received any federal money to build an arena, and even then, it was a relatively small amount. The Senators received $6 million to build the Palladium (now the Scotiabank Place). Ironically, money for a Quebec City arena would come as Canadian teams benefit from a strong Canadian dollar.
Finance officials are also keenly aware of the potential domino effects of federal support for Quebec City. The Finance memo also includes a chart listing the stadiums that host Canadian Football League teams, as well as how much federal funding they received. The chart notes that Regina has asked for slightly more than $100 million from PPP Canada, a $1.2-billion fund created by the Conservatives to bankroll public-private partnerships. The fund is one possible option the Conservatives could use to finance the Quebec City rink.
Mayeda further notes that the last time Canada floated the idea of federal subsidies for sports teams, it didn't go over so well. If Flaherty was attempting to fly under radar with this one, it looks like he missed badly.
Hamilton stadium reno plan has budget gap, too
Those of you who questioned whether there would really be no funding gap for the Hamilton Tiger-Cats' stadium renovation plans, give yourself a prize: The latest cost estimates for rebuilding Ivor Wynne Stadium came in at $159.1 million, which leaves a gap of $38.6 million.
Hamilton city councillor Lloyd Ferguson insists to the Hamilton Spectator that the inflated price tag is the result of overly cautious provincial estimators; city recreation director Diane LaPointe-Kay retorts that to rebuild a stadium to Pan Am Games specs adds more costs.
Either way, city officials are now turning to the province for more money — so far Ontario says it will help, but won't issue a "blank cheque." Which leaves the question of why this plan is any better than all the other stadium plans. Also, whether this can possibly all get worked out by that February deadline.
January 24, 2011
Economist: No economic benefit to stadiums, but they're so purty!
Yet another economist points out that the academic literature on stadium subsidies concurs that economic benefits are a load of hooey:
"Economists — except for those who have a vested interest — pretty much cannot really find a benefit/cost analysis to support a publicly financed stadium, to the state or the government interest that pays for it," said [Joe] Friedrich, a St. Cloud resident and professor emeritus of economics at St. John's University and the College of St. Benedict (he retired 18 months ago).
"On the standpoint of strictly economic costs to the state, I literally can't find a study that comes up with a positive return."
Friedrich does acknowledge that "there are things in life that are not really easily translated into dollars and cents," and says that the Minnesota Vikings "do contribute to the spirit of the state." Yet he notes that you can put a dollar value on that as well if you try hard enough, by resorting to "environmental economics," which can figure out how much citizens are willing to pay for a certain non-monetary benefit (such as cleaner air or water). And while he didn't put a dollar amount on this, economist Bruce Johnson of Kentucky's Centre College did a few years back, and came up with a figure of between $23 and $48 million dollars, which needless to say is a heck of a lot less than the Vikings are asking for.
Everybody's got a Plan B for Quebec arena
Quebec City Mayor Regis Labeaume declared last week that he's given up on federal funding for a new hockey arena, and "it's time to move on to Plan B." And what would that Plan B be, Postmedia News?
He declined to give details on the so-called plan B, but has said the city could increase its financial contribution to the project.
Given that the city has currently only proposed chipping in $50 million, and there's a $175 million funding gap, that'd have to be a hefty increase.
Likewise, Quebecor media titan Pierre Karl Peladeau announced last night that he'd be willing to put "tens of millions of dollars" in private money into the project, which likewise sounds more impressive when you don't take into consideration that the whole shebang is supposed to cost $400 million. Also, Quebecor would likely want the right to manage the arena as part of any deal, which means it could end up recouping its money via a cozy lease with the public owners. No way to say for sure, as Peladeau said he wants to "keep these talks private," which is no doubt why he announced their existence to a reporter for the Globe and Mail.
Brown's RDA plan would hit Chargers funding, too
I was so focused on what California's Gov. Jerry Brown's death-to-RDAs proposal would do to the Oakland A's stadium plans, I neglected to consider what it would mean for the San Diego Chargers' stadium plans. Fortunately, Tim Sullivan of the San Diego Union Tribune is on the ball:
"We're done, finished (if Brown's proposal becomes policy)," Chargers spokesman Mark Fabiani said Friday. "Redevelopment money is an essential part of the downtown concept and without it, the project is dead."
Both Brown and [AEG exec Tim] Leiweke have hurdles left to clear — for the governor, there's the state legislature and assorted special interests; for Leiweke, there are regulatory requirements and L.A.'s labyrinthine politics — but the success of either man's initiative would significantly raise the risk of the Bolts relocating.
"We will look at every other possible option if the redevelopment dollars go away," said Darren Pudgil, spokesman for San Diego Mayor Jerry Sanders. "But that certainly doesn't bode well for a new stadium ... We don't want to overreact, but the bottom line is losing redevelopment dollars would be devastating for San Diego."
Sullivan also reports that Ed Roski, who is competing with AEG to build an L.A.-area NFL stadium, charged that AEG's plan would cost "well over a billion dollars" in taxpayer subsidies. No reference to what he was talking about, but it presumably stems from this quote, which seems to have gotten much play in the blogoverse. For now, it's probably safe to toss all three Southern Cal stadium plans in the "nobody's quite sure who'll end up paying for them" bin.
January 21, 2011
MN stadium chief: Metrodome roof fix could take six months
When new Minnesota Governor Mark Dayton selected former state senator Ted Mondale (son of that other Mondale) to head up the state's stadium commission last week, it was widely seen as good news for the Vikings' stadium push. And Mondale did nothing to dispel that impression when he was sworn in yesterday, immediately declared that he intends to get a stadium built, and oh, by the way, the Metrodome roof might not be ready for the 2011 preseason.
"I can't tell you whether it will or it won't [be ready]," Mondale told reporters. "There's a couple of factors involved."
Read further, and you'll see that Mondale actually said that if the roof has to be replaced, it could take up to six months, which would mean the Metrodome would barely be ready in time for exhibition games next August. If the Vikings open at home, that is. And if there even are any exhibition games.
Still, Mondale took the opportunity to publicly raise the threat that the Vikings might be homeless to start what the St. Paul Pioneer Press insisted on calling "their final season in the Metrodome." (Really, Pioneer Press? You think either a new stadium will get built in 18 months, or the team will move out of town?) For good measure, Mondale added: "The NFL cannot bring 60,000 people into an arena with the threat of death and mayhem. The roof cannot come down during a game. So the interest of the commission and NFL and Vikings are all aligned — public safety has to be the top priority."
If you're Zygi Wilf, the image of "death and mayhem" being the alternative to a new stadium has to be music to your ears. Even if the Metropolitan Sports Facilities Commission has long been carrying water for Minnesota's pro sports teams, albeit not always that effectively. Right now, the only thing that matters is the tenor of stadium talks when they start in the state legislature in the next few weeks — and "the old stadium is broken, we can't make it go" is way better background music than "how are we going to pay for this thing again"?
January 20, 2011
Jerry Brown's RDA threat could blow up A's stadium plans
If you've been ignoring the latest iteration of California's budget crisis — thanks, Prop 13! — you've missed what could be big news for the Oakland A's plans to build a new stadium in San Jose. From today's San Francisco Chronicle:
Under [Governor Jerry] Brown's proposal, existing redevelopment agencies - which oversee urban renewal in blighted areas and are funded through property taxes - would cease to exist beginning July 1. Instead, that $1.7 billion in property tax money would be used to help plug a $25.4 billion deficit in the general fund for one year and in future years would be directly distributed to counties, cities and school districts. Backers of redevelopment agencies say they are critical economic drivers, but the nonpartisan Legislative Analyst's Office has been a major critic of them and in a report published this week reiterated the conclusion that "there is no reliable evidence that redevelopment projects attract business to the state or increase overall economic development in California."
And what, exactly, does this have to do with the A's? Recall that it was the San Jose RDA that's supposed to be buying the land for A's owner Lew Wolff's stadium project, and there's still about $20 million worth of parcels to go. While that's not an insurmountable sum — the RDA is already working on selling some other land to raise cash, with one of the bidders, ironically enough, being Wolff — it's going to be awfully hard for the RDA to write checks once Gov. Brown waves his hand and makes it go poof. And while it conceivably could rush to beat the July 1 deadline, knowing that they're on the clock is going to give a lot of pricing leverage to the landowners who have so far reufsed to sell — who, let's not forget, include the San Francisco Giants' ballpark naming rights sponsor, AT&T, who might have a vested interest in not wanting to see a San Jose A's move go through.
The alternative, obviously, is for Wolff himself to buy the land, though he might not be so eager to throw $20 million at a project that could end up too rich for his blood anyway, unless Bud Selig breaks character and forces Giants owner Bill Neukom to cough up territorial rights for next to nothing. Though given that Oakland's latest stadium plan would be even more hamstrung by the death of RDAs, Wolff might not have any other options, unless you count sitting tight at the Oakland Coliseum or trying to get stadium talks going in some smaller non-California town (Portland? Las Vegas?) as viable alternatives. If MLB would really let him buy the Dodgers and make the A's the league's problem, now might be the time to consider it.
January 19, 2011
AEG will build L.A. stadium — if conditions are met
You know, this is the kind of stuff that drives me, as both a journalist and a reader of the news, completely bonkers. Headline in today's San Diego Union Tribune:
Anschutz agrees to finance LA football stadium
He does? All by himself? Well, no: What AEG owner Philip Anschutz actually did was set a series of conditions under which he'd consider building a $1 billion stadium: A naming-rights agreement and other sponsorships have to be in place, the city needs to approve spending $350 million to replace the West Hall of the L.A. Convention Center to make way for the new stadium, an NFL team must commit to moving to L.A., and the NFL itself must approve it.
Those are a lot of details, especially given that an NFL team must not only agree to move to L.A. but must agree to a lease that leaves Anschutz enough money to pay off his stadium; and that the NFL ain't approving nothing until after this fall's expected lockout. And note that there's actually nothing new here: All you have is AEG president Tim Leiweke, who's been point dude on the stadium project, passing along that Anschutz is on board with the plan — as if his boss would have let him spend the last several months talking it up if he weren't on board.
The real goal of this planted story appears to be to put time pressure on the L.A. city council — Leiweke says he hopes to have everything but the NFL approval in place by March (really? even a commitment from a team to move?), which puts the council on the clock at a time when councilmembers are pushing for an impact study on how a stadium would affect the convention center's business. We'll see if anybody folds in this game of chicken.
January 18, 2011
Edmonton approves (more) talks about Oilers arena
The Edmonton city council voted yesterday to officially start talking with Oilers owners the Katz Group about building a new arena. As opposed to what the two parties were doing before, which was unofficial talking, I guess.
In any case, everyone involved insisted to the Edmonton Journal that any talk was just, you know, talk:
"Negotiations are just negotiations," said Mayor Stephen Mandel. "We'll see what happens when they come forward at the end of the day ... We can always say no."
Ben Henderson, who brought forward the motion to enter negotiations, said he felt the motion was a necessary next step.
"My support of this is not to say I support a final. But we have to at least give you (city administration) permission to enter into negotiations in order to nail these details down. No details are possible until some kind of negotiations begin."
Wake me when somebody finds another $300 million.
January 17, 2011
D.C. United exploring D.C. stadium sites
D.C. United is apparently preparing to play Baltimore and Washington against each other in its bid for a new stadium: After talking up Baltimore last summer, team president Kevin Payne now says he's discussed four sites in D.C. with city officials.
One leading candidate, according to the Washington Post, is Buzzard Point in Southwest Washington:
[City council member Tommy] Wells said last week that he isn't sure how a stadium would be financed, particularly with the city facing an expected $400 million-plus budget shortfall next year, but that a stadium on Buzzards Point would enliven the neighborhood. The Akridge property is between First and Second and R and V streets SW, a neighborhood that has seen little new development. "It's an area that really could be a great place for soccer, but also a great place to have more commerce and retail on the west side of South Capitol," Wells said.
If Buzzard Point is familiar to you, that may be because it's part of the same area that was supposed to be revitalized by the Washington Nationals stadium when that was opened in 2008. But surely the second time will be the charm.
January 13, 2011
Vikings: We'll pay one-third of roofless stadium cost, not a dime more
Minnesota Vikings stadium point person Lester Bagley declared yesterday that the team is willing to pay one-third of the cost of a new outdoor stadium, but if the state wants to add a roof, it's on its own dime. Which is exactly the same thing Bagley said last spring, but it made headlines nonetheless. (Some, admittedly, less positive than others.)
The next step appears to be the introduction of a bill in the state senate, where Republican Julie Rosen says she'll have legislation ready to go by mid-February. "It's not going to be a clean mechanism like it was with the Twins," Rosen told the Associated Press. "It's going to be a cobbling together of many sources." Not that she said what those sources would be — what do you want, spoilers?
In any case, with a roofless stadium estimated to cost $700 million, and a roof adding at least a couple hundred million more, it looks like the state would be looking at spending at least $700 million just to make the Vikings more profitable. Rosen, though, thinks it's worth it: "You have to ask yourself what would the Legislature be doing if, say, Target was threatening to move out of state? It demands a response."
As I Dislike Your Favorite Team responds:
Here's something I bet the State Legislature would say--"Hey, Target, before we create a tax just so you can build something, can we get a look at your books? Because we were under the impression that you are a multi-billion dollar operation." And again, let's talk about false equivalences--Target employs 10,000 people in Minnesota, it has been here since 1902 and is a Fortune 500 company. None of those things describe the Vikings. Target is ably run, too. Oh, and when Target needed a new $260 million headquarters, they built it.
Actually, Target does have two things in common with sports teams: Most of their jobs are poorly paid, and they've asked for subsidy deals that haven't worked out too well. Here's something I hope the state legislature will say: If we don't spend that $700 million on the Vikings, how many jobs can we create by doing something else with the money?
Hamilton launches Tiger-Cats stadium renovation study
The Ivor Wynne renovation plan inched ahead yesterday, as the Hamilton city council voted unanimously to conduct a study analyzing the Tiger-Cats' plan by January 24.
Estimates are that the cost of renovation could be covered by the $45 million already committed by the city and $70 million from the Pan Am Games, so at least unlike previous stadium plans, there'd be no funding gap. There are no details about what kind of lease the Tiger-Cats would want, though, which is somewhat worrying — apparently the city of Hamilton has already been subsidizing the team to the tune of $1.3 million a year, so one would hope that would be eliminated in exchange for providing them with a renovated stadium at no cost.
Also unknown: Who'll get the proceeds from naming rights and other sponsorships, if those are sold? As hopefully Hamilton officials already known, a construction funding agreement is a nice start, but the real devil is in the lease details.
January 12, 2011
Kings owners met with Anaheim Ducks owner about move
Those Anaheim Kings rumors got a smidge more believable yesterday, as Sacramento radio station KFBK reports that Kings owners Joe and Gavin Maloof met "recently" with Anaheim Ducks owner Henry Samueli to discuss a move south:
The plan as told to me includes moving the Kings to the Honda Center in Anaheim. Samueli will give the Maloof's 100-million dollars to pay off some debt as well as help pay off territorial rights to the Clippers and Lakers. Should the Maloofs default on that loan, then Samueli would assume some control of the team. What is not clear is how much control Samueli would get.
Also not clear: What the lease would look like at Anaheim's Honda Center, and whether there'd be enough revenue to go around to make both the Maloofs and Samueli happy. (According to KFBK, the two sides met previously in early 2010, but the Maloofs didn't like Samueli's proposal.) Also, who told KFBK's Rob McAllister (he just says "a source") that this was the plan — this could be Samueli leaking it to try to build momentum for an Anaheim move, the Maloofs leaking it to try to scare up support for a new Sacramento arena, or something else entirely. Just because two sides met to discuss a move doesn't necessarily mean they found anything to agree on.
In other news, as the Ball Don't Lie blog headlines it, "Kings to name arena after sham energy bracelets." Now that's the kind of publicity for your product you just can't buy. Oh wait, you can.
Broward County unanimously votes to oppose Dolphins reno tax
That hissing sound you heard yesterday was the air coming out of the Miami Dolphins' latest stadium-funding trial balloon:
Broward County commissioners denounced a plan to send hotel tourist taxes to the Miami Dolphins stadium, using terms like "vile" and "shameful" and saying they'd effectively kill it.
Now they've made it official, voting solidly in opposition Tuesday to a proposal to spend Broward's hotel bed taxes to fix up the 23-year-old Sun Life Stadium in Miami-Dade County.
"Solidly" here actually means "unanimously," as the South Florida Sun-Sentinel makes clear in its blog post on the same story. So while the Dolphins' plan to tax a neighboring county for its stadium renovations may not be dead yet, it now has a decided death sentence placed on it should it come out of hiding.
January 11, 2011
Tiger-Cats: Let's rebuild Ivor Wynne instead
Another day, another Hamilton Tiger-Cats stadium plan. Just five days after touting a free-for-taxpayers stadium in Burlington, the Ticats owner Bob Young today announced a new plan to rebuild Ivor Wynne stadium in Hamilton instead. Wrote Hamilton Mayor Bob Bratina in a letter to the city council:
The Tiger Cats are prepared to sign a lengthy lease with the City to continue to play in a rebuilt stadium on the Ivor Wynne site. The old stadium was originally rejected because of the requirement for about twenty acres to include an adjacent warm-up track as required by Hostco. This configuration was not possible on the available land. When the difficulties over site selection continued to the point where the deadline was looming the Tiger Cat management put all options on the table. In our discussion yesterday afternoon I urged them to give serious consideration to rehabilitation of the old stadium, and a long-term agreement with the City as a show of faith to residents and fans. There was no hesitation by both Bob Young and Scott Mitchell in agreeing to a 20 year lease arrangement, pending details of course.
Pending details, of course. Young told a press conference this morning that building at the Ivor Wynne site could save $100 million in land and infrastructure costs, which would be convenient given that land costs have been the main holdup in any new stadium deal. Not the only holdup, though — there was about a $30 million construction funding gap as well, and neither Young nor Bratina said exactly how much a redone Ivor Wynne would cost. Nor are there any details immediately on whether the Ticats would need to relocate for renovations, though from the sound of it Young may be talking about the kind of phased reconstruction during offseasons that the Boston Red Sox used for Fenway Park.
That said, it's at least promising that Young, instead of drawing a line in the sand, is agreeing to a scaled-down stadium project that avoids having to hit up taxpayers for additional money. Then again, he may not have had much choice: Yesterday Burlington Mayor Rick Goldring all but took his city out of the running for a Ticats, saying, "Burlington is simply not large enough and therefore does not have the financial capacity to lead on this project." And, of course, available Pan Am Games funding is due to expire if not used by February 1. Sometimes, cities have leverage too.
January 10, 2011
Kings move rumors start flying: Anaheim? San Jose? Cucamonga?
With the latest batch of Sacramento Kings arena plans seemingly going nowhere, Orange County Register sports columnist Randy Youngman is starting up the Anaheim move rumors:
The relocation rumors revved up again Friday when Bloomberg News Service reported that two private investment firms are negotiating to acquire a controlling interest in the Palms Casino Resort in Las Vegas, also owned by the Maloofs, after the family violated its loan covenants.
If the Maloofs are having significant financial problems — the Sacramento Bee reports that in 2009 the family sold its original beer distributorship in New Mexico for more than $100 million and that there also were staff layoffs in the Kings organization and at The Palms — then perhaps there is a greater sense of urgency to move the franchise to a market with better demographics, more potential corporate sponsors and an NBA-ready arena.
That's where Anaheim comes in. If the Maloofs decide to move the Kings — or are forced to sell a team struggling on the court (NBA-worst 8-25 record) and struggling at the gate (29th out of 30 in home attendance) — Anaheim and San Jose are believed to be the most likely destinations because they both have NBA-quality arenas and waiting billionaires to help them overcome financial obstacles.
Well, maybe. Except that Anaheim and San Jose also both have hockey teams that are the primary tenants, and they're not going to give the Kings the kind of sweetheart lease that they'd want, assigning them all the arena revenues and as few of the costs as possible. Unless the Maloofs are really strapped for cash, it seems like it would make sense for them to at least wait for this latest round of arena proposals to run its course, on the off change they'd land the golden ticket — if not, there'll be plenty of time to move to Anaheim after the lockout.
Miami columnists savage Dolphins' hotel tax plan
The Miami Dolphins' proposal to tax neighboring Broward County for stadium upgrades in Miami-Dade County is not going over so well so far: Carl Hiassen hates it, while South Florida Sun-Sentinel columnist Michael Mayo hates it so much he wrote about it twice in one week. Key quotes:
- Hiassen: "[Dolphins CEO Mike] Dee has won the support of some major hotels, and for the first time he said that Dolphins owner Stephen Ross will actually kick in some dough toward the renovation. That's a real heartwarming gesture — sort of like offering to repaint your own house if the neighbors first agree to build you a new five-bedroom wing."
- Mayo: "The NFL is awash in billions of dollars in TV money, has billionaire owners and millionaire athletes (on the brink of a labor war which could stop play next year) and the Dolphins want bed tax money from a neighboring county to build an unnecessary roof to land future Super Bowls?"
- Mayo again: "I'm glad that the Broward tax idea seems to be dying quickly, a wobbly pass knocked down at the line of scrimmage like a Chad Henne throw. But the chutzpah of these pro sports people never ceases to amaze."
AEG promises "completely private stadium" on public land
Still no financing plan for AEG's proposed downtown Los Angeles football stadium, but lots of headlines:
- AEG is "close to" a naming-rights deal with Farmers Insurance, according to "sources familiar with the negotiations."
- AEG exec Tim Leiweke promised L.A. Times columnist Steve Lopez that it would be "a completely private stadium" and AEG wouldn't consider taking "a penny from taxpayers." To which Lopez points out that AEG is asking for a $1 lease on city land, plus $350 million in city-floated bonds (which AEG would pay off, but presumably at a cheaper interest rate than they could get themselves).
- There was a big piece in the New York Times on Saturday recapping everything everybody already knows about L.A.'s twin NFL stadium battle.
Note that none of the stories were prompted by actual investigative reporting, but rather by leaks and press statements by people involved in the deal. All in the service of building "momentum," no doubt...
NYTimes: Stadium subsidies on wane, except when they're not
Aw, man: Favorite FoS punching bag Ken Belson of the New York Times wrote another inane stadium article last week, and I somehow missed it. A quick recap of the lowlights:
- The headline: "Teams and Owners Find Public Money Harder to Come By." Belson's evidence? "In the last few years, owners of the Mets and the Yankees in New York, the Jets, the Giants and the Red Bulls in New Jersey and the Cowboys in Texas built stadiums that they financed primarily themselves." Yeah, uh, not so much in the case of the Mets and Yanks, and the others got significant subsidies as well. More to the point, all of these teams got every penny that they asked for from the public — so it's tough to argue that public money was any harder to come by for them.
- Even Belson doesn't seem to believe his own premise: He writes that "Cities that are short of cash can no longer afford to build stadiums, which is why teams in Sacramento, San Diego and San Francisco have struggled to win support for public subsidies." (Actually, those cities' teams have all been struggling to get support for stadium plans since well before the economic crash, but whatever.) He immediately follows that up with: "But in just as many cities and states, lawmakers, often desperate to appease fans, are finding new ways to help their home teams." And then sports economist Dennis Coates points out that "no matter how often the public sector says no, the people who want to build a facility will come back to that well because no is not permanent, but yes is."
- Belson writes: "Public dollars made up less than one-third of the price tags for Citi Field and Yankee Stadium." The actual figure is about 57%.
- Belson notes that "a recent St. Petersburg Times/Bay News 9 poll showed that two-thirds of residents were against using taxes to pay for a new stadium, even if it meant the team would move," citing this as an example of tea-party opposition to tax hikes. Except that a little historical research would have found that this isn't anything new: Polls asking if people want their tax dollars used for sports stadiums have almost always found people overwhelmingly opposed, especially when a team hasn't yet presented a full-court public campaign in favor of a stadium plan — as is the case with the Rays.
- The Wall Street Journal already did this exact same story two months ago.
And so on. I probably shouldn't blame Belson too much: He does get some information right, even if it doesn't remotely support the overall thrust of his article. But it may not be his fault that tighter stadium subsidies got spun as a rising trend — his editor probably heard it at a dinner party.
January 07, 2011
Bengals on lease concessions: Ha ha, we had our fingers crossed!
No yay after all. It turns out when the Cincinnati Bengals agreed to pay $7.4 million in extra rent last month in exchange for naming rights on their stadium — in order to help the county close a $130 million funding gap — they neglected to mention they also wanted a new scoreboard, $30 million in future lease breaks, and a 20-year lease extension with the county agreeing to pay for upkeep. But these, Bengals officials say, are mere details:
In a statement Friday morning, the Bengals said: "The facts show that the Bengals and the County reached an agreement on December 1, and the Bengals submitted a document to the county entirely consistent with that agreement. The Club stands ready to affirm its pledge to Hamilton County and continues to be willing to provide the County with $8 million to help stabilize the stadium fund."
Hamilton County Commissioner Todd Portune, who once sued the Bengals for defrauding taxpayers with their original stadium lease, was having none of it, saying, "We're seeing what happens with these 11th-hour agreements. Even though I didn't like the original deal, the fact is the Bengals need to do what they originally agreed to do and stop trying to beat up their favorite opponent." Wait... isn't that what they're paid to do?
New Kings arena plans even vaguer than last batch
So it looks like Sacramento's arena task force didn't like the city's four new Kings arena proposals any better than I did:
Of the four teams looking to develop a new Kings arena and entertainment complex in Sacramento, two don't have concrete finance plans while the other two must leap significant financial hurdles to bring their projects to fruition.
That's the rundown of a public hearing Thursday hosted by the task force reviewing the proposals — reconvened by Sacramento Mayor Kevin Johnson after a team led by developer Gerry Kamilos failed to deliver after being selected last year to exclusively work on a new arena deal.
Fireworks flew when panel member Mark Harris, a professor and infrastructure finance expert, grilled Kamilos. Harris had previously compared Kamilos' three-party land swap proposal — between Cal Expo, property in the Railyards and Natomas land that houses Arco Arena &mdash to a game of three-card monte. This time, he said that statement was an insult to those practicing the three-card monte scam.
Yowsah! The "hurdles" facing the two plans that actually have plans include the need for approval from Cal Expo in the case of the Kamilos plan (the same thing that deep-sixed his previous arena proposal last year), and the reliance on selling 10,000 seat licenses plus $70 million in PILOT bonds in another, despite the fact that, as the Sacramento Business Journal notes, "representatives from the Natomas team couldn't answer the panel's questions on how those bonds would work." At this rate, I could become the frontrunner tomorrow with my plan to fund an arena with elfin magic.
January 06, 2011
Red Sox drop bullpen redo to save state tax credits
The Boston Red Sox had previously announced plans to expand their bullpens and move in the right-field wall as part of ongoing renovations to Fenway Park, but that piece was abruptly put on hold today, after the Massachusetts Historical Commission ruled that it would jeopardize state historic represervation tax credits that the Sox are receiving for the project.
The article in the Boston Herald isn't especially clear, but here's what I've been able to figure out from looking at the regs and a conversation with a preservation expert:
- Starting in around 2006, the Red Sox have been applying for state tax credits from a pool designated for historic preservation projects. (Eligible projects can have up to 20% of their costs paid for by the state.) They've received $11.1 million so far, and are seeking an additional $28.4 million.
- To get historic preservation credits, needless to say, you need to be doing historic preservation. The state commission ruled that moving the fences in from their historic distances so that relief pitchers could have more elbow room wouldn't qualify as "preservation" — and so would jeopardize the entire $39.5 million that the Sox are looking to get.
- Sox execs, needless to say, dropped the bullpen plan like a hot rock.
What's still not clear is whether, once the Sox have all their tax credits in hand (presumably within the next year, since this is the last round of announced renovations), they can then go about doing whatever they want to to the bullpens, regardless of what the state thinks. The state regs say that "The taxpayer must retain the property for five years beginning on the date on which the project has been completed, or else the credit is subject to recapture," but they don't say whether "retain" means retain ownership, or retain the property in its historically preserved state.
A Sox spokesperson told the Herald that the bullpen redo "is still on our radar screen" but "there is no immediate timetable for this project." So if I'm reading between the lines properly, it sounds like they don't know how it works, either, but they're darn sure going to find out.
Dolphins propose taxing neighboring county for stadium upgrades
The owners of the Miami Dolphins have figured out how they want to pay for their proposed $225 million renovation of their stadium (I honestly have no recollection what it's called this week), and it's a doozy: raise Miami-Dade County hotel taxes by 1%, plus get Broward County to chip in its own hotel tax money. That'd be the Broward County that the Dolphins' stadium isn't actually in, if you're keeping geographical score at home; Dolphins execs insist that this would be a good idea because all the Super Bowls they'd get from a roofed stadium would lift the whole region's economic boats.
Increasing the Miami-Dade hotel tax — which would require a change to state law — was, you'll recall, wildly unpopular when the Dolphins first proposed it last winter, and this latest plan looks to be stirring up even more opponents, according to the Miami Herald:
Late Wednesday the parent company of the Florida Panthers, the hockey team that plays in an arena built with Broward hotel taxes, issued a statement Wednesday night saying it was "vehemently opposed" to the Dolphins plan. The Panthers said the Dolphins want to use Broward taxes to subsidize a private facility to compete with a "publicly owned facility in Broward County."
From the looks of things, the Dolphins are gambling that by pooling all this money, they can promise a cut of the vig to help expand the Miami Beach Convention Center, which area hotel owners would like. It seems like an awfully complicated shell game, but stranger Rube Goldberg funding schemes have come to pass.
Tiger-Cats promise: Burlington stadium won't cost taxpayers a cent
That Burlington stadium plan for the Hamilton Tiger-Cats got a boost yesterday when team officials promised that it wouldn't cost the city anything. And how would they work that, exactly? By estimating construction costs at between $90 and $120 million, down from the $166 million price tag for a stadium in Hamilton; assuming that the Pan Am Games will still kick in $70 million (I had $60 million, but maybe somebody misreported something); adding $30 million in private "investment and capital"; getting free land from a developer who wants to build next to a stadium; and handwaving away the possibility that a $120 million cost would still leave a $20 million budget gap. ("If they need more than that, well, that’s the Ticats challenge," said Burlington Mayor Rick Goldring.)
Burlington would still be on the hook for unspecified "infrastructure" costs, though Goldring insisted that these would be necessary with or without the stadium.
Burlington city councillors still sound pretty skeptical, but if nothing else this gives the new stadium plan some momentum (otherwise known as "headlines") leading into the last few weeks before the Pan Am Games' February 1 deadline. Stay tuned for more exciting plot twists!
January 04, 2011
Analyzing stadium trends: Camden Yards marked for death?
J-Doug at Beyond the Boxscore has a lovely graphic showing the history of baseball stadium construction, as depicted in the average age of ballparks around the league.
The upshot: By the 1950s, after four decades of not much new construction, the average stadium was nearly 40 years old, then expansion and the "concrete donut" era knocked that down to around 20 years by the mid-'70s. Average age had crept back up above 30 years by 1990, but then the post-Camden Yards boom brought it back down to around 20 after the turn of the century, where it's stayed — or, as J-Doug puts it, "the rejuvenation of MLB parks does seem to be more durable this time around."
Of course, one man's rejuvenation is another's mindless destruction, as the Boston Globe's Derrick Jackson wrote in his Sunday column, in which Jackson noted that on his recent visit to Greece he saw several ancient (as in millennia, not mere decades) sporting facilities that were still in use. Which leads up to his conclusion:
Boston's Fenway Park (1912) and Chicago's Wrigley Field (1914) [are] absolute treasures. These stadiums, which underwent renovations that preserved their original charm, are actually going to have 100th birthdays.
Few other stadiums will. No fan screaming for the Pats in Gillette Stadium (2002) or for the Jets and Giants in the new Meadowlands can expect their great-grandchildren to occupy the seats they sit in today. With all the giant scoreboards, blaring sound systems, and high-tech turf, the modern American sports stadium has become just another big-box store for owners. Instead of the centuries of sporting spirits in the air in Greece, our stadiums have all the soul of a Home Depot. Outside of Fenway, Wrigley, and Lambeau, we no longer give them the time to develop one.
And to take one final turn at interpreting that "durable rejuvenation": If you think about it, the only way to maintain a steady average age around 20 for MLB stadiums is to ensure that most stadiums are replaced after 30 years or so. (It would be 40 years — 20 being the midpoint of zero-to-40 — but those near-centenarian outliers like Fenway and Wrigley skew the average way up.) Since the typical stadium bond is usually around 30 years, that means that the current baseball business model is for every city to be continually subsidizing its team with stadium construction funds, and building a new one as soon as the old one is paid off.
It also means that, if current trends are going to continue, circa-1990 stadiums like SkyDome/Rogers Centre, New Comiskey Park/U.S. Cellular Field, and even Camden Yards would have to be replaced by the end of this decade. Okay, probably not Camden Yards — though I wouldn't be shocked to see the Baltimore Orioles ask for "improvements." But it's going to be very interesting to see whether teams start demanding new stadiums, and if so how they justify them, as the first wave of "retro" parks start going out of warranty.
(In the NFL, of course, we already have our answer.)
January 03, 2011
Sacramento developers throw more Kings arena plans at the wall
Four of the developers whose Sacramento Kings arena plans were rejected in the last set of talks are back for another round, submitting arena plans by last Thursday's deadline. Though in some cases, "plans" might be pushing it:
- Gerry Kamilos, whose three-way land swap plan was rejected by Cal Expo in September, is back with a new iteration of the same plan: This time, Cal Expo would stay put, but hand over 125 acres of its land to Kamilos for redevelopment, in exchange for getting help rebuilding on a smaller site. Kamilos would then package the profits from that land, plus development on the current Arco Arena site, to come up with $350 million to build a Kings arena on downtown railyard land.
- A team led by ICON and developer David Taylor team would "focus on identifying strategies to finance an integrated arena and regional transit center in the railyards" and present a "conceptual approach" by April, according to the Sacramento Press. In other words, they don't really have a plan, but they'll be writing more in a week or two.
- The "CORE" team is now considering either the Westfield Downtown Plaza or the railyards as sites, but according to developer Ali Mackani (in the Press' words), "more information must still be gathered to create a workable financing plan under a public/private partnership."
- Natomas ESC Partners has probably the most worked-out plan, which should be no surprise, since it just resubmitted its same proposal that was rejected last time around. This would build an arena on city-owned land just north of Arco Arena, with construction costs coming from $10 million in annual rent from the Kings, a share of game-day ticket revenues, naming rights, parking fees, and other money that the Kings owners are presumably counting on themselves as the whole reason they want a new arena.
Sacramento Mayor Kevin Johnson summed up the proposals: "At the end of the day, to develop a project of this nature in these difficult economic times is a challenging endeavor, but the teams who have submitted bids certainly reflect a seriousness of purpose." In other words, A for effort. But still no one has found a solution to the problem of how to generate money out of thin air.
