May 31, 2011

Thrashers-to-Winnipeg move to be greased with public loonies?

According to the Sporting News, Winnipeg arena owners True North Sports and Entertainment have scheduled a noon press conference to announce the purchase of the Atlanta Thrashers and relocation to the Great White North. This is has been rumored to be in the works for weeks now, but it sounds as if it's now official.

True North was previously briefly in the running in the Phoenix Coyotes sweepstakes, but has apparently found a less complicated sale partner in the Thrashers, who have almost matched the Coyotes empty seat for empty seat since arriving as an expansion team in 1999. So far, Thrashers fans seem to have responded to their city's second loss of an NHL team to Western Canada with grudging resignation (and hating on Canadian media).

The interesting bit for FoS purposes is that while the Manitoba provincial government says it won't "support the operations" of a relocated Thrashers, it could help pay for renovations to the seven-year-old MTS Centre to help out the team. This would be on top of more than $40 million in public subsidies that the private arena received back when it was built.

Still, it looks like Winnipeg is set to get a new team for a total expenditure of less than $100 million in taxpayer dollars, which isn't bad as sports subsidies go. It just goes to show that if you have a good market for your sport — and the league is desperate enough for relocation sites and your mayor isn't the world's worst negotiator — you can still get a team without breaking your piggy bank. Just denting it severely.

Nevada legislature readies TIF financing bill for Vegas arena

Las Vegas still has more arena and stadium plans than you can shake a stick at, but pretty much all of them have one thing in common: They'd use tax increment financing, the much-derided financing scheme that kicks back property taxes (and sometimes other taxes) to help a developer pay off construction costs. And now there's a bill in the Nevada legislature to create a TIF district for an arena (or a stadium or something), introduced as only the Nevada legislature can:

This is the murky way some policy gets made in the final days at the Legislature: No agenda, no formal meeting on the bill. The "fiscal notes" meant to tell lawmakers and taxpayers the potential cost of a bill to the public were not available. Instead, lawmakers gathered to the side of the Senate Chambers - "behind the bar" - as press and lobbyists tried to listen in.

Sen. Ben Kieckhefer, R-Reno, and Sen. Barbara Cegavske, R-Las Vegas, voted against introducing the bill.

"I have no idea what it means," Kieckhefer said. "I've had six different lobbyists tell me it means six different things."

Potential beneficiaries include Chris Milam's proposed $1.95 billion sportsplex, the old Cordish plan, and, well, pretty much anything. No word yet on the bill's likely fate, probably because legislators are still reading it to figure out what the heck it means — not that that's stopped anyone before.

Sacramento's $387m arena proposal includes no payment plan, parking

Playing a bit of catchup here after an extra-long Memorial Day weekend, so please be patient as we gather in all the loose threads of stadium and arena battles from around North America. First off, the Sacramento Kings arena plan, which showed up on Thursday and, as predicted, included no actual financial details at all:

The report concluded that a new arena would best be located in the downtown rail yards, would cost about $387 million and would require a private/public partnership. However, developers said they were not yet ready to identify specific funding sources.

"The financing is always going to be a little more dicey," said council member Sandy Sheedy, who said she wants more information about how a possible transient-occupancy tax -- better known as a hotel tax -- would work.

Also a problem: The arena plan doesn't include any on-site parking. "I'd say enjoy the walk, and buy a meal on the way, and enjoy downtown, and use light rail and the train system and don't drive," developer David Taylor told KCRA-TV following Thursday's presentation, which may be the first time anyone in history has told Californians not to drive while keeping a straight face. It still doesn't beat D.C. baseball aide Stephen Green's suggestion that having a too-small subway station would encourage fans to stick around and go shopping after the game for wackiest transit-related sports rationalization, but it's up there.

May 26, 2011

St. Paul mayor: Everybody gets a new stadium!

St. Paul Mayor Chris Coleman entered the Minnesota Vikings stadium debate with a bang yesterday, issuing a complex plan to use local sales tax hikes and a statewide liquor tax to: build a Vikings stadium in Minneapolis, move the Timberwolves and Lynx to St. Paul's XCel Center (which would receive $75 million in upgrades for the current tenants, the Wild), redevelop the Target Center, and build a new stadium for the minor-league baseball St. Paul Saints...

...and the Vikings and the Wolves owners already hate the idea, and that's before even getting into the problems getting approval for all those tax hikes. But at least Coleman got his name in the paper.

May 25, 2011

Kings arena plan coming tomorrow, actual plan details coming who knows when

The plan for a new Sacramento Kings arena is due out tomorrow at 2 pm Pacific time, and according to several reports, it's going to look something like this:

• A price tag of between $350 million to $395 million, according to Mayor Kevin Johnson, for a "smaller but yet world-class venue."
• The project would be a "public-private partnership" in which the Maloofs' only contribution may be rent: "If they're coming in as tenants only, which I think is where they'll come in, that's a different level of contribution," Johnson told FOX40 News.
• According to the Sacramento Press, "After the feasibility study is presented to the council Thursday, developers and officials must start work to determine how much private money will be available to help pay for an arena and how much of a gap remains that may be filled by public financing."

So in that case — whoa, hold on, say what? This long-awaited arena financing plan isn't even going to include a plan for financing, but rather just throw it up to "developers and officials" to decide who will pay for the thing? Who on earth would come up with an idea that poorly though ... oh, right.

Not to say that a plan that relies entirely on team rent payments for the private portion is necessarily a bad thing — the Minneapolis Metrodome, after all, was financed that way, and ultimately paid off its construction costs without dipping into public coffers. Still, without knowing how much rent would be paid, whether the public would be required to donate free land, or really how any of this would be paid for, there are way too many wild cards to evaluate this plan. And it doesn't sound like things will get any clearer tomorrow at 2.

May 24, 2011

Vegas $2B arena-and-stadium plan doesn't come with parking

So it turns out that not only is developer Chris Milam proposing to build a $1.95 billion sports complex in Las Vegas, but that doesn't include land for parking:

Nearly a dozen artist renderings depicting the stadiums on a 63-acre site west of Interstate 15 across from Mandalay Bay show the facilities linked by walking paths through greenbelts.

But the renderings depict zero parking spaces, though the largest stadium would seat 36,000 soccer fans.

Stadium developers are reportedly targeting an estimated 50 acres nearby for parking, event marshaling and facility maintenance.

But unlike the site for the stadiums, which is empty desert controlled by Texas developer Christopher Milam, much of the area planned for parking is already occupied by older single story industrial properties and warehouses.

The Las Vegas Review-Journal, which reported the above, didn't include estimated land costs in that area, so it's hard to say for sure exactly how much has just been added to the $1.95 billion price tag, but suffice to say it ain't nothing. And, of course, we have no idea how that cost would be paid for.

Speaking of paying for the sports complex, the same article includes more details on Milam's proposed funding plan:

He said he stadium project might be scuttled unless the Legislature approves the special taxing district, which would add a 12 percent ticket sales tax for any event at the three arenas.

The legislation would also allow stadium owners to keep sales, live entertainment, property and other taxes generated there for reinvestment in the facilities.

A ticket sales tax effectively comes out of Milam's own pocket, so it seems silly for him to be insistent on that — if it comes down to it, he could accomplish much the same thing by just raising ticket prices 12 percent and devoting the added money to paying off construction costs. Unless he's counting on these "user fees" to distract attention from that "also": kicking back sales, property, and other taxes that would normally go to government coffers. As I noted before, this guy does have a knack for thinking big.

Why won't the Giants negotiate an A's stadium solution?

Great piece at Newballpark.org on the likely options for San Francisco Giants owner Bill Neukom in his never-ending standoff with Oakland A's owner Lew Wolff over the A's future home. As site proprietor Marine Layer writes, Neukom can basically go three ways:

• Refuse to bargain over territorial rights to San Jose, and hope the A's move out of town. He asserts that Neukom would then be forced to compensate Wolff for the territorial rights to the East Bay; I'm less certain that that's part of MLB bylaws, but I'm sure that Wolff would attempt to work that into any deal to relocate.
• Refuse to bargain, and keep paying revenue sharing to the A's while the team stays put in Oakland.
• Take a payoff from Wolff to allow the A's to move to San Jose. Newballpark.org estimates the cost to the Giants as maybe $12.5 million a year in lost revenues, which would mean an up-front payment in the $100-150m range should be enough to make it worth Neukom's while (caution: extremely back-of-the-envelope math at work here). The question, as I've raised here before, is whether that kind of price tag would be worth Wolff's while — presumably not, or else the A's wouldn't be stuck in this holding pattern.

Marine Layer concludes that "No matter what Neukom decides, it looks like he’ll have to pay," which is a bit harsh: He'd get benefits from each scenario as well, don't forget (sole rights to the Bay Area, a continued monopoly on all the rich bits of the region, or a pile of territorial rights cash, respectively). But clearly Neukom doesn't see Door #3 as a preferred option, at least not at the price Wolff is willing to pay. Of such decision matrices is gridlock made.

K.C. Star writer to Sacramento: Sprint Center cost nothing! Really!

On Sunday, the Sacramento Bee ran a front-page (of the E section, anyway, whichever one that was) opinion piece by Barbara Shelly, a columnist for its fellow McClatchy-owner paper the Kansas City Star, on what Sacramento's Kings arena push can learn from Kansas City's own arena battles. And Shelly's conclusions went a little something like this:

Since opening in 2007, the Sprint Center has shattered the expectations of even the most ardent believers. Pollstar magazine rated it the fifth-busiest arena in the nation and 12th-busiest in the world in its latest rankings. It turns a profit for its operators and the city, even though a pro sports franchise has not yet materialized.

In a coup that silenced all but the most hard core of the naysayers, Kansas City built a $276 million arena without raising taxes for residents or assuming any risk for operating losses. Its story involves a great deal of luck, but it could point to a way forward for Sacramento and other cities.

Only one problem with that description: It bears no resemblance to reality. As both I and my own corporate colleagues at The Pitch explained two years ago, the Sprint Center turns an operating profit for Kansas City — but that's only if you don't count the city's annual $13.8 million in construction bond payments. And that money is all coming from hotel and car-rental taxes — which only counts as "not raising taxes for residents" if you think that people only ever rent cars while on vacation. (And even if you do think that, there's still an opportunity cost to devoting car and hotel taxes to an arena: It means you can't raise them to pay for something else, meaning other taxes — the kind that are indisputably paid by residents — have to be higher than otherwise as a result.)

Even with my lowered expectations for standards of professional journalism since journalism effectively stopped being a viable profession, I find it pretty astounding that this stuff could end up in a major newspaper without anyone bothering to do a quick fact-check, or even a reality check. I was hoping that The Pitch might have caught wind of it and taken the Bee to task, but they're kind of busy right now with a wind of their own, so it's probably understandable that they haven't.

Vikings stadium bill headed for special session (maybe)

The Minnesota state legislative session expired yesterday without holding hearings on a Vikings stadium bill or — what was the other thing? — oh, right, passing a budget. As a result, both items will need to wait for a special session in June, or as Minnesota House Speaker Kurt Zellers insisted on calling it, "overtime."

If history is any guide, whether the Vikings bill has a chance of getting anywhere in June likely depends on two things: Whether legislators have enough time after settling the budget squabble to address anything else, and whether somebody finds enough money laying around to fill the current $200 million gap. And even then, there's always that pesky referendum campaign waiting out there in the weeds.

Okay, three things.

May 22, 2011

Sacramento columnist: Public arenas are bad, let's build one!

Every once in a while I get (or ask myself) the question: Why, after nearly two decades of economic studies showing that stadiums and arenas are lousy ways to spend taxpayer money, has this had so little effect on people arguing for public sports subsidies? And here is our answer, courtesy of today's column by the Sacramento Bee's Marcos Breton on the pending Kings arena finance plan:

Will an arena by itself create tons of jobs? No. Are arenas an economic drag when the public sector assumes all the costs and the sports owners collect all the money? Yes.

That's why we can't have one of those deals. It's why you are probably not going to hear talk of a sales tax increase to finance an arena. It's why financing will take some form of hotel or car rental tax, some leveraging of public land, some redevelopment money and some private equity investment to get it done.

Let's go down that list: Hotel or car rental tax? Public money. Leveraging of public land? Public money. Redevelopment money? Public money. So essentially Breton is saying that to avoid "one of those deals" (the bad kind), Sacramento just needs to have a deal where "some" money comes from a private party — something that's true of virtually all stadium and arena deals, if only because team owners invariably get to collect naming-rights revenues and throw that into the pot as their "private" contribution.

When newspaper columnists (and, presumably, elected officials) are able to think to themselves, "Sure, virtually every economist agrees that public sports facilities are a terrible deal, but this is a public-private partnership, so that's a totally different thing!" then there's really no reasoning with them. And as recent events have shown, when people really want to believe in something, they have an amazing capacity for cognitive dissonance.

May 20, 2011

Milam's Vegas sports complex would use tax dollars

Remember how I wondered last week whether Texas developer Chris Milam, who was proposing a $1.95 billion privately financed sports complex in Las Vegas, had something up his sleeve? Well, now Milam has shown his cards:

Investment banker Morgan Stanley is seeking to raise revenue through bonds that would be leveraged against the creation of a special taxing district that must be approved by state lawmakers. The proposed district would draw a line around the 63-acre site and would bond against the tax revenues generated by the project, the source said.

Yup, it's a straight-up TIF. So when Milam says "privately financed," he apparently means, "a private financial firm would sell the bonds, and taxpayers would pay them back."

I actually should have suspected this last week, as Milam proposed a similar funding scheme last year, when all he wanted to build was a basketball arena. That's the same time that he declared that "we have an NBA team under contract" to move once "other pieces of the puzzle fall into place." The guy certainly does seem to have a knack for outrageous claims — but then, he is from Texas.

New Bucks arena plan floated ... oh, wait, it's gone already

It's been a long, long while since Milwaukee Bucks owner Herb Kohl declared that his team would need a new arena by 2012. (So long, in fact, that 2012 seemed far away then.) But now the Bucks arena debate is back on the map, thanks to Metropolitan Milwaukee Association of Commerce president Tim Sheehy:

A prominent Milwaukee business leader said Wednesday that the community needs to discuss "at an appropriate time" the idea of extending the Miller Park stadium sales tax as a way of funding a new arena for the Milwaukee Bucks...

In an interview, Sheehy said he already had begun to form a group of business leaders who have been meeting informally on not only possible extension of the 0.1% stadium sales tax as a means of financing a new facility, but other options.

Sheehy should probably start working on those "other options," because pretty much every prominent elected official in Wisconsin immediately slammed the sales tax extension: a spokesperson for Gov. Scott Walker said he opposed it, Milwaukee Mayor Tom Barrett called it "a dead issue," and Milwaukee County Executive Chris Abele said, "That's not something I would support."

Sheehy also asserted that a new Bucks arena is "not a next-month problem," but rather one for the next five or six years. Since the Bucks are currently breaking even and increasing in value, it's hard to say exactly what the urgency is — but maybe Sheehy, like Kohl eight years ago, just came up with a date that seems politically feasible, without waiting so long that the food apocalypse arrives before then.

May 19, 2011

Edmonton approves same Oilers arena deal as last month

Six weeks after the Edmonton city council announced that it would open talks with Oilers owner Daryl Katz, the council approved said arena agreement last night. Under the plan, the city will contribute $125 million and own the arena and the land, Katz would put in $100 million, $125 million would come from "user fees," and $100 million would come from the province.

And if all that sounds like exactly what the council announced six weeks ago, you have a good memory. (Either that, or you clickedn the first link to that old FoS post above.) In fact, this agreement is identical to last month's proposal, right down to the $100 million in funding from the province that the province says it has no intention of providing.

Alberta Premier Ed Stelmach's office said last night that he would look at the proposal, but that he was opposed to any subsidies for private enterprises. And if that doesn't work, maybe the council can just announce the same plan again, and see if anybody bites.

Road cost recalculation trims Vikings stadium fund gap to $200m

Minnesota transportation commissioner Tom Sorel may not have been asked to come up with a cheaper Vikings stadium road plan, as he said Tuesday, but he came up with one anyway: Road upgrades will now cost $131 million, according to a report Sorel released yesterday, down from the earlier $175 million estimate, but up from the $80 million Vikings officials claimed they could be done for.

"It's progress and this makes it more manageable," Vikings stadium czar Lester Bagley told the Minneapolis Star Tribune yesterday. Still, no one has proposed any way to pay for even $131 million in road costs. Add in the fact that the Vikings say naming-rights money goes to pay off their share, and the state says it's theirs, and the funding gap is still at around $200 million or so. "We've got to find creative financing," Bagley told the Strib, shortly before practicing this over and over again.

But hey, all that can be worked out by the state legislature before it adjourns on Monday, right? After all, it's not like they have anything else they need to be working on.

May 18, 2011

Complete chaos breaks out in Vikings stadium fight

I step away from the Minnesota Vikings stadium wars for a couple of days, and already the plotlines have gone all to hell. I mean, sweeps month or no, who could have seen this coming?

• NFL Commissioner Roger Goodell pledged the league's financial support for a stadium at the Arden Hills ammo plant site in Ramsey County, but wouldn't say how much money the NFL would kick in, saying only he'd provide more details "in the next few days."
• Ramsey County commissioner Tony Bennett said he'd been "told that our people and MnDOT's people" will shortly come up with a plan for trimming the estimated $175 million in currently unfunded road costs for an Arden Hills stadium — at which point Minnesota transportation commissioner Tom Sorel promptly said that he had never been asked to come up with a cheaper plan.
• Primary Vikings stadium bill sponsor state senator Julie Rosen said she might introduce two bills, one for Arden Hills and one for Minneapolis. "I don't know right now," Rosen told the Pioneer Press yesterday. "Do you put two bills in, or do you just put one bill? I don't know. That's what we're trying to figure out."
• Local business leaders have hired Jac Sperling, a sports consultant who had a hand in getting stadium or arena deals passed in several other cities, to help spearhead their own efforts to choose a site to get behind.
• Um, this.

I have no idea what to expect next, but maybe Minnesota state officials can try this if they're running out of ideas.

NYTimes: Small arenas failing because of economy (only not really)

The New York Times ran an article yesterday on how nine small cities that built small arenas in recent years have been left holding the bag after low revenues left them with piles of unpaid bills. One city, Rio Rancho, New Mexico (home of the New Mexico Renegades minor-league hockey team), is even suing arena manager Global Entertainment (which convinced the nine cities to build the arenas, possibly like this) to recoup losses that, according to the Times, are "eating into the city's already tight budget and pushing lawmakers to eliminate jobs and cut costs, including asking police officers to buy their own practice ammunition."

All very interesting and informative, especially if you're a geek for the finances of mid-sized arenas. Only one problem. The Times chose to lead its story like this:

The plan sounded great during the real estate boom: build a midsize arena, stuff it with sports, music acts and monster trucks and create a centerpiece for the new city center being developed on a dusty mesa here, 20 miles north of downtown Albuquerque.

That's certainly the argument of Global Entertainment (did I mention they also own the Central Hockey League? The Times gets around to that way down in the 17th paragraph), which insists that the lousy economy is to blame for all its empty arenas. But Rio Rancho city manager James Jimenez says it actually shouldn't have sounded great, even during boom times:

"If you look at the numbers that Global Entertainment presented to us, it was really, really questionable then, let alone during a recession," said James C. Jimenez, the city manager in Rio Rancho, who was hired after the arena foundered. "If we didn't have to allocate the money for debt service, our employees would have had raises and our budget would be in a better position."

And who was responsible for this mix of decent reporting with weird spin that ends up supporting sports leagues' claims even against its own evidence? Why, it's Ken Belson. Could there have been any doubt?

May 16, 2011

Islanders arena plan must convince rest of humanity

Newsday, which apparently is willing to drop its paywall if you're reading on a phone (or just pretend to be), has a good rundown of the hurdles facing the new New York Islanders arena, and they are legion:

• The $400 million plan must be approved by Nassau County voters, which is no slam dunk, despite an August 1 referendum date seemingly picked to ensure low voter turnout, which would benefit a get-out-the-vote campaign by construction unions.
• Two-thirds of the county legislature would need to vote for the financing plan, and right now even the Republican majority isn't entirely on board. "We don't need to have a contract in place," county comptroller George Maragos told Newsday. "We just need a good understanding of the revenue sharing and why it is beneficial to the county."
• The Nassau Interim Finance Authority "represents perhaps the biggest hurdle," according to Newsday. George Marlin, a board member of the agency that took over the county's finances in January, told the paper: "I have a fiduciary obligation to examine and study the proposal and make sure the assumptions are based on reality and not pie in the sky hopes. And if it does not meet reality, then as a fiduciary, I have no alternative but to seriously consider not approving such a project."

In all three cases, it sounds like the key will be whether Islanders owner Charles Wang can make a case that the arena financing numbers will add up — or at the very least, explain what they are. Wang told Newsday: "We'll do everything we can to make it work, get the information out, make people understand what the alternatives are, and we'll keep working at it." HTH

Could Ramsey County residents force a Vikings stadium vote?

That get-out-of-vote-free card that some Minnesota state legislators want to hand to whatever county agrees to build a new Vikings stadium may not be worth as much as they'd hoped. The new group No Vikings Tax (self-described as "a project of several neighborhood activists and community organizers") say that they can use county and city charters in Ramsey County and Minneapolis to effectively overturn any no-vote legislation passed by the state:

Opponents say those charters allow them to collect enough voter signatures (about 10 percent of registered voters) to place a referendum on the next election ballot that would overturn any state measure that bans a referendum on the stadium. If successful, they then allow a public vote on any ordinances passed to fund the project.

"We could usurp their usurpation," said Chris David, head of the small group, which met to plot strategies to get the Vikings and their owners to pay the entire cost of a new stadium.

A referendum campaign would require about 25,000 signatures to get on the ballot in Ramsey County, or 8,500 in Minneapolis. If successful, even putting the referendum on the ballot would be enough to put a stadium bill on hold until a public vote is held.

In other Vikings stadium news, Gov. Mark Dayton became the latest elected official to say he isn't crazy about the Ramsey County financing plan, since it gives too much stadium revenue to the team, and puts the state on the hook for both $300 million in stadium costs and as much as $240 million in new roads — $300 million, declared Dayton, is "absolutely the limit" for the state's contribution.

Meanwhile, the St. Paul Pioneer Press reports that "nearby cities" are hoping that a Vikings stadium in Ramsey County could help spur other development ... though the only person saying this in the article, it turns out, is the VP of a local commercial real estate firm. Also, the "other development" is the rest of the Arden Hills ammo plant site, much of which is polluted, and "the remaining [cleanup] costs chased away a developer a few years ago," according to the Pioneer Press.

The Vikings would control development of the site, and have presented a plan for retail, restaurants, a movie theater, and parking — none of which really will benefit from a football stadium next door, because who's going to open a movie theater on the off chance that on ten Sundays a year, Vikings fans will decide they want to take in The Hangover Part VII after the game? It's always possible that the site is ripe for retail development, but if so, then there's no need to build a stadium there to jump-start it; and if not, then ... ballpark village, anyone?

May 13, 2011

Vikings plan gets hate from Ramsey County pols, new naming-rights funding gap

The hits just keep on coming for the Arden Hills Minnesota Vikings stadium plan:

"I am generally not supportive of spending $300 million at this time for a Vikings facility." —St. Paul City Council president Kathy Lantry

"It is important to a whole lot of people, but the Ramsey County proposal is a complicated one. I need to know those [sales tax] numbers. What are they asking the residents and the people shopping in St. Paul to pay? What are the benefits of the Arden Hills site to St. Paul?" —St. Paul Mayor Chris Coleman

Of the county's 22 state representatives and senators, 18 responded to a Pioneer Press survey asking whether they supported the current county-Vikings proposal. ... Only one, freshman Sen. John Harrington, DFL-St. Paul, supported it, although Rep. Tim Mahoney, DFL-St. Paul, said he's "strongly considering it." Two lawmakers said they hadn't decided. Fourteen said they oppose it, with many responding via email with capital letters: "NO." —St. Paul Pioneer Press

Now, of course, there's no reason a Ramsey County Vikings bill can't get through the state legislature without the support of elected officials from Ramsey County or St. Paul (which is the county's largest city). Still, having seemingly every politician around hating on the bill isn't exactly a good start, especially when there's only a week and a half to get the thing passed. It's notable that the chair of the state house transportation committee, Rep. Michael Beard, told the Minneapolis Star Tribune that one option could be to send "some signals" to the Vikings this year and then pass a bill in 2012: "We have time to get [the details] teed up next year yet."

Speaking of the details, more are emerging with the release of the Ramsey County term sheet:

• As part of the deal, Ramsey County will buy the 430-acre Arden Hills site from the U.S. Army "on terms acceptable to the Parties," then turn around and sell 170 acres to the Vikings for a pro-rated price. Cost overruns on land acquisition similarly get split on a 170/430 basis.
• The Vikings pay cost overruns on the stadium itself, but they have a big out: "If the Team determines a retractable roof is not economically or otherwise feasible, the Team may decide to develop the Stadium with a fixed roof." The Vikings get to keep the first $41 million in cost savings from a cheaper project, splitting anything over that evenly with the county.
• The team will pay no rent, but will cover operating expenses, though the county will kick in $1.5 million a year toward those as well.
• "The County and Team shall jointly seek to exempt from sales taxes building materials purchased for the Stadium and related improvements." That's not a huge subsidy, but given past precedent it could amount to an extra $10 million or so from the state.
• "All revenues (net of generally applicable taxes, fees, etc.) derived from the operations of the Stadium and parking facilities including signage, naming rights, etc. shall belong to the Team." That's rather a big deal, given that the Rosen bill says that naming rights belong to the state; if the state balks at this provision, it could potentially an additional funding gap of $100 million or more.

Add in that estimated $175 million cost of new roads that no one's figured out how to pay for yet, and there are still a ton of questions to be resolved about this plan, and not a lot of time in which to resolve them. No wonder Beard is already looking ahead to a Plan B.

May 12, 2011

Nassau exec proposes $400m Islanders arena, to be paid for by (mumble-mumble, hey look over there!)

Stop the presses, the New York Islanders arena project lives! A year and a half after team owner Charles Wang declared an impasse, Nassau County announced a revived arena plan yesterday:

A suburban county placed under a state fiscal watchdog earlier this year will ask voters this summer to let it borrow $400 million to replace the New York Islanders' aging arena, as well as construct a minor league baseball park nearby.

If approved, the proposal to replace the Nassau Veterans Memorial Coliseum will keep the NHL team on Long Island until 2045, Nassau County Executive Edward Mangano said at a raucous news conference Wednesday. The event at the nearly 40-year-old arena featured several hundred union workers in the grandstands chanting "build it now," as well as a smattering of Islanders fans decked out in the team's blue and orange jerseys.

Mangano insisted that revenue from the Islanders and sales tax generated by the new arena would be enough to repay the $400 million in bonds over the course of a new 30-year lease for the team, although neither he nor Islanders owner Charles Wang offered specifics on the financial arrangement.

So who exactly would be paying off the bonds? As noted above, Mangano wasn't exactly saying. "Revenue from the sales tax generated by the new arena" sure sounds like a STIF, though, which is an extremely dangerous funding method given that 1) you could just end up cannibalizing existing sales tax receipts and 2) there's always the danger that if the economy slumps, sales tax receipts will go down, and then you end up having to dip into the general fund to make the bond payments. The Nassau Interim Finance Authority, which took over the county's finances in January, seems to agree, issuing a statement that it's "deeply concerned" about the arena plan and its "fiscal implications for the county."

Either way, though, it looks like this thing is going to a vote of Nassau County residents on August 1. According to New York Magazine's cite of the paywalled Newsday, "pressed for details about the revenue-sharing agreement -- and whether those figures would be available to the public before the August vote -- Mangano said, 'If it can be done, it will be.'" Now that's reassuring.

Glendale pays another $25m for one more season of Coyotes

With that lawsuit still holding up the sale of the Phoenix Coyotes to the guy who plans to buy them with money supplied by the city of Glendale, the Glendale city council voted Tuesday night to give the NHL $25 million for operating costs to keep the team in town for the upcoming season.

This is actually the second $25 million the city has forked over to the league, as they did the same last year. That means that if the sale of the Coyotes to hedge fund manager Matthew Hulsizer goes through — and that's hardly certain — Glendale will end up paying $247 million over seven years to keep a team that's only valued at $134 million.

With that kind of return on ROI, Glendale might be better off if the sale doesn't go through, in which case city taxpayers will at least only be out $50 million. Sure, they'll be out a hockey team as well, but all indications are that not too many people would be put out by that.

May 11, 2011

Me on radio re Vikings, 9:35 am CT

Just a note that I'll be on 830 WCCO in Minneapolis for 10-15 minutes this morning starting at 9:35 Central time, talking about the Minnesota Vikings stadium situation. Tune in online, or via one of those radio things if you're actually in the Twin Cities.

Ramsey County Vikings plan has a $175m hole

MinnPost has a good wrapup of the aftermath of the last two days' dueling Minnesota Vikings stadium plans, including media and politician response. The upshot:

• There's still a whopping big hole in Ramsey County's stadium budget, as the $1.05 billion stadium price tag apparently doesn't include an estimated $175 million in road improvements (and possibly as much as $240 million if the rest of the Arden Hills site is developed) that the state would have to pay for — on top of its $300 million contribution to the stadium itself. State senator Julie Rosen told the Associated Press that going over $300 million in state funds was a "non-starter," so it sounds like it's back to looking under sofa cushions if this deal has a hope of moving forward.
• Several Ramsey County legislators already hate the plan, with three of them — state reps Alice Hausman and Mindy Greiling and state senator and longtime stadium critic John Marty — issuing a joint statement declaring: "Ramsey County is facing massive and damaging cuts in human services. To choose to raise taxes for a Vikings stadium represents not only misplaced priorities, but a lack of sensitivity to human needs." (Greiling further told the AP: "The vast majority of Ramsey County legislators don't support it," said Rep. Mindy Greiling, DFL-Roseville. "They're smoking up the wrong pipe. The public is not for this if you poll them, and if they are they want it to be as cheap as possible.")
• The Star Tribune editorial board thinks the Minneapolis stadium deal would be a better one for the state legisature because it would cost the city government less than the suburban plan would cost Ramsey County. Which doesn't exactly make sense (the state legislature made it eminently clear in the Twins deal that it's only going to safeguard its own pocketbook, not those of local cities or counties), though it makes somewhat more when you read the disclosure note on the editorial: "(Disclosure: The Star Tribune owns property near the Metrodome site, and the value of that property is likely to be affected by the location decision.)"

May 10, 2011

Ramsey County and Vikings announce $1.05B retractable-roofed stadium plan

That didn't take long. Just 24 hours after Minneapolis announced its Vikings stadium plan, Ramsey County announced its own. This one would cost $1.05 billion, and have something Minneapolis doesn't have — the agreement of the Vikings:

The agreement calls for an $884 million stadium and an additional $173 million for on-site infrastructure, parking and environmental costs.

Ramsey County said the Vikings will commit $407 million to the project — 44 percent of the stadium costs and 39 percent of the overall costs. The county's share would be $350 million, to be financed by a half-cent sales tax increase.

Why the Vikings objected to paying $400 million for a Minneapolis stadium but are willing to put up $407 million for one in Arden Hills is a mystery, unless 1) they really, really don't want to have to play at the U of M stadium for three years; 2) they really, really want to play in the burbs where there's ample room for parking and tailgating; or 3) they were offended that Minneapolis came up with its plan without them, while Ramsey County said "please" and "thank you."

In any case, there's still one thing the Ramsey County plan hasn't got: actual money. To get that, the state legislature will have to approve both $300 million in state funding and a get-out-of-referendum-free card for Ramsey County, which otherwise would be required by law to hold a public vote to raise its sales tax. Both of those items are included in the Rosen bill; however, last we checked in the bill was getting extremely lukewarm reviews, and it has only until a week from next Monday to make it through committee and to a vote. (Though this latest announcement will likely light a fire under some legislators, especially those from Ramsey County who dig football and higher sales taxes.)

If nothing else, Zygi Wilf and his crew have pulled off an impressive come-from-behind drive: Just two months after it looked like a Vikings stadium bill was dead for this year, now the team owners have at least an outside shot of getting something passed, NFL lockout be damned; and if not, they still got a jump start on a city-vs-suburb bidding war to whip up in earnest for 2012. If they're thinking long-term &mdash and most sports owners worth their salt are able to do so when it comes to stadium deals — that's a win for the Wilfs, regardless of how things turn out in the legislature the next two weeks.

Minneapolis unveils $990 million Vikings-Wolves stadium-arena construction-renovation plan

And the Minneapolis plan for a Minnesota Vikings stadium is in. The highlights:

• An $895 million domed football stadium on the site of the Metrodome (and, according to Reuters, "incorporat[ing] parts of the existing Metrodome"), plus a $95 million renovation of the nearby Target Center.
• The state of Minnesota would contribute one-third, or $300 million, as a bill in the legislature has already proposed.
• The city would kick in $195 million (22%), to be collected from a ticket tax, parking fees, restaurant and liquor taxes, a new 0.15% city sales tax, and the extension of taxes currently being used to pay off the city's convention center.
• The Vikings would pay $400 million (40%) of the stadium cost.

Clearly this plan faces a ton of hurdles: The state bill has to be passed by the legislature before it goes home on Monday. The city money would need a voter referendum for approval. And did I mention that Vikings execs hate the idea?

Lester Bagley, a Vikings' vice president, said the Vikings appreciated the proposal but that a $400 million contribution was too much. He also noted that playing in the University of Minnesota's TCF Bank Stadium for three years while the new field was built would cost the Vikings $40 million in lost revenue.

"$440 million for the site does not work, and it's not something we can support," Bagley said. "Three parties need to negotiate a deal, and this does not accomplish that."

Still, it's got people talking about where to build a stadium, not whether to build one, and the Vikings owners have to be happy about that. If you're in the Twin Cities and want to join the conversation, veteran MinnPost stadium reporter Jay Weiner is interviewing Minnesota stadium czar Ted Mondale next Monday night; tickets are $15. Hey, if 60 million people show up, maybe they can use the proceeds to build a stadium!

Developer proposes $1.95B Vegas sports complex

Texas developer Chris Milam has bought the minor-league Las Vegas 51's baseball team, which wouldn't normally be notable here — except for what Milam insists he plans to do next:

Milam has labeled the privately financed $1.95 billion project the Las Vegas National Sports Center.

With a 9,000-seat ballpark for the 51s, the proposed center, which will be located on a 63-acre parcel, will feature a 17,500-seat arena designed to house an NBA basketball team and a 36,000-seat stadium for a Major League Soccer squad.

"It's the beginning of the greatest thing ever to happen for sports in this community," said 51s executive director Don Logan, who helped broker the sale of the Pacific Coast League franchise.

That's right, $1.95 billion for an MLS stadium, an NBA arena, and a minor-league baseball stadium — and all privately financed! Since typically all three of those items put together wouldn't cost more than $600 million tops, either Milam has something up his sleeve or he's completely insane, or both. Though to be fair, it's got to cost a lot to build stadiums out of liquid metal.

For those playing along at home, this looks to be the warmed-over Cordish plan, which hasn't been heard from in a couple of years, but stadium and arena plans never really die, especially in Vegas. The baseball stadium would be expandable to 36,000 seats to be MLB-ready if a team could be lured there; as Craig Calcaterra notes, Las Vegas' entirely tourist-based economy is a lousy fit for MLB, but as vaportecture goes, at least Milam is dreaming big.

May 09, 2011

Minneapolis set to announce Vikings stadium plan

Word on the street — if it's a street where the Minneapolis Star Tribune is sold — is that the city of Minneapolis is set to announce today a plan for a new Minnesota Vikings stadium on the site of the Metrodome. According to the paper, citing a "source with close knowledge of the plan":

The city plan, according to the source, would use sales taxes from the city's convention center for the project and also would provide money for renovation of Target Center, the home of the Minnesota Timberwolves in downtown Minneapolis. The proposal would also change the debt structure for Target Center.

No city property taxes would be used for the Vikings stadium, the source said.

Still, diverting sales taxes would almost certainly trigger a requirement for a public vote, under the 1997 law requiring a referendum on any stadium expenses more than $10 million. Not to mention that changes in sales taxes already require a public vote in Minnesota, though of course the state legislature is already talking about waiving that requirement, as it did previously for the Twins.

We should find out more once the press conference happens, which the Strib says will be by "mid-afternoon." Stay tuned.

Rays in first place, nobody there to notice

Tampa Bay Rays attendance is still dropping like a rock (down 6,811 fans per game through yesterday), and Noah Pransky's Shadow of the Stadium blog has some theories why:

• The New York Yankees and Boston Red Sox haven't come to town yet.
• Fans would rather watch on TV.
• The Tampa Bay Lightning are in the playoffs.
• People are mad at Rays owner Stuart Sternberg for threatening to move the team after he promised he wouldn't.

All good theories, with much overlap with the similar list proposed for why the New York Yankees (down 3,418 per game) aren't selling tickets this year. (Though at least no one in Tampa Bay is proposing lousy weather as an excuse, given the Rays play in a dome.) I'd add in the fact that the Rays ditched many of their highest-profile players last winter — Carl Crawford, Carlos Pena, and so on — which probably dampened enthusiasm among fans, even if doesn't seem to have hurt them much on the field. And then there's also those 65% price hikes for some seats that the team instituted last season, though they did lower some other prices as well. Still, not exactly the kind of thing that's likely to give your fan base the warm fuzzies at ticket renewal time.

In any case, Pransky indicates that hope might be on the way: "they can expect a significant boost in their next homestand when Darius Rucker kicks off their summer concert series on Saturday night." Now there's a marketing slogan: Come for Hootie, stay for the baseball!

Columbus on Blue Jackets bailout: No money, ask again later

If you want a parable explaining how the economy's impact on state finances is affecting stadium and arena campaigns, look no further than Columbus, where two years ago the Blue Jackets' demanded a state bailout of their privately owned arena. And two years later, that demand is still "in a state of pause," according to the lawyer trying to broker a deal.

The Columbus Dispatch continues:

That pause accompanies uncertainty about the state budget and whether tax revenue from a casino could be part of a solution. The casino developer has sued the city and county in a case that could decide how much tax revenue Columbus receives from the project.

The casino plan sounds like a mess right now — there are actually two lawsuits, including one over whether the suburban casino site will get annexed to the city — and the state budget is equally messy. Still, it's worth noting that this is just a "pause," not a rejection, and Columbus Mayor Michael Coleman said all the requisite team-friendly things about how he doesn't want to cause "rippling economic consequences" if the hockey team were to move: "I do not want to lose the Blue Jackets. I don't know much about hockey, but I do know about economic development." (Apparently Coleman doesn't know much about the substitution effect, either.)

The upshot: Local government budget crises are putting stadium and arena plans on hold, but the back burner remains lit. And team owners, even those losing $12 million a year like the Blue Jackets claim to be, can afford to sit and wait in hopes for a nine-digit payday; what else are they going to do, all move to Winnipeg at once?

May 06, 2011

Vikings stadium: The dome or the dump

Hennepin County, where Minneapolis is located, has pulled itself out of the running to be the home of a new Minnesota Vikings stadium, with county board chair Mike Opat writing to Gov. Mark Dayton, "In this time of severe cuts proposed to local governments and to the services we provide, it is too burdensome for Hennepin County to act as a local partner for the Vikings stadium."

That doesn't take Minneapolis entirely out of the picture, but it does seemingly knock out the site near Target Field that some business leaders were trying to push, since Minneapolis officials are focused on a stadium on the site of the Metrodome. But don't forget that Minneapolis voters passed a $10 million cap on city funding for any stadium way back in 1997; that would either have to be repealed (difficult) or gotten around (also difficult) to make any city-funded deal work. Minneapolis Mayor R.T. Rybak seems to be in favor of the "wave your hands really fast and hope a solution emerges out of thin air" strategy: His spokesperson John Stiles told the Minneapolis Star Tribune that the there are "a lot of different ways you could get a local partner done. It wouldn't have to be just one. ... I don't know that the final resolution would include a three-way split." Not like there's a bill in the legislature that would require a three-way split or anything.

That seems to leave only Ramsey County, home of the Arden Hills ammo plant site. And, in fact, Ramsey County Commissioner Rafael Ortega told the St. Paul Pioneer Press yesterday that the county is "very, very close" to an agreement with the Vikings, though he didn't provide any details of what an agreement would look like.

Of course, that would still leave getting a bill through the state legislature, which adjourns two weeks from Monday. Not that that's impossible, just very, very improbable.

May 05, 2011

McCourt sale to spur Dodger Stadium demolition, NFL land flip-flop?

This is so far into rumor-land that I don't even know what to do with it, but here it is, courtesy of Yahoo! NFL writer Jason Cole:

Out of all the places in L.A. available to build an NFL-quality stadium (the Los Angeles Coliseum site is out of the running with USC in charge of it), the Dodger Stadium site in Chavez Ravine is the one most coveted by the NFL. That's not new information, but the critical obstacle the past eight years has been [Dodgers owner Frank] McCourt, who the NFL has been leery of working with for the financial reasons Major League Baseball is now addressing...

There are some who see even bigger ideas with the Dodgers potentially in play. The idea of moving the team from Chavez Ravine to the downtown site where Anschutz Entertainment Group president Tim Leiweke has been proposing a football stadium has been met with some interest among people inside baseball and the L.A. sports scene...

If someone with extremely deep pockets (such as Anschutz) could buy the Dodgers, build a football stadium next to Dodger Stadium and then buy a football team, the marketing possibilities could be endless. ... Or, there's this idea: Anschutz, who NFL people think just wants another professional team to help build the traffic and convention business downtown, could buy the Dodgers and basically flip the stadiums. He could use the convention center space for a state-of-the-art baseball stadium, tear down Dodger Stadium and build a football paradise in Chavez Ravine. Of course, the cost would be problematic, but the idea for someone like Anschutz isn't farfetched because it would build the value of the downtown area.

That's all a heck of a lot of hand-waving speculation, and Cole provides exactly bupkis in terms of numbers making the case that this would cost out. (Or quotes from any named sources, for that matter.) Still, McCourt has explored the idea of an NFL stadium at Chavez Ravine in the past, so it's not entirely crazy. Unless you consider anything to do with McCourt as inherently crazy, which probably isn't a bad assumption.

Edmonton perpetual-ticket-money-generation-machine idea gets shot down

Rich Winter, who you'll remember as the guy with the wacky idea to sell perpetual seat rights to raise money for an Edmonton Oilers arena, was in Edmonton yesterday to present said wacky idea to the city council. Which he did, projecting that it could raise $700 million by selling as many as 2,000 seats for between $278,000 and $417,000, easily paying off the building's construction cost.

Who could be opposed to that? For one, Oilers owner Daryl Katz, the guy who suddenly wouldn't be collecting any ticket revenue — ever — for 2,000 of his best seats. Katz Group VP Bob Black issued a statement yesterday that read, in part: "The Katz Group studied the concept of seat mortgages years ago as part of our due diligence. We determined that it would not work for the new downtown arena. ... What they put forward is not achievable in our market and we consider the numbers projected to be something of a flight of fancy. Moreover, such a scheme would sacrifice the Oilers long-term financial viability in order to fund arena construction costs."

Katz' huffiness at the prospect of an arena-funding scheme that would actually hit his own wallet aside, the Winter plan does seem a bit dubious in other ways. First off, rights holders would get use of the seats, free of charge, for all events at the arena, hockey and otherwise; you try telling Lady Gaga that if she comes to your town, she'll have to pay for her giant gyroscopes without the proceeds from 2,000 seats because that money has already been spent. Second, $700 million seems awfully ambitious: That'd be an average of $350,000 per seat, which is an awful lot to spend for maybe 100-150 events a year, even in perpetuity. (If I'm doing the math on mortgage rates correctly, it's the equivalent of spending something like $200 a ticket.)

Following Winter's presentation, city councillor Karen Leibovici (whose husband works for Katz, but who hasn't let that stop her from being critical of the arena plans) said: "Maybe people might call me a skeptic, but I've always thought you don't get something for nothing. When a deal sounds like it's too good, there's usually a reason for it." Well put.

May 04, 2011

Miami New Times report: Six lies about the Marlins stadium

My Village Voice Media cousins at the Miami New Times have completed their analysis of the new Florida Marlins stadium, and come up with six big lies about the project. Let us count them off:

1. Local pols were just doing their best for the taxpayers: "A New Times review has found that the former county commission chairman [Bruno Barreiro], whose district includes Little Havana and the site for the new park, took almost $40,000 in donations in 2008 — one in every six dollars of his total take — from firms with an interest in bidding on the project."
2. The Marlins can't survive without a new stadium: "In 2008 and 2009, even as the team was begging for a public handout at county hall to build the stadium, it turned nearly $49 million in profit. By [blogger Jorge] Costales's calculation, the Fish have made $300 million in revenue sharing since 2002 and banked at least $154 million in profit."
3. The stadium will create good jobs: The New Times provides a long laundry list of malfeasance from contractors working on the project, including an electrical contractor that had been "blackballed from county work for almost a decade after its contractors were accused of stealing $17 million," and a sheet metal firm that was sued by the EEOC for allegedly firing an employee who became pregnant.
4. Fans will love it! The attendance boost from a new stadium only lasts about four years, according to a study by Washington University economist Ron Kamara. Also, "In a random poll of 800 Miamians that [stadium opponent Norman] Braman commissioned before the vote, 57 percent said they hated the new park."
5. The stadium will revitalize the Little Havana neighborhood: "'If there's any spillover, it doesn't go more than a block or two,' says Neil deMause, author of the 2008 book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit. 'The whole point of a new stadium is to have all this shopping and food inside so you spend all your money there.'" (As I also pointed out but it didn't make the final cut of the article, having a stadium is hardly going to change Little Havana much given that the Orange Bowl was already there for decades.)
6. It's too late to change the deal: A pending lawsuit charges that "the City of Miami broke Sunshine Laws, illegally gave the team tax-free land, and improperly tied public money to the project," and is hoping to have the whole thing rescinded (though it's unclear how that would happen, given that the place is already half-built).

All of which is great investigative work, but still none of it can match the article's opening sentence: "Like a festering, silver-plated pustule, a grotesquely huge can opener, or just an obscene ode to wasted cash, the new Florida Marlins stadium is rising above Miami's skyline." Okay, that beats the Bagel Slicer.

Goldman Sachs touts Louisville arena as part of its plan to eat humanity's face do good deeds

If you read the kind of publications that Goldman Sachs advertises in, you may have noticed some ads from the vampire squid touting its role in helping save Louisville by selling bonds for its new basketball arena. (There's a Goldman-created video, too.) As the San Francisco Chronicle's David Sirota picks up the story:

As Goldman's ad tells it, Louisville's major problem was its need for a new arena. That's when the bank swooped in with a "financing strategy" to build the stadium, which then supposedly led to "a vibrant downtown scene, where new businesses are opening (and) existing businesses are expanding."

The only problem, writes Sirota: "If you do bother to click around the Internet, you'll inevitably find that the Louisville economic picture is anything but 'vibrant.' Today, the city is suffering from an 11 percent unemployment rate and a $22 million budget shortfall." He also cites the article we mentioned last fall that noted that Louisville's TIF district wasn't generating enough tax revenues to pay for the arena construction costs, which would leave the city having to dip into general funds to pay off those Goldman bonds.

And it gets even worse, according to Insider Louisville's Terry Boyd:

The truth is even weirder: Goldman Sachs fell short of being able to place all the arena bonds.

It was in fact Louisville-based brokerage Hilliard Lyons that saved the day, placing the highest-risk, lowest rated piece of the arena debt.

How do I know? I wrote the story for Business First last year.

Concludes Boyd: "We'll find out pretty soon if the arena's revenue will match our collective debt obligation. But one thing is for sure — you can bet Goldman Sachs makes money no matter what happens to tax payers."

Ramsey County, Minneapolis spar to be Vikings stadium site, mum on money

The Minnesota Vikings stadium funding bill may remain stalled in the state legislature, but plenty of people are lining up to provide a new home for the Vikes, should the state decide to throw money at one. Well, two people. Or maybe one and a half:

• Ramsey County Commissioner Tony Bennett says his county is continuing to negotiate with the Vikings on building a stadium in Arden Hills: "We've made a lot of progress. We've talked over a lot of their concerns and our concerns, and we've reached agreement on a lot of those areas." What exactly they've agreed on, Bennett didn't so much say.
• The best site for a new stadium would be the Farmers Market site near Target Field in downtown Minneapolis, according to a study by ... a developer who owns land near there. As reported in the Minneapolis Star Tribune, which also owns land in the area.

Way more details on the site debates here thanks to MinnPost, though no talk of how any of this would actually be paid for.

Everybody wants to build a Kings arena, nobody wants to pay for it

Elected officials from around the greater Sacramento region have begun chiming in on the idea of regional cooperation for a new Kings arena, calling it a great idea so long as it doesn't cost them any actual money:

• "I'm totally in favor of regional cooperation," Yolo County Board of Supervisors chair Matt Rexroad told KXTV. "My question is, how is it financed? I have a strong personal belief that it needs to be funded by the people who use the arena."
• Sutter County Supervisor Stan Cleveland told KXTV of voters in his district: "They really do not want any of the taxpayers' funds going toward a new arena in Sacramento."
• Yuba City Mayor John Dukes told the Appeal-Democrat: "We want to take a different approach, more tourism related. We're looking at fees, no general fund tax money. We're looking at private and public investment, fees that can be developed by people who travel through the area. There are a lot of different options."

There's a bunch of wiggle room there, obviously — car rental or hotel taxes, for example, are often described as "user fees" though they're really not. But it's clear that drumming up enthusiasm for a new Kings arena is going to be a lot easier than actually passing the hat for cash. Especially since any tax hike would likely require a voter referendum, and as California state assemblymember Roger Dickinson told the Sacramento Bee yesterday, a tax hike would be a tough sell if voters are worried about "schools or streets or child care or whatever."

We may know more on May 26, when the ICON-Taylor group is expected to present possible arena funding strategies to the Sacramento city council, though given its past performance, it might not be best to get your hopes up for too much in the way of specifics.

Meanwhile, the NBA has sent a nine-member marketing team to help the Kings sell tickets, something that wasn't so much a priority when the franchise was planning on being in Anaheim come fall — or whenever the next NBA season actually gets around to starting. Suggested marketing slogan: "Buy tickets or we'll shoot this team."

May 03, 2011

Sacramento keeping the Kings — now what?

So as reported yesterday, the NBA, Sacramento Kings owners Joe and Gavin Maloof, and Sacramento Mayor Kevin Johnson all announced yesterday that the Kings are staying put for at least one more season, spurning (for the moment) an offer to move the team to Anaheim. So now that Johnson has pulled off another miracle finish, what happens next?

First off, NBA commissioner David Stern made clear yesterday that this is only a stay of execution: If Sacramento doesn't cough up a new arena plan by next May 1, the team is outtie. "If this becomes yet the fifth or sixth or seventh [failure], it'll be the last, as far as we're concerned, effort with respect to an arena," Stern said yesterday during a conference call with reporters. He added that while he's giving KJ the benefit of the doubt, "With respect to the issue of an arena, I think anyone who's watched this over the last decade or so has the right to say, We'll see.' That's all."

To that, the Maloofs added this not-so-subtle threat in their own statement:

"During this process, Mayor Johnson has strongly indicated to both the community and the NBA that he is capable of getting the support to build a state-of-the-art entertainment and sports facility that the Sacramento Region and the tremendous Kings fans so rightly deserve. We look forward to seeing Mayor Johnson bring his vision to reality. However, if an arena plan cannot be finalized in a timely fashion, the NBA's relocation committee has assured Maloof Sports and Entertainment that it will support an application to move the franchise to another market starting in 2012-13."

Note that that's "another market," not "Anaheim." And though clearly Orange County is the leading Plan B, this delay also gives the Maloofs another 12 months to come up with Plans C and D in case an arena in Sacramento still proves impossible, and the details of a lease in Anaheim and payoffs to the Los Angeles Lakers and Clippers can't be worked out.

As for Sacramento, the ball is now in its court, but it's a really, really expensive ball. The last batch of plans were for a $350 million arena, and no one had yet quite figured out how it would be paid for. Johnson, for his part, insisted to Sacramento's KXTV that any funding gap will have to be filled in part by the Maloofs:

"They're going to have to participate by this public-private partnership. They're going to have to put dollars in some shape or form. What that is or how much we don't know yet. But they're going to have to participate," said Johnson.

He also said his first objective is still to protect the taxpayers.

"Maybe there's a new way to help finance this darn thing. We going to find all of our options, everything is on the table, but at some point between May, June and July, we going to have to say, here is what we think is the most likely scenario to finance a new arena, get out and talk to the public, try to get people on board. That's why the regional commitment is so important."

Tough talk, but in the end it comes down to "I'm going to scrounge around for whatever money I can find, and in the end hope that the Maloofs will agree to pay what's left over." It's never worked in the past, but as Stern implied, there's a first time for everything.

May 02, 2011

Maloofs: Kings staying in Sacramento "one more season"

And the verdict is as expected:

It's official. The Kings are staying.

After weeks of political drama and speculation, team officials said this morning they are dropping plans to move to Anaheim this year, co-owner George Maloof told The Bee.

"We are heading back to Sacramento. It was a tough decision. Ticket holders were reaching out to us, and it was the right thing to do to give it a shot at one more season," Maloof said during an interview in his office in the Palms casino in Las Vegas.

That's hardly a ringing endorsement, but it's about the most you're probably going to get out the Maloofs after the NBA apparently arm-twisted them into staying put for another year to see if arena and/or sale plans work out.

The tough part now is going to be for Sacramento to negotiate that arena deal, since presumably if nothing gets done by next March, the team really will be allowed to depart (assuming the whole matter of restitution to the Lakers and Clippers can be worked out — that sort of got punted in all the excitement over the emergence of a new Sacramento arena plan). It's going to be hard for Mayor Kevin Johnson to drive a hard bargain under those circumstances, especially given how he's set up retaining the Kings as a signature of his administration.

If nothing else, this was extremely well played by the NBA, which now has an upgraded offer from Anaheim and a potential upgraded offer from Sacramento to choose from, where six months ago the Kings were looking at having to survive on just the revenues from their ancient 19-year-old arena. That Jerry Reinsdorf knew what he was talking about.

Report: Kings staying put in Sacramento for 2011-12

It's D-Day for the Sacramento Kings on their proposed move to Anaheim — no, really this time — and one report by Comcast SportsNet California says that the Kings owners are being told the team will stay put for next season, with NBA and Kings press statements due later today, as well as a press conference by Sacramento Mayor Kevin Johnson.

Since Kings owners Joe and Gavin Maloof haven't even formally applied to relocate yet — that's what today's deadline was all about — presumably this report, if true, means the Maloofs have been convinced not to apply yet, to keep the peace with the NBA while waiting to see if any of the new arena plans in Sacramento are for real.

Speaking of which, after years of failed proposals, it seems like everybody and their sister now wants to get in the game of building a new home for the Kings (though of course, plenty of people had ideas in the past in this regard, not that any of them ended up working out). Among the latest developments:

• Mayor Johnson said the new arena should be bigger than the Kings' current home in square footage, but smaller than Los Angeles' Staples Center. He didn't say anything about how much this would cost to build.
• A mysterious "private equity fund" headed by a "Nevada businessman" reportedly wants to buy the Kings and build a mammoth 25,000-seat arena that would be "community funded and owned," according to Sacramento's Fox affiliate, which broke the story on Thursday. Of course, this is the same station that previously led fans to believe the team was moving when it wasn't, though also the same station that first reported Ron Burkle's interest in buying the Kings, so your call whether you choose to believe them this time.
• If you and 499,999,999 of your closest friends each have a dollar, you can build a Sacramento basketball arena with no tax money at all.

This site written and maintained by Neil deMause. Copyright © Neil deMause, all rights reserved.

Powered by Movable Type 3.2.