August 31, 2011
Dayton: Never mind that Vikings referendum thing
And so much for that: One day after saying that he'd support a referendum for a Minnesota Vikings stadium because "people should have their own voice," Minnesota Gov. Mark Dayton said he didn't actually mean it:
"I don't have a problem with [a referendum], but I'm not advocating it," Dayton said. "I want to get this stadium project done."
The governor's comments clarified remarks from Monday at the State Fair where he said he would support a referendum. Dayton said those comments were twisted.
"I'm not supporting it, per se. I'm not opposed to it. If they pass legislation and the Legislature goes along with it, I'll support it," he said of the referendum.
Dayton also said that a special session of the state legislature to discuss the Vikings stadium issue was possible for November, but didn't specify whether that meant he actually wanted one or if he'd just go along with it if the Legislature wanted it.
In other Vikings stadium news, the team now says it doesn't need the roof on its stadium to be retractable, which would cut the total construction cost from $1.06 billion to $1.03 billion. That still leaves a $200 million funding gap, but I guess every penny counts.
August 30, 2011
Vikings hint at move, governor hints at stadium referendum
With the likelihood of a special session of the Minnesota state legislature this year rapidly evaporating, the Minnesota Vikings yesterday launched a new round of non-threat threats to move the team:
"I am concerned," about the future, said Lester Bagley, the Vikings vice president of public affairs and stadium development. "There is growing concern within our ownership, there is no doubt, about where this is headed and the fact that every year, we get to the end of the session and there's a different reason why (it didn't get done)." ...
"But now we're down to the end of the lease, and if we don't get it done this fall, we get to February (and) we will be the only NFL team without a lease," Bagley said. "The only one. There's already been knocks on the door about, 'Hey, we want to talk to you guys when your lease is up.'"
This kind of magical thinking about the end of the lease is widespread — one local paper wrote today that the lease ending means that after the season, "team owner Zygi Wilf is free to pack the team's bags and head out of Minnesota" — but actually meaningless, given that if the Vikings had wanted to move before this year, they would have been free to just by paying rent on the final year of their Metrodome lease. Still, it's a good opportunity for Vikings execs to rattle the move threat saber, so that's exactly what they're doing.
The response, though, may not be what they wanted. Gov. Mark Dayton responded by telling fairgoers at the Minneapolis Star Tribune booth at the state fair — yes, you read that right — that he'd "be supportive" of Ramsey County holding a public referendum on a stadium deal, saying, "In a case like this, people should have their own voice. We should do it somewhat expeditiously, like this November, so we can get it decided one way or another because the clock is ticking."
The Vikings, of course, don't want a public vote, because they're fairly certain they'd lose. So it looks pretty bad for any kind of Minnesota stadium deal in the immediate future — unless, of course, Dayton was just rattling the referendum saber.
August 27, 2011
Convention cites L.A. stadium as reason to avoid L.A.
It's only one event, but the irony is still pretty delicious:
A national medical group has cancelled its 2014 convention in Los Angeles, citing concerns about the construction of a proposed downtown stadium, according to a Los Angeles Convention and Visitors Bureau memo.
The Society of Critical Care Medicine had planned to book more than 9,000 room-nights at 10 downtown hotels for its February 2014 convention, according to LACVB documents. The convention was projected to bring 5,000 visitors to Los Angeles. But SCCM has decided to move its convention to another city "due to the uncertainty surrounding construction plans for the LACC," an Aug. 24 LACVB memo said.
Part of the rationale for the new stadium, of course, is that rebuilding part of the convention center would make it more attractive to conventions, which would create a windfall for L.A. That's arguable to start with — most convention center expansions only end up throwing good money after bad — but it's also important to factor in that some conventions may steer clear during the construction period, an impact that could stretch on for years given that no one knows when construction will begin or end.
In other L.A. stadium news, AEG president Tim Leiweke warned that the project could be derailed if the state legislature doesn't give him a get-out-of-lawsuits-free card in the next two weeks, though it's hard to picture him complaining if he gets legislation a week late. Meanwhile, the state legislative analyst's office has reiterated that the economic impact analysis of the AEG stadium overstates its benefits, in particular noting that most spending at the stadium would just be cannibalized from elsewhere in the state:
[Economist Mark] Whitaker gave his testimony during a three-hour hearing of the Senate's Select Committee on Sports and Entertainment, which was reviewing the economic benefits of the project and the potential for a bill that would allow AEG to curtail legal challenges to the project on environmental grounds. The written report received by the committee was even more blunt, with analysts saying the state and region would see "minimal" economic benefits from the project.
"The overall economic activity across the region would not necessarily increase but instead shift to Los Angeles … with little net benefit to the region or state," it said.
August 24, 2011
MetLife inks Jersey naming rights deal for ... some number of millions
The MetLife naming-rights deal for the New York Jets and Giants stadium is now official, with a 25-year agreement worth a reported $17 to 20 million a year. It's unclear whether this means the payments vary, or news reports are just guessing about the amount — or, for that matter, whether the dollar figures are based on anything other than previously reported guesses.
This is actually an upgrade for MetLife, which previously was paying $7 million a year for advertising rights to a corner of the stadium. Instead, it will now get not only the name of the stadium (which will host the 2014 Super Bowl), but "120,000 square feet of branded space at the stadium's main entrance," according to the Newark Star-Ledger.
The uncertainty over the price and the inclusion of ad space at the entrance makes it tough to compare the dollar figures here to other naming-rights deals, but it's fair to say that this is a sign that the naming-rights market is returning to life, after most corporations sat it out the last few years during the recession. (With some notable exceptions.) As MetLife chief marketing officer Beth Hirschhorn explained her company's big buy: "MetLife has near ubiquitous brand awareness. This helps raise our top of mindedness." Not to mention their neologismshare.
August 19, 2011
I'll be traveling next week, so posting will be light to nonexistent unless there's major news. For minor news, gossip, and the usual kibitzing, please treat the comment section of this post as your open thread for the week.
'Preliminary' Kings arena funding plan floats ticket fees, parking money, anything else lying around
Think Big Sacramento, the confusingly unpunctuated task force assigned by Sacramento Mayor Kevin Johnson to come up with a way to build a new arena for the Kings, issued its "highly preliminary" report yesterday — no, really, it says "highly preliminary" in big red letters on the top of each page — on how to pay for a $387 million arena.
The main focus of the report is what it calls "user fees," which it defines to include ticket surcharges, concessions surcharges, parking fees — and, more weirdly, business improvement district revenues and naming rights revenues. Local businesses and naming-rights sponsors aren't usually considered arena "users," but given that the report declares that "public support for users fees is strong" (apparently Think Big isn't any better at grammar than punctuation), there could be some attempted spin at work here: Look! We're going to raise all the money with user fees! User fees good!
Except, of course, that things like ticket and concessions surcharges mean that the Kings wouldn't be able to charge as high a price for tickets and hot dogs — since presumably they'd already be charging the most the market will bear, so a surcharge would drive fans away unless the base price were lowered. So this is really a revenue-sharing deal, which, while potentially promising from the city's perspective, isn't likely to make the Kings owners the Maloof brothers too happy, since if they wanted to build an arena with their own money they would have done so already.
And also except that the Think Big report also specifies that the "finance plan will require support from three areas: private investment, user fees and public participation" — so there would almost certainly need to be more public money involved. (The report does some quick back-of-the-envelope math to come up with annual revenue of between $5 million and $20 million, which is to say somewhere between "nowhere near enough" and "not quite enough" to pay for arena construction itself.) Other public funding, as laid out in a cursory flow chart, could include the sale of public land or "revenues from assets directly enhanced by" the arena, which sounds an awful lot like a TIF.
Initial reaction to the proposal from all corners could probably best be described as "wait and see." A less preliminary plan is slated to be revealed on September 8.
Met Life to pay $20m/year for Meadowlands naming rights?
The New York Post is reporting that the New York Jets' and Giants' year-old home will become MetLife Stadium under the terms of a naming-rights deal to be announced in the next week. According to the paper, MetLife's payments "could range as high as $20 million year for 20 years" — though of course, we've heard that before.
The main interest here is that, if true, it means that the market for naming rights has rebounded a bit after the economic collapse, which would seem to bode well for other teams (or cities) trying to raise funds by selling their stadium name. At least, if your city is the largest media market in the U.S., and your stadium has two NFL teams playing in it.
Foster: I have a secret plan for keeping Rays in St. Pete
Move over, John Iselin! St. Petersbug Mayor Bill Foster, under pressure to ramp up talks to resolve the Tampa Bay Rays owners' stadium demands, told the city council yesterday that he has a plan for keeping the Rays in St. Pete, he just won't say what it is:
"They can come to me. There is not one meeting they have asked for where I didn't run down and try to meet with them,'' Foster said. "As far as having a detailed plan for keeping the Rays in St. Petersburg, I have that plan," which he said he had previously discussed with individual council members.
"What plan?'' Curran asked. "Marketing?''
"No,'' Foster said, "something we have discussed in the past.''
He wouldn't say what, though, even after council members voted 6-2 to hold a "workshop" to ask the mayor for more information. He did clarify, if "clarify" is the right word, that his plan may not involve a new stadium, and substantially consists of what to do if the Rays try to leave St. Petersburg.
To be fair, Foster is in a tricky place here: He knows the Rays want to leave, ideally for Tampa, which is closer to its wealthier fan base. Yet his best bargaining chip is the Rays' lease, which runs through 2027 and not only prohibits the Rays from moving, but even from talking to other cities about moving. So even if he wants to negotiate a settlement of the standoff with the Rays, he can't openly discuss, say, a buyout of the lease to set up a Tampa move, because then he's giving Rays owner Stuart Sternberg the ability to talk about a Tampa move — and, worse, starts a bidding war between the two cities.
Instead, we get this weird semi-public dance, where Foster says he's willing to talk but not about the team leaving the west side of the bay, while Sternberg says he's willing to talk but only if Tampa is on the table. They may fight eternally.
August 17, 2011
San Diego mayor launches tour of crappy stadium deals
San Diego Mayor Jerry Sanders has announced that he's going to step up his Chargers stadium efforts by taking three advisers on a tour of other cities that have recently built new sports facilities. And which cities did Sanders pick? That'd be:
- Indianapolis, which spent nearly $1 billion on a Colts stadium that overwhelmingly benefits the team, and whose sweetheart lease with the Indiana Pacers has been declared "the worst of all taxpayer-funded bailouts."
- Kansas City, which built a money-losing arena to lure an NBA or NHL team, then agreed to a sweetheart lease with AEG that all but guarantees it will never get one.
- Denver, which is just your run of the mill city that built a whole bunch of sports facilities near its already-gentrifying downtown entertainment district and then tried to retcon the stadiums into being responsible for the economic revival.
The common link, it looks like, is that all three cities pursued sports facilities as downtown revitalization efforts, though they haven't all been very successful.
San Diego Union Tribune columnist Tim Sullivan writes today that Sanders "should complete his three-city due diligence, perform his polling, assemble his staff, tweak the numbers, and then tell us where in the name of Waldo is enough money to build a stadium for the Chargers." That'd sure be nice, but don't hold your breath — typically in stadium deals, it's breathless tales of urban renaissance first, financial details later.
August 15, 2011
Detroit turning profit on Red Wings lease, but not for much longer
There's a great, detailed article today by Bill Shea of Crain's Detroit on the finances of Joe Louis Arena, which concludes: The city is netting $2.6 million a year on the home of the Red Wings, including revenues from rent, ticket taxes, and a cut of concessions and suite sales.
Given that the arena was built in 1979 for only $30 million, that's a pretty excellent deal for the city of Detroit — which is, no doubt, one of the reasons Red Wings owner Mike Ilitch wants out of Joe Louis. Ilitch has actually already let the lease expire two years ago, but continues to operate under its terms while negotiating a new one.
(Incidentally, this should serve as a reminder to anyone who worries that teams will "have to move" once their current leases expire: No, they don't. The number of cities that have actually evicted teams is, while not exactly zero, pretty darn close to it on the major-league level.)
However, Crain's notes, "stipulations in the contract call for the city to immediately lose the ticket tax and in five years lose the surcharge on concessions and suites," so regardless of whether Ilitch gets a new arena, Detroit looks likely to see its arena revenues evaporate. Unless, of course, the city drives a hard bargain with Ilitch in negotiating a new lease — but as we've seen, that doesn't happen too often.
Santa Clara reclaims half its redevelopment funds for 49ers
The city of Santa Clara looks to have finally resolved its attempts to reclaim redevelopment funds that it had earmarked for a San Francisco 49ers stadium and which the state was trying to take back. The upshot: The city will repay the state $11.2 million this year and $2.7 million each year thereafter, amounting to about half of the city's available redevelopment funds, but will be allowed to keep the rest.
With the city having promised $40 million to the 49ers, $2 million and change per year isn't going to cut it, so it's unclear what this will mean for the stadium plan. "In a project of this size and financial complexity, it's going to require some flexibility to see it through," 49ers spokesperson Steve Weakland told the San Jose Mercury News, which translates as "We'll figure something out."
Realistically, a few million missing dollars in public money isn't likely to have as big an effect on whether the project gets built as the underlying shakiness of the $493 million in private money, what with the economy still in the crapper. NFL money would help some, obviously, but it still looks as if the most financially workable scenario involves the 49ers and Raiders sharing a stadium — which, since it presumably requires one to be the tenant and one the landlord, is going to be no easy feat to negotiate.
August 11, 2011
L.A. stadium benefits rely on crazy number of events, nonexistent taxes
In yesterday's item on the AEG stadium, I almost called out the Los Angeles Times for its unquestioningly rosy depiction of the project's economic benefits, which it said "gave city leaders a rare chance to seize on a major economic development after years of slashing payrolls, scaling back services and watching helplessly as the real estate market dried up." I didn't have time to do a full evaluation of the project's likely impact, though, so I skipped it.
Fortunately, last night the Associated Press did it way better than I could:
A close reading of an economic study that AEG released last month shows that the promise of a sales and property tax windfall appears to be overblown. ...
The study released by AEG sees some $22.1 million in city taxes being generated, including $11.6 million that would come from hotel room taxes.
Yet, two of the largest hotel offerings in the area got breaks on those taxes to spur their development. The JW Marriot and Ritz-Carlton hotels in AEG's adjacent LA Live entertainment complex get to keep their respective room taxes until 2035, unless better-than-expected business gets it to a maximum rebate of $246 million before that.
AEG chief operating and financial officer Dan Beckerman said new stadium and convention business would help the hotel reach the rebate cap faster, so the city would begin collecting the taxes sooner.
Also unlikely to materialize are the $3.1 million in property tax and $1 million in parking taxes that the study says would go to the city, since the deal approved this week would earmark that cash for the repayment of a loan taken out to move the convention center building.
Beckerman defended the inclusion of that cash in the tally.
"The purpose of the study is to identify the universe of new taxes and then the city will identify the portion of those new taxes that are going back into the project," he said.
The AP story also questions whether an AEG stadium could really host 38 events a year, as the report promises: Supposedly this would include 12 NFL games (which would require an L.A. team to make the playoffs every years and for the players union to accept an extended regular season), the Pac-12 Championship (which currently goes to the school with the best record), an annual boxing match ("If you look back in the history of professional boxing in the United States, you could probably put on one hand the number of championship fights that drew 50,000," fight promoter Roy Englebrecht told AP), and one "Super Bowl-sized event," whatever that might be in the years when the Super Bowl inevitably went elsewhere.
Coincidentally, I went to a presentation yesterday on the mathematical models used to draw up these kinds of economic impact reports, and one of the comments from an economist in the audience was that the model itself matters a lot less than the assumptions that go into it — it's easy to get pretty much any Excel formula to spit out a positive number if you can put in any inputs that you like. So, kudos to the AP in vetting what sounds like a patently ridiculous study by AEG; but was there really nobody on the L.A. city council staff who knew that the NFL season is only 16 games long?
August 10, 2011
L.A. council okays AEG stadium — what now?
And it's on: The Los Angeles city council last night unanimously approved AEG's preliminary deal for a $1.5 billion downtown NFL stadium, including $275 million in public tax and lease kickbacks. If the plan gets final approval, construction could begin next June, though the stadium wouldn't be complete until 2016.
There are still a few hurdles to be crossed, though, before "Los Angeles" starts showing up in the NFL standings again. Among them:
- The council still needs to vote on several environmental and other approvals, which is expected to take place over the next few months. Given last night's unanimous vote, though, it's pretty unlikely that these will present much of a roadblock.
- Lawsuits and the threat of lawsuits. AEG president Tim Leiweke made a preemptive move to head off any legal challenges yesterday, saying he'd ask for legislation exempting the project from environmental lawsuits; or as Leiweke put it, "We're going to need some protection from the crazies."
- Some NFL owner needs to decide he wants to play there — or to sell the team to someone who does. (Leading candidates are the San Diego Chargers, the Minnesota Vikings — oh, just go look at Leiweke's target list.) This could be the trickiest part, given that AEG is going to have a $1-billion-plus mortgage to pay off, and so is presumably going to need to get either a mammoth yearly rent or a hefty share of stadium revenues, either one of which would cut into an NFL team's profits. Two possible mitigating factors: If the NFL throws a bunch of money towards an L.A. stadium (or a team that moves there — same difference), that would reduce the amount of debt that would have to be paid down; and if Ed Roski keeps pushing his City of Industry stadium, there's the slim chance of a bidding war for a team.
That said, it's still an awful lot of money to raise while still providing an NFL owner with the kind of profits he'd be looking for, meaning you shouldn't be surprised if the search for a team goes on even longer than the search for a stadium.
August 08, 2011
Oilers reported to mull arena on Native reserve
Notwithstanding the possible breakthrough in getting provincial money for a new Edmonton Oilers arena, team execs appear to be ratcheting up the threat of a Plan B if they don't get their sought-after downtown facility. A "source close to the negotiations" tells the Edmonton Sun that the Oilers are looking at a local Enoch Cree reserve as a possible fallback site: "They could easily build an arena out there, is what they're alluding. I don't know how much is playing poker and how much is reality."
Cree leader Ron Morin, meanwhile, was somewhat more circumscribed, saying only that officials had spoken with representatives of Oilers owner Daryl Katz this spring about possibly hosting an arena, but that they'd only consider it if a downtown arena fell through:
"We know, without a doubt, the Oilers are Edmonton. Everybody knows that. We're not trying to disrespect or trying to do anything malicious. What we're saying at Enoch is, if Edmonton can't find a way to get it done, then if there's a chance for all of us to put our heads together -- meaning Edmonton, the Katz Group, Enoch, the province -- and see if it could work better at Enoch, why wouldn't we explore that?"
No financial details were provided, so take this with a huge grain of salt for now: Katz needs construction money, not land. But he also needs leverage, so leaking work of another possible bidder — if he's the one who leaked it — could serve him just as well as an actual workable plan.
August 05, 2011
Wolff: Still waiting on Selig, won't threaten to move A's from Bay Area
All week, the inestimable Newballpark.org has been featuring a five-part interview with Oakland A's owner Lew Wolff, about — well, his plans for a new ballpark, naturally, but lots of other stuff as well. The five sections, with linkage:
- Part 1 - History of working in Oakland, 980 Park site, Process
- Part 2 - Oakland now and what it takes, Earthquakes, contraction
- Part 3 - Territorial rights, Giants' motives, Dodgers/Mets, Coliseum
- Part 4 - Tarps, discounts, player development, CBA, payroll, T-rights again
- Part 5 - Redevelopment, Target Field, Cisco Field, Keith Wolff, museum and history
It's a fascinating (if long) read, in no small part because it's a healthy reminder that the sports stadium game isn't just about the battles of faceless politicians and plutocrats, but rather of human beings. It's easy to hear about a team owner who wants a new home, and think, "Yeah, yeah, that's what they all say, it's part of their business model"; and as true as that may be, every unhappy owner is unhappy in his own way. Yet at the same time, you can't forget the economic forces at work even while evaluating a particular owner (or mayor, or what have you) as a person: There are reasons why so many end up playing the same roles, and it has more to do with the pressures acting upon them than whether or not they're nice people.
And with that, some of the top takeaways from the Wolff interview by Newballpark.org honcho Marine Layer:
- Wolff really thinks that asking for development rights, as he initially did with his Oakland and Fremont stadium plans, isn't the same as asking for public money: "You entitle that - assuming the city wants that - those entitlements back then were worth $100k per unit just for the right to build, sort of like land value. Instead of the developer taking that money, that money would go into a small joint powers unit (authority) and be used to fund a baseball park. That's a double win there." Of course, the city could also have taken the money and put it into something else, but that doesn't seem to cross Wolff's mind.
- He genuinely doesn't want to be that guy who saber-rattles about moving the team out of town: "I didn't want to be the owner who says, 'If you don't do what I tell you we're moving to San Antonio.' Also, I didn't want to get on a plane and start schmoozing with the mayor of San Antonio or Portland or Las Vegas or Monterrey, Mexico. I don't think that's the way to do one of these things." Of course, that's easier to do when you can play local cities off against each other, as Wolff has tried to do with San Jose, Fremont, and Oakland.
- He's still peeved about Bud Selig's relocation committee taking its damn sweet time about things: "You could've written a PhD dissertation by now. There's other reasons that perhaps Bud Selig is contemplating this. ... I think he's got enough information to make a decision. He may be trying to figure out a good way that the Giants are happy and we're happy. He tends to do that. And right now, what choice do I have?"
- Wolff doesn't think that he can do much to make the Oakland Coliseum more attractive for fans: "Everybody's saying you have to open this or do that, make it cheaper and cheaper. We need revenue, yet nobody says, 'Look how reasonable the A's game is compared to the Giants.' Which is fine, they have a better environment to go to. You should pay more there." (Wolff also talks about the difference between official paid attendance and actual "in-the-house" attendance, noting that one recent game that officially drew 11,000 fans had a turnstile count of only half that.)
- The A's are doing okay financially, so long as they keep payroll around where it is currently: "The rule of thumb for running a team before you get huge revenues is that if you can keep your MLB salary at 50% of your revenues you’ll probably be at the break even point or make a few dollars. ... Our revenues are around $140-150 million. Our payroll is $75 million. That's about right. I could name another team or two teams whose payroll is around $40 million. We'd make a lot of money if we did that. I will not do that."
- The San Jose Earthquakes stadium is in a holding pattern because the financing doesn't work yet: "We haven't pulled the string yet to build it because if you look at the economics of it you're only using it for 19 games or 20 games. ... So what we've done is that if there are 10 steps to it we're in step 7 or 8. We've spent money to do that but we haven't pulled the string yet."
The impression one gets of Lew Wolff overall — if you can get a meaningful impression from a transcription of an interview, especially one that the subject himself requested — is of a longtime power broker who is frustrated at not having the financial resources that the other MLB teams have at their disposal, and genuinely doesn't see why he's the only guy who's having such trouble getting a stadium built. It's hard not to sympathize with that — and yet, the argument still ultimately comes down to "all the other kids on the block are getting one, so I should too."
At one point, Wolff complains about teams overspending for free agents and how it makes it harder for the A's to operate: "All these teams that have spent haphazardly without breaking even have gone and caused problems for themselves and baseball." One could equally well make the same argument about stadiums: When the Yankees get a new stadium partly on the public dime, it puts even more pressure on smaller-market teams like the A's to get taxpayer subsidies for their own stadium. What might be fairest would be for the teams that have gotten stadium subsidies to pool their boodle and chip in for the A's to build a stadium to keep up with the Joneses (beyond the revenue-sharing deduction it gives for stadium costs) — but you probably don't want to hold your breath on that one.
August 04, 2011
Ticket bubble watch: Slate today, Orlando ESPN tomorrow
I haven't written much about the sports ticket bubble lately (though there's plenty to comment on, including the Pittsburgh Pirates' no-fee week and some impressively low StubHub prices for the New York Liberty). If you've been wanting an overview of the lay of the deflating-ticket-price land and what it could mean for the sports industry, check out my new article on the same in Slate.
On a related note, I'll be on ESPN 1080 in Orlando at 10:05 am tomorrow (Friday), talking about my Nation article and the Slate article. If you're in Orlando, tune in on your radio; if not, use the streaming doohickey.
"Why Do Mayors Love Sports Stadiums?" now free online
If you've been refraining from reading my Nation article from last week on why cities keep pursuing stadium and arena deals because you're cheap or allergic to newsprint, you may now commence rejoicing: It's now un-paywalled and readable for free on The Nation's website. Read it now, and read it often!
Sorry, Islanders: Brooklyn Nets arena still too small for hockey
Now that the New York Islanders aren't getting a new arena in Nassau — not this week, anyway — there's much talk about whether they could instead share digs with the Nets at the new Barclays Center in Brooklyn. Forbes blogger Tom Van Riper calls a Brooklyn move "the most cost efficient way for the franchise to move on," while the Brooklyn Paper, with its characteristic reserve, shouts, "GAME CHANGER! Professional hockey could be coming to Brooklyn."
The only problem, as sharp-eyed FoS readers will remember (or as even dull-eyed Village Voice readers will, since I just wrote about it there on Tuesday): In order to save money, Brooklyn arena builder Bruce Ratner "value engineered" the Barclays Center to have a floor too small for hockey, essentially requiring that thousands of seats be ripped out to make room for a playing surface twice the length of a basketball court.
The Brooklyn Paper's headline was based on the same canned statement by Barclays Center CEO Brett Yormark as I cited in my Voice piece, which went like this in its entirety:
"The Barclays Center will have an ice rink that can support professional hockey. Due to the venue's design, the capacity for hockey would be a few thousand seats less than for basketball. While we hope to explore hockey opportunities in the future, our primary focus at the moment is to build the best sports and entertainment venue in the world."
The Brooklyn Paper pegs the number of seats lost at 3,500 (no source given), which would give the arena the smallest capacity in the NHL. More to the point, as I noted in the Voice (thanks in part to a tip from an FoS reader), squeezing an NHL rink into a structure built for basketball could create some seriously ugly sightlines, as happened when the Phoenix Coyotes tried a similar scheme at America West Arena a bunch of years back.
Add in that the Islanders would be tenants of the Nets at the arena, and would probably be expected to pay rent (they'd be taking up nights that could otherwise be used for Lady Gaga shows and the like, after all), and it starts sounding like a less tempting opportunity. (Though at least the Isles wouldn't have to pay a territorial rights fee to the Rangers — they already covered that back in the 1970s.)
So: Brooklyn Islanders, possible? Yes. Likely? Unless both Charles Wang and the NHL decide that the Brooklyn market is so lucrative that it's worth playing in a substandard arena, don't hold your breath.
49ers unveil teeny tiny stadium
This just in: The San Francisco 49ers have finally succeeded in building a stadium! Okay, it's only two-and-a-half feet long, but why quibble over details?
Aside from allowing team employees to fondle it, the new stadium model looks pretty much identical to the computer renderings that were issued two years ago, though the "green roof" looks to have disappeared. (Either that, or the 49ers' craft drawer ran out of felt.) There will, however, still be metaphors about both Roman amphitheaters and open-source software.
AEG stadium wins first L.A. council vote
AEG's $1.5 billion plan for an NFL stadium in downtown Los Angeles cleared its first hurdle yesterday, as the city council's Ad Hoc Committee on the Downtown Stadium and Convention Center voted 4-0 to recommend approval of the city's memorandum of understanding with AEG.
Significantly, one of the four votes came from Bill Rosendahl, previously one of the strongest skeptics of the deal. "I'm delighted to see all these answers to my questions," Rosendahl said before his yes vote. (One key answer provided by AEG: It promised to cover any shortfalls in tax and lease revenue generated by the project, though it didn't address the fact that some of this tax revenue could end up cannibalizing existing tax revenue.)
The full council is expected to approve the MOU on Tuesday. After that, it will sit down with AEG to negotiate an actual lease. "This is the table setting, not the meal," stadium committee chair Jan Perry told the L.A. Times. It's possible that new hurdles — or new compromises — will emerge at that point, but right now it sure looks like the reason the council is setting the table is that it intends to eat the meal.
At that point, the biggest obstacle will be landing a team — and there you might actually have some problems. In the NFL, where local TV and ticket revenue is a drop in the bucket compared to the national TV contract, playing in a big market like Los Angeles isn't a huge advantage for an owner. (This is in part why L.A. lost its two teams in the first place to smaller markets in St. Louis and Oakland.) A new stadium is a draw — but only because of the new revenue streams it would create, and in an AEG stadium, much of that would be dedicated to paying off the stadium costs.
In the end, then, the question will be whether an AEG stadium can be lucrative enough to pay for itself and generate extra cash for both its owner and an NFL franchise. It's certainly possible — it did work in New Jersey for the Giants and Jets, on more or less the same model (mostly private funding, leavened with tax kickbacks). But just because L.A. gets a new stadium deal is no guarantee that it'll get a new team.
August 03, 2011
Six-year-old St. Louis stadium to shed rusty metal panels
In a reminder that not only old stadiums show wear and tear, a four-foot piece of metal trim fell off the outside of the St. Louis Cardinals' Busch Stadium yesterday, closing nearby sidewalks and leading to an inspection of the rest of the stadium. After rusted bolts were found holding the decorative panels in place, the other panels are now being removed, with plans to have the work completed well before the Cards return from a road trip next Tuesday.
All of which is unusual, but hardly extraordinary. And it's notable that no one is declaring it to be a sign that the six-year-old Busch Stadium is falling down and needs to be replaced — unlike the case when bits have fallen off of certain other stadiums I could name.
St. Pete talkers talking about Rays talks
There's very little going on on the Tampa Bay Rays stadium front right now, but the St. Petersburg Times isn't letting that stop them from reporting on what could be going on.
On Sunday, the Times reported that with four of the eight seats on the city council up for re-election this year, new faces could vote to amend the Rays' lease at Tropicana Field to let them out of it early. All it would take would be for five members out of eight to vote to change the lease, then six to vote to override Mayor Bill Foster's certain veto ... okay, the math doesn't really work, but they did manage to collect a bunch of quote from council candidates saying, "We and the Rays should be talking." (Though it's worth noting that Foster, currently seen as the main roadblock to a new stadium deal, said similar things when he was running for office.)
Which, incidentally, even Foster says:
"I know a lot of people are discouraged that the two parties of the contract aren't talking," Foster said. "And I will say that no one is more discouraged at the lack of communication than I am."
That's part of another Times article today that mostly focuses on how a Rays booster group made of local business leaders is going to meet with Foster to try to get him to open talks with the team about a new stadium. Which would be easier, of course, if the Rays owners would agree to talk without dropping their demand that Foster first let them out of the lease provision that precludes them from negotiating with other cities.
Foster, for his part, seems to be determined to hold tight to the lease, knowing full well that it's the best leverage he has in his negotiations with the Rays:
Foster said Tuesday that any proposal for a stadium must recognize the investment taxpayers put into Tropicana Field, and the city's relationship with the team.
"And then it's got to get sweeter," he said of a stadium proposal detente.
August 02, 2011
Nassau County voters kill Islanders arena plan
The votes are in — 62 percent of them, anyway, as of around midnight — and it looks like the New York Islanders' $400 million arena plan has gone down to a decisive defeat. With about 15% of registered Nassau County voters turning out at the polls, 58% of those voting opposed the plan to hike property taxes by as much as 4% to pay for the new building.
What happens now is anyone's guess. Islanders owner Charles Wang has said he'd move the team if the arena vote failed, but owners have said that before (cf. Carl Pohlad after the Twins referendum lost in 1996), and his list of relocation options isn't all that great. Kansas City isn't going to offer a sweetheart lease to a sports team and neither is Quebec, Hamilton has that Balsillie problem, which leaves ... Houston? It's tough to see abandoning the nation's largest market, with a proven hockey fan base, for a Sunbelt city that hasn't had a major-league hockey team in 33 years, especially after all that mess in Phoenix. There's always that talk of a hockey arena in Queens, but that has nothing in the way of a funding plan, and would give New York City three arenas competing for concerts (and the metro area six arenas, at least until the Meadowlands and the Nassau Coliseum were torn down), which is a heck of a lot, even for an urban area with 20 million people.
After the vote, Wang said only: "I have to tell you I'm disappointed and to put it very bluntly, I'm heartbroken. I have to tell you it's a very emotional day for us." He added: "We're committed to the Nassau Coliseum until 2015. We will honor our lease."
Before the vote yesterday, Wang had been more defiant, proclaiming, "We don't have a place to play anymore, because come 2015, our lease expires. ... We have to have a place to play, so we're out of options basically." Given that the last time anybody tried that gambit was seven years ago, and everyone just laughed at them — as anyone who's rented an apartment knows, the thing about leases is after one expires you typically get another one — Wang isn't exactly sounding like a man with a solid Plan B. It's going to be very interesting to see what his next move is, once he gets over his heartbreak.
August 01, 2011
AEG: L.A. stadium needs public funds because it's so unprofitable
The Los Angeles city council held another hearing on AEG's NFL stadium plan on Friday, and councilmembers got to hear the slightly weird argument that the public should fund the project because it's such a crappy investment:
During the full council's first public review of the stadium's financing plan, economic consultant Bill Rhoda told the City Council that Anschutz Entertainment Group will see a 6.7% rate of return from the project over 30 years. Projects of a similar size typically generate a return of 15% to 20%, he said.
"You really can't take any more revenues out of this entity because then [the deal] won't be financeable," he said.
Chief Legislative Analyst Gerry Miller, who advises the council, offered a similar take, saying AEG's return will be "less than half" the amount that such deals normally produce.
You can sort of see the logic here — "It's not like we're getting rich off this!" — but it's still a bit of a strange tack to argue that taxpayers should be footing the bill for part of a stadium project in order to protect a private developer's profits. Especially as it's not like the city would expect to see any profits from the deal at all. Still, it looks to have been enough to sway councilmember Bill Rosendahl, the plan's most prominent skeptic, who declared on Friday, "I'm not there yet. But I'm getting close."
More on Friday's hearing, including how the LAPD barred some reporters from reporting on it, from the L.A. Weekly.
As Islanders vote looms, finance board remains wild card
It's New York Islanders arena vote day in Nassau County, and ... there really isn't much to be added to what's been said already. Still, papers have gotta be published, so there's plenty of ink spilled today on the plan:
- The Times has a long article that will be of interest to anyone who knows absolutely nothing about the arena deal and needs a primer. Key quote: "'It's a Catch-22,' [retired Nassau resident Bob Orosz] said. 'If it's passed, our taxes are going to go up. If it fails, our taxes are going to go up.'"
- The Daily News has another editorial dissing the plan, its second in two weeks, which seems like a lot for a project that doesn't even affect most of the News' readers. Key quote: "Voters who care about fiscal sanity should go to the polls - and terminate the plan with extreme prejudice."
- Newsday runs down the basics of the plan and what happens next. Key quote: "If the referendum is approved, it would next go before the 19-member Nassau County Legislature which would require a supermajority of 13 members, including at least two Democrats, to guarantee passage. NIFA also must approve the lease agreement and bonding."
- The Wall Street Journal runs down the basics of the vote as well, with an extra helping of quotes from arena opponents. Key quote: "William Biamonte, the Democratic Commissioner of the Nassau Board of Elections, said voter turnout would likely be less than 10%, compared with up to 70% for a presidential election. 'Whatever the result, we won't be able to read any type of public intent from it,' Mr. Biamonte said."
- One of the more in-depth articles on the Islanders plan, weirdly, is in the Montreal Gazette, where columnist Pat Hickey crunches the numbers and finds them wanting. Key quote: "The Islanders have tried to make the picture rosier by projecting $229 million in annual revenue for the new building. ... Consider these numbers: If the Islanders, who had the lowest attendance in the league last season at 11,059 per game, sell out all 41 games in a 17,500-seat arena with an average ticket price of $65 — which would be among the highest in the NHL — and every fan spent another $50 a game on beer, hotdogs and souvenirs, the total revenue would be a mere $82 million. It would take a lot of concerts and other events to make up the difference in the Islanders' projections."
The last poll, taken in mid-July, found that registered Nassau County voters opposed the plan, 51-36% — but as Biamonte noted, turnout is expected to be so low that this will be more a referendum on who's motivated to go to the polls than on what county voters actually think.
The more interesting wild card could be NIFA, which was appointed to oversee the near-bankrupt county's finances last winter, and which has already said it will take a hard look at the arena numbers before approving any deal. NIFA already rejected the county's overall budget last month, so clearly it's not afraid to make some tough calls. So however the vote goes today, the Islanders saga is far from over.
