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November 28, 2011
Sales taxes are still regressive, 49ers and Kings still spinning wheels, and other non-news
With Thanksgiving making for an epically slow news weekend — aside from for those reporters lucky enough to cover Black Friday pepper-spray incidents — we were instead treated to a smorgasbord of stadium non-news stories this weekend:
- Rich people pay more property taxes while the poor and middle class pay more sales taxes, reports Cincinnati.com. This is considered newsworthy because the deal to cut property taxes following a sales-tax hike to pay for new Bengals and Reds stadium will mean not just a massive transfer of funds from taxpayers to the sports team, but also from the hoi polloi to the hoity toity: "The half-cent stadium sales tax paid by homeowners is estimated by the county to be a maximum $192 annually, while owners of the county's highest-value homes get rollback rebates of $1,175 or more — netting them nearly $1,000 apiece under the current structure."
- The NBA lockout looks to be over, and everybody in Sacramento is back to saying what they were saying before about a new Kings arena. "Our position from day one is that this has never been about building a facility to benefit a professional sports team," said Mayor Kevin Johnson, who two years ago kicked off his arena campaign by declaring that without one the Kings "very may well look elsewhere." The apparent end of the lockout "is good for the efforts to keep the Kings in Sacramento," said Michael Ault of the Downtown Sacramento Partnership, which is working on efforts to keep the Kings in Sacramento. And a local economic consultant and a woman who runs a restaurant said they hoped the end of the lockout would help the economy. This is considered newsworthy because it's the same thing the Sacramento Bee runs every other day, and the announced resumption of the NBA season gave them an excuse to run it on page one.
- The San Francisco 49ers are winning, but don't have a new stadium yet, writes the San Francisco Chronicle. And they're not especially talking to San Francisco about one, while continuing to pursue one in Santa Clara. This is considered newsworthy because ... okay, I'm stumped on this one. Maybe the reporter was originally assigned to cover Black Friday, but came away empty-handed when no shoppers thought to bring pepper spray?
My favorite part of the Kings deal -- oops, sorry, the ESC deal -- in Sacramento is that KJ insists this is all about "jobs, jobs, jobs."
Well, we're going to "invest" $387M in an ESC that will produce 150 full-time and 550 part-time jobs. And when they say "part-time", think 10 hours/week.
I think that $387M could be invested better. That seems like some extremely expensive job-production to me. I'm not sure Toyota would invest $387M in a plant that would then employ 150 people full-time. And, sorry, but those part-time jobs simply do not pump money back into the local economy.
Re-reading that, I have a new nickname for myself: Captain Obvious.
By the way, it was reported yesterday that KJ still hasn't given up on his strong-mayor initiative. I'm hoping for a June election, but I don't think KJ would do that. How can we get a recall going?
@MikeM - don't those part time jobs (ticket takers etc.) already exist at the current arena? And won't the people who currently hold those jobs will want to keep them, and move over to a new arena? So how can politicians claim that this would be job creation (other than temporary construction jobs).
We have the same claims here, that the Santa Clara stadium will create new part time jobs, when in fact those jobs already exist at Candlestick, and chances are good that those current employees will simply drive down the peninsula to keep those part time jobs.
SCT, what KJ is referring to is the report that claims the construction of the arena will create over 4,000 jobs... But if you read the report KJ cites, it really doesn't even say that. The report says that about 1,200 of the 4,000 will be in the City itself. Who really knows where the other 2,800 jobs will be located?
You still don't spend $387M to create 1,200 jobs that will last a year, or even 2 or 3 years.
We'll see how this goes, but right now, I think this project will be blindsided by something KJ doesn't see coming: The EIR. Something approaching 100% of the 18,000 fans that attend these events will have to cross I and J Streets at about the same time as the evening commute. Those two streets are already very impacted. The only way I can see around this is a walkway above street level that would extend from the north side of I Street to the south side of J Street. I don't see a budget item for that anywhere, but a preliminary environmental study shows a red line indicating a bridge right where I imagine it would have to go.
In other words, I think the EIR could easily kill this location. We'll see, but right now, this could be one of the factors.
The Santa Clara City Council told us on June 7th that the 49ers just don't feel like paying the $493M they "estimated" while they were carpetbombing us with "Measure Jed" last June.
That percentage is now '15 to 25% of the total development costs' of a $987,000,000 stadium.
So, more than a year after Measure Jed, the 49ers are now scheming to pay only $250M instead of $493M.
And you say they STILL don't have a stadium?
I'll take a guess and say that Jed York is actually trying to get NFL money without subleasing to the Raiders - and that the other 30 millionaires plus GB are pushing him right back.
It's a total ripoff. The Santa Clara Stadium Authority is going to be down for hundreds of millions of dollars more than we were told last spring - and York and the NFL are haggling over what could end up being only 25% of their stadium's cost?
Bill Bailey, Treasurer,
MikeM is right 'on the money.'
The job creation myth was used to deceive Santa Clarans, too - early claims of 515 'full-time-equivalent positions' were obviously nonsense.
Turns out that it's 2,600 stadium jobs, serving weepy franks on soggy buns for the equivalent of eight hours per week in a year. Those jobs don't pay $30K a year - they pay less than $7K a year.
The trades? Santa Clara Agencies will be heavily in debt for at least 20, and possibly for 25 years, to pay for 'job creation' that will disappear in about 31 months.
Meaningful job creation from a heavily-subsidized NFL stadium? Don't believe it for a minute.
Bill Bailey, Treasurer,
The Sacramento Bee is very selective on how it practices journalism. It uses its "investigative reporting" to publish hit pieces on public employees- who are numerous as Sacramento is the state's capitol. But when it comes to bogus arena consultant reports and press releases put out by the Downtown Sacramento Partnership- the Bee regurgitates and does no investigative reporting.
In the economic development world (where I work) a figure we use a lot for "reasonable subsidy" is around $10,000 per full time job. And these are well paying manufacturing jobs at $10-15/hour not minimum wage ones.
Measure Jed in Santa Clara got around a bad EIR traffic/parking report by getting Santa Claran's (former city council members) to be the front for a 'citizen's group'( backed by $5 million from the 49ers owners)to put a 'citizen's initiative' on the ballot instead of a city staff written ballot measure. Citizen's initiatives aren't subject to the same EIR challenges as a city-backed measure would be. All the Kings have to do is pay signature gatherers to put an initiative on the ballot that's worded the way the Kings want it to be - and voila, you'll have the same situation we had here in Santa Clara.
FYI - Yesterday, I read online that Walmart is using this same tactic in some cities, using paid signature gatherers to put an initiative on the ballot than then will not be subject to the same EIR challenges that a city council backed measure would be.
You can buy "signature collection" from canvasing companies for around $3.00-$4.00 a pop depend on what issue and where in the country.
I'll tell you what I think is the most dangerous aspect of KJ's position that we need this ESC, with or without the Kings... I believe that this position, in conjunction with Think Big's "research" claiming this arena would produce $7B of economic activity over 30 years will justify the Maloofs paying no rent at all in the arena. They'll claim that any payment they make is basically nothing next to that $7B; creating all this new activity will, in effect, be their rent.
Just watch and see now. I'd bet the Maloofs haven't been asked about their contribution yet, but when they eventually are, they'll cite Indianapolis as "just the way things are done in these deals now"... And at least 3 Council members will be just fine with that.
Yup, I really do think that KJ is that bad at negotiating business deals.
The only way I can see the Santa Clara Stadium happening is if the 49ers & Raiders current ownership groups come together and do a deal similar to the Giants & Jets which allows the Jets to opt-out after 15 years if they can get their own stadium.
This Kings situation is messy, I believe the NBA would make the Maloofs wait one more year before approving their move to Anaheim while the New Jersey Nets are going to relocate to Brooklyn, NY. After that the NBA has to fix their situations in Minnesota, Milwaukee, Indiana & Utah as they could eventually find themselves in the relocation bubble.
Newark (A team could be packaged with the Devils which apparently allow the ownership group to make a profit on the Prudential Center) & Louisville (Apparently have a very rich Abu Dabi investor) are the only realistic options right now and maybe Pittsburgh is Penguins owner Burkle can get an interested group to work with him.
But the NFL needs to force the York Family & Davis Family to work together and keep those two teams in the Bay Area, they got the voter approval and I think they could sell naming rights, sponsorships and get 2 G3 loans to close the gap.
Let's hope that the other owners of the NFL eventually force the 49ers to abandon their plans in Santa Clara and move out of the Bay Area. Fingers crossed!
Any entity that invests in the Santa Clara stadium will implicitly be agreeing with all of the shenanigans that went on here to get Measure Jed to pass:
- taking away our right to vote (which was promised by the Term Sheet) on a change to our city charter so that the 49ers can override our charter requirement for competitive bidding, thus disenfranchising 46,000 voters and violating our constitutional right to vote (all to financially benefit a private corporation),
- putting a ballot question and ballot measure before the people that did not disclose the stadium costs (because as our city attorney argued in court, the state of CA does not require cost disclosure on city-wide ballot measures, so therefore Measure Jed used a loophole in CA state law to keep cost information away from voters),
- all of the campaign donations made to pro-stadium Santa Clara city council members by pro-stadium forces, including the Yorks and their contractors and others who stand to financially benefit from the stadium, so that pro-stadium people stay in power on our council to vote 'yes' for everything pro-stadium forces want,
- the lack of parking - no businesses have signed up to allow their parking lots to be used by NFL fans, and the horrific gridlocked traffic that's predicted
- the almost 100 closed door sessions between our city and the 49ers (as listed on city council agendas), and the lack of transparency with Santa Clarans about the stadium deal
- the denial of the General Fund loss and the denial of the 2 to 1 negative return on investment as predicted by Santa Clara's consultants
- the many millions of dollars spent on consultants and city staff time because of the stadium project, plus the millions now to be spent on pre-construction work (without a DDA) and the six million borrowed from the 49ers for pre-construction work (because Santa Clara doesn't have the money)
- the extension in time of our redevelopment agency to fund stadium debt, which has cost our RDA $11.2 million in a 'pay to play' payment to the state, and will cost another $2.7 million/year to the state to keep the RDA going, all while starving our general fund and schools of property tax dollars from the RDA area
- the lack of honesty with the people on the north side of Santa Clara about the horrific environmental consequences of the stadium ( pro-stadium city council members were invited but would not show up to speak at two town hall meetings held on the north side to discuss the EIR results)
- the lack of disclosure of the possibility of the Stadium Authority not being able to meet its stadium bond debt payments or operational costs. The Term Sheet explicitly says the 49ers are not responsible for the Stadium Authority's bond debt. The costs/debt/risks are being shoveled onto the Stadium Authority, and that wasn't disclosed to the public during the Measure Jed campaign.
That's not the full list. There's more. But any individual or entity that invests in the stadium is publicly stating his/her/their support for what's gone on here. No community should have had to go through what Santa Clara has been put through by our pro-stadium council members and Measure Jed supporters.
The 49ers have sold 200M+ in luxury suites already. Out of their portion 250M will be done by suite sales alone without the NFL's help.
Of the 493M the Niners owner subtract 250M and you have 243M.
The NFL will match what the 49ers owners put in as cash as they did in New York and Dallas.
Take that 243M in half and you have 121.5M each. That means the NFL will loan that amount and the Niners are done with their share.
If luxury suites sold at such a rampant rate, SBLs will sell real fast with the team winning now. Why? Because they are cheaper.
In the end Santa Clara will have excess $$ in the Stadium Authority once naming rights and SBLs have been sold.
This stadium gets built. The 49ers have announced they are going to try to finish this in 2014 not 2015 because sales are going so well.
All of what Santa Clara Plays Fair states does not happen if the #s the City Council and 49ers projects even come close to reality. You guys are assuming nothing sells and the city goes into debt....Look at the news....The 49ers are selling expensive luxury suites with no issues just as I predicted.
Once SBLs go on sale, you will see Santa Clara re-coup their portion really fast. You will see I am right on that too.
As for the Kings...They are done in Sac. Without a sales tax increase they do not have have the private sector like Silicon Valley to privately finance it and make money. Much like the A's in Oakland.
"The 49ers have sold 200M+ in luxury suites already."
Not one penny of that helps Santa Clara pay off what will be well over $500,000,000 in stadium debt. Every bit of luxury box money goes into Jed York's pockets.
"Of the 493M the Niners owner subtract 250M and you have 243M."
Completely FALSE. In the City Council meeting of June 7th, we learned that the 49ers are now only down for 15-25% of the ***billion-dollar*** construction cost.
"If luxury suites sold at such a rampant rate, SBLs will sell real fast with the team winning now. Why? Because they are cheaper."
Just because a corporate CEO can afford a million dollar box does not mean that a 49ers fan can afford up to $20K for a single seat on the fifty.
"Take that 243M in half and you have 121.5M each. That means the NFL will loan that amount and the Niners are done with their share."
Again, false/old numbers. The total stadium cost is ONE BILLION. You have no clue of what the NFL is contributing - and you're ignoring the debt down to Santa Clara's Agencies.
"In the end Santa Clara will have excess $$ in the Stadium Authority once naming rights and SBLs have been sold."
No way that you can prove that Personal Seat Licenses (yes, they're really PSLs) and Naming Rights will carry the Stadium Authority. The Stadium Boosters tried telling us that we'd get a deal like L.A.'s - and their reasononing was totally illogical, too.
Our General Fund gets only $180 THOUSAND in the first year - while Jed York takes over $130 MILLION out of it.
The city of Santa Clara DOES go into debt and gets only crumbs in return.
You may want to read our City Council's Agenda reports before trying to tell us Santa Clarans what the 49ers are truly taking out of our city.
Always a pleasure,
Bill Bailey, Treasurer,
Sid can also show us proof of where a NFL stadium has led to properity for the city that owns it. We can show numerous examples using this website where it hasn't.