January 17, 2012
Cubs plan party patio, ad board in right-field bleachers
Chicago Cubs owner Tom Ricketts announced his latest planned change to Wrigley Field over the weekend, declaring that he'll build a "Budweiser Patio" in the right-field bleachers by Opening Day that will feature a dining area and bar seating a la recent additions to Fenway Park. It will also feature, according to the crappy rendering, a giant Budweiser ad and an electronic LED strip board, which would be quite a change for a ballpark that still relies on a hand-operated scoreboard in center field.
This is almost certainly an attempt by Ricketts to generate more revenue while dodging landmarks questions; as Cubs VP Mike Lufrano told the Chicago Sun Times, "It doesn't affect any of the historic features. It does not change the bleacher height or the outfield wall. It's a way to continue to modernize the park, but keep within the historic tradition of Wrigley Field." Still, they plan on going before the Landmarks Commission next month, just to be sure.
There's plenty to like about this plan — it keeps the Cubs in Wrigley, with no public money — and equally plenty to be squeamish about, if you're a fan of the pre-electronic brand of baseball that can be found now pretty much solely at Wrigley. (There's currently a small electronic board in center field, but this new one seems more likely to be the kind of strip board that can flash advertisements between batters.) If you're a fan of the renovated Fenway Park, though — recognizably the same, but with all the modern amenities like cupholders and electronic advertising signage — this is a sign that Ricketts is indeed headed in the same direction, though he presumably hasn't given up hope of getting public subsidies to help pay for it.
December 16, 2011
A tale of two landmarks, one of which isn't a landmark
The Boston Red Sox this week formally requested that Fenway Park be listed on the National Register of Historic Places, in order to get $40 million in federal tax credits on the just-completed renovations to the soon-to-be-100-year-old stadium. (This is different from the $40 million in state tax credits the Sox are getting for the same work.)
Skipping right over the whole tax credit issue, the New York Times cheap irony desk immediately noted that Boston is not Chicago:
Over in Wrigleyville, the Cubs say they are hamstrung by a City Council decision to give landmark designation to parts of 97-year-old Wrigley — including the marquee, ivy, scoreboard, and bleachers. Not only does the local distinction not come with federal tax dollars, but the Cubs say the landmark status is a factor in their failure to follow the Fenway rebuilding model.
"If you're going to restore and maintain the facility, you're going to have to take parts of it down and rebuild it," the Cubs' president of business operations, Crane Kenney, said in 2008. "Landmarking authorization doesn't let you do that."
Of course, the national register isn't actually landmark status (which Fenway doesn't have), and Chicago landmarks law doesn't actually prevent renovations so long as "historic" architectural features are retained, but why ruin a good story? Though it does take away a bit from the contrast between the two teams when the Times reveals that "the Cubs have discussed a listing in the National Register, but will not pursue it until after Wrigley has been renovated" ... in other words, just like the Red Sox did.
As for the $80 million the Red Sox will reap in tax credits — actually more like $50 million, given that more revenues for the team also means bigger revenue-sharing checks to the rest of MLB — that's undeniably public money, but not actually a special subsidy, since it's a tax credit that anyone can avail themselves of if they're rehabbing a landmarked building. Whether you think historic preservation credits are a good idea in the first place likely depends on your feelings about whether you think maintaining historic buildings is a public good — I'd say yes, though a cumulative 40% tax credit seems a bit richer than necessary — but that's a larger issue to take up with the U.S. Congress and Massachusetts legislature.
Meanwhile, back in Chicago, Cubs owner Tom Ricketts spent $20 million this week to buy a McDonald's across the street from Wrigley. That would fit well with a Fenway-style redo of Wrigley — the Sox bought several buildings adjacent to Fenway for office and kitchen operations, though those weren't across the street from the stadium as the McDonald's building is from Wrigley. Still, it looks like Ricketts intends on spending some more time trying to squeeze some stadium cash out of the city of Chicago before he commits to anything like that.
November 03, 2011
Emanuel: Wrigley amusement tax kickback a "non-starter"
The Cubs' plan to renovate Wrigley Field by having taxpayers kick back any additional ticket taxes generated over the next 35 years died a quiet death yesterday, as Chicago Mayor Rahm Emanuel shot down the plan as a "non-starter." While Emanuel said he was excited about new Cubs GM Theo Epstein's arrival from Boston, according to the Chicago Sun-Times, "that does not mean the mayor is changing his tune about using taxpayers funds to finance Wrigley at a time when his 2012 budget is cutting human services, closing police stations and raising taxes, fines and fees by $220 million."
And what did Emanuel actually say about that? Let's have a listen:
"I'm excited that the Cubs have made this decision and wish him the best. But I am not changing my perspective from the taxpayers just because people are excited. I will still evaluate anything I do as it relates to Wrigley Field based on the interests of the taxpayers. That's who I'm negotiating for."
And when asked about rescinding or adapting Wrigley's landmark status:
"I understand that. And when I sit down, I'm gonna sit down with them and work through the issues. But you know who I'll be representing: the taxpayers of Chicago."
Okay, so that's not actually so much a pledge not to use taxpayer money as a pledge that Emanuel knows who casts votes. Still on the table, according to the Sun-Times: Having the state buy and renovate Wrigley, kicking back a smaller amount of amusement tax, creating a tax-increment financing district around Wrigley to kick back other taxes, using historic preservation tax credits, expanding the area subject to a 1 percent tax on downtown restaurant meals, or the sale of personal seat licenses, none of which Emanuel specifically ruled in or out before storming out when someone asked him whether he was liked during his time at the White House.
October 31, 2011
Trib columnist: Wrigley needs "lessened burden," not subsidies
Chicago Tribune columnist David Haugh weighed in on the Wrigley Field renovation controversy yesterday, with a slightly strange column calling for the city to find ways to let Cubs owner Tom Ricketts get more money out of his 97-year-old landmarked ballpark.
Why strange? For starters, there was the headline, which insisted that it is "Time for government to get out of Cubs' way" on renovations and also that the club "needs [a] helping hand" from government. Hough then issued a list of complaints about Wrigley Field and the way the city stymies the Cubs from earning money on it:
- Because Wrigley is landmarked, the Cubs are limited in what changes they can make to the structure, or what ads they can hang on its sides.
- City officials wouldn't let the team take over adjacent Sheffield Avenue to turn into an outdoor mall on busy game days, as the Boston Red Sox do with Yawkey Way.
- The White Sox got a free restaurant. And, um, the Cubs didn't.
- City ordinances limit the number of night games the Cubs can play.
- Chicago collects a 12% amusement tax on each Cubs ticket sold, even though the stadium is privately owned.
Concludes Haugh: "If the Cubs were permitted to lift landmark status to allow signage, increase the number of night games and redirect some of the revenue the amusement tax generates, it would considerably lessen the burden on the Cubs for the proposed $400 million Wrigley renovation."
Makes sense, right? All the city needs to do is to lift some of those nasty regulations that other teams don't have to follow, and Ricketts could have enough money to pay for a renovation of Wrigley in order to bring in more money to make up for the fact that nasty city regulations prohibit him from... waitaminnit...
The fact is, though things like rent breaks and additional ad signage sound less like subsidies than the straight-out cash transfers that Ricketts has been gunning for, they're just the same thing under a different name. In particular, exempting the Cubs from the city's amusement tax — something that, regardless of whether the Boston Red Sox don't pay one as Haugh complains, is applied to everything from cable TV to pleasure boat rides — would be a massive kickback of city funds, not to mention exactly what Ricketts has demanded (though Haugh never mentioned this).
Even more to the point, all those terrible city ordinances were in place when Ricketts bought the team in 2009, something that was no doubt taken into account in the $900 million sale price. Yes, the Cubs aren't the money-making machine that the Red Sox are — but then, you almost certainly couldn't buy the Red Sox today for $900 million. If Ricketts didn't notice the fine print about the city amusement tax or the ban on billboards on his landmarked stadium — one that, incidentally, allows him to charge sky-high ticket prices even when the team playing in it is dismal, as is often the case — then it's a bit disingenuous for him, or his supporters in the media, to be griping about how gummint regulation is strangling his ability to find a half-decent center fielder.
September 26, 2011
Should Cubs sell Wrigley to fans in order to save it?
With not much left to focus on in the Chicago Cubs this year other than whether they'll be stuck with Carlos Zambrano for another season, Chicago Tribune columnist Phil Rosenthal tries to solve the lingering Wrigley Field crisis* by making a modest proposal: Sell shares in the beloved ballpark to baseball fans, thus raising money without tapping the public purse:
Separate the ballpark from the team, on paper at least. Set up a foundation. Something. Let the Ricketts family retain control of the subsidiary and sell shares in it to finance the rehab.
Okay, that's a bit hand-wavy. But could something like this actually work?
First, keep in mind that Wrigley Field is current privately owned, so pays property taxes. That would have to be dealt with in any sale — it's one thing to buy a certificate that says you own a brick of Wrigley Field, another to commit to sending checks to the city of Chicago every April 15. (I don't actually know how the tax law would work if the Ricketts family tried to transfer ownership to a foundation, let alone a "something.")
Second, what would the market be for these shares? Yes, the Green Bay Packers are owned by shareholders, but there you're actually getting a park of the team. The most recent example of a team trying to raise funds by selling bits of a stadium was Labatt Park in Montreal, and that wasn't exactly a rousing success.
Rosenthal proposes that buyers could "get to attend annual meetings at the ballpark, private tours, special events and other perks," calling this "free money" for the Cubs. But, of course, if those things have value, then the Cubs could sell them right now — call it a "Cubs Platinum Members Package" — and keep the cash for themselves. That's not something Ricketts is going to jump at, certainly not as long as the possibility of using other people's greenbacks is still on the table.
September 02, 2011
Emanuel to back $200m in Wrigley Field subsidies?
Catching up on this late, but apparently Rahm Emanuel, the Obama hatchet man turned mayor of Chicago, is willing to put up as much as $200 million in city money towards a renovation of the Cubs' privately owned Wrigley Field. Or so say the "sources" cited by Crain's Chicago Business:
According to insiders, the team has pitched a range of public-funding options, from allowing the team to use amusement-tax revenues to pay for renovations to a sales or property-tax subsidy, a state credit for rebuilding an historic structure and bonds that would be issued by the Illinois Sports Facilities Authority, which owns the field where the White Sox play.
Some of those ideas already have been shot down. For instance, a source close to Mr. Emanuel said there is no chance the mayor would back an expanded tax on restaurant meals in the Lakeview area to pay for stadium work.
But a state historic tax credit in the range of $40 million is said to be potentially doable, and the team argues that it ought to be a subsidy from new taxes that its renovation would create, in the same manner that scores of local projects have received tax-increment financing subsidies.
TIFs, of course, have a somewhat problematic history in Chicago, having been handed out so vigorously to developers by Emanuel's predecessor, Richard Daley, that the city's property tax base has been left with more holes than the Cubs' starting rotation. And as the Chicago Reader notes:
There are no real community economic development benefits to be gained by pumping $200 million into Wrigley Field. The surrounding Wrigleyville area is already booming—as wild on weekends as the French Quarter in New Orleans.
There are certainly other areas in town—like most of the west and south sides—far more deserving of public subsidies. And, as we all know, the schools and city are deep in the red.
All in all, it's really not a good time to essentially take money that could go to public school students—among other worthy recipients—and turn it over to a baseball team.
Especially one that's as wretched as the Cubs. Sorry, easy target.
The Reader goes on to note that Cubs owner Tom Ricketts is rich enough to afford to pay for renovations himself — which, while true enough, is sort of beside the point, since it's unlikely that $400 million worth of renovations is going to produce $400 million worth of new revenues. Which does raise the question of why a major renovation is desirable in the first place, but then, we know what the response to that is.
In all, given the lack of details (the Crain's article just alludes to possible kickbacks of property taxes or amusement taxes, the latter being a rehash of the Cubs' previous plan), the unnamed sources, and the fact that it dropped in mid-August, this feels more like a trial balloon than anything. Still, it's probably a sign that the Wrigley subsidy debates are likely to heat up again, once everyone has had time to forget about the Cubs' season.
June 28, 2011
I fell behind on my RSS feed reading last week, but I'd like to belatedly point readers to my old BP colleague Christina Kahrl's column for ESPN.com on the latest iteration of the Wrigley Field controversy. For those who missed it, earlier this month baseball eminence blanc Peter Gammons went on the radio in Chicago and called Wrigley Field, the near-century-old home of the Chicago Cubs, a "dump," setting off a round of blog chatter on whether Cubs owner Tom Ricketts would, or should, consider tearing it down, moving out, or other blasphemous notions.
Christina's response was, sensibly enough, to actually go to the ballpark, where she filed this report:
Looking around, the wear and tear of long service doesn't seem especially grimy, certainly not relative to years past. Where a decade ago you might run afoul of the stench of stale beer and urine as soon as temps top 80, things on the Ricketts' watch seem much tidier. We didn't have all that far to go -- our seats are in section 224, just a little to the right of home plate. The sun hadn't quite settled into that space between the upper and lower deck, when dusk goes gold and the sun bathes right field and the rooftops beyond in warm light. But it will, and it does, because this cold spring gives us a perfect night for baseball.
From our vantage, only a few square feet of the right-field corner were out of view, so the sightlines were exquisite. ... And we sang the anthem -- a low-key instrumental version, so we got the unusual pleasure of hearing the voices of the thousands of people around us, all singing. There's something a lot more inspiring about this than being drowned out by the speakers. In general, Wrigley's not as noisy as most parks, thanks to the absence of a Jumbotron, meaning that the ambient noise of the game and of the crowd has more opportunity to register -- but also more opportunity to actually have a conversation or two during the course of the ballgame, about the game itself. ...
So where does dumping on Wrigley come from? From the people who work there, and who are used to something better these days. Certainly, those are the people most likely to say something about working in Wrigley and have it become "news." Maybe the Ricketts can punch up the amenities for the players or the press by adding a building on the northwest corner of their block, up on the corner of Clark and Waveland, an idea that has been discussed in the past.
There are two main points here, and they're both ones worth remembering: One, when you hear sportswriters or athletes calling a stadium "outmoded," they're almost certainly referring to the quality of the weight rooms or the postgame buffet — older stadiums can often provide a better fan experience than new ones, especially if you're the kind of fan who prefers seats close to the action and anthem singalongs to cupholders and hi-def video boards. (And, to be fair, some fans do legitimately prefer the latter.) And two, cushy surroundings for those who work at stadiums can be provided without spending half a billion dollars on a new building.
Of course, Gammons himself noted this in his original statement, saying, "They're going to have to spent $200-and-something million on re-renovating Wrigley Field, do what the Boston owners did with Fenway Park." But all anybody hears these days are the four-letter words.
November 23, 2010
Tax-exempt Wrigley bonds could be tough nut to crack
In all the hubbub over Wrigley Field, one thing I haven't address is whether Chicago Cubs owner Tom Ricketts' plan would use federally tax-exempt bonds, like the last Cubs stadium renovation subsidy plan.
Chicago Tribune business writer Ameet Sachdev asserts that it would use tax-exempt bonds, citing former Congressional Budget Office bond expert Dennis Zimmerman and, um, me to point out how this represents a federal subsidy. (My moment of fame, for those who can't be bothered to click through, comes via a quote: "Kansas City Royals fans would no doubt not be pleased to learn that their tax dollars are going to help make the New York Yankees even richer.") But Sachdev doesn't actually establish whether the Ricketts plan would actually be eligible for tax-exempt bonds.
So let's try to figure this out ourselves. The tax-exempt bond law is fiendishly complex, but the main rule we're interested here is that the bonds can only be paid off by "generally applicable taxes," not special fees. This was meant to prevent developers from just borrowing cities' ability to raise cheap money by offering to pay off the bonds with rent — something that would be great for the developers and no skin off the cities' noses, but would — and did, prior to the 1986 Tax Reform Act — lead to a gazillion private projects getting undeserved federal tax breaks. Instead, the bonds have to be paid off using taxes that everyone pays (or, if you're the Yankees or Mets, rent money that you put in a box with "TAX MUNNY" scribbled on it) in order to be legal.
So, does the amusement tax Ricketts would be using to pay off his bonds qualify as "generally applicable"? Let's check the definition in the IRS regs:
A generally applicable tax is an enforced contribution exacted pursuant to legislative authority in the exercise of the taxing power that is imposed and collected for the purpose of raising revenue to be used for governmental purposes. A generally applicable tax must have a uniform tax rate that is applied to all persons of the same classification in the appropriate jurisdiction and a generally applicable manner of determination and collection.
So far, so good: The amusement tax is "for governmental purposes" and is "applied to all persons" who are selling tickets in Cook County. So it's considered public money, not private money, and thus eligible to be used to pay off tax-exempt bonds.
That's assuming, though, that the only revenue stream being used to pay off the bonds is the amusement tax. That's what Ricketts has implied he wants, certainly, but it comes with its own problems: Nobody knows how much that added tax money will amount to (since no one knows how much Cubs ticket sales would go up in a renovated Wrigley), and no bond buyer in their right mind is going to buy bonds without a consistent revenue stream. You could get around this by having the Cubs promise to pay a certain amount per year no matter what the amusement tax amounts to — but that kind of dedicated payment is explicitly verboten under IRS rules.
The only way around this, then, is for the city and state to promise to pay off the bonds, with one tax revenue stream or another, and just hope that the new Cubs revenue is enough to do the trick. If not, then tax-exempt bonds would seemingly go out the window. Unless Ricketts knows some other Stupid Bond Lawyer Tricks that I'm not aware of.
November 22, 2010
Wrigley battle now about whether it's "tottering"
I don't know if it was intentional or not, but somehow Chicago Cubs owner Tom Ricketts' pledge to keep the team at Wrigley Field has — by way of his demand for $200 million or so in public money for renovations to the place — turned into a raging debate over whether to tear the 96-year-old ballpark down. First you had Reason writer Steve Chapman's argument for razing Wrigley, which also appeared as a Chicago Tribune op-ed; that led to sports blog replies that Wrigley is hardly falling down, and that if you really can't go to a baseball game without super-wide concourses, then you hate baseball. (It's worth noting that, with the Cubs continually drawing high attendance figures despite lousy teams and sky-high ticket prices, most fans don't seem to mind the narrow concourses.)
James Warren of the Chicago News Cooperative, meanwhile — the New York Times-affiliated non-profit that's previously shown itself willing to parrot Ricketts' claims without checking his facts — wrote that Ricketts' problem is that he didn't "grease the political skids better" and credited him with being "too candid by half" in not overtly threatening to leave town if public funding isn't approved. Warren then added insult to injury by saying that he really wishes "cramped, tottering Wrigley should be replaced, just like Yankee Stadium."
Then there's Chicago Tribune sportswriter Paul Sullivan, who counters:
I spend a lot of time at Wrigley from April through September, with an occasional appearance in October, and have been in every nook and cranny of the ballpark.
Yes, it's cramped. Yes, it's antiquated. Yes, the visitors' clubhouse is probably smaller than Tom Ricketts' closet.
But "falling apart"? Hardly.
Again, there's no way of knowing whether Ricketts envisioned all this when he floated his demand for public funding for renovations. But he certainly can't be displeased that the conversation has turned so quickly from whether the Cubs are deserving of public subsidies to whether he'll be shackled to a rusty girder.
November 18, 2010
Cutting off Wrigley's nose to spite Cubs' face
Steve Chapman, writing in the libertarian magazine Reason today, argues that if it's going to cost taxpayers $300 million to renovate Wrigley Field, maybe Wrigley Field should be torn down:
Wrigley is attractive and charming in many ways, but it's like driving a vintage car: After a while, the novelty is not enough to justify the antiquated design. The ivy-covered walls and manually operated scoreboard have to be balanced against the cramped concourses, primitive restrooms, modest kitchen facilities, and obstructed views. ...
A new park would rid the Cubs of their maintenance headaches, while providing them better ways to relieve fans of cash — lots of luxury boxes, better dining, new shops, and diversions.
It would allow the team to hire better players and pamper them in style. The architect could lovingly re-create the treasured features of the existing stadium, while omitting the shortcomings.
Only one problem: A new stadium would almost certainly cost even more than renovating Wrigley. So that luxury box money would either need to be diverted from pampering players to pay off stadium debt, or (more likely) Cubs owner Tom Ricketts would still be asking for hundreds of millions of dollars in public subsidies to pay for a new place.
Chapman's error is in buying Ricketts' argument that renovations are necessary because Wrigley costs $10 million a year to maintain. Even if you accept that a redone stadium would have cheaper maintenance costs (not at all a sure thing, given that it would have more stuff in it that would need to be maintained), even $10 million a year in savings wouldn't be enough to pay for $200-300 million in renovation costs — it would be cheaper, in other words, for Chicago taxpayers to just take over maintaining Wrigley than to pay Ricketts to rebuild it. The fight here isn't over whether a Wrigley reno is a good idea — Ricketts, notably, hasn't shared any details of what it would mean for the team's finances — but over whether the public should hand over hundreds of millions of dollars to make it happen.
We've been through all this before, of course, with Fenway Park, which 11 years ago was similarly declared obsolete and in need of replacing with a modernized replacement. In the end, thanks to both a new owner and the concerted efforts of Boston activists — who, among other things, conducted an architectural charrette to come up with ideas for ways to increase revenues at Fenway, helping originate such innovations as the Green Monster seats — Fenway was saved and received a widely popular renovation, with very little public subsidies. (It did receive federal historic preservation credits, which are available generally to anyone rehabbing historic structures.) On the face of it, the Wrigley reno looks like a similar plan. But if Ricketts says he can't do it without public money, the proper response isn't necessarily "tear it down," but rather "okay, if it's cheaper to keep maintaining the old unrenovated place, then just do that."
November 16, 2010
The day in Wrigley Field subsidy scrounging
The last 24 hours has been a bit of a whirlwind for Chicago Cubs owner Tom Ricketts' plan to pay for $200 million in Wrigley Field renovations by having the state and city kick back any future increased amusement taxes to the team. (It's really a ticket tax, but Chicago insists on calling it an amusement tax, a term that, my Baseball Prospectus colleague Marc Normandin notes, always makes him "picture someone coming up next to you to collect when you're enjoying yourself too much.") To recap:
- Both Mayor Richard Daley and Gov. Pat Quinn came out against the Ricketts plan, Daley because he doesn't want to saddle future mayors with lost tax revenues (ironically, given his own past funding proclivities), Quinn because Ricketts told legislative leaders about it before his announcement, but not him. "Apparently, they don't think I'm as important as some others," said Quinn. "Well, I'll show them." (Okay, I made the "I'll show them" part up.)
- The Windy City Watch blog revealed that Ricketts' dad Joe is the backer of a group called Taxpayers Against Earmarks, and says in a video on the group's website that "I think it's a crime for our elected officials to borrow money today, to spend money today and push the repayment of that loan out into the future on people who are not even born yet." (A spokesperson for the group later told the Huffington Post that it only cares about federal spending, not state spending.)
- Ricketts held a news conference at Wrigley this morning, trotting out local business and construction union leaders to support the plan. Chicagoland Chamber of Commerce President Jerry Roper declared: "I say to those of you who are concerned about this, 'Get behind it. We need projects like this. We need visionaries like the Ricketts [family] who are willing to put their money on the line.'" (The Chicago Sun-Times transcript didn't indicate whether "their money" came with an air asterisk.)
- Ricketts also revealed some more details of the renovation plan, which includes moving back-office facilities to neighboring properties and using the space for expanded concessions concourses. (Sound familiar?) He also indicated that he doesn't plan to live up to the Tribune Company's promise to build out the so-called "Triangle Building" next to Wrigley with private funds in exchange for having been allowed by the city to expand Wrigley's bleachers — "The family had nothing to do with the prior legislation," said Ricketts PR flack Lissa Druss Christman — which is sure to win lots of friends on the Chicago city council. Not.
- MLB.com ran a story headlined "Wrigley renovation plan earns locals' support," because the mayor and governor don't count as locals.
- Something called Chicago Breaking Business (which makes me think of what happens when your Chicago business fails to pay off the protection racket) has a much more accurate headline: "Confusion reigns over Ricketts' Wrigley request." House Speaker Michael Madigan, it noted, told reporters this afternoon that Ricketts had withdrawn the amusement-tax rebate plan, a statement that a Ricketts spokesperson immediately denied, insisting, "Nothing has changed, and we are hard at work."
The odds on any of this going anywhere legislatively in the next few weeks seem slim, given that Illinois faces a budget deficit of approximately a bazillion dollars. That said, for running-stuff-up-the-flagpole purposes, it seems to have worked fine: State Senate President John Cullerton said he's open to other funding ideas, and Ricketts said the same thing, so expect a discussion to follow not of whether to fund Wrigley renovations, but how. And amidst all the hoopla, everyone seems to have forgotten that Ricketts promised last year that he wouldn't seek public money for Wrigley, so on that count, it's all working according to plan. Bwahahaha!
Rogers: Ricketts deserves Wrigley reno money because, well, just because
Chicago Tribune sports columnist Phil Rogers has chimed in on the notion of kicking back $200 million in tax money to the Cubs so his employer's former baseball team can renovate Wrigley Field, and he thinks it's a spiffy idea. Why? Near as I can summarize it:
- The White Sox, Bears, Bulls, and Blackhawks all got public money, so "why shouldn't the Cubs get their share?" (In logic, this is known as the "But all the other kids have got one!" fallacy.)
- Cubs owner Tom Ricketts doesn't just do what's "popular with their fans," like signing free agents or hiring Cubs legend Ryne Sandberg to be manager.
- "Rather than simply pledge allegiance to a continued stay in Arizona, they explored a move of spring-training operations to Florida."
- Wrigley Field costs $10 million in maintenance each offseason, and in a renovated Wrigley "that money — along with the proceeds from new or improved revenue streams — to be shifted into baseball operations."
Nowhere in the article, you'll notice, is anything supporting the subhead: "Investment in a solid sports team is a solid one for a city" (unless you count Ricketts' assertion that spending public money on Wrigley would be "a no-brainer"). But when it's a matter of giving taxpayer money to an unconventional owner bold enough to shake down Arizona for spring-training money, just so he can increase his player payroll (and/or profits), who's going to quibble over economic details?
November 11, 2010
Cubs owner demands $200m in tax kickbacks for Wrigley reno
So remember when Chicago Cubs owner Tom Ricketts was promising to stay put at a renovated Wrigley Field for the long term? Apparently that didn't mean he wasn't going to threaten to leave unless he got public money for his renovation plans:
The owner of the Chicago Cubs is asking the state to help finance more than $200 million in renovations at Wrigley Field that will ensure the team stays at the historic ballpark for the next 35 years.
The Ricketts family, which purchased the team last year from Tribune Co. in a deal valued at $845 million, has pledged that the project will not be financed by new taxes or an increase in existing taxes.
The family's plan calls for the Illinois Sports Facilities Authority, which owns U.S. Cellular Field, to float up to $300 million in bonds. The bonds will be paid over 35 years through amusement taxes that Wrigley Field customers already pay.
In 2009, the Cubs paid $16.1 million in amusement taxes to the City of Chicago and Cook County through the 12 percent levy on each ticket, the team said. The city and county will be guaranteed this amount for the duration of the bonds. Growth in amusement taxes beyond $16.1 million — through increased ticket sales or prices — will be redirected to pay the bonds. The family says the incremental growth in the tax will cover the bonds.
The Ricketts plan, announced this afternoon in an email to season ticket holders, is actually a pretty clever twist on tax increment financing, with ticket taxes taking the place of the more usual property or sales taxes that would be kicked back to the team's owner. But it's still a loss of public money — just the same as it would be a loss to your landlord if you told him you wanted to buy a new big-screen TV, and pay for it by him agreeing never to raise your rent again. And as such, it means Ricketts is going back on his vow that he had "no plans" to seek public funds for a Wrigley renovation.
As for whether he'll be successful, that's another story: Gov. Pat Quinn, who'd have to sign any Wrigley funding bill, responded to Ricketts' announcement by saying it was "news to me," and huffing, "They can present anything, I suppose, to the [sports facilities] authority, but I think it'd be important to touch base with the governor before they do." Add in that Illinois is facing a $15 billion budget deficit and that Ricketts doesn't really have any other options for the Cubs — even if you could move them to, say, Portland, they'd lose most of their value outside of the North Side of Chicago — and you'd like to think that bailing out sports teams will be low on the legislative agenda this fall.
Still, crazier things have happened, and it's entirely possible this is just an attempt by Ricketts to get "stadium money for Cubs" on the legislative agenda in hopes that it'll be approved one of these years. Stay tuned.
November 03, 2010
Mesa voters approve blank check for Cubs spring-training field
Only one big stadium referendum this year, in Mesa, Arizona, where voters decisively approved spending $99 million on a new spring training stadium for the Chicago Cubs:
The city will provide up to $99 million to construct the complex two miles southwest of the Cubs' current facility at Hohokam Park. Any additional funds and upkeep of the new park will be financed by the Cubs, who plan to develop a shopping and entertainment area near the ballpark. ...
Mesa's funding will come, in large part, from the sale of undeveloped city land.
The referendum actually approves spending "more than $1.5 million" on a Cubs facility, and critics have warned that the final price tag could be higher than $99 million. The Cubs have promised that won't be the case, but that's currently a non-binding agreement. And they still haven't agreed on how much rent they'll pay yet. All this will presumably be hammered out in future negotiations between the team and the city of Mesa.
Assuming it goes forward, the Cubs say they'll build a shopping center called "Wrigleyville West," which according to CSN Chicago will "attempt to recreate the atmosphere surrounding Clark and Addison with shops, bars and restaurants." Only in the desert. And without all the actual people who live in Wrigleyville. Why does this sound like it should really be in Vegas?
October 06, 2010
Mesa Cubs deal: Vote first, ask questions later
Remember that Chicago Cubs spring-training stadium the team is trying to get built in Mesa, Arizona, the one that featured an abortive plan to tax all the other Arizona spring-training teams to pay for it? It's still alive, with Mesa now talking about using a combination of existing funds, selling off city-owned land, and an increase in the hotel tax to raise $99 million in construction costs.
The hotel tax hike requires voter approval, and in advance of the November 2 referendum, the Goldwater Institute — which has already gone after the proposed Phoenix Coyotes lease concessions — has been raising questions about the plan, last week with an Arizona Republic op-ed noting that the proposition authorizes spending "greater than $1.5 million" without any spending cap, and this week noting that it's unclear how much the Cubs would provide, beyond "benefits to be determined."
But, you know, what could possibly go wrong if Mesa voters delivered a blank check before all the ink was dry on the stadium agreement? It's not like anything like this has ever happened before, right?
April 13, 2010
Twins stadium opens, Wrigley improvements unveiled, Rays and Yanks bicker over Trop
Baseball opening day was last week, but with half the teams starting the season on the road, yesterday marked first games at several stadiums, including something old and something new, plus a non-first-game at something that its tenants are outspokenly blue about:
- The Minnesota Twins debuted their new $522 million Target Field (of which $387 million is being paid for by county taxpayers), and goggling fans described the new place as "intense and extreme" and "how baseball is supposed to be played." (The Twins had been indoors at the Metrodome since moving out of Metropolitan Stadium in 1982.) The Mankato Free Press calls it "ultra-intimate" and says the "second deck of the left-field seats hovers so cozily over the field that it's remindful of a Fenway Park Green Monster seat view &mdash minus the stiff cost." From my vantage point watching on TV, this looked like more than a bit of an exaggeration — the upper decks are set back fairly far and stacked relatively high, and the "party deck" in the left-field corner looks like a bit of an obtrusive eyesore (kind of a cross between San Diego's Western Metal Supply building and Citi Field's glassed-in Acela Club) — but it certainly is outdoors. If any FoS readers were there, I'd welcome hearing your thoughts in the comments section.
- Wrigley Field held its 97th season opener (the 95th for the Cubs; the first two were for the Chicago Whales of the long-ago Federal League), and debuted the first of the offseason renovations that new owner Tom Ricketts has planned. The most talked-about improvements seemed to be to the bathrooms: "Clean, dry, toilet paper, it was very nice," said one female fan, while a male fan noted: "Much nicer, much cleaner, and I'm glad they kept the tradition of the troughs, but they do have some private urinals if you're into that kind of thing." Other changes include a spruced up back of the scoreboard and large banners of Cubs players adorning the front of the stadium. No glowing Toyota ad in the bleachers yet, though. (No, it wasn't recalled.)
- The Tampa Bay Rays actually had their home opener last week, but the Yankees' first series of the year there sparked a war of words over Tropicana Field, starting when Yanks catcher Jorge Posada griped "it's not a baseball stadium" after a ball hit a catwalk and was ruled a single. (Note to Jorge: If stadium-specific ground rules aren't baseball, then what are all these for?) Rays manager Joe Maddon shot back: "Tell them we're trying to get a new yard ourselves. If they want to contribute in any way, we'll take it. ... We'll take all kinds of donations; any major-league team that wants to contribute to the new ballpark, we'd be happy to accept." Added Maddon: "We could just build it on Jeter's property out there." Maddon tactfully failed to mention that the Rays, along with 28 other major-league teams, are already helping pay for the Yanks' own new stadium.
March 18, 2010
Wrigley Field to get giant Toyota ornament?
The Chicago Cubs have let drop another element of their Wrigley Field renovation plan, and this one could be less universally popular than adding bathrooms: Team owners want to erect an illuminated red Toyota logo atop the left-field bleachers. (Yes, Toyota. Make your own jokes about how the cursed love company.)
The new signage — which would be by far the most obtrusive at what's baseball's least ad-festooned ballpark — would accomplish two goals: First, raise money to help pay for the renovations (and Alfonso Soriano's contract). And second, partially obscure the casino ad on a neighboring rooftop that's been peeving Cubs execs, in no small part because it's designed to get free airtime on game telecasts.
The sign could still be denied by the Chicago Commission on Historical Landmarks, which has jurisdiction since the Chicago board of aldermen landmarked Wrigley back in 2004, as part of the bill that allowed expansion of the ballpark's bleachers. No word yet on when a decision is due.
March 12, 2010
Cubs drop AZ ticket tax, launch Wrigley seat auction
The Chicago Cubs have bowed to opposition from the entire rest of Major League Baseball and abandoned their plan for a ticket tax on all Arizona spring training games to help fund the new spring training stadium they're demanding as a condition of not moving to Florida. Instead, the team now says, it would happy to stick with just a $1 tax surcharge on rental cars in Maricopa County, something that's drawn less opposition.
Maybe the Cubs should consider using one of their own novel revenue-generating approaches, such as auctioning off front-row seats to the highest bidder, which they're now doing at Wrigley Field for the third straight year. Though since that would come out of their own pocket, not out of the pockets of Arizona tourists, I'm guessing not.
February 19, 2010
Selig, D-Backs endorse Cubs stadium TIF
Baseball commissioner Bud Selig has officially come out against an Arizona-wide ticket tax scheme to help fund a Chicago Cubs spring-training stadium. In doing so, Selig joins every other team in Arizona, who would rather not be helping to foot the bill for their rival's new home, no matter how many Cubs fans boost the gate at their spring games thanks to the team's presence in Arizona rather than Florida.
Selig says he'd rather see a tax-increment financing scheme. The Arizona Diamondbacks agree, which should be no surprise given that a TIF was their idea in the first place; however, team president Derrick Hall hedged a bit, saying, "We would be open to [a TIF], but believe the legislators are not in favor of it. ... We are just seeking other solutions so as to not tax fans who attend any and all spring games." In other words: We don't care who you tax, Arizona legislature, so long as it ain't us.
February 15, 2010
Cubs begin Wrigley reno, unveil latest self-scalping plan
Renovations have begun at Wrigley Field, though nothing yet along the lines of the more ambitious plans announced last summer. First up: more bathrooms, opening up space underneath the bleachers to fans (a la Fenway Park's Big Concourse), adding some ad boards, and removing granite panels that had been added to the outside of the ballpark, to allow sunlight in. The Cubs are also replacing the bricks along the left-field line, and auctioning off the old ones; no word on whether winning bidders also get to throw them at Steve Bartman.
To help pay for this, meanwhile — or just to pay for Marlon Byrd — the Cubs have announced a special presale of selected seats to games this year, but only for fans willing to pay a 15-20% surcharge. "We believe there are fans who will pay extra, just like they'll pay for a Fast Pass at the amusement park," Wally Hayward, the Cubs' chief marketing officer, told the New York Times.
According to the Times, some fans are calling this a stealth ticket price hike, and there's a good argument that that's exactly what it is, especially since the Cubs haven't revealed what percentage of tickets will remain after the "presale" — meaning fans who really want tickets will have a huge incentive to pay the 20% premium or risk being shut out. From a marketing perspective, it's actually a pretty clever way to test the waters on pricing: If fans are really willing to pay more, you get to charge them more, and if they're not, you end up getting to sell to them anyway at the old prices, without risking embarrassing rows of empty seats. And at least it's arguably less likely to outrage fans than setting up your own ticket scalping agency.
February 11, 2010
Rival teams propose TIF to fund Cubs stadium
Baseball teams unhappy with the plan for Arizona to tax their spring-training tickets to fund a new spring stadium for the Chicago Cubs have come up with a new alternate funding plan for the $84 million facility: Yes, it's our old friend tax increment financing!
The general dubiousness of TIFs — in which new tax revenues from a development project are kicked back to pay off the development bonds — aside, there are a couple of specific problems with trying to fund a Cubs spring home with one. First off, unlike in some other states, TIFs aren't commonly used in Arizona, and House Majority Leader John McComish went so far as to say that "TIF is a four letter word down here." (Caveat: McComish is a leading sponsor of the ticket tax.)
More important, however, is that it's going to be really difficult to argue that you're going to get significant new revenues from 1) a stadium that's only in use one month out of the year for 2) a team that already plays in your city. Or rather, it's going to be hard to argue that without economists pointing and laughing. But then, that's not usually something team owners let themselves get too concerned about.
December 28, 2009
Wrigley Field to stay Wrigley Field
Fresh off promising a Fenway-style renovation of Wrigley Field, the new owners of the Chicago Cubs continued to go against the sports-owner playbook by saying they don't plan on selling naming rights to the 95-year-old ballpark. "We are not going to take the ivy off the walls and replace it with advertising signage," team marketing officer Wally Hayward told the New York Times.
Or rather, told the Chicago News Cooperative, the non-profit journalism outfit that actually wrote the story, though the Times is where it appeared. As a sign of Journalism of the Future, this article isn't entirely auspicious: It counterposes new owner Tom Ricketts' desire to preserve the ballpark with "an unrelenting need for major repairs at Wrigley that could run to $400 million or more" — without noting that that was the price tag to, according to Ricketts, "basically keep the marquee and store the scoreboard for a year, and tear everything else down." (Ricketts now plans a more modest reno for "significantly less than" $200 million.)
The news cooperative, meanwhile, cites as its source for the $400 million figure "documents reviewed by the Chicago News Cooperative and interviews with people who saw cost estimates during the Cubs' two-and-a-half-year auction process," though they could have gotten the same number by reading nine-month-old copies of the Chicago Tribune. You can take the profit out of journalism, but that doesn't guarantee good reporting. Even if sometimes it works out.
October 30, 2009
Ricketts plans Fenway-style reno of Wrigley
Tom Ricketts was sworn in as the new owner of the Chicago Cubs today, and gave a long interview to the Chicago Sun-Times, much of it on the matter of the future of Wrigley Field. The upshot: He plans some renovations, costing "significantly less" than $200 million, but nothing that would dramatically change baseball's second-oldest ballpark as it nears its 100th anniversary in 2014.
Ricketts said he intends to work out "a five- to seven-year plan" for renovations during each offseason, most of it focused on the building's interior and adjacent plots of land, not the seating areas:
I see that bowl staying essentially the way it is. People like that. You're close to the field, good sight lines, it's good. Behind that, in the stadium will be better amenities, and you'll feel more comfortable when you get up to go get food or go to the restroom or anything like that...
We can look at more washrooms, we can look at some of the congestion on the concourses, we can look at a few other things that will make it a little easier for fans in the short run.
And while Ricketts called the current Wrigley skyboxes "Stalin-esque," he said he has no plans to add lots of corporate seating: "One of the nice things about Wrigley, we have great corporate sponsors, but it's not really a corporate place. It's not a corporate experience. It's not like sky boxes are driving the revenue here. And that's just fine with us."
If all this sounds reminiscent of the Boston Red Sox owners' recent renovation of Fenway Park, Ricketts made the connection explicit, saying that "to be able to rehab your stadium and improve it in kind of just the offseason, that's something that we have to strive to emulate. We have to do that.
You can't copy every page of the playbook, but certainly they've done stuff that we would try to emulate."
Ricketts added that he has "no plans" to ask for any taxpayer dollars (though we'll see if he pursues historic preservation tax credits, as the Red Sox did), and made clear that the state takeover plan that helped get Rod Blagojevich in such hot water is dead. And he also let slip some details of what that $400 million "renovation" would have entailed:
The proposal that the state was considering—and we really weren't very much a part of these discussions at all—was to basically keep the marquee and store the scoreboard for a year, and tear everything else down.
Their thought was that they would basically take it down for a year or two and just keep the brick walls, basically keep the shell, and redo the whole inside. In another park or another situation that might be an answer that's useful. But here, I just don't see it. You have all these people who have spent all this time and money over the last 10 or 15 years building new stadiums to look old. Well, why don't we just take our old stadium and fix it up a little bit?
The other thing is I just don't think it would be the right thing to do.
All in all, Ricketts sounds like he's eager to follow John Henry's lead in doing a ballpark renovation that is more preservation and upgrade of the fan experience than an attempt to modernize Wrigley. And hey — if he needs a project manager, you know there's a good one available.
August 27, 2009
New Cubs owners said to be considering Wrigley rehab, not reconstruction
Soon-to-be Chicago Cubs owners — as soon as the team has been put through a cleansing bankruptcy wash — the Ricketts family are likely looking at a scaled-down renovation of Wrigley Field, not a major reconstruction, according to Crain's Chicago Business. As the Chicago Sun-Times reported last month, this would be a $250 million makeover, not the earlier $400 million-or-so plan, focused on the "triangle building" to be built in what's now a parking lot adjacent to the third-base grandstand. According to Crain's:
Other elements are likely to include upgraded skyboxes, a lounge area, widened concourses, better bathrooms and concessions, and some sort of fan-friendly space between the triangle building and the stadium, a source said....
The state envisioned many of the same improvements the Ricketts are mulling, but it considered an ambitious expansion of Wrigley's modest skyboxes, which hang underneath the upper deck. Certain parts of the upper deck might have had to be "done over" to accommodate new skyboxes, [Illinois Sports Facilities Authority chair Jim] Thompson said.
But the trend among stadium owners is to eschew over-the-top luxury boxes, which have faded in popularity, in favor of private lounge areas dispersed throughout the ball park, coupled with expanded retail offerings, says Jason Thompson, a senior associate at facility planning firm Brailsford & Dunlavey in Washington, D.C.
If all this sounds familiar — a building next door to house shops and back-office operations, widened concourses, limited skyboxed — it's probably because you've been to Fenway Park lately, as this is precisely the model the Boston Red Sox have used for their renovation of their 90-something-year-old ballpark. While it's too soon to say if the Cubs' new management will have as polished a touch as Janet Marie Smith did for the Sox (the Ricketts aren't talking about specific renovation plans at all yet), this is certainly a good sign for fans of baseball's two remaining classic ballparks.
As for who would pay for it, that's a state secret as well, and Crain's doesn't deign to speculate. Has Carlos Zambrano's fine fund hit a quarter-billion dollars yet?
July 07, 2009
Cubs being sold to somebody or other; Wrigley reno back on?
The Chicago Tribune is reporting that the Chicago Tribune Co. has reached a preliminary agreement to sell the Cubs to Ameritrade billionaires the Ricketts family for around $900 million. Reuters, meanwhile, says that the Trib has also agreed to terms with a group led by private equity investor Marc Utay; given that the Trib is currently in bankruptcy, this could mean that a court could ultimately determine the team's owner, or just that the current owners are hoping to show they've done due diligence. (MLB would still need to sign off on either sale, and as we've seen, judges don't like to mess with sports leagues' control of franchises.)
Whoever ends up with the Cubs, one big question here is: What will this mean for Wrigley Field, which the previous ownership had suggested selling to the state as part of a tax dodge scheme? Chicago Sun-Times city hall reporter Fran Spielman writes that the latest plan was for a "$250 million makeover" to be completed by 2014, with "new concourses, washrooms, concessions, skyboxes and a club seating lounge." The team would also build a five-story building in what's currently a parking lot between Wrigley and Clark St., allowing it to add restaurants, retail space, and player workout space a la what the Boston Red Sox did by buying buildings adjacent to Fenway Park.
Adds Spielman: "Sources said Tom Ricketts, the family's point man on the Cubs sale, has seen all of the renderings, but has not yet signed off on a specific renovation plan." And no word at all on whether the plan to sell it to the state to generate tax savings is still on the table — if so, they'd better hurry, as the IRS provision that would allow them to save $50 million or so via the PILOT dodge expires at the end of December.
Spielman concludes by quoting "a source familiar with the issue" as saying that Ricketts is intent on staying put at Wrigley — albeit a Wrigley with added skyboxes — for the foreseeable future: "The ballpark is safe and structurally sound. Substantial resources have been put into maintaining it." We'll see if Ricketts changes his tune once he finds himself needing to convince Illinois legislators to help foot the renovation bill.