Chargers and Raiders say they can copy 49ers’ private stadium financing, but it’s not quite that simple

More information is trickling out about the proposed $1.7 billion San Diego Chargers/Oakland Raiders stadium in Carson, and it adds up to — well, let’s just run it down first, then see what it adds up to:

  • The promised press conference in Carson happened on Friday, and tons of local officials showed up, but no representatives of either team took the stage. (Chargers stadium chief Mark Fabiani was in the audience, but didn’t speak.) No details of how the plan would work were revealed, with one elected official (SFGate didn’t say who) saying, “The financing will work with the revenue generated by the stadium itself. I don’t have all the details. This is about convincing a community that this is a good project.”
  • Fabiani was busy talking up the press elsewhere, telling ESPN’s Aaron Markazi that St. Louis Rams owner Stan Kroenke’s announced Inglewood stadium was what prompted the Chargers to immediately jump in on a stadium elsewhere in the L.A. area: “We deliberately changed our strategy in the wake of what Kroenke did. When this opportunity to create an alternative came along we decided to seize it.” Fabiani also told Markazi that the Raiders just officially came on board last week.
  • Fabiani told Markazi that the model for the stadium is the San Francisco 49ers‘ $1.3 billion stadium in Santa Clara: “We took the template of the Santa Clara funding mechanisms … so we basically took that and adjusted it for different costs here.” (A Goldman Sachs rep who’s been working on the plan echoed this at the press conference.) He also insisted that the Chargers are prepared to fund the stadium alone if necessary.
  • Regarding the use of NFL G-4 funds for a Carson stadium, NFL VP Eric Grubman told the OC Register, “A stadium project can be eligible for league financing provided the project and its sponsors meet certain criteria. A Carson project would be eligible and could apply if it met those criteria.” Of course, one of the criteria of the G-4 fund is that “the project must not involve any relocation of or change in an affected club’s ‘home territory,'” so either Grubman is saying that the league has changed the criteria, or coyly saying that Carson wouldn’t be eligible, or just ducking the question because he doesn’t want to mess with the teams’ leverage.
  • U-T San Diego reports that San Diego residents hope the team doesn’t move, and more surprisingly, that the newspaper’s headline writers think they’re called “San Diegians.”

So what do we have? Clearly the message the teams are trying to send (or at least Fabiani is trying to send — the Raiders seem to be merely along for the ride) is “the 49ers did this in Santa Clara, so we can do it too.” There are some significant differences, though: First off, the Carson stadium is projected to cost an extra $400 million, something that additional G-4 funding won’t come close to making up, assuming the NFL changes its rules and approves it. Second, L.A. is not Silicon Valley, and the Chargers and Raiders aren’t the 49ers, meaning selling $500 million worth of personal seat licenses to fans, as the 49ers did, is less of a sure thing. And third, the NFL hasn’t committed to waiving relocation fees for teams moving to L.A., which could blow as much as another $500 million hole in the budget.

Probably the best way of looking at the Carson stadium plan is the way this commenter suggested: It’s part negotiating ploy, part fallback plan, and both Chargers owner Dean Spanos and Raiders owner Mark Davis are hoping that it will shake loose stadium money in San Diego and Oakland and they’ll never have to decide whether to shoot the dog. (Fabiani also spent a fair bit of media time over the weekend shaming San Diego officials about not being as friendly-like as Carson ones.) Grubman’s statement seems calculated to support this tactic: He’s not going to commit to G-4 funding, but he’s not going to rule it out, either.

The big question, then, is: If one or both teams can’t use the Carson threat to get stadium money out of their current home cities, will they really pull the trigger and move? That, we simply don’t know, and won’t until there’s more details revealed about how the Carson stadium money would work, beyond “We’ll have what Santa Clara is having.”

Come to think of it, though, there’s one equally big question: If the Santa Clara stadium’s private financing can be picked up and relocated to Carson, how come it can’t be done in San Diego or Oakland? Yes, L.A. is a bigger market, but market size doesn’t matter that much in the NFL. And as noted above, it comes with a bigger price tag, in both construction cost and relocation fees, than a stadium in the teams’ current homes would.

Good questions for officials, and journalists, in San Diego and Oakland to be asking, anyway. It’s possible to take threats seriously without taking them at face value, and that’s what everybody should be focusing on now. If only to take their minds off of the horror that is this photo:

Chargers, Raiders team up for $1.7B Carson stadium announcement (actual stadium not necessarily included)

Well then:

On the field, the San Diego Chargers and Oakland Raiders have had as bitter a rivalry as any in the NFL but in a sense, they’re now partners.

The teams will officially announce Friday that, while they work on stadium deals in their current cities, they will jointly pursue a shared, $1.7-billion NFL stadium in Carson as an alternative…

The Chargers and Raiders will continue to seek public subsidies for new stadiums in their home markets, but they are developing a detailed proposal for a privately financed Los Angeles venue in the event they can’t get deals done in San Diego and Oakland by the end of this year, according to the teams.

In a statement given to The Times on Thursday, the Chargers and Raiders said: “We are pursuing this stadium option in Carson for one straightforward reason: If we cannot find a permanent solution in our home markets, we have no alternative but to preserve other options to guarantee the future economic viability of our franchises.”

There are two possibilities here: Either this is the biggest NFL stadium news in the history of ever, or Chargers owner Dean Spanos and Raiders owner Mark Davis just issued a mindbendingly huge bluff. Let’s examine each of the possibilities:

  • It’s for real: $1.7 billion is an awful lot of money to spend out of your own pocket for a stadium, but if you squint, it just might possibly work with two teams sharing the load. The New York Jets and Giants owners managed to build a stadium that cost almost as much on their own dime (mostly), and if Spanos and Davis can piece together, say, $400 million from naming rights, and $800 million from seat license sales (about what the New York teams managed) to fans who don’t notice what lousy investments seat licenses are, and $400 million in NFL G-4 fund money, then that’s … still not quite enough to break even, but it’s in the ballpark, as it were.
  • It’s a bluff: Both Spanos and Davis are having a bad time of it in stadiums talks in San Diego and Oakland, though much of that is their own doing. What better time to announce that you’re moving to L.A., really you are, any day now, if you can’t get a deal done in your hometown, and if the other team also can’t get a deal done in theirs? (The team statements didn’t say what happens to this “stadium option” if one team decides to bail on it.) Actually moving to L.A. would require huge risks: Not only might the PSLs not sell like hotcakes, but the NFL could demand as much as $250 million in relocation fees per team (Spanos and Davis could try to fight it, but that would involve a lawsuit, which again means risk), plus the G-4 fund stipulates that “the project must not involve any relocation of or change in an affected club’s ‘home territory.’” Suddenly you could be looking at a $1 billion funding hole, which ain’t pretty.

There is one other likely reason for Spanos and Davis to announce this now, whether bluff or for real: What with St. Louis Rams owner Stan Kroenke announcing his own maybe-a-bluff-maybe-not stadium in Inglewood last month, and the NFL unlikely to approve more than two teams in the L.A. market (not to mention the L.A. market not likely to support more than two teams at a level sufficient to pay off two stadiums), there’s a bit of a land rush going on now to be the first to stake a claim to the market just so no one else does. Spanos, in particular, really doesn’t want two teams that aren’t his on his Southern California doorstep, so this serves as a bit of a shot across Kroenke’s bow: We’re going to build a stadium but split the price, and we don’t have a stadium offer back home like you do, and do you really want to gamble that the league will approve your plan over ours?

That’s not the worst thing for California taxpayers, frankly, since it means the three owners are so busy trying to outmaneuver each other that they can’t spend as much time and energy trying to exact tribute from local governments. (Chargers and Raiders execs claim that the Carson stadium wouldn’t require any public funds, but we’ve heard that before.) Though the prospect of Spanos and Davis using this as leverage in San Diego and Oakland could be bad news for taxpayers there, of course.

We may know slightly more once the two teams and their Carson development partners hold a press conference this afternoon. (Friday afternoon, the traditional time for dumping news that you don’t want fact-checked too thoroughly: Add that to your conspiracy bucket.) In the meantime, just enjoy the fact that one side of the stadium would apparently look like a giant, translucent, luxury-box-filled shuttlecraft:

Ah, vaportecture, where would we be without you?

Everybody suing everybody else over everything, same as usual

Lawsuit news! Nothing but lawsuit news!

Yeah. I think you can see why I don’t always report on every piece of lawsuit news: There’s nothing stopping anyone from filing suit for any reason, so while it’s often interesting to know what’s being challenged in court (hey, you never know what might succeed), most of it ends up being just a lot of legal fees signifying nothing, and there are more important things going on. Today’s a slow news day, though, so a perfect day to play catchup, and give you all some information for filling out your restraining order brackets.

Chargers exec, San Diego mayor yell at each other a lot about stadium plans

San Diego Chargers stadium czar Mark Fabiani is mad about who Mayor Kevin Faulconer has on his Chargers stadium task force, and Faulconer is mad that Fabiani is being “divisive,” and you can go read it all if you really want, but all you need to understand is that the two sides are bickering angrily in public, so they’re probably not arranging a stadium deal in the immediate future. If you want to use this to jump to conclusions that the Chargers really want to move to L.A. before everyone else does, go for it, everyone else will anyway. Or you can just take the opportunity to make some Simpsons jokes, which is more entertaining and at least as enlightening.

And speaking of L.A., I just noticed the Los Angeles Times had a mention that Stan Kroenke’s proposed stadium in Inglewood would cost $1.5 billion and “a clear, retractable roof … and open-air sides.” Accompanied by a rendering that shows a roof that has no machinery for retracting, and no open-air sides. Stadium planners will just say anything, man.

Wisconsin agency says Gov. Walker’s $220m “jock tax” for Bucks could cost state lots more

I’ve previously criticized the Milwaukee Business Journal’s Rich Kirchen for being overly credulous on the Bucks‘ arena, but today he reports on some news that’s not so positive for the team’s plans:

Wisconsin Gov. Scott Walker‘s proposal for the state to issue $220 million in bonds for a new arena in downtown Milwaukee could carry an actual cost of at least $380 million including interest, according to a preliminary estimate by the nonpartisan Legislative Fiscal Bureau.

Note that “including interest,” though. Is this just a case of misunderstanding the difference between present value (what a purchase costs you in today’s dollars) and nominal cost (what it costs you if you added up all your payments over time, like if you buy a $200,000 house and pay it off with $400,000 worth of mortgage payments over 30 years)? Or is it an actual case of the cost being higher than at first projected, like when it turned out that the Miami Marlins stadium included so many backloaded balloon payments that it was costing taxpayers an extra $450 million?

A little of each, it looks like. Since Gov. Walker’s plan relies on kicking back future income taxes from NBA player salaries, and NBA player salaries aren’t expected to soar into the necessary stratosphere for a while yet, the state probably would have to backload payments, which would increase the cost of the bonds beyond $220 million. How much, no one knows yet — Legislative Fiscal Bureau analyst Al Runde didn’t say — nor did he say how much additional the state could be on the hook for maintenance costs on an arena, something that has yet to be negotiated. Let’s just leave it at “a lot” for now, then.

Indy Eleven’s own projections show $50 million ticket tax shortfall, state committee okays plan anyway

The Indiana state assembly’s ways and means committee voted 20-3 yesterday to move a bill forward to fund an $82 million stadium for the minor-league Indy Eleven soccer team, because that’s what they do in Indiana. The committee did, at least, discuss some new details of how team owner Ersal Ozdemir expects the stadium to generate $5 million a year in new ticket taxes:

The team released a report by KSM Consulting of Indianapolis that says the 18,500-seat stadium would open in 2018.

The report estimates 66 events per year, including 15 professional women’s soccer games and 10 concerts.

The report also estimates average paid attendance and average ticket prices for various events:

—Indy Eleven: 16,500 at $29.50.

—Women’s professional soccer: 8,500 at $17. (There is a nine-team National Women’s Soccer League.)

—Concerts: 10,000 at $55. (There is another outdoor concert venue planned for Downtown.)

The report estimates six events as “other soccer,” five as “other events, exempt” (from ticket taxes such as school sports) and 10 as “other events.”

The Indianapolis Star, which is where that’s from, didn’t do the math on what all that would add up to, so let’s do it for them. Let’s see, 15 Indy Eleven home games times 16,500 tickets per game times $29.50 per ticket (for minor-league soccer? okay then) times a 10% ticket tax is $730,000. Fifteen women’s soccer games would generate another $217,000. Concerts would provide $550,000. Even if you’re optimistic about those 16 “other” taxable events, then, you’re still looking at around $2 million in ticket taxes, tops, not even enough to repay half the state’s costs.

The headline here really should have been, well, the one I put on this post. Or at least “Indy Eleven stadium to need hotel tax money to supplement ticket taxes,” which is something else that came up at yesterday’s hearing. Instead we get “Indy Eleven stadium bill moves on, but lawmakers express reservations,” because journalism is all about reporting what Important People think, not giving readers the information to decide for themselves. Apparently.

Inglewood stadium developers gave $118k to city officials, mayor calls this “free speech”

Inglewood Mayor James Butts has been an enthusiastic backer of Stan Kroenke’s Hollywood Park stadium-and-development project, even saying that “no tax dollars have been requested or will be used for this project if approved” when that’s not exactly true. Now it turns out that Kroenke’s development partners gave $118,500 in campaign contributions to Butts and two city councilmembers in recent years, and Butts may have turned around and given some of that cash to two more councilmembers:

Campaign finance records show that in 2013, Hollywood Park Land Co. contributed $42,500 to Butts’ 2015 campaign. Last year, the company contributed $15,000 to his 2014 campaign fund, according to campaign records…

Butts’ campaign lent about $160,000 to other candidates, including Councilmen George Dotson and Alex Padilla, finance records show. The development company contributed $5,000 to Councilman Ralph Franklin in 2011 and again last year, campaign records show. Councilman Eloy Morales Jr. received five donations totaling $18,500 from the developers between 2006 and 2014.

Butts and the councilmembers reported receiving the donations, and there’s no cap on campaign contributions in Inglewood, so there’s nothing illegal here. Still, it certainly doesn’t look good when city officials who are considering approving a major development deal while evading both a public vote and an environmental impact review got paid hundreds of thousands of dollars from the beneficiaries of such a vote. Or at least, it doesn’t look good unless you’re Butts, who defended such a system as just good politics, or good business, or something:

“Won’t it be unusual if somebody who had so many projects in a community that they won’t want to exercise their free speech to try and ensure that people are in government that have good governing sense and business skills?” Butts said. “I would find that unusual if they didn’t.”

The issue here, just to be clear, isn’t whether the Hollywood Park development would be a good one for Inglewood — that’s something that we simply don’t know yet, since both the public costs and the economic, traffic, and other impacts of such a project haven’t been determined. Which is exactly why an EIR, or at least a year-long public debate during an initiative campaign, could shed more light on the pros and cons of the deal than the council just voting to approve it, which they could do as early as next week.

Instead, we have people in elected office who apparently consider it “good governing sense” to approve development plans without due diligence — which just happens to be the position of the people giving money to their campaigns. That’s not unusual, no, but it is kind of a problem.

MLS rejects Vegas expansion bid, $122m stadium subsidy plan promptly evaporates

Looks like Bob Beers can drop that lawsuit over the rejection of his petition drive to repeal Las Vegas’s $122 million MLS stadium subsidy: There will be no subsidy, because there will be no stadium, because there will be no Las Vegas MLS team, by decree of league commissioner Don Garber.

Major League Soccer Commissioner Don Garber told Las Vegas officials Thursday the city’s bid for an MLS franchise in 2017 or 2018 was unsuccessful. Sacramento, Calif. and Minneapolis remain in the competition for the 24th MLS franchise.

“Given the timing of our expansion rollout and the uncertainty as to when we might be able to move forward in Las Vegas, we are no longer considering Las Vegas as an expansion market until after 2018,” Garber wrote to Mayor Carolyn Goodman.

No one quite seems to know what that “uncertainty as to when we might be able to move forward” line meant, but really, it doesn’t matter — Garber’s the boss, so he can approve or reject expansion candidates for any reason or no reason at all if he wants.

Las Vegas Mayor Carolyn Goodman still wants to try to get a major-league sports team of some kind, but it apparently won’t be with the Cordish-Findlay development group, which spoke of its stadium in the conditional perfect tense yesterday. So, R.I.P., crazy-expensive soccer stadium that only got approved at all because the developers tricked the city council into giving them more lobbying time to pick off one swing vote. You will not be mourned, but we’ll still be a little sad to no longer have reasons to write about you.

Boston columnist compares Red Sox playing in Fenway to baseball’s history of segregation

I’ve been a newspaper columnist myself, so I get what they’re for. At their best, they combine insightful reporting with the kind of personable, entertaining writing that isn’t usually allowed on the news pages. (I’m not sure that distinction will hold up in the age of blogs, but it’s been useful for newspapers.) At their worst, they’re just people who are paid a lot of money to gush opinions that aren’t any more sensible or well-researched than those held by any random person on the street, but which for some reason go out to millions of readers.

The Boston Herald’s Steve Buckley, at least, is up-front about what his opinions are: This is a guy who last summer called himself “the cranky guy who screams that Boston needs a new baseball park.” So we shouldn’t be surprised that with Boston talking vaguely about somehow building a stadium for the 2024 Olympics if it gets them, Buckley, who doesn’t want Boston to get the Olympics, has nonetheless turned it into an opportunity to scream that Boston needs a new baseball park:

Fenway Park isn’t going to last forever. As Red Sox principal owner John Henry said last spring, the aging ballpark has “an expiration date.”

When?

“I think we’re several decades away, a good 30 years,” Henry said. “Hopefully we’ll still be around, but we’ll leave that for the next ownership group. Someone at some point in the decades ahead will have to address the possibility of a new ballpark.”…

But if we left all our problems to be solved by future generations, we’d still be dumping raw sewage in the Charles River. Jackie Robinson never would have gotten into Ebbets Field without a ticket.

And there you have it, the kind of opinion trap that columnists all too often find themselves building and then falling into: The Red Sox continuing to play in Fenway Park is like swimming in filth and segregation. I really doubt that Buckley sat down to write that yesterday, but eventually he got to a point where he needed to figure out how to argue that the third-most-valuable team in baseball can’t live without a new stadium, just because the team’s owner said Fenway should be structurally sound for another three decades or more, but three decades isn’t until the end of time, now is it?

This is the kind of logic that an editor really should catch and send back for rewrites, but opinion columnists don’t generally have their ideas rejected just because their editors think they’re screwy. Unless somebody powerful objects to it, that is, in which case it’s bound for the circular file. Some ideas are more unacceptable than others.

NASCAR Hall of Fame that Charlotte dropped $137m on is now requiring more bailouts

Have I really never mentioned the subsidy deal that Charlotte entered into in order to become home of the NASCAR Hall of Fame? Well, better late than never, so how’s that working out, anyway?

As it turns out, the $192 million Nascar Hall of Fame, with vintage cars dating to the 1940s, is drawing fewer than half the visitors forecast when it opened in 2010, leading officials last month to use $5 million of public funds to settle bank loans. The move is raising questions about how North Carolina’s largest city has financed economic development.

Alrighty then!

Here’s how the deal went down: Charlotte sold $137 million in bonds in 2009 to help pay for the monument to fiery death, to be repaid by a 2 percent tax on hotel and motel rooms. Unfortunately, the Charlotte Regional Visitors Authority also agreed to run the place, and instead of bringing in lots of new visitors, it’s been losing money hand over fist, making necessary last month’s bailout.

Bloomberg News draws the obvious conclusion, which is that sports and tourist enterprises are risky investments for cities, but there’s another lesson as well, which is: Keep your eye not only on the up front costs, but on the operating expenses. Handing over hotel/motel tax money for a venture like this was bad enough, but agreeing to cover operating losses was just doubling down on the risk. I know that tourism bureaus think it’s their job to throw money at crazy ideas in hopes that people from all over will come to town and lavish the local economy with out-of-town currency, but shouldn’t somebody be thinking this through more than “We have the money, we might as well spend it on something, what the hell, let’s see if this works?”

“The $5 million isn’t money that can pay for streets or anything else,” [city councilmember Vi] Lyle said. “It’s paid by people who stayed in our hotels.”

Apparently not. Carry on!