Hartford Yard Goats stadium opening delayed until July, now officially complete disaster

Surprise, surprise, the Hartford Yard Goats‘ new stadium was deemed not “substantially complete” on Tuesday, meaning it won’t be ready to host the team’s much-delayed home opener on May 31. In fact, it now won’t be open until at least July, which likely means more home games in Norwich — at this point, Hartford fans would have had an easier time seeing their new home team if it had stayed put in New Britain.

With the designation of the stadium as falling short, Hartford can now levy fines of $15,000 a day on developer DoNo Hartford, which is nice but unless this drags out all year isn’t going to do much to cover the $2 million that team owner Josh Solomon can now pull out of providing toward finishing the stadium, plus $500,000 in this year’s rent. (Solomon said yesterday, “I will continue to honor my agreement with the city and I will be flexible to help,” which sure sounds like “Our deal says I don’t have to pay you that $2.5 million now, but you have my sympathies.”) The city apparently has some insurance coverage it can avail itself of, but if it fires DoNo now and goes to seek a new developer the stadium may not open all year, and oh man, is this a juicy mess. Let’s go, Bees!

Orlando soccer stadium has raised $15m via the old green-card-for-investment scam

The interwebs are freaking out about this article in the New York Times by our old friend Ken Belson, which talks about how Orlando City F.C. owner Flávio Augusto da Silva is seeking overseas stadium investors in exchange for a shot at green cards, “in what may be the first deal of its kind.”

As with so much that Belson writes: No, not exactly. The federal EB-5 program offering to let foreign investors in U.S. development projects jump the line for visas has been around for 25 years (which Belson notes), and was in fact a key part of then-Brooklyn Nets owner Bruce Ratner’s finance plan for his arena project back in 2010 (which he doesn’t). The money there went to pay for infrastructure for the larger site, not the arena per se, but still it means the Orlando deal isn’t exactly a first. (EB-5 loans were also proposed for one of Las Vegas’s many arenas that never got built, at least not yet.)

EB-5 has been criticized for being ripe for abuse, with some developers allegedly using it as a scam to rake in cash without ever building anything, while others have complained that if the U.S. is really going to sell green cards to people will to pay for the privilege, it should at least get the money directly instead of giving it to private developers in the hopes that it will somehow create jobs. (The provision of the EB-5 program that da Silva is using is only available for projects in high-unemployment areas, which is certainly true for the area around the Orlando soccer stadium, though how a handful of temporary construction jobs and less temporary hot dog vendor jobs is going to do much to mitigate this is less clear.)

Anyway, this is indeed a scam, though it’s one that is by no means limited to Orlando’s soccer stadium (which is otherwise being funded entirely out of da Silva’s pocket), and one that’s more about how developers have sweet-talked the federal government into getting them access to cheap capital by bumping certain foreigners with money to the front of the immigration line. Team officials haven’t said how much they’re expecting to raise by this method (they say they have $15 million so far), but keep in mind it’s just a no-interest loan, not a grant, so while da Silva would be saving money, he’s still be on the hook for the principal. It’s worth getting upset about, in other words, but less because da Silva is applying for it than because it still exists at all.

K.C. mulls plan to redo Kemper Arena with private money, plus free land and tax breaks and (mumble mumble)

Ever since Kansas City opened the Sprint Center in 2007, it didn’t need a second arena with no sports team that was failing to pay back its construction costs. But now the city seems to have found a potential reuse for Kemper Arena, former home of the Kansas City Kings and Kansas City Scouts:

The repurposing plan Kansas City officials have chosen to pursue would span the original arena floor with a second level, adding enough new floor space for seven high school-sized athletic courts. Those would be in addition to four courts that could be positioned on the existing arena floor…

If all the needed financing details fall into place, developer Steve Foutch said, the facility could be redeveloped by the end of 2017 at an estimated cost of $25 million to $30 million.

Hey, first-class youth sports facility paid for by a private developer, and getting the city out from paying $1 million in maintenance on the place? What’s not to like? Building a second arena floor in mid-air is a bit weird and bound to present engineering challenges, but at least the taxpayer cost is limited—

None of this is a done deal unless state and federal authorities agree that Kemper Arena is worthy of placement on the National Register of Historic Places. That step is necessary to apply for historic tax credits that could cover more than one-third of the redevelopment costs.

Okay, so federal taxpayers would have to put up about $10 million to preserve a 42-year-old arena that’s “historic” mostly because its roof caved in once, but that’s still not so bad—

Foutch said Monday that he is in the middle of negotiations with the city but expects to acquire the property for a “nominal” amount, given that reusing Kemper would save the city the cost of demolition.

Give the developers the arena for nothing? And presumably let them keep all the proceeds from running it? That’s a bit more dubious, but at least then the city would collect property—

Another part of the needed financing plan involves Foutch getting approval for property tax abatement. Foutch said he will seek 100 percent abatement for 10 years through the city’s Land Clearance for Redevelopment Authority.

You are trying to make me hate this deal, Kansas City! Knock it off! Sigh.

Falcons lower food prices at new stadium from completely insane to only mildly overpriced

The Atlanta Falcons owners have announced that when they open their new stadium next year, ticket prices may go up but concession prices will come down:

On what team officials are calling a “fan-first menu,” a number of items will be priced at $2: soft drinks (with unlimited free refills at self-serve stations), Dasani bottled water, hot dogs, pretzels and popcorn.

Also part of the plan: Pizza slices, nachos, waffle fries and bags of peanuts will be available for $3. Twelve-ounce domestic beer will cost $5.

That’s not all that impressive in the real world, but in the captive-audience universe of sports stadiums, bottled water for $2 is a freaking revelation. Steve Cannon, CEO of the Falcons’ parent corporation, told ESPN’s Darren Rovell that they tried to match prices fans would pay in “everyday life,” which bucks sports trends, to say the least.

Possible things that are going on here:

  1. The Falcons owners are hoping that if fans can get cheap food, they’ll be willing to spend more on tickets.
  2. The Falcons owners are hoping that if fans can get cheap food, they won’t bring their own in those clear plastic bags the NFL requires.
  3. The Falcons owners are hoping that if fans can get cheap food, they’ll start buying more PSLs already.
  4. This is a bait-and-switch where in a year or so, the cheap concessions items will get smaller and smaller, and you’ll have to pay top dollar for a normal-sized Dasani water.
  5. The Falcons just love their fans so much that they’re doing them a favor by HA HA ha ha sorry, couldn’t keep a straight face there.

Anyway, something is going on here, and it’s worth noting in case it becomes a more widespread trend. I still stick to my motto of “friends don’t let friends buy stadium food,” but if other teams started charging $2 for water, I … would probably still pay 50 cents for mine at the corner grocery before heading to the game, but it’s be less of a necessity.

 

Santa Clara, 49ers involved in epic battle over proper filing of police overtime bills

There is a throwdown going on between Santa Clara Mayor Lisa Gillmor and the owners of the San Francisco 49ers about whether the team is using general fund money for stadium costs, and both the total amount of money (maybe a couple hundred thousand dollars) and the details are fairly trivial, but since it’s being talked about: The 49ers pay the city $170,000 per game for police and fire department costs, and when the city sends more officers and firefighters to a game than that, they’re supposed to bill the team. But they haven’t been, or the team hasn’t been paying it, or something. It hardly seems worth the $200,000 audit that Gillmore has ordered, to me, but if that’s what it takes to get the accounts receivable department in order, okay then.

The interesting bit here is that Santa Clara is even getting to make a stink about proper payment of police and fire overtime, since very few other teams pay for these costs at all — they’re a big part of why Judith Grant Long found that unreported stadium costs typically inflate the total public price tag by about 40%. So really, this isn’t so much a sign that the 49ers are ripping off the public (though they might be, in a very, very small way) as that the deal that Santa Clara cut protects taxpayers to a degree that’s unheard of in much of the nation. California really is a different world for stadium and arena deals, at least if you don’t count Sacramento as part of California.

Vegas stadium builders still have no idea how much public money they’re asking for

An article in Friday’s Las Vegas Sun revealed a few more details about the tax-increment financing plan that Sheldon Adelson, Mark Davis, and Majestic Realty have floated for a possible Oakland Raiders stadium in Vegas:

“We build a billion-four project, bring (an NFL) team, it now generates a substantial amount of incremental tax revenue … and so we would take that increment that we created by our investment there,” [Majestic Executive Vice President Craig] Cavileer said in an interview. “Without that increment, you would not be successful in your investment.”…

The district could theoretically include property taxes, live entertainment taxes paid on tickets at stadium concerts, sales taxes from merchandise sales and so on.

Details of the proposed tax district are still unclear, however, including exactly which taxes would be involved. But Guy Hobbs, managing director of Hobbs, Ong & Associates, said the district would likely not encompass any revenues that weren’t directly incidental to the stadium itself.

Hobbs, who sits on the infrastructure panel’s technical advisory committee, said tax increment revenue could flow into a pool of money that would also include funds from operating the stadium. All of that could be used to pay the stadium expenses, he said, and any remaining revenue could be used to help provide a financial return to Sands and Majestic.

Let’s break that down a bit: First off, “directly incidental to the stadium itself” is a strange way of putting it, but presumably means it would only involve taxes actually paid on the stadium site. (What about at a steakhouse built next door to the stadium as part of the same project? Neither Cavileer nor Hobbs said.) Sales tax increment financing isn’t actually legal in Nevada, according to Greg LeRoy of Good Jobs First, or at least hasn’t been used there previously, so that could be a tough lift, and sales tax would be by far the largest piece of any TIF district. And paying stadium expenses with tax money would be, of course, a subsidy in exactly the same way that paying for construction costs would be, since this would be a privately run stadium where the private companies involved got all the stadium revenues — which you’d think would be enough to provide their “financial return,” but maybe they’re saying this is such a horrible stadium deal that it can’t turn a profit without $750 million in cash subsidies plus hundreds of millions more in TIF money? Stop with the hard sell, guys!

Hobbs suggested that any TIF numbers should be “stress tested” to make sure the money involved doesn’t get to a point “where it’s perceived to be — or is — too high,” since “otherwise, you could have these unbridled returns, and I don’t think anybody is interested in that.” No, I have no idea how much additional tax money kicked back to a billionaire who’s already getting $750 million in tax money qualifies as “unbridled,” and I’m sure Hobbs doesn’t either, but this appears to be a way of setting up an argument that hey, sure, we’re kicking back taxes on hot dog sales, but not as much as we could have, okay? I’m sticking with the quote that I gave the Sun for the same article: ““The question for me is not whether this is a bad deal for Nevada — it’s how bad of a deal.”

Coyotes to Glendale: If we can’t run arena, we’ll take our puck and go … somewhere

Arizona Coyotes owner Anthony LeBlanc had already made pretty clear that he doesn’t want to keep the team in its current arena in Glendale without its prior sweetheart management deal, but he hammered in home yesterday by sending an open letter to city manager Kevin Phelps declaring that they’re outtie as soon as they can figure out a place to be outtie to:

Simply put, the Arizona Coyotes have every intention of leaving Glendale as soon as practicable. … By unilaterally breaking a 15-year signed management agreement with the team — a contract the Coyotes would have honored for the length of its term — the Council effectively evicted us from our home. While you claim that the Council has had a change of heart, we have not. As a business responsible for hundreds of employees, and a team, that relies on the support of hundreds of thousands of fans statewide, we simply cannot afford to do business with partners who do not keep their word, or honor their contracts.

Boom! Burn those bridges, Anthony! Except, of course, that the Coyotes don’t actually have another place to go to, so unless they’re going to relocate to the Suns‘ old arena or move in with their friend Oscar, they have to stay in Glendale for the time being, hence that “as soon as practicable” line in LeBlanc’s letter.

Local news coverage had this as LeBlanc declaring that he wouldn’t engage in lease talks with AEG, the arena management giant that recently won the rights to operate the Glendale arena, but realistically he’s going to have to talk to them at some point, since right now the team doesn’t have anywhere to play starting in September 2017, and nobody’s going to build them a new arena by then. LeBlanc keeps saying that he’s going to have an arena announcement real soon now, and maybe that will include a new temporary home, for all we know. If not, he’s painting himself into a potentially ugly corner, but we’ll just have to wait and see.

Falcons PSL sales slow before reaching halfway mark, haven’t we seen this movie before?

Personal seat licenses are a weird thing. When it goes well, forcing fans to buy the right to buy season tickets — a right that they can then sell to other fans down the road, demand willing — can raise hundreds of millions of dollars for teams building new stadiums. When it goes not so well, fans realize they don’t have to spend on PSLs in order to get tickets, the bottom drops out of the PSL market, and the Oakland Raiders happen.

The Atlanta Falcons are currently walking that knife’s edge with their PSL sales, which with 16 months to go before the new stadium opens, are slowing just shy of the halfway mark:

The latest sales figures — obtained from the GWCCA, a state agency, through an open-records request — show 4,437 club seats have been sold (up from 4,259 through Nov. 30) for $98 million and 24,774 non-club seats have been sold (up from 22,358 through Nov. 30) for $70.8 million.

The Falcons have said PSLs will be required for all seats sold as season tickets in the 71,000-seat stadium, with the exception of about 5,000 seats in suites. Team officials have declined to say how many seats are available as season tickets, noting some seats are withheld for groups, sponsors and other business purposes.

This isn’t necessarily a disaster — 16 months is a long time, and the Falcons can always tweak their pricing like the New York Jets did if they have to. And since they’re only counting on the PSLs bringing in a couple hundred million dollars, and it’s on Falcons owner Arthur Blank to make up any shortfall, it’s not a big deal from a public-cost perspective.

Still, if it turns out that Falcons fans didn’t have to buy PSLs in order to get seats, and the value of the licenses collapses as a result, this could lead to other cities’ fans getting cold feet about giving their cash over for an asset that they can’t resell at anything close to what they paid for it, which could ultimately end up wounding the PSL goose, if not outright killing it. And that would have a significant effect on how future NFL stadiums get funded, and which ones get built at all. Worth keeping an eye on, anyway.

Minnesota senate approves United soccer stadium tax break, whatever the cost

The Minnesota state senate voted 37-30 yesterday to approve a full property tax exemption for St. Paul’s proposed Minnesota United stadium, without once attempting to calculate how much this tax break will be worth to the team owners. Or at least that’s what all available evidence is showing — for starters, here’s the entire text of the stadium-related portion of the bill they voted on:

Section 14. Soccer stadium; property tax exemption; special assessment. Provides that any real or personal property acquired, owned, leased, controlled, used, or occupied by the city of St Paul for the primary purpose of providing a stadium for a Major League Soccer team is exempt from property tax. The properties are still subject to special assessments. Any real or property subject to a lease or use agreement between the city and another person for uses related to the purpose of the operation of the stadium and related parking facilities are also exempt regardless of the length of the lease or use agreement.  This property tax exemption does not apply to any real property that is leased for residential, business, or commercial development or any other purpose not necessary to the operation of the stadium. Effective upon approval by the St. Paul City Council.

Also, the Minnesota senate has only posted partial video of the hearing, but there’s no discussion there of an actual price tag on the value of the tax breaks, or any talk about the stadium at all. (Yes, I actually listened through 38 minutes of an omnibus tax bill hearing to determine this, so you don’t have to. I’ll be hitting the Advil early today.) So our best guess is still the $57 million in present value that Minnesota Public Radio estimated back in March.

Two notes on this: First off, yes, a tax break is still a public cost even if it’s on land that’s not currently paying taxes. For United’s owners, paying $57 million less in future taxes is exactly the same as getting $57 million in cash from taxpayers to help pay for a stadium. (Well, slightly different in that they’d be getting payments over time instead of all at once, but they can always just borrow $57 million from a bank and pay it off with the future tax savings — that’s precisely what “present value” means.) United owner Bill McGuire has been saying that there’s no way he can afford to build a stadium without the tax exemption, and whether you believe him or not, clearly it’s worth a significant pile of cash if he’s threatening to walk away from the stadium plan without it.

Second, it’s worth noting that this same senate voted 61-4 to approve a ban on tax breaks for a Minneapolis soccer stadium last year. The difference? Minneapolis mayor Betsy Hodges was opposed to it, while St. Paul mayor Chris Coleman is in favor of it. You can pretty much ignore most of the arguments made for or against the tax exemption on the grounds of what’s good policy or how much it’d cost whom: This comes down to “the mayor wants it, so the senate isn’t going to argue with him.” It’s possible things will be different when the state house votes — both Coleman and the senate leadership are Democrats, and the house is controlled by Republicans — but given past history, I wouldn’t hold my breath.

Florida to again consider $100m in sports tax kickbacks for projects already being built regardless

It’s time again for the Florida legislature to vote on the dumbest sports subsidies ever, wherein the state gets to hand out money from sales taxes to any sports organization that asks, to pay for venue upgrades they’re doing anyway, just because Florida, man. This year’s three candidates are the Jacksonville Jaguars, the Miami Dolphins, and Daytona International Speedway, which are set to receive a total of $210 million over 30 years (about $100 million in present value); the state Department of Economic Opportunity insists that Florida taxpayers will get a return on their investment via increased economic activity, though given that the work is already underway (in the speedway’s case, actually completed) whether or not the team owners get the money, it’s hard to see how this could be true.

It’s all mind-numbingly idiotic, and should be laughed out of the legislature in a sane world. Instead, naturally, we have legislators only thinking it’s a bad idea because Miami Marlins owner Jeffrey Loria ripped them off once:

“I personally have an issue where taxpayer money is being used to fund billionaires,” [House Economic Development & Tourism Chairman Rep. Frank] Artiles said. “If [Marlins owner Jeffrey] Loria actually tries to sell the Miami Marlins, he has a major windfall on the back of taxpayers.”

That Loria, he just ruined it for everybody.