Ohio official says LeBron’s return worth $500m, or $50m, or something with a “5″ in it, anyway

Early yesterday, the office of Cuyahoga County Executive (and Ohio gubernatorial candidate) Ed FitzGerald, he of the “win tax,” announced that FitzGerald would be giving an afternoon press conference on just how much money LeBron James’ return to Cleveland would mean to the local economy. FitzGerald had previously claimed that county ticket tax receipts measurably went down when LeBron left four years ago — not too much of a surprise, since people stopped going to Cavs games and presumably did something else not subject to the ticket tax — so the only question was how huge a number FitzGerald was going to come up with.

The answer: $500 million. Per year.

That certainly sounds crazy, but let’s do some rough math and figure out just how crazy. The Cavs had about $145 million in total revenue last year, about $30 million of it via gate receipts, the rest from concessions, cable fees, and so on. Let’s assume that every single Cleveland fan were to double their spending as a result of LeBron’s return — buying twice as many tickets, twice as many hot dogs, twice as many cable contracts. Let’s further assume that 100% of that money would otherwise have been spent outside of Cuyahoga County if not for LeBron, because we all know how many attractions there are in the distant Cleveland suburbs. And then let’s apply a multiplier of 2x, just for the hell of it, under the assumption that all money spent on Cavs games is recirculated in the local economy, because surely NBA players cash their paychecks and immediately spend them at the local Dave’s.

This would get us a yearly impact of $290 million. Still not half a billion.

Or to look at it another way: Last year the Cavs sold 710,000 tickets, and had 132,000 go unsold. Even if the team were, let’s say, to double ticket prices next year, each of those 132,000 new attendees would have to spend $3560 apiece on their visit to a game in order to generate $500 million in economic activity.

Fortunately — or unfortunately, depending on your perspective — it’s not clear that FitzGerald himself believes that $500 million figure. Sure, his deputy chief of staff, Nate Kelly, said it at yesterday’s press conference, but the actual figures mentioned by his staff were far lower. (I’ve requested a spreadsheet or any kind of document at all detailing the economic impact data, but I’m still awaiting a promised call back from FitzGerald’s economic development aide.) From the summary published in today’s Cleveland Plain Dealer:

  • Cuyahoga County will collect about another $3.5 million in ticket taxes this year. The ticket tax rate is 8%, so that would imply an additional $43.75 million in ticket sales, which if they jack up prices to $60 a pop and go deep into the playoffs … sure, maybe.
  • Cavs fans will spend an additional $34 million a year, and the Cavs’ overall economic output would rise by $53 million. Again, that’s not unreasonable, though at least some of this spending would be cannibalized from money that would otherwise be spent on other things in Cuyahoga County, something FitzGerald’s office didn’t attempt to account for.

And … that’s it? That’s not anything close to $500 million a year, and probably not that close to $50 million a year either. The Plain Dealer called Kelly’s half-billion-a-year claim “a much more aggressive interpretation of the data,” which is a nice way of saying “we have no clue why that came out of his mouth.”

Meanwhile, the source of these numbers is in dispute as well: The initial Bloomberg News report said they came from “calculations by the Cuyahoga County Fiscal Office,” but the Plain Dealer reports that FitzGerald said his office worked with the tourism agency Positively Cleveland, drawing on a dubious study commissioned by the team in the heat of last winter’s sin tax extension battle.

In other words, this is a big-ass mess, and there’s no reason to take any of these numbers the slightest bit seriously. Yet the headlines have been written, and you know that the next time some sports team owner is looking for cash to subsidize a new arena, or tax breaks to boost his profits at an old arena, or the purchase of a new point guard, someone will point to this and say, “Keep in mind that even a single player like LeBron James can be worth $500 million a year to a local economy.” (We already went through this with the last NBA superduperstar, don’t forget.) Zombie ideas can be a dangerous thing.

Buffalo Bills stadium report delayed, because writing is hard!

A New York state-commissioned report on the future home of the Buffalo Bills that was expected to arrive Friday didn’t, with the Associated Press citing “a person familiar with” the consulting firm blaming “the large volume of information.” Yeah, I’ve used that excuse too.

While we wait for the report, though, it looks like Buffalo elected officials are increasingly declining to take the Buffalo News’s bait that a new stadium is inevitable, and it’s just a matter of where to put it:

County Executive Mark Poloncarz tells 2 On Your Side his preference is at this point is a renovation of Ralph Wilson Stadium.

“I’ve said all along the one thing we cannot do is take off the table Ralph Wilson Stadium. We’re investing $130 million there, one of the reasons it was done was not only to make it good for the next five to ten years, but many years thereafter. After the investments we’re doing now it’s going to be a different stadium and when people go there this fall they’re going to realize that it’s still very viable to have the Ralph as the home of the Bills,” said Poloncarz.

We also asked Mayor Byron Brown about whether he thinks a new stadium is needed to keep the team in Western New York.

“I’m not sure about that,” said Brown. “I certainly want to see the team stay in this community for the long term and if a new stadium is needed, if a new stadium is required, I think it makes sense for us to accomplish that.”

It’s probably too soon to call this a major shift — even politicians who want to build new stadiums often say they’ll look at renovation, if only so they can reject it later — but taken along with Gov. Andrew Cuomo’s subtle rhetorical shifts, it looks like Buffalo elected officials are at least realizing that building a whole new stadium for a team that just got a renovated one is going to be a hard sell. We’ll see what they say once they get a look at the clear plastic binder.

Hartford mayor scraps $60m bond sale for Double-A team, instead proposes “public-private” mumble mumble something

Faced with many many people very unhappy with his plan to sell $60 million worth of bonds to build a stadium for the New Britain Rock Cats, Hartford Mayor Pedro Segarra accounced on Friday that he was scrapping the bond sale and replacing it with, um, splunge:

The council is expected to see a new resolution for the stadium at its Aug. 11 meeting, Segarra said. That plan would be contingent on the “public-private partnership” that has yet to be determined; proposals from developers are due Aug. 1.

From the sound of it, Segarra is now hoping that accompanying housing and retail development will somehow generate enough money to pay for the ballpark, though whether that’s “private developers are so desperate to build housing in downtown Hartford that they’ll fund a stadium just to get to do it” or “enh, let’s just kick in a bunch of property tax revenues to pay off the stadium bonds and call that ‘private’,” who the hell knows. It’d be nice to think that we’ll actually learn what the proposal is before the August 11 meeting — you know, so that people can actually comment on it — but don’t hold your breath.

Chicago landmarks board okays Cubs putting ad signs wherever the hell they want at Wrigley

As expected, the Chicago landmarks commission approved Chicago Cubs owner Tom Ricketts’ revised plans for Wrigley Field renovations, unanimously even. That’s revised upwards from two outfield ad signs to seven, and with new expanded decks in the bleachers over public streets, and with new seating along the foul lines and the bullpens moved under the bleachers, but hey, he waited a month and made the bullpen doors smaller, so what’s not to approve?

The only thing standing in the way of renovations beginning immediately, it appears, is a lasuit from the neighboring rooftop owners charging that the ad signage would block their view in violation of their contact with the Cubs — but given that they still haven’t filed a lawsuit after talking about it for six months, Ricketts really could start work tomorrow and nobody would be able to stop him. It’s still possible that legal action could be filed and delay things a bit longer, but if you want to see Wrigley before this (only with corporate logos wherever it says “Cubs”), you should probably get your tickets now.

Raiders say they don’t need to tear down Coliseum right this very minute after all

No major shifts in the Oakland A’s and Raiders who-gets-dibs-on-the-Oakland-Coliseum-land controversy today, but there is one minor bit of notable news: The Coliseum City development team aligned with the Raiders issued a letter on Wednesday saying they don’t actually need to tear down the Coliseum right away, and are fine with the A’s new lease requiring two years notice before any demolition.

Which couldn’t have been that hard, given that the lease is almost certainly going to go through anyway, that the Raiders aren’t going to have funding in place for a stadium anytime soon, and that waiting two years in the grand scheme of things isn’t that big a deal if there’s a new stadium and a giant development project on a huge swath of public land at the end of the wait. But still, it’s a concession, kind of.

In any event, it seems like everyone involved is now positioning themselves to move ahead to Act II (or really more like Act XXVII), wherein the two teams fight over the Coliseum site without discussing in public, for as long as possible, how much public cash and/or free land and/or tax breaks they’d want as part of the deal. Assuming the Oakland city council signs off on the A’s lease extension by the end of the month, which while still likely, isn’t yet assured, with tons of official “undecided” votes. We could be here a while.

Oakland stadium battle lines officially shift from city-vs.-A’s to A’s-vs.-Raiders

Looks like you can forget any thoughts of Oakland city officials trying to make major changes to the A’s lease extension that the city-county joint Coliseum Authority just approved. Oakland Mayor Jean Quan yesterday declared at a news conference, “We need the City Council to approve it as quickly as possible so we can start talking seriously about a new stadium in the city,” though she did say that she’d sent city administrator Henry Gardner to meet with A’s owner Lew Wolff to discuss “clarifications” of the deal.

And with everyone kissing and making up, it’s apparently time for Wolff to make nice as well, responding to councilmember Larry Reid’s stated concern that the A’s could have moved to San Antonio or Montréal by saying he would never dream of such a thing:

Wolff said he hadn’t spent any time thinking about those two cities and wasn’t even sure Montreal has a stadium that would fit the team’s needs.

“I have not done one thing relative to that,” Wolff said. “We’d rather stay in the Bay Area than move to Timbuktu.”

Not one thing other than sending a late-night email saying he could move out of Oakland if the lease wasn’t approved exactly as he proposed it. But apparently not to Montréal, or San Antonio, or Mali, something he took pains to clarify as soon as it was clear that the lease extension was going to be safely approved.

Anyway, if you’re disappointed that the likelihood of political fisticuffs seems to be fading, never fear, as there’s still plenty of opportunity for entertaining chaos ahead. That’s because the developers behind Coliseum City — the redevelopment project that Quan has endorsed despite nobody knowing how to pay for it — sent a memo to the mayor last week asserting that the Oakland Coliseum needs to be torn down next year to make way for a new Raiders football stadium. The new A’s lease would preclude that, since Oakland would be required to give Wolff two years’ notice before demolishing the Coliseum, yet Quan still insists that both the A’s lease and the Coliseum City project should go ahead, despite them being mutually contradictory on this point.

Members of the Coliseum Authority, meanwhile, have pointed out that the city doesn’t actually own the Coliseum, they do, and they have no intention of tearing it down tomorrow. City councilmember and authority board member Larry Reid called the idea “crazy, absolutely insane,” while county supervisor and authority chair Nate Miley said, “This is either smoke and mirrors or they are on crack.”

All of which means that Quan and Wolff’s rapprochement notwithstanding, we still have a major war of all against all going on over Oakland’s stadium situation, with next major issue being whether the A’s or the Raiders get control over the Coliseum site. Quan seems dead-set on being on every side at once, but then, she might not be mayor anymore by next year, and in any case the Coliseum Authority holds the ultimate cards, so… yeah, pretty much more chaos assured.

And meanwhile, neither Raiders nor A’s execs have provided any details about how much new stadiums would cost, how much public money (or free land or tax breaks or what have you) would be required, or where the teams would play if the Coliseum needed to be demolished before starting construction on new venues. These might seem like important things to find out before choosing sides on a potential billion-dollar-plus redevelopment plan that could determine the fate of two sports franchises, but so much gets lost in the fog of war.

Raiders oppose A’s lease extension, set up showdown for Coliseum development rights

Forget the Oakland city council — an actual heavyweight has weighed in on A’s owner Lew Wolff’s proposed 10-year lease extension, and boy, are they mad:

The development team working to build a new Raiders football stadium has urged city officials to reject a lease extension for the Oakland A’s because it would frustrate the football team’s desire to tear down O.co Coliseum next year.

In a letter to Mayor Jean Quan and council members last week, the development team’s attorney wrote that “the current proposal … simply allows the A’s to buy more time to find a site outside of Oakland … and disrupt the ability to deliver a stadium for the Raiders and the ancillary developments adjacent to that stadium.”

Translation: We wanna build a new stadium where they play! Why aren’t you making them leave? This is so unfair!

Matthew Artz’s article in the Oakland Tribune does shed a bit more light on the gamesmanship going on between the A’s and Raiders owners, though, as well as some of the strategy involved. Both Wolff and Raiders owner Mark Davis, notes Artz, have their sights set on not just building a new stadium where the current Oakland Coliseum now stands — a location that’s plenty big enough to fit two stadiums if need be — but on being the primary partners on developing the rest of the site. And that town literally isn’t big enough for the both of them:

Because outdoor sports stadiums are often money losers and Oakland can’t afford to help pay for them, any new stadium development in the city is expected to include shops, a hotel and offices to subsidize the project. Sports economists have questioned whether the A’s and Raiders would want to work together because a second stadium would remove land that could be used for more profitable development.

“The probability of Coliseum City working financially and some team committing to it would be greater if there was only one team involved,” Stanford University Economics Professor Emeritus Roger Noll said when asked about the development in April.

In other words, it’s clearer than ever now that both owners’ business plans involve extracting as much as possible in negotiations over the Coliseum site, not just in public money, but in development rights to land, which in the suddenly hot Oakland real estate market could be more valuable than any old sports stadium. Which explains both why Davis is insisting on the A’s eviction at the earlier possible time, and why Wolff is eager to get a lease extension signed that would force the Raiders to wait (two years, anyway) on their stadium plans: The owners aren’t just negotiating with Oakland for the best possible deal, they’re competing with each other not just for sports market share, but for dibs on a mammoth piece of prime real estate.

Right now the Oakland council seems cranky about the Raiders’ less than detailed plans, and so is inclined to let Wolff have his way. (Or as much of his way as they have to, anyway.) But then, Davis hasn’t yet sent any late-night emails pointing out the existence of the rest of North America.

 

 

“Private” Virginia Beach arena could cost public $185m

The Virginia Beach city council found out last night how much a new “privately funded” arena would cost the public, and the answer is: a lot.

On Tuesday, City Council learned that it could cost $52.6 million to $78.8 million to pay for the utilities, road improvements, and traffic patterns in the area.

Add in $7 million a year in tax kickbacks that the developer would be demanding, and that’s a total public cost (in present value) of between $160 million and $185 million. For an arena that will cost $200 million to build.

City councilmembers, naturally, were taken aback by the high price tag:

Council members seemed thrilled with the idea and thought it was time to move forward.

Sigh.

Buffalo News still just wants to know where we can put the new stadium, oh boy oh boy

The Buffalo News, never afraid to ask the tough questions about a new Bills stadium, is at it again, wondering where a replacement for the just-now-being-renovated Ralph Wilson Stadium should be built. And who better to ask that question to than a disinterested party, like, say, local developers?

  • “Downtown makes a lot of sense for a lot of reasons,” [former Sabres president Larry Quinn] said, noting the growth that’s already gone on there and the availability of a decent amount of existing parking.
  • “Given that we are a relatively small NFL market, that we are next to a large and rapidly growing metropolis like Toronto, that our binational location is one of our key strategic differentiators and that Niagara Falls is an internationally recognized icon – it’s certainly worthy of a close look as a possible new stadium site,” [said developer and regional development organization co-chair Howard Zemsky].
  • “The only logical place is downtown Buffalo,” [downtown's biggest landlord, Carl Paladino,] said, mentioning the Shoreline Apartments along lower Niagara Street and the Commodore Perry projects between South Park Avenue and the Niagara Thruway.

If there’s a surprise here, it’s that several of the developers somewhat chided the News for jumping the gun by assuming that a Bills stadium is necessarily necessary: Quinn said you can’t decide on a stadium until the team has a business plan (which requires an owner who is still breathing), Zemsky echoed his boss Gov. Andrew Cuomo by saying that the current renovations work well and “if we don’t need to change that formula, let’s not” (but if we do, let’s), and hotel developer Rocco Termini warned that stadiums themselves don’t necessarily boost economic activity in the surrounding area (“Show me where it’s worked and prove me wrong”).

The News, hearing this criticism, topped off its article with a sidebar listing six possible sites for a new stadium.

Oakland council mulls ways to change A’s lease deal without actually changing it

The Oakland city council, fresh off its decision to cave completely to A’s owner Lew Wolff’s threat to move the team out of town, somewhere, and approve the stadium lease extension exactly as he proposed it, met in closed session yesterday to discuss making some “tweaks” to the lease. Or perhaps doing some “tinkering,” depending on which part of KCBS’s report you choose to go by. Either way, it would likely run afoul of Wolff’s “enough talk, just vote for my plan” edict of last week, but it’s nice to see the Oakland council trying to figure out how to flex its muscles after agreeing not to do so, maybe? (Two pro-lease councilmembers got fed up and walked out of the meeting, for whatever that’s worth.)

For his part, Oakland councilmember Larry Reid (one of those two meeting walkouts) says he doesn’t think Wolff’s move threat was a bluff, insisting “they have options” and citing San Antonio and Montreal as two possibilities. Which I guess means he didn’t read my article for Sports on Earth this morning on where the A’s could possibly move to, because no, those are not good options at all. (And I didn’t even get into the problem that San Antonio’s only existing stadium, the Alamodome, would feature a 280-foot distance to the right field wall.) One hopes, though, that he at least read the SF Weekly’s take on the A’s lease mess, which sums it all up pretty nicely:

“I looked at the numbers, thought, ‘this isn’t so good for the city,’ and then mentioned that in public,” Quan said. “I don’t know what I was thinking. I’d like to apologize to the A’s, and to all of professional baseball. Of course you can stay, and take whatever you want from the taxpayers. In fact, I would like to offer Major League Baseball commissioner Bud Selig one of my kidneys. Even if he doesn’t need it. Please: it’s the least I can do.”

A spokesman for Selig responded that he would like both of Quan’s kidneys.

(The photo caption is pretty excellent, too.)