The Nevada state senate vote didn’t come until late in the day, but hours earlier it had become clear hours that something was in the works with the bill to build the Oakland A’s a stadium in Las Vegas. The day before, Gov. Joe Lombardo had signed several bills that he had previously opposed, including one requiring that health insurance cover gender-affirming care; then came word yesterday morning that the stadium bill was being amended to include two measures Lombardo had previously vetoed: a prevailing wage minimum for monorail projects and a 12-week family and medical leave law for projects getting tax abatements.
The amendments also included a couple that actually affected the stadium project, though nothing that significantly moved the needle on the public price tag:
- The stadium site would now be locked in as the location of the current Tropicana Hotel.
- Language firming up the requirements for a community benefits agreement, including diverse hiring and a minimum $1.5 million a year of team donations to community projects.
- More excess stadium tax revenues could be used to reimburse the state for the $180 million in transferrable tax credits it would be handing to the A’s, as well as for $5 million in homelessness prevention spending, before it was used for stadium upgrades. (This assuming that there are any excess stadium tax revenues from a “district” that only includes the stadium itself, which is doubtful at best.)
The amendments did not include any changes to the $500 million in tax subsidies in the original bill, nor to the $100 million tax break A’s owner John Fisher would get from being exempt from the state’s live entertainment tax, which State Sen. Fabian Doñate had specifically called out as unacceptable. Would that be enough to flip three Democratic votes and assure the bill’s passage in the senate?
Senate math on stadium bill:
Yays
-8 Ds (Cannizzaro, Flores, Daly, Doñate, Dondero Loop, Lange, Ohrenschall, Pazina)
-4 Rs (Seevers Gansert, Buck, Hammond, Krasner)Nays
-5 Ds (Nguyen, Neal, Harris, Spearman, Scheible)
-2 Rs (Goicoechea, Stone)Absent
-2 Rs (Hansen, Titus)— Sean Golonka (@s_golonka) June 13, 2023
With eight Democrats, including Doñate, flipping to yes votes, it was more than enough to overcome the two Republicans who flipped to no. The final senate vote was 13-8 in favor of the stadium bill, after Hansen and Titus showed up and voted no, while Stone flipped back to yes.
The timing could could not have been more bizarre, as the vote in favor of spending $600 million in tax money to move the A’s to Las Vegas came mere hours before a long-planned “reverse boycott” by Oakland A’s fans, who packed the Oakland Coliseum with more than triple the team’s average attendance, wearing kelly green “SELL” t-shirts and chanting “Sell the team!” (And, in the later innings, “Fuck you, Fisher!”) Adding to the surreal atmosphere was the team’s announcement that it would donate $800,000 in ticket sales from the night to a local food bank, which did not have the PR impact it presumably hoped for:
https://twitter.com/sydrpfp/status/1668796387058745345
None of this is the final nail in the coffin of the Oakland A’s, not quite yet, at least. The Nevada assembly still needs to vote, though that will happen today, and it’s almost inconceivable that the result will be any different than in the senate, unless Lombardo somehow failed to count votes in the assembly while deciding on what amendments to offer up. In addition, Fisher still needs to come up with $1 billion or so of his own money to go along with the $600 million in tax benefits he’ll now receive from the state; that should be doable, but given that he’s moving his team to what would be MLB’s smallest stadium in its smallest media market, it can’t be considered 100% a slam dunk.
In the end, Nevada legislators named their price for approving A’s subsidies, and it was one that Lombardo was willing to pay. Whether a Republican governor signing a gender-affirming care bill and some living wage provisions is a reasonable tradeoff for $600 million in state cash going to a sports billionaire is an open question — and it’s worth noting that Sen. Dallas Harris, one of the gender-affirming care bill’s co-sponsors, declared herself “thrilled” but then voted against the stadium bill anyway. But mostly it confirmed that politics is increasingly less about doing what’s right, or even what legislators think is right, and more about horse trading; “the governor and the lobbyists really wanted this dumb stadium, and at least we exacted something in exchange” isn’t exactly a stirring rallying cry, but right now it’s the kind of democracy we’re stuck with.
UPDATE 3:06 pm ET: And it’s still not over!
If the assembly is genuinely adding more amendments, that's interesting both because 1) the A's bill then has to go back to the Senate and 2) it means Lombardo didn't actually do an assembly headcount before cutting his deal with senate Democrats. https://t.co/88VKiPMnjY
— Field of Schemes (@fieldofschemes) June 14, 2023
As I write this, the assembly is just calling the roll. Follow along here.
UPDATE, 3:18 pm ET: Never mind, they’re back in recess for “a few hours.”
UPDATE, 6:15 pm ET: BREAKING:
Fisher said he had something he had to do and could not speak when I approached, left the building, came back with a drink minutes later, and returned upstairs.
— Laura Albanese (@AlbaneseLaura) June 14, 2023
Further updates as events warrant.
UPDATE, 8:40 pm ET: After staying in recess all day, the assembly voted to:
- increase the community benefits fund from $1.5 million to $2 million
- make sure the person in charge of it has lived in Clark County for at least five years
- other, even less momentous things
Hot take:
tl;dr: One deck chair rearranged, slightly. https://t.co/X8vXM9wmHL
— Field of Schemes (@fieldofschemes) June 15, 2023
There’s still a chance that the senate rejects this for some incomprehensible reason, but given that the assembly speaker says he expects this to be wrapped up tonight, presumably not. So we’re back to where we were at the top of this post: Nevada is offering John Fisher $600 million toward a stadium, and it’s up to him to see if he can make the rest of the financing work. You may now resume your chanting.
I welcome a return to horse trading over different government projects, good and bad. That’s pretty much how it worked for decades. It’s far preferable to “culture war” crap.
Right on the mark! Until the Gingrich revolution, earmarks, log rolling and the like were commonplace. New Deal, Great Society et al would not have been possible if FDR and LBJ didn’t offer political trade offs. An example of utter selfishness is Bud Selig. When he was blackmailing Milwaukee to get his new stadium, the city was in the middle of a referendum to greatly improve the public schools. Right wing radio was in its nascent stage and flooded the airwaves with the grossest tripe pushing to defeat the referendum. Living in the area, and an ardent opponent of public financing for stadiums, I would have supported the Brewers if only they had the guts and moral rectitude to come out in favor of the referendum. Perhaps saying what is good for Milwaukee is good for the Brewers. Not a word.
This is appalling.
The inclusion of the monorail bit is clearly just a Simpsons reference.
The M.C.A.T. is tricky
it’s really more of a Shelbyville idea
It’s not only one of the greatest episodes of TV ever, it describes exactly what’s going on here.
They might as well have just called the bill the “Sorry, Mom The Mob Has Spoken Act of 2023.”
Sources report the current delay is because the ring came off Assembly Speaker Steve Yeager’s pudding can.
Take my pen knife, my good man.
Monorail! Monorail! Monorail!
It never gets old.
So…. reading the tea leaves here… does all this mean Yeager is dead?
I mean, when you draw a line in the sand like “over my dead body”, voters have a right to expect you to live up to it (or not live, in this case).
Without getting unnecessarily technical… Passan is reporting that the subsidy deal (pardon me, “Bill”) is worth “$380m”.
Yet here we have what amounts to a TIF worth $500m plus an exemption from the entertainment tax which could total $100m.
Other than just lazy math on ESPN’s part, what is the difference down to?
Passan is taking the A’s (really Aguero’s) word for how much the bill would cost. That leaves out the entertainment tax break (estimated value $100m) plus the property tax exemption for the stadium and the land under it (estimated value $184 million).
More math here:
https://www.fieldofschemes.com/2023/05/27/20012/vegas-as-stadium-could-cost-public-500m-counting-property-tax-breaks-and-hidden-renovation-fund/
Thanks. I understood that the “A’s” weren’t going to own the land? I seem to recall that Bally’s was hoping to “lease” the land to Fisher (bwahahahahahahahahaha), possibly for a significant sum if they did infrastructure improvements for the stadium up front.
Pause to let that one roll around in my mind.
I know property tax should still be payable by somebody, so I guess it is still part of the subsidy…
This whole thing just keeps getting weirder. Unless there is a great deal of hidden money somewhere for Fisher and the A’s (even accounting for the MLB welfare checks he will continue to cash, possibly while continuing to field a AA team indefinitely) it just doesn’t pencil out – even as a move and sell capital appreciation project. There’s no there there.
The land and stadium would be deeded to the stadium authority. That way Fisher gets out of paying property tax, while the state gets … the people’s ovation and fame forever? Something like that.
I don’t see how this makes sense from Fisher’s greedy perspective. On the one hand he could have had the right to build ~3,000 market rate homes that could sell for about $3 billion. On the other is the revenue from a ballpark in such a small market. I just can’t see the latter being such a cash cow.
The guy is a developer. He should know that ballparks don’t pay for themselves, even when you get $600 M to help with things.
Oh, and there’s the small issue of cooling down an entire ballpark in 110-120 degree weather. I’d love to see an analysis of how much electricity it will take to do the necessary AC on those hot, hot summer days.
He’s not really a developer — he’s a former hotel owner and heir to a clothing fortune.
“I’ll show you, Oakland — I’m gonna go to Las Vegas where they appreciate me and be a STAR!” seems like perfect failson logic, honestly.
I’ll give you that. But he is a wealthy businessman who was set to make a ton of money by developing a huge project in Oakland.
I know the old owner Lew Wolff (who most definitely was a developer) was rumored to want to get out of Oakland because he hated the town and its racial makeup. There’s probably some of that going on here too. “Oakland” just doesn’t scream glitz and glory like “Vegas” does.
EDIT: According to Wikipedia he first worked in real estate but wasn’t successful. He did work with Lew Wolff too. In any event, “nepo baby” or “spoiled billionaire” fully apply.
I used to work for a hapless billionaire heir middle child at the Village Voice, and there really is something special about failchildren that is different from mere nepo babies. The “I’m gonna prove that I can carve my own path if I have to drive this car right off a cliff!” energy is strong with these dudes.
The racial component is probably there too. But Fisher did pursue Howard Terminal before burning it all down in Oakland, so I can’t help feeling like this was mostly about finding a city that liked him, that really liked him.
LOL! I do question the sincerity of Fisher trying to stay in Oakland. From the git go, HT just seemed like an impossible project. Transportation, etc. just seemed like a mess.
I think his unwillingness to go for a decent deal in Oakland vs. what seems like a worse deal in LV is evidence of his desire to leave.
I was going to post the relevant lyric section…. maybe just the first verse… but it ALL works so well…
So, with apologies, to Ms. Brennan and Mr. Waits…
https://genius.com/Tom-waits-goin-out-west-lyrics
I first heard that song via the Blacks’ phenomenal cover version, but they’re both great. And, yes, apropos.
The other two headline assets I’ve heard about the Fisher family owning are, of course, a big chunk of The Gap, and a significant amount of timberland in the NorCal coastal counties. The Gap shares are likely a permanently impaired asset at this point — look at all the cheap no-name clothing brands rotating in and out on Amazon; the discount imported garment industry has been aggressively and permanently disintermediated. Trying to repair that legacy business is a mug’s game. And I can only imagine that during the past decade, the cost to insure all that timberland has gone up quite steeply, if it’s even insurable at all anymore. You might be able to call the Fisher family billionaires, but they’re billionaires with a high-risk portfolio.
On the other hand, he’s demonstrated the ability to consistently turn a cash profit in the millions of dollars on the A’s, so long as Beane/Forst were still able to string the fanbase along through raise ’em up/trade ’em off Moneyball strategies, and the team was able to qualify for revenue sharing. And reading here and elsewhere, it seems that the Las Vegas A’s being in the smallest MLB market would continue to qualify them for a full share of the revenue-sharing gravy train.
So, perversely, this whole desperate effort to get the Vegas ballpark in place has been the clearest indicator to me so far that Fisher wants to be in it for the long term, or at least the medium term. He doesn’t have to flip right away — he’s got a proven strategy for being able to extract cash from the team if necessary, and he can wait and see how the new scenario affects the team’s valuation. The rest of his assets (that we know about) are a whole lot less of a sure thing. He might get press coverage as one of the wealthier MLB owners, but I can’t help but think he’s in a similar situation to Mark Davis — stuck inheriting legacy assets that demand big moves be made if he wants them to hold up.
Yeah, the revenue-sharing bit may actually be key: He was about to get locked out of revenue-sharing money in Oakland (thanks to MLB’s ever-changing rules), but Las Vegas is such a small market, and his revenues should be so low, that he looks set to keep collecting those MLB checks forever.
Still not sure it makes up financially for having to pay off $1 billion worth of stadium construction costs, but it’s definitely a choice.
Speaking from experience, The Gap/Old Navy/Banana
Republic makes much better stuff than what’s available from sketchy brands on Amazon.
Not sure if that’s very profitable these days, however.
My thought being, a lot of overseas manufacturers who may have been willing to contract for brands like Gap in the past now have the opportunity to go direct, or at least probably have consultants/sales gurus in their ear telling them to go direct. You’re still gambling with the rando Amazon brands, but Gap’s room to maneuver has also been decreased.
The earth enough cheap clothing right now.
https://gizmodo.com/clothing-pile-chile-atacama-desert-satellite-image-1850443019
He’s not a real estate developer though. The biggest reason why he’d take $400 million from Vegas instead of $775 million from Oakland boils down to one simple reason: the man is a coward. Despite being worth billions, he simply does not want to put his money into anything that does not have a “guaranteed” return on investment nor exposes his money to any sort of major risk. Howard Terminal fell apart because he demanded that private real estate development be done concurrently with the stadium’s construction, as well as have redevelopment rights to the full Coliseum site to “defray” his costs. That’s not at all how stadium/concert/entertainment deals work: you build the venue first, then pivot to developing the rest of the site. You can still make oodles of money that way but the payoff won’t be until years after the venue has been up and humming. It’s also still risky if a major downturn in the housing market and/or deep recession blows up your projected revenue. But serious developers know this is part of the game. Fisher isn’t.
Vegas, on the other hand, is a smaller dollar amount from the government and a lower ceiling but a) includes more direct subsidies in the form of transferrable tax credits and b) sits in an area that’s already been developed and has guaranteed foot traffic. It’s also why Fisher (allegedly) turned down an offer to buy the Las Vegas Festival Grounds for $1.00: it would’ve given him more space to develop, had more potential profitability and probably could’ve gotten him a fatter handout with half the headache, but it’d mean taking a risk on redeveloping the north side of the Strip. Fabric Fauntleroy can’t stand risk, because he’s never actually earned his fortune.
Somebody, I believe it was John Bladen, brought it up here the other day: Howard Terminal never made a damned bit of sense anyway. Transit goes nowhere near it, and the ideas for maneuvering around that (gondola????) were ridiculous. If you consider the ball team as the core asset, rather than just an anchor for a much bigger real estate development, then the Coliseum allows you to peel off a big chunk of that South Bay crowd they wanted from the Fremont/San Jose dreams, AND gives much easier access for all the suburban and exurban residents in the greater East Bay and further out, which includes a huge number of legacy fans.
My family was one among thousands that pulled up stakes and moved over the hill in the past 30 years, and giving all those people an easier option for major league baseball than the Giants has been a seriously underrated business opportunity this whole time. Howard Terminal wouldn’t do that. If you’ve got to get off the train and walk or bus multiple blocks, or pay through the nose for urban parking, you might as well go through the tunnel or over the bridge and see the Giants with their much better track record of recent success.
HT only satisfied Fisher and a few Oakland politicians. It was always closer to a fantasy. But, as we will continue to see in the months to come, Fisher has to scramble to lay hands on the cold hard cash to make anything happen anyway. Everybody craps on east Oakland, but I wouldn’t be surprised if whoever ends up with the Coliseum property builds something that makes Fisher look like a damned fool over the next 20 years.
Is there another way for Fisher to still stick it to Oakland? He owns half of the coliseum site, right? Could he use that to jerk Oakland around so that they’d pay him a huge sum simply to go away?
I guess he could try, but he doesn’t own half the coliseum lands yet. He has paid a deposit according to Rebecca Kaplan (?).
He may have the right of first refusal on the Alameda county owned portion/percentage of the land, but if he is stuck in a partnership with the city (which is the municipal authority that makes the laws and regulations surrounding development and zoning) they can hold him up at least as much as he can hold them up.
Just as an example, supposing he notifies Oakland that the team is leaving on day X. Oakland then puts out a notice that it is rezoning the coliseum land for “something else” and is going to commit $200m in infrastructure improvements for whatever they plan to do with the property in future. As part owner of the land (and it is not clear whether Fisher would be part owner of a corporation that holds the land, a shareholder or whether he will own a specific 50% of the parcel etc. I haven’t been able to find out whether that land has a single title or is broken into parcels that are each/all owned in partnership between the county and city), Fisher would be responsible for matching that infrastructure commitment… or at least having his development rights to any of it on hold until he ponies up. Even at that, the city can (and probably already has) apply to the federal and state governments for infrastructure funding to cover their portion. Mr. Fisher likely could not do so successfully.
Oakland could also expropriate the portion of the land it does not control if Fisher will not agree to any development or otherwise acts to prevent any reasonable development.
On the other hand, if he does complete the purchase and applies to redevelop all or a portion of the land, the city can just review what he plans to build and tell him it does not fit their vision for the property and is not suitable.
My personal hope is that if he follows through and buys the land he has an option on, the city rezones it all to a usage that carries a very high tax rate and then passes a resolution that forces the land to be taxed at “fully developed” rate even if it is not developed within 3 years. This type of thing has been done in other districts to ensure that undeveloped land is developed according to schedule (you are going to be paying the finished version property taxes anyway, might as well build and rent/lease it)
Who knows if Thao and co will play hardball with their former “partner”. Personally, I hope they do. It will be entertaining to watch.
My bet/guess would be he just notifies Alameda county that he will not be proceeding with the purchase. And asks for his deposit back, naturally.
I’m pretty sure the ownership is half of the whole property, as opposed to something like north half vs. south half. It was joint ownership by the City and County.
I’ve seen situations like this where joint property owners don’t get along. Basically, neither side can move forward with any development plans if they don’t agree on them.
The fact that one owner is also the agency with the power to regulate development on that site is interesting, but they are still only one of two owning bodies.
My prediction is that once the A’s are gone the City will want to buy the other half. Fisher can hold out for much more than the cheaper price he bought it for (~$85M).
Footnote: The County sold their half to the A’s and said they needed the money to pay off what was still owed for “Mt. Davis”.
Overnight ratings for Game 5 are out- the greatest sports event in Las Vegas history got 127,000 households in the market tuning in- not sure how you extrapolate this to regular season baseball but it seems like they’re going to have a minuscule tv audience.
It’s not a big city.