Friday roundup: Sixers owners offer to swap one tax break for another, Titans got nearly 80,000% return on their lobbyist spending

Hope it’s not brutally hot where you are! Admittedly, this is a pretty idle hope assuming you live on this planet. Maybe it’s a good time to revisit my look at which U.S. sports cities are likeliest to become completely uninhabitable first, and to note that several of them are looking at building new stadiums or arenas that could outlast the cities that would be building them, or at least their ability to maintain their population ranking as parts of the world flood and others dry up.

Or, we could just ignore the flames and keep on with business as usual. It’s what sports team owners do every week, and they’re rich, so it must be working out okay for them, right?

  • The Philadelphia 76ers owners are reportedly offering to scrap their request to continue a tax increment financing deal at their proposed downtown stadium site that would allow them to get breaks on the standard property tax rate and use them to pay for arena construction, and instead give the land to the city and then make payments in lieu of property taxes (PILOTs) that would enable them to pay less than the standard property tax rate — and if that sounds to you like the exact same thing described differently, you’re not the only one. A Sixers spokesperson said this would “generate significant increases in tax revenues,” but wasn’t clear on whether she meant more tax revenues than under the TIF plan or just “tax revenues will go up because ARENA!!!!“, hopefully there’ll be more on this soon.
  • Meanwhile, a key battle in the 76ers arena fight is shaping up to be around City Councilmember Mark Squilla, who represents both the proposed arena site and neighboring Chinatown, and who last fall said he would oppose the plan unless local residents supported it but now says he’ll make his decision based on three team-funded impact studies in the works. “If you do the wrong thing, we will never forget,” said Asian Americans United founder Debbie Wei last Friday. “It will be remembered that, in spite of your promises and the desires of most of the city, you destroyed Chinatown.”
  • Some rich people are richer than others, and the “cash-poor” Tennessee Titans billionaire owners had to sell some of their assets to get money to put into their new stadium. They also spent $1.6 million on lobbyists to convince the state of Tennessee and city of Nashville to give them $1.26 billion in tax money toward the stadium, which is a good reminder that there’s no ROI like the return on buying elected officials.
  • Albuquerque Mayor Tim Keller’s office has confirmed that construction on a New Mexico United stadium will begin this winter, though not when this winter, which isn’t really technically confirmation. Keller indicated the stadium will be getting $13.5 million in public money, with the rest coming from the team — how much that will be is also unconfirmed.
  • The Cincinnati Bengals are still working on a new stadium lease, and the Cleveland Browns are still working on a new stadium lease, and in both those cases “new stadium lease” likely means the government paying for lots of stadium upgrades in exchange for the team not threatening to leave, yes the concept of renting is very different when you’re an NFL owner than for most regular tenants.
  • Oakland A’s president/stadium-grubbing czar Dave Kaval is set to teach a sports business management course at Stanford, and you can bet I will alert you at the first report of him crossing paths in the hallways with Roger Noll.
  • Sacramento shops hope for business boost amid renewed hopes of soccer stadium” reads the headline on a KCRA-TV story that quotes exactly two people endorsing such hopes, one a local pizzeria owner and the other the CEO of Sacramento’s tourism agency, yep, that’s 2023 journalism.

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13 comments on “Friday roundup: Sixers owners offer to swap one tax break for another, Titans got nearly 80,000% return on their lobbyist spending

  1. I look forward to your report of Dave Kaval crossing paths with Roger Noll at Stanford!

  2. Can you explain the “in lieu of property taxes” gambit?

    As I understand it, that was the deal that the Coyotes wanted/want in Arizona. Arizona has given it away to other non-sports projects too.

    (https://www.fieldofschemes.com/2022/11/28/19409/fine-print-shows-coyotes-privately-funded-arena-could-cost-taxpayers-over-500m/)

    Why go through this whole charade of the city “owning” the land and then leasing it for less. Why don’t they just offer a special lower property tax rate and then make-up some reason why certain projects deserve it?

    1. “Why don’t they just offer a special lower property tax rate and then make-up some reason why certain projects deserve it?”

      That’s how TIF (tax increment financing) works: You lower the property tax rate to some arbitrary cap, and the property owner gets to keep the rest.

      A PILOT (payment in lieu of property taxes) works by: You lower the property tax rate to 0%, then set up a special non-tax payment that is set at some arbitrary cap, and the property owner gets to keep the rest.

      It’s all exactly the same except for the bookkeeping, but presumably the Sixers owners are figuring that if a TIF is running into headwinds, they can maybe get around that by rebranding it as a PILOT instead.

      1. I see. Thanks.

        Perhaps people might like the notion that the city owns the land and is charging rent, although it’s not on terms that most businesses have with their landlord.

        1. Yeah, “We’re giving the land to the city for free!” is a common argument for a venue deal, even though the last thing you want is an arena built on public land, because that just lets it get out of property taxes.

          1. Well, if they were paying an appropriate fee to lease the land, that would be fine. But that’s never how it is.

  3. Corrected the headline, as a reader pointed out I was off by a couple of decimal places — it’s an 80,000% return, not an 800% return.

  4. Neil, I’m waiting for the Review Journal to refer to your website as
    “Schemes of Fields!”

  5. Man, I leave for a week and all hell breaks loose…. ok not actually all hell.

    But as signs of the apocalypse/end stage capitalism go, Dave Kaval teaching (or just attempting to teach) anything to anyone is surely up there with disaster, plague and pestilence which, um, yeah…

    What’s his main topic going to be? How wonderfully the Golden Baseball League worked out for everyone???

    1. Roger Noll tells me Kaval is really just a guest lecturer in someone else’s class, which is more reasonable. Hopefully it’ll be like the times my Psych 101 prof would open class by saying, “Okay, what problems did you find with the reading this week?”

      1. Ah, so it will be like when they asked me to speak at career day… I got all prepped to make a difference in the lives of young minds and… it turned out that I was the negative outcome example.

  6. Dave Kaval teaching…. spaghettiOs-Barferino. Will the Athletics ever be free from his bondage? We may know the answer just after an insufficient number of owners vote to allow the move. ha!

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