A reporter asked me this week if I thought there was one particular thing driving the current wave of stadium and arena demands, and I said not really, though there are a few factors influencing it — lots of ’90s stadiums hitting the end of 30-year leases, local governments feeling a little more flush thanks to federal infrastructure and COVID relief money, baseball teams rushing to get deals in place before expansion takes move threat targets out of play. But at the same time, man is the sports subsidy news ever a firehose right now: This site is seeing multiple posts a day right now, and still I feel like I’m leaving more news than ever for the Friday roundups.
Which is all fine and good and I’m happy to do it, it can just be a little exhausting to write. If it’s not too exhausting to read as well, and you want to throw some additional coins in the tip jar to help me shoulder this increased workload, that’s always appreciated. I’m sure things will die down some once we get to the end of various legislative sessions in the spring and early summer, but right now we should all be taking our vitamins to keep our stamina up.
And speaking of the firehose, let’s turn it on and get blasted:
- Chicago Bears CEO Kevin Warren says as far as a new stadium goes, “the timeline has to be in 2024,” adding, “Time is money. It takes probably three years once you put a shovel in the ground. ’24 should be the focal point.” Oh hey, it’s our old friend the Two-Minute Warning from the standard stadium playbook! As is de rigueur, Warren did not indicate what would happen if his team didn’t get a new stadium approved in 2024, but given that right now he doesn’t have a lot of viable alternatives, I’d wager that holding his breath until he turns blue is not off the table.
- And speaking of arbitrary deadlines, St. Petersburg is pushing back a council vote on Tampa Bay Rays stadium funding until May, so there’s enough time for committee meetings first. Rays president Brian Auld warned back in October that “any delay is going to fundamentally alter the entire agreement”; nothing yet from Auld on whether he has a problem with this delay now, but given that it looks like relatively smooth sailing right now for Rays owner Stuart Sternberg to get a potential $1.5 billion in public cash, I’m expecting he won’t complain too much about waiting a few extra weeks for the check to arrive.
- MGM Resorts International CEO Bill Hornbuckle, who previously said he had seen the mythical Oakland A’s Las Vegas stadium renderings and that they were “spectacular,” now says he’s seen three different versions of where the stadium would go on the current Tropicana resort site, and it’s holding up his plans to renovate his resort across the street until he sees the final design. “I have to believe, in the next 30 to 60 days, we should find out more,” Hornbuckle said; maybe he has to believe it in order to sleep at night, but with the stadium renderings now overdue by two and a half months and counting, we are under no such obligation.
- The meeting between A’s execs and Oakland officials about a potential short-term lease extension at the Coliseum were “really positive” according to an unnamed team official and “very open and frank” according to Alameda County supervisor David Haubert, who added, “No food fights.” I read somewhere that I can’t find now that the whole thing only lasted about 30 minutes; more meetings are expected, at which there should be plenty of time for food fights.
- For the many of you expecting Joe Lacob to ride to the rescue and buy the A’s from Fisher and keep them in Oakland, Lacob has an update of sorts: “I’ve not checked in recently. It’s his team. If he decides he wants to sell, he knows who to call, that’s all I’ll say. We might be interested, obviously. We’ve said we were interested in the past. But I don’t think he’s doing that. I think he’s very committed to continue to own the franchise. Looks like he’s committed to Las Vegas. We’re always there. But I’m not calling anybody, it’s his team. I want to stay out of the way. We’ll cross that bridge if it or another team comes available.” Read those tea leaves as you prefer.
- Jacksonville mayor’s office lead negotiator Mike Weinstein says Mayor Donna Deegan is considering paying the public’s share of $2 billion in Jaguars stadium upgrades by using money in the city’s pension funds, which would be repaid by (scroll, scroll) nope, he didn’t say how, so this is very much the equivalent of explaining how you’ll afford a new purchase to your spouse with “I’ll put it on our credit card.” Note to First Coast News headline writers: This is not what “paying for” means.
- Virginia state Sen. Louise Lucas says her finance and appropriations committee will “absolutely” strip funding for the proposed Alexandria arena for the Washington Wizards and Capitals from a 2024 budget bill: “I’m not changing my mind.” We certainly seem headed for a scenario where the state house approves an arena bill while the state senate does not, though there’s still lots of speculation that Senate Democrats are just haggling over their price, possibly for cannabis legalization, an increased minimum wage, more affordable housing, or possibly a pony.
- An analysis of the Virginia arena deal by the D.C. city council, which obviously isn’t impartial, estimates that it would actually cost taxpayers more than $5 billion counting maintenance and debt service. That’s not entirely fair since a bunch of that money would be paid out in the far future — it’s the old fallacy of calculating how much your house costs by adding up all your mortgage payments over 30 years — but the report does note that the arena plan includes a publicly covered $12 million a year repairs slush fund that would grow at 2% a year, so that’s maybe another $250 million in cost that hasn’t been accounted for by the first $1 billion or so in public money, add it to the list.
- Another stadium playbook standard is the Home Field Disadvantage, claiming that the old place is just too decrepit ever to stack up with modern buildings, and the Kansas City Royals deployed that one this week, having Populous stadium designer Earl Santee say it’s “just not feasible” and “not realistic” to renovate the team’s current stadium, on account of it having what’s called “concrete cancer.” Oh, really, Earl? This didn’t come up when the Royals stadium was just renovated last decade? Do you have an engineering report to show us, or a price tag on what it would cost to subject Kauffman Stadium to concrete chemotherapy? Hello, Earl, we have followup questions! Earl!
- Buffalo Bills execs say that their new stadium will have a steeper upper deck that will allow it to bring fans closer to the field, so that, in WGRZ-TV’s words, “fans who sit in the last row of the general concourse will be 54 feet closer to the field than they are at the current stadium.” Yes, that’s how geometry works, and yay for them for applying it — except that the old stadium holds 71,608 fans and the new one will hold only 62,000, so really a lot of the improvement is just from lopping off the farthest 10,000 seats, so not so yay after all.
- The city of Pawtucket sold $54 million worth of bonds last week to fund a new Rhode Island F.C. stadium, and while that’s a lot for a minor-league soccer stadium and double what taxpayers were supposed to be on the hook for less than a year ago, perhaps most alarming is the news that the bonds were sold at “a yield of 8.24%, equivalent to almost 14% on taxable securities.” Nothing tops off massive public cost overruns like the worst interest rate imaginable, that’s what I always say!
- I was on the radio in Chicago this week to talk about the new White Sox and Bears stadium proposals, and props to WBBM’s Rick Gregg for leading with my juiciest quote: “I think we went in fairly skeptical, and we came out of our research horrified.” Click the link above to give it a listen, and have a good long weekend for those who celebrate!
Joe Lacob: LOL!! The Knight in shining armor narrative for JL just won’t die. At least he’s made folks completely forget he yanked his NBA franchise out of Oakland and will set up his Bay Area WNBA franchise NOT IN OAKLAND…
I’m sure Lacob would rather own an MLB team in San Francisco, but there’s an obstacle there.
Is it the communists???
The San Francisco Marxist-Leninists are set to have absolutely stifling defense this year. Praxis Through Plays At The Plate!
We get it. You hate Oakland. It’s tedious.
If I remember correctly, when the Royals Stadium opened in the 1970’s, wasn’t it designed to last a long time like 80, 90, 100 years? It was state of the art design with every seat having a good view of the field.
Does anyone else recall?
It was, Rob. And there is no practical reason that a reasonably well maintained concrete and steel structure that is not near either the atlantic or pacific ocean can’t have a service life of well over a century.
Bridges and overpasses have a much harder life than sports stadia (IE: they are fully exposed to the elements and often deal with regular baths in salt solutions…) and yet these are deemed safe. Only sports stadia, it seems, have this incredibly advanced aging process that comes straight out of Star Trek TOS…
https://en.wikipedia.org/wiki/Alkali%E2%80%93silica_reaction
And which sports stadiums have 25,000 trucks weighing 80,000 pounds crossing it at 70mph?
For the most part, none, although several have bridges and other structures designed to get HGVs into them (meaning those portions of the facilities do face significant loads).
That said, I think it’s important not to confuse concrete deterioration with the basic strength of concrete and steel structures. The two concepts are very different.
All over southern France Roman structures built 2,000 years ago are still standing. I guess in American cities with politicians who aren’t very good at math, structures deteriorate really fast.
Neil, as a Pittsburgher I’ve been thinking a lot about the ’90s stadiums hitting the end of their leases, specifically wondering whether we will see differences between cases where everyone agrees the stadiums are terrific (Pittsburgh, Baltimore) and the ones everyone agrees are flawed to terrible (White Sox, Royals). I don’t mean the former group won’t ask for free money – no capitalist ever fails to do that – but whether they will ask for less or differently. I don’t know whether you have specific thoughts about how that is going so far.
In this context I am wondering about Kansas City. I was at Kauffman last year for the first time and thought that there were two conspicuous things about it for someone who doesn’t know the city – that it is stupidly located and the spot they want to move to makes much better sense for baseball fans, and that they had in fact created a crazy concrete problem for people who actually like watching the game. Everyone who likes watching the baseball game (only a percentage of people who attend them, of course) knows that sitting in the lower deck in the sections behind home plate is decisively better for seeing the action than sitting anywhere else. In most contemporary stadiums, there are good baseball watching seats, there are club seats, and there are good baseball watching seats that are also club seats.
In Kauffman stadium, 100% of the good baseball watching seats are inside the club area, something I’ve never seen elsewhere. In practice this means it’s a $50 or more dollar premium just to want to watch the game. I suspect this has turned out to be as undesirable design choice for the Royals as it has been for many of the most committed fans. Anyway, I’m no expert but it really didn’t look like something you could renovate away without eliminating the club distinction altogether, which obviously no team would do, since it is a big piece of profits.
None of this is a full explanation of the team wanting a new stadium, let alone an excuse for giving them one at public expense. I guess its just a reflection about what happens if you built a stadium in the 1990s and its design and/or location genuinely did turn out to suck. I think as a baseball fan in KC I’d really want a new stadium. (Ironically when I was a baseball fan in Oakland I didn’t have that same desire!)
The “Royal’s Stadium is crap” is fairly new argument. For most of its history people loved it. Baseball only. Most of the seats in the infield. It only became a “crap” stadium when the owners wanted a new fancy stadium. The White Sox stadium had flaws when it opened. Too many high upper deck seats, strange bullpen tunnels. But most of those have been fixed. Tore down the top seven rows. Added canopy, and more seats to the lower level. Built proper bullpens (better than Wrigley’s hidden bullpen,” and painted baseball green. It’s only problem now is it’s not on the glamours side of town, and the owner also want something as fancy as the other owners have.
I would agree with mb: Most everyone loves Kauffman Stadium, so Sherman is having to resort to things like “the concrete is old.”
The Orioles owners (about to be former owners) already asked for and got $600 million in renovation money from the state of Maryland, so clearly having a stadium from the 1990s that everybody likes is no obstacle. I would expect the Pirates owners to soon go the Cleveland route: It’s a great place, but it’s showing its age, just needs a little spiffing up, that’ll be $300 million please.
Great question Kenny! I’ve wondered that to and have already begun ways to tell the Pirate ownership group where they can stick it.
I have to admit that I admire the way they have slowly renovated and updates aspects of the stadium in such a way that I can’t recall off the top of my head how much has been paid for by the public in terms of actual cost… I think the only big expense has been the south end zone expansion at Heinz Field.
A renovated Oakland Coliseum will beat White Sox Park once Mt Davis is demolished. Both are on the wrong side of town, but a view of the Oakland Hills really beats a view of the Dan Ryan Expressway. As for Kansas City, I remember when it opened and thought it was spectacular. Although it feels like it’s in farm country halfway to St. Louis, it’s less than 10 miles from Downtown and easy to get to from most of metro Kansas City. The Chiefs and Royals owners also have oceans of land to develop surrounding the stadiums, similar to Westgate in Glendale.
With respect to the “firehose” and the question of timing, I think the answer is generational and it relates to the decline of NIMBY politics.
Neil, when you wrote your book and started this site, the majority of political and business decision-makers were Boomers and there was this dominant sense among that generation that there was too much land development, developers had too much power and were ruining our cities and so forth. NIMBY politics ruled the day and went hand-in-hand with anti-stadium efforts.
We’re in a pretty different place, today. There’s a backlash to NIMBY politics among younger people. Most of that backlash has to do with the extremely limited housing supply in many metro areas and how NIMBY politics have led to such an insane housing market, not commercial real estate or things like stadiums. Nonetheless, these circumstances have de-fanged a lot of the political forces that would traditionally oppose developments like stadiums. There are not a lot of people under 60 who hold the view that, just as an example, what the Bay Area needs right now is LESS development and LESS construction.
With respect to KC, Kaufman Stadium is located outside of the city core, basically at an interstate intersection, in a really racially segregated area. When I see the new KC stadium proposal (and I think this is echoed by the reactions I saw among people under, say, 60) I see remediation of past mistakes: the stadium is downtown (no White Flight-type suburban development), it prioritizes transit access over parking and cars, they are proposing to cover over a part of the interstate that runs through downtown (ideally should be leveled, but covering it is better than leaving it as is) and just generally a much smarter urban development proposal than what KC has going on now with the Arrowhead-Kaufman complex.
Boomers, in contrast, see a land grab, evil developers bringing unwanted density and so forth.
It’s all generational and it has to do with aesthetic preferences. Boomers don’t like change. They wish 1965 would stay encased in amber. Younger people are excited to see their cities adapt to the 21st century and change.
As someone who’s been following both sports stadium politics and urban development issues for close to 30 years now, I can say that there is zero evidence for your theory. (If anything, there’s maybe marginally more public opposition to stadium deals now than in the ’90s, not that that necessarily has much effect on elected officials.) And I would be happy to introduce you to lots of people under 60 who think that the Bay Area needs less market-rate development, not because they fear change, but because they think that it enables forced displacement.
I’ve been hearing generational politics arguments for decades, and the more time passes, the more garbage they seem. Yes, young people tend to think differently than old people, but that’s always been the case, and positions change as people age and their personal concerns evolve. I am avidly awaiting the day when pundits blame the aged Millennials for being deathly afraid of change because they didn’t grow up getting new phones every year.
The problem with Kansas City is it doesn’t have a core. It has two cores one on the Missouri side in Jackson County and one on the Kansas side in Johnson County. Putting it at the intersection of the highways means easy access from both while downtown means the Johnson County side has worse access which is bad because that’s where the money is in the Kansas City metro area. And all those people from Kansas have to drive because other than a couple of buses public transit does not cross the Missouri/Kansas border.
The push for the downtown stadium is entirely because the ownership group is funded by one of the major construction companies in the area and would make bank on building it, especially if it’s built with other people’s money. And the land they’re targeting all contains parcels they already own that the city would need to also buy from them. If they were really concerned about where people live in the metro area they’d be looking at where it currently is or the opposite highway I-435/I-70 junction in KCK where Livestrong Park and the Speedway are as both are situated more roles evenly between the two population centers.
When it comes to Chicago, is there any estimate of what the land the current stadiums are on would be worth if the teams were to leave? I would imagine the city would fetch a nice sum for Soldier Field if the Bears left. I don’t know about Guaranteed Rate Field since I’ve only driven past it once.
Soldier Field can’t be sold or developed. That is protected park land and the columns around the stadium are landmarked memorials for WWI soldiers.
The county assessor and treasurer could easily provide property tax estimates for the Sox land, if they were motivated.
For an assessment of what the White Sox land is worth, take a look at where Stateway Gardens and Robert Taylor were on the other side of the Dan Ryan.
Here’s a little tidbit for you…Florida turned down some number of billions (estimated to be around 11) for infrastructure and climate change because…I suppose because they could?….even though the other 49 states gladly accepted the money.
Then, as they prepared the budget they realized that they are about 4 billion short. They have all kinds of ideas where they can cut (schools, naturally being their top target).
But nowhere on that list were handouts to billionaires. Hey, Tampa you want that $1.5 billion, sure! Jax, here’s $2b for you!
(And yes I’m aware that it’s city / county money and not state money. But it all comes from “somewhere” and will affect us all. )
Oh yeah. Two other thoughts:
On the concrete cancer, I do recall the dolphins ownership playing that game too on their stadium – “the concrete might just crumble and fall down if we don’t have the money for upgrades!”
And to the Tropicana site maybe being small, they could just go with street rules that we had when we were kids. The outfield is in the street and when a car comes someone yells “car” and they hold up the game.
The manhole cover could be second base too.
” If he decides he wants to sell, he knows who to call…”
Ummmm. Joe, I’m pretty sure that’s not how it works. And I’m also pretty sure you know that that is not how it works, given that you already hold ownership positions in other sports leagues…
There are two ways pensions become financial problems: overpromising and underfunding. I’m pretty sure ‘investing’ in sports arenas falls into the latter category.
Illinois tried that pension stunt 30 years ago, with disastrous results. If Jacksonville tries something so stupid, a useless $2 billion football stadium will end up costing 4 billion, and maybe alot more.
Can you explain that math? Raiding the pension fund to cover costs is dumb, yes, but it shouldn’t make the costs any higher.
It does increase costs if you don’t replace the money in the pension fund and leave an unfunded obligation for 25 years… which is inevitably what governments and private corporations that dip into their employees pension funds for “investment” purposes do.
That cost will never be assigned to the project the money was diverted for, true enough. But to me, it is still the cost.
Of course the pension admins like to say “well, the money doesn’t sit in an account just earning interest, it gets put to work anyway”.
Which is true. But not in some shady deal arranged by a politician desperate to save face and which has no change of being paid back – much less earning dividends or interest – by the wildly optimistic income projections on a building that is used 10-15 times per year.
No, it doesn’t increase costs, that’s just bookkeeping. If you have $2 billion (present value) in debt and choose to cover it by taking it out of the pension fund, you still have the same $2 billion hole, it’s just in the pension fund now and not in the general fund.
Pretending that borrowing from the pension fund to spend money isn’t really spending money because “we’ll put it back later” is absolutely terrible policy. But so is selling $2 billion in bonds on the same basis. Either way you’re taking on $2 billion in debt, with the only idea for getting it back being “> ??? > profit!”
It is only borrowing if you pay it back within a reasonable time frame. It is not borrowing if you take it from a source with no intention or ability to pay it back. That debt and accumulated interest/charges is the problem.
Just like a credit card.
Sure, the tv still only cost $500. But if you put it on the no money down plan and don’t pay for a year and then don’t pay right before the interest deadline, your tv will end up costing you a lot more than $500.
Carrying costs matter. If you don’t want to include them as a cost of purchase, that’s fine, in fact it is inarguably true… Carrying costs aren’t part of the purchase price. But financing is only necessary because purchasers typically do not have the cash ready to pay up front.
The mortgage fallacy has a corollary: the opportunity cost of financing a purchase of that size over a lengthy term.
I think we’re saying the same thing here, ultimately. There are two ways to dig yourself a money pit: all at once or slowly over time, and the first way costs you more now, while the other way spreads out the pain but there’s more of it eventually.
Neil, you might find this article quite interesting regarding the White Sox now wanting lots of coin to build their new palace on The 78 parcel of land…https://wgntv.com/sports/white-sox/report-reinsdorf-to-seek-1-billion-in-public-money-from/
Neil,
Can you explain the mortgage fallacy?
If you buy a house for, say, $500,000, your mortgage payments over 30 years are going to end up adding up to more than $1 million. That doesn’t mean that you “paid $1 million for a house” or “bought a $1 million house” — it means you paid $500,000 for a house, then paid a bunch of interest over time to borrow $500,000 from a bank.
If that doesn’t work for you, let’s try this thought experiment: You give me $10,000 a year for the next 10 years. At the end, I’ll give you $101,000. Great deal for you, you made $1,000! See the problem with not distinguishing between money paid now and money paid in the future?
Regarding Kauffman Stadium: It’s interesting that it has “concrete cancer” but Arrowhead Stadium, built right next door, at the same time, by the same contractor is in line for renovations to keep it in use another 40+ years. If billionaire owners want the tax paying public to subsidize their already profitable businesses they could at least be honest about their reasons (i.e. to make them more profitable).
The 2024 deadline is real….sort of. As you’ve written about before the plan for a Bears Stadium, and the one for a White Sox stadium are predicated on a 2021 bonding clause the legislature already passed for the Illinois Sports Facilities Authority. The clause expires at the end of 2024.
Now could the legislature just pass it again? Sure. But I believe the original purpose was to give them extra flexibility after hotel tax revenues came in well below projections, because COVID. It was never really meant to be for building new stadiums and its not obvious they would pass it again, because it’s not 2021.
So yeah, there is a deadline to give Chicago sports teams free money without the legislature having to actually debate it.
As it pertains to Jacksonville, it has to be said that the Mayor cut here teeth as a newscaster and breast cancer survivor who ran an annual 10k race fund raiser for breast cancer. Math and negotiating with Billionaires may not be her specialty. T
The plan they threw out was the Pension Fund would be guaranteed a 6.5% return on the funds withdrawn to fund a portion of the City’s “commitment” towards the stadium. Not sure how /where she expects to get that 6.5% or the money to pay the principal from but it appears to be a sleight of the hand to the taxpayers who don’t realize they are getting snookered.
I don’t expect a lot of criticism or deep reflection on the proposal from the local press. She has the local press swooning because they all hung in the same circles when she was “one of them”. Sort of a new version of the “old boys club”.
I have to give her credit though, she was able to raise 175k to remove some statues from private funds so she could by pass the Council funding process. I am hoping she can raise at least 250k for the stadium.