In case you missed the live recap of yesterday’s St. Petersburg city council meeting, the council approved selling $287.5 million in bonds for a new stadium for the Tampa Bay Rays, reversing their vote of two weeks ago to hold off on the move. What happened is pretty straightforward: The two councilmembers who’d flipped to “no” votes two weeks ago flipped back to “yes” — while their stated excuse was that they were content that team execs were no longer calling the deal entirely dead, presumably it was more the recognition that this was likely now or never, as starting in January there would be two new anti-stadium-funding members of the council, and they didn’t want to be accused of dawdling too long like the Pinellas County Commission.
So what happens now? The county commission still has its slim 4-3 majority against selling its $312.5 million in stadium bonds unless Rays owner Stu Sternberg renegotiates the deal; at the same time, Sternberg and his top aides are insisting that they need the pot sweetened to cover the costs of the bond sale having been delayed, even though the original deal said it didn’t need to happen until next April. Historically, this usually leads to some serious haggling between team officials and whichever commission member they think they can flip — the only question is which one would be willing to flip for the cheapest price, and whether “okay, we won’t ask the county to pay for the cost overruns that we’re suddenly claiming exist” would count as a concession. (Okay, there’s also the question of when and if the St. Pete council will sign off on repairing the Tropicana Field roof so the Rays would have somewhere to play in 2026 and 2027, as they didn’t vote on that yesterday, but even if that’s delayed a bit, the team could presumably extend its stay at Tampa’s Steinbrenner Field into early 2026 without too much trouble.)
Or the county commission could decide to hold the line at its December 17 meeting and delay the bond sale again, or even reject it altogether, at which point, understates Mayor Ken Welch, “that sets us on a different path.” We’ll find out a week from Tuesday, but right now, the odds of Sternberg getting his $1 billion public subsidy deal or something close to it look a lot higher than they did a couple of days ago.
But enough about the Rays, already — other stuff happened this week, let’s get to it:
- The Las Vegas Stadium Authority Board gave its final signoff to an Athletics stadium in Las Vegas after team owner John Fisher submitted a letter vowing that “members of my family and I are committing to contribute up to $1,100,000,000” to the project. The Associated Press called this clearing “the last major hurdle” for a Vegas stadium, which isn’t really true: The Clark County Commission still needs to hold its own vote, something A’s exec Sandy Dean said the team was in early stages of talks for; and, of course, Fisher still needs to actually figure out where to get that $1.1 billion — he claims he’s still looking for new private investors, but those seem unlikely to materialize at this late date, so he may need to decide on whether it’s worth committing a large chunk of his family’s wealth to building a very expensive stadium in what would be easily MLB’s smallest market. If he does, and if the county signs off, construction could start as early as next spring with a stadium opening in 2028, but those are still fairly major hurdles.
- The Cleveland Browns hired a real estate consulting firm, as one does, to determine the economic impact of building a new stadium in Brook Park, and announced that the county would see an added five squillion dollars in annual economic impact (give or take a squillion). Cuyahoga County Executive Chris Ronayne responded with a statement that “economic impact studies commissioned by organizations with a vested interest often present overly optimistic projections that do not reflect the financial realities faced by local governments and taxpayers” and that “we’re going to have to throw a flag on the play.” (And we were so close to getting out of this without any football metaphors!) Still, this allows the media to portray this as “Browns study says five squillion dollars, city claims only three squillion, truth must lie somewhere in the middle,” which is why real estate consulting firms get paid the big bucks.
- A city council vote on the proposed Philadelphia 76ers arena is expected by December 19, and Chinatown groups made a last-ditch effort to demand that the team owners increase their community benefits agreement from $50 million to $300 million. (Sports economist Geoff Propheter says this would be close to what Sixers owner Josh Harris would be saving in property tax breaks, at least.) Developers said at a hearing Tuesday that $300 million would be too much, but were open to a smaller increase; with the council seemingly set on approving the deal, we look to have entered the haggling over the price phase.
- NYC F.C. held a groundbreaking for their new Queens stadium, now to be called Etihad Park after a brief but memorable spell being depicted as Naming Rights Sponsor Stadium. The city’s Independent Budget Office recently issued its long-awaited report on the cost of city tax breaks for the stadium, and determined that team owners Sheikh Mansour bin Zayed Al Nahyan and the New York Yankees will save $538 million via the site being exempted from property taxes, though it also notes that it could have saved all but $74 million of that money through other city tax breaks anyway. So, yay?
- Washington Commanders owner Josh Harris (yes, same Josh Harris) and NFL commissioner Roger Goodell went to D.C. this week to lobby Congress to hand over the RFK Stadium site to the district for a potential NFL stadium, and Maryland’s two senators responded that they would demand that one of D.C.’s two Air National Guard squadrons be transferred to Maryland in exchange. This is officially peak haggling over the price, I think we’re done here, have a good weekend and see you on Monday!
I know it’s outside the scope of this site, but I wonder what’s the economic impact of a National Guard Squadron is vs a seldom used football stadium? I assume the National Guard isn’t paying any property tax either. But it might involve a lot of people coming to the district and working and eating every day. Seems like a double loss for DC. Getting a money sucking football team and losing a money generating government agency.
I’m no economist and can’t be certain of it, but I suspect a National Guard squadron would in the long run be a better economic boon. There are a certain number of steady (as in, full time 5-day-a-week) employees, mostly better-paid than minimum-wage concession clerks (only there on game days), as well as Guard members coming and going (typically on monthly maneuvers) throughout the year rather than just the 6 months or so of the football season.
In other words, there’s a more constant cash flow that lasts through the year. Tens of thousands of spectators coming in on game days would definitely flood the local economy in ways a single Guard squadron can’t come close to, on those game days, but the effect would be more consistent.
Full disclosure: I live not too far from an Air Guard squadron (one that’s on the smaller side) and can say that businesses local to it definitely benefit from its presence.
As a Marylander, we would be happy to have another ANG squadron in the state. The RFK site only makes sense for DC if the city is able to build up the area around the stadium. They don’t need another sea of unused parking.
I take it that ‘all but’ $74m of the tax breaks would have come about if they built the affordable housing component and other stuff anyway?
Or does that calculation include putting 3-4 times as much affordable housing on the same site (and no stadium)?
If they were eligible for the majority of that tax break anyway for what they are doing, and if public funds worth less than 10% are going to the stadium itself I think it is a good deal (I have often said that public funding for what amounts to private professional sports facilities should never exceed 20% of the total cost).
On the other hand, if the “remaining” $464m in tax breaks would only have been triggered if they filled the entire site with housing or other “public good” projects, then those incentives should be counted toward the public cost of the stadium IMO.
10% and 70% are pretty far apart.
Would have helped if I had put in the correct link for the IBO document:
https://acrobat.adobe.com/link/review?uri=urn%3Aaaid%3Ascds%3AUS%3A404b77dd-7d63-357a-b697-e3925dcdf7b7
“IBO estimates that if the soccer stadium were built on private land that was fully taxable, this would yield $538 million in property tax revenue over the stadium’s 49-year lease period. (All dollars in this report have been inflation-adjusted to 2024 dollars.) If the stadium were built on private land, however, it would likely qualify for an existing City property tax break available to many types of commercial development: the Industrial and Commercial Abatement Program (ICAP). Under ICAP, IBO estimates the stadium on private land would pay only $74 million in property taxes to the City.”
So if NYCFC hadn’t gotten a special tax break for the stadium, they likely could have gotten a special tax break for commercial developments that would have been worth almost as much. ICAP is pretty pointless and wasteful too, though, so maybe the best way of putting this is “NYC is giving over half a billion dollars in tax breaks to a soccer stadium because it just likes giving tax breaks to big developers”:
https://gothamist.com/news/how-a-useless-400-million-tax-break-for-nyc-developers-chugged-along-for-20-years
Ah, thank you. That makes it clearer. Although also kinda weird… I just assumed the breaks were tied to the affordable or submarket housing.
Silly me.
I am not a mathemortician, but a phrase like “…committing to contribute up to $1,100,000,000…” can clearly include any positive number between 1 and 1,100,000,000.
But having said that, I do not have to be a mathemagician to know that $1.1Bn + $380m does not equal $1.75 Bn.
Hmmmn. Sorry, was channelling the commish there for a moment.
When you are putting money toward YOUR OWN project, why would you use the word “contribute”?
He isn’t offering to put that money towards a public park, library, drug treatment centre, school or hospital is he?
If I buy a new car, should I hold a press conference to announce that I am prepared to contribute up to 50% of the price of the car over the 8/30 year financing contract? Wouldn’t somebody ask “so who is going to fund the rest?” Like the car sales people, for example…
Contribute sounds like donate. The only donations in this project are headed from the public purse to Fisher’s family. And really what better use of tax dollars in a state that cannot fund it’s schools than to a GAP heir?
Fisher’s (fake, nonbinding) promise can’t be taken seriously. His family’s wealth is in Gap stock. The market cap of Gap is about $9.8 billion. They’re not going to sell $1.1 billion in Gap stock, because selling 11 percent of the company’s stock at once would tank the stock price and cost the family members a lot more than just the $1.1 billion they’d be giving to John Fisher’s Vegas boondoggle.
The game is either to sell the team and let new ownership fund a stadium, or to get investors to pledge a few hundred million on the condition that Nevada double or triple the “public contribution” that is already on the table.
Ding! He and his family are not liquid. That’s why Fisher is actively soliciting investment and no one is biting. Furthermore, he is so cash poor the man is creating a LLC for the stadium and asking for investors in that. Who in their right mind would invest in a stadium company in which said stadium would be partly owned by the City of Las Vegas and Clark County on land leased by a gaming REIT.
Hardly anyone wants the A’s here, mainly due to Fisher and it being a relocated team instead of an expansion one. Whose going to watch baseball in the dead of summer in Las Vegas?
Those politicians grifting off this better enjoy their time in public office because it will be coming to an end.
It is pretty standard to have a separate LLC for the stadium. In fact aren’t the A’s going to hand the stadium over to the quasi governmental Las Vegas Stadium Authority so they don’t pay any taxes? But the A’s will still get all revenue generated and may or may not be on the hook for upkeep costs
That’s the A’s collecting all the revenues, though, not the LLC. If Fisher is really seeking investors in Stadco, a company that won’t really have any revenues – and I haven’t been able to confirm that with a quick web search – then you’d be better off buying that teenager’s meme crypto.
And the point still stands that surrounding ancillary development has no benefit to the Fishers, that’s all going to be Bally’s and GLPI. This contrasts sharply with the Howard Terminal/Coliseum deal, which would have had ample opportunities for cashflow from ancillary development. In fact, Kaval was consistent in maintaining that Howard Terminal would not pencil out financially without the team also owning and redeveloping the Coliseum!
So that alone makes it seem like this whole thing is an attempt to rescue the team’s value as an increasingly stranded asset, and do anything to meet the $2 billion price floor that the other owners are trying to set. But there’s also ample evidence that Fisher is an impulsive, irrational actor. Looking backward in time: jumping from Red Rock to the Tropicana site; that ridiculous puff piece with him climbing the cargo crane and falling in love with Howard Terminal once they were forced to pivot from Laney College; trying to barge into Laney College in the first place without talking to anyone there… need I go on?
At this point, I’m not sure what the heck is going on with the Rays. But honestly I don’t know what the heck they were trying to pull in the first place. This only makes sense to me as a gamble to snatch the land out of the deal while finally getting full access to the highest bidder outside the Tampa market, or as a poorly thought out political maneuver to bring the newly elected stadium critics to heel. If they truly could no longer afford the deal, they’d already be at the point of pulling out of the deal even if it meant losing the land. If they’re willing to risk sticking to the deal, they have to have a way to afford it.
Agreed.
I guess the one ‘strategic’ point they may have achieved is to get the council(s) to say they aren’t out (yet), while making public statements themselves which could be construed (yet are not legally binding) as either in or out.
Does that have any real value? Well, I would say only if they can get the BCC to believe that it is up to THEM to bring the Rays over the finish line.
I am hoping that doesn’t happen, frankly, as I don’t believe this sort of behaviour should be encouraged.