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Wyandotte County claims it will totally make money on $180m+ subsidy of Chiefs stadium

access_time personNeil deMause

We finally have a number for how much tax money Wyandotte County could hand over to Kansas City Chiefs owner Clark Hunt following last Thursday’s vote to funnel virtually all sales and hotel taxes from a 200-acre stadium district in Kansas City, Kansas to help pay off $2.775 billion in state STAR bonds for stadium and related construction. Or rather, a couple of numbers:

The local tax breaks could total $350 million to $450 million. The Unified Government expects the project to generate $488 million in revenue, netting the county at least $38 million over 30 years.

I have questions! So many questions:

  • How did the county estimate $350-450 million in tax expenditure (over 30 years, it sounds like, which would be more like $190-230 million or so in present value) when it’s unknown exactly what the Chiefs plan to build on the 200 acres?
  • How did the county come up with that $488 million estimate for new tax revenue, and did it account for money cannibalized from other spending that would have taken place in the county even without a stadium?
  • Since the state is planning on going ahead with the stadium regardless of whether Wyandotte County chips in, wouldn’t it get any new tax revenue either way, making the tax breaks a net loss?

Todd LaSala, a private attorney who serves as an economic development consultant for the Unified Government, attempted to answer the last question, at least, speculating that Hunt could build his stadium in a different part of the state if the county didn’t agree to the funding: “If you voted no, it sends an interesting, if not a dismissive message to the Kansas City Chiefs, who want to choose Wyandotte County as their home.” LaSala didn’t indicate why the Chiefs owner would balk at a Wyandotte stadium site when he’d be getting the same amount of STAR bonds for it regardless, but it is important to remember that if you want to remain attractive to the local billionaire, you must never speak your mind and learn how to light his cigar right.

As for the other questions, I’ve gone through all the documents presented for last week’s county commission vote, and I can’t find anything giving details about how those tax break and tax revenue projections were calculated. Given that when the state of Kansas tried a similar exercise with its own $3 billion-plus in Chiefs tax breaks, economists deemed the resulting figures to be “incredibly optimistic,” “insane,” and “just not credible,” it’s probably a good idea to take these latest numbers with a grain of salt — even before considering that these tax subsidies look to be money that Wyandotte County is voluntarily giving up to land a stadium it would get regardless. I’ve reached out to both the county and LaSala with the above questions, and will post an update here if I hear back from them.

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Oregon bill offers Blazers owner all income taxes from in and around arena in exchange for not threatening to move yet

access_time personNeil deMause

The Portland Trail Blazers are in the middle of being sold to Carolina Hurricanes owner/subprime auto loan baron/“glass chewer” Tom Dundon, and apparently the threat of the team’s expiring lease in 2030 and Dundon’s reputation for playing hardball has Oregon elected officials moving toward spending a ton of money on upgrading Portland’s arena to avoid the team from moving to (Oregonian staffers throw darts at giant wall map of the U.S.) Nashville or Kansas City. What would Oregon taxpayers give up, and what would they get in return? As usual, it’s complicated:

  • According to a bill introduced on Monday by state Senate President Rob Wagner, the state would take all income taxes collected in and around the Blazers arena for the next 30 years and make them available for Dundon to use on arena upgrades. That would include not just taxes on Blazers players and staff, as team execs were previously reported to be seeking, but income taxes paid by any entertainers who perform at the arena, and even by the construction workers performing the upgrades.
  • This income tax money would be used to pay off $360 million in state bonds, as part of an overall $600 million public funding package. The rest would come via $75 million from a city climate fund meant to be used on projects that reduce carbon emissions and help residents at risk of climate change impact, $75 million from county car rental taxes, and $50 million from city business taxes and $40 million from county business taxes on the sale of the team to Dundon. All of these look to be present value, meaning the nominal amount of taxes redirected over time would be considerably more, if you prefer to count that way (I do not); the bill itself helpfully informs us that it “may have fiscal impact, but no statement yet issued” and “may have revenue impact, but no statement yet issued.”
  • In exchange, Dundon would agree to keep the Blazers in town for “a specified term” of time, which isn’t vague at all. If the Blazers’ eventual lease extension ends up concluding anytime before 2044, it could break the Charlotte Panthers record for the most expensive per-year lease extension in sports history.

That’s significant chunk of change for an arena that Portland taxpayers already helped then-Blazers owner Paul Allen build in 1995 and then took off the hands of Allen’s heirs in 2024, saving them about $1.2 million a year in property taxes. Oregon Gov. Tina Kotek is on board, though, calling the arena subsidy “an opportunity for the city and the state and the county to put their best foot forward and say, ‘Look, we want to be a partner with the new owner to keep the team'” and meeting with NBA commissioner Adam Silver last month to argue for the deal. Then there’s Oregon U.S. Sen. Ron Wyden, who took in a Blazers game on Saturday and wandered the arena telling anyone who would listen that he wants to “help anybody who wants to keep us in town” and calling the privately owned NBA team valued at $4.25 billion “infrastructure” and “a huge economic development opportunity” and “a big economic force in the state” when he wasn’t too busy exchanging hugs with former Blazers player Buck Williams.

The biggest stumbling block right now appears to be Multnomah County, where county leaders have expressed a desire to use their $40 million business-tax check from the Blazers sale to spend on actual resident services, or at the very least to backfill the car rental tax money the county would be giving up. That’s relatively small potatoes, though — the biggest piece, the $360 million in income tax money, is expected to be voted on by the Oregon legislature by the time it wraps up its session on March 8.

That leaves less than four weeks for public discussion, which would be plenty of time to go over the dubious theory that businesses should keep the income taxes paid by their employees because if they skipped town all that tax money would go away, which 1) it almost certainly wouldn’t and 2) pretty much defeats the whole economic purpose of luring and retaining businesses regardless. Tune in Monday at 8 am PT to watch the state senate rules committee discuss the income tax diversion bill, sorry, looks like no public testimony at this one as it’s a committee “work session,” but surely there’ll be time for the public to be heard, at least minutes before the legislature takes its ultimate vote.

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Pritzker’s office met with Bears, Goodell to talk stadium spending, everybody speculate wildly!

access_time personNeil deMause

Illinois Gov. JB Pritzker continues to drop hints about possible state involvement in funding a new Chicago Bears stadium in Arlington Heights, and the assembled media continues to Kremlinologize about it:

  • The Chicago Tribune, citing “sources familiar with the discussions between the Bears and state of Illinois officials,” reported that both sides have been meeting regularly since early December and discussing both state infrastructure funding and approval of local property tax cuts for a Bears project, as well as possible guarantees by the team to make games more affordable.
  • Pritzker spoke twice with NFL commissioner Roger Goodell last month, though the governor’s office declined to comment on what was discussed.
  • At an event to announce Illinois’ launch of STAR bonds — state bonds repaid by siphoning off future sales tax revenue from a development district, most recently seen funding $2.775 billion toward a Kansas City Chiefs stadium project —  Pritzker noted that while STAR bonds can’t currently be used for sports venues, the legislature could always change that: “We’re not specifically looking at it that way — perhaps the Bears are.”
  • At the same event, Pritzker said of the STAR bonds, “We’re not going to do anything that’s bad for the taxpayers here. I mean, I am not… we’re not throwing money at building a stadium. For anybody.” He then added on the potential of the Bears moving to Indiana, “I’m always concerned about making sure that we’re attracting businesses or keeping businesses in the state of Illinois”; asked if he would consider offering enticements for, say, the St. Louis Cardinals to move to Illinois, Pritzker replied, “I am trying to attract businesses, yeah. You said ‘any world?’ Yeah, like every world in which we are trying to attract businesses—and that includes teams—but businesses to the state of Illinois.” (Cardinals president Bill DeWitt III, asked for comment on this, said his team remains focused on renovating its current stadium and “Illinois is not on our radar,” though you have to imagine putting Illinois on Missouri’s radar when it comes time to ask for renovation money is very much on DeWitt’s radar.)
  • “People familiar with the discussions” tell CBS News that “representatives from Gov. JB Pritzker’s office, at least two Illinois state lawmakers, village leaders, and the Bears have met multiple times a week since December to discuss legislation to help the Bears with their proposed stadium in Arlington Heights” and they’re getting close to an agreement. Pritzker confirmed that there’s “progress that’s been made,” including on infrastructure spending “and other things that are sort of available to any business that is growing or building something new in the state of Illinois that’s putting people to work.”

New highway ramps and moving a commuter rail station aren’t typically things available to any business, so we’ll have to wait and see if Pritzker is talking about a smaller state infrastructure spend than the Bears owners’ $855 million ask, or if he’s trying to have his “not throwing taxpayer money at a stadium” and eat it too. All the good tea never gets spilled, this world needs some better people familiar with discussions, stat.

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MLB has lockout and more revenue sharing on deck; what will it mean for the stadium game?

access_time personNeil deMause

For the purposes of this site, I’ve been mostly ignoring the coming end to MLB’s union contract (and expected lockout) following the 2026 season, in part because it’s a bit tangential to Field of Schemes’ coverage area and in part because it’s just too damn depressing to think about how I’m going to spend my time next spring. (Watch the MLS transition season? Shoot me now.) Money stuff is money stuff, though, and as Marc Normandin pointed out in his newsletter yesterday, team owners’ stadium revenue strategies are affecting how they’re thinking about revenue sharing with players:

I believe there are owners who genuinely want a [salary] cap. I also believe there are owners who have not fully considered what having a cap would mean for them, in terms of having to argue with the MLBPA again and again about what actually constitutes baseball revenue. To go back to the WNBA again for a second, there has been a salary cap in place there for ages, and now that the players are in a position where they have more bargaining power, the two sides are arguing about what should count as revenue toward revenue sharing. There is much more money involved in MLB’s side, and just as significant of a grift — hello, baseball stadiums that are also real estate bonanzas of “non-baseball” revenue.

That’s a bit in the weeds if you don’t regularly follow sports CBA negotiations, but rather than me try to explain it, let me get Normandin to do so, since he’s the expert. Hey, Marc, get over here a minute!

Can you explain, briefly if that’s possible, what the pros and cons of a salary cap are for baseball owners?

MN: The pros are pretty simple. Owners will say that a cap would level the playing field, even though the parity of MLB is no worse and in some cases better than that of capped leagues, but the actual reason for one is to slow or outright inhibit spending. And with it, the expectation of spending to compete. It maybe wasn’t noticed enough in the negotiating for the existing CBA, but the owners offered a salary floor of $100M and a cap of $180M attached to it before dropping the subject.

My guess as to the low floor and ceiling there is less “this is the cap the owners expect to institute” and more checking the temperature on the Players Association in general. It’s either that or the owners don’t understand how a salary cap is actually calculated, based on revenue, which is where the con lies. The books are never opened for a reason, and MLB teams insisting that real estate revenue made at a baseball stadium isn’t baseball revenue is another reason to keep them closed. Having to open the books and argue about what is or isn’t revenue would take longer than the rest of bargaining combined, and it’s not even clear if the owners would agree with each other, never mind the players, about what constitutes baseball revenue.

So do you have a sense whether team owners have been hot for “non-baseball” revenue from mixed-use districts like the Atlanta Braves‘ Battery because that revenue is easier to hide from players (and other owners)? Or do they just want them because they’re free money, but then it becomes a reason to keep the books closed? (Also, wondering if you know how this works for, say, the NFL, which both has a salary cap based on total team revenue and is equally gung-ho about turning stadiums into real estate deals.)

MN: Being able to hide it is a plus, but that there’s simply more of it is a win, too. Get a city/county/state to pay for the land and the stadium, build a mall there financed with the kind of low-interest loans a billionaire can take out, profit. It’s a great deal for everyone involved besides the taxpayers, as you know!

The NFL breaks things into three sections (league media, postseason/NFL ventures, local) with the percentages going into sharing varying for each. Concerts held at NFL stadiums don’t count towards local revenue, though, so I imagine the league has successfully argued itself out of counting real estate around stadiums as football revenue.

Of course, the NFLPA hasn’t exactly covered itself in glory over the years, so “well the NFL does it this way” might not be a convincing argument in the MLBPA’s eyes.

Do any of these revenue-sharing machinations have anything to do with teams like the Pirates and A’s signing actual players to actual contracts all of a sudden? I know they have a reason to try to avoid grievances for cashing their revenue-sharing checks and never spending them, but this seems like more than the token efforts of the past where they’d sign a guy or two with plans to trade them come July.

MN: My read on this uptick in activity — from two organizations that literally could not be threatened into spending by the PA for years — is that they know it’s likely revenue-sharing is going to see an increase in the near future, via the next CBA. Which is not a move that requires a cap, either, as the existence of revenue-sharing in the present reminds.

But like in the late-90s and early aughts, the newer (or just more successful) streams of revenue some teams have access to and others do not in the same quantities means a rebalancing is in order. Bud Selig had to convince George Steinbrenner to agree to a system The Boss felt was socialist, but he got there. Rob Manfred probably has it a lot easier since the system is already in place and just needs redefining by nationalizing, as it were, local revenue streams to the same degree that the NFL has to eliminate some portion of the advantage that the Dodgers et al have. While (at least in theory) inspiring teams like the Pirates and A’s to spend their newfound funds, too. The Dodgers and Yankees and so on aren’t agreeing to a new system where they cut checks to teams that won’t use them, so this is teams showing they can be trusted with very large bags of money they otherwise won’t have access to.

So this gets us back to the central contradiction of revenue sharing of any kind: It makes it easier for small market teams to compete with big market teams if they want — but any leveling of the playing field also means that teams can be a lot more footloose, because it doesn’t matter if they play in Green Bay if they still get a cut of those national checks. Obviously we don’t know how revenue sharing will look exactly under a new CBA, but do you see a real possibility of a kind of NFLization of MLB, where market size doesn’t matter as much either for competitiveness or for relocations?

Or to put it way more simply: Does any of this make it more likely that the A’s will move to Las Vegas?

MN: Someone would still have to foot the Vegas stadium bill, and it sure doesn’t seem like it will be John Fisher. But hey, MLB already waived the relocation fee for the A’s, maybe they will let him off the hook with the stadium costs, too.

You bring up a good point related to that, which is that this opens up the possibility for some new markets that previously had limitations, which in turn would mean expansion is finally on the table again and the expansion fees that come with it, never mind the larger shared revenue pools that can come with additional broadcasting deals, gates, merch sales, etc. Revenue-sharing getting a huge revision would impact so much on its own, which is another reason the cap talk just doesn’t seem realistic to me. Not when there is a solution that wouldn’t endanger 2027, or the broadcasting negotiations of 2028, and requires full player buy-in, too.

Thanks! Still more reasons to dread next spring, just what I needed!

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Chiefs practice field in Olathe would break new ground in siphoning off city tax money

access_time personNeil deMause

Two local Kansas governments will be holding public hearings tomorrow on possible subsidies for a new Kansas City Chiefs stadium to defray the state’s possibly insurmountable costs. Wyandotte County holds its first public hearing at 5:30 pm, and the city of Olathe in neighboring Johnson County, where a Chiefs practice field would be built, will follow at 6 pm. Olathe apparently plans to vote on stadium funding at its meeting, and accordingly has published its plan, which is a doozy:

  • The legislation would create a 165-acre tax district around the new facility for diverting city taxes.
  • Within that area, all city sales tax revenues, the city’s share of county sales tax revenues, and 7% of the 9% city hotel tax — except for any money already pledged to paying off other projects — would be redirected to the Chiefs to cover the team’s development costs.

Economist J.C. Bradbury weighed in over the weekend to call this “bonkers,” and it indeed would break new ground in siphoning off tax money for a stadium: Olathe wouldn’t be just giving up increased tax revenues like in a TIF, but all sales and hotel tax revenues within the tax district, for the next 30 years. (At least the tax district is smaller than the state’s incredible 293 square miles, but that’s a low bar for comparison.) The likely practice field site is currently undeveloped, at least, so Olathe wouldn’t be losing much in existing taxes; unless, of course, a Chiefs development lures away businesses that would otherwise locate elsewhere in Olathe and moves them to the tax-subsidy district, which is pretty likely.

Meanwhile, economist Geoffrey Propheter chimes in to note that rezoning the practice field site as exempt from property taxes would cost the city about $37 million in present value of lost future tax revenue. No one has yet attempted to calculate how much Olathe would give up in future sales and hotel tax money.

At this point, the best-case scenario for Olathe might be that it turns out no one wants to open a ton of hotels and restaurants and other businesses around a practice field that’s only open to the public a handful of days a year, and there’s not so much local tax revenue to lose. Or the city council could just say, “We get all the hassle of hosting a Chiefs practice field but the Chiefs keep all the tax money? No thanks.” We’ll find out tomorrow night.

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Friday roundup: Chiefs stadium deal still not finalized, Royals even less so

access_time personNeil deMause

Pressed for time here on a bunch of projects (I’ll be able to reveal more about one next Thursday or Friday), so let’s take a brief spin through the rest of this week’s news:

  • Wyandotte County will hold a public hearing sometime in the next three weeks to help decide whether to put some amount of city and county sales taxes into a Kansas City Chiefs stadium that would be built somewhere in the county. Meanwhile. legislators from both parties are criticizing the deal as “tax giveaways for billionaires.” The Chiefs deal isn’t falling apart or anything, but it does still have a lot of t’s to cross and i’s to dot before Clark Hunt can cash his $4 billion check.
  • Clay County officials said three weeks ago that they were no longer talking with Kansas City Royals owner John Sherman about building him a new stadium, and now the county commission has announced that the deadline has passed for putting a stadium measure on the April ballot. Royals stadium sites are truly falling like dominoes (I don’t think that’s actually how that metaphor works, but sure, close enough).
  • It’s been almost four years since the Los Angeles Angels‘ sweetheart stadium land deal was torpedoed by an FBI fraud and bribery investigation into then-Anaheim Mayor Harry Sidhu, which means it’s about time for city officials to start bringing up the prospect of a new stadium land deal. Councilmember Natalie Meeks, who proposed the agenda item, seems open to ideas — selling the parking lots around the stadium for quick cash, leasing it out for development for slow cash, turning it into open space — and any proposal will also have to deal with the state’s Surplus Land Act, which requires that any sale of public land prioritize affordable housing. City officials say they haven’t talked with Angels owner Arte Moreno about any of this, which will probably be necessary, only hopefully this time with fewer federal investigations.
  • ICE is going to be present at the Super Bowl in Santa Clara, and Batman will not stand for it.
  • The owner of a dead mall in Phoenix wants to get one of those “theme park districts” to divert tax money to a new domed women’s soccer stadium. Tasmania says hold my beer.

 

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Rays stadium cost set at $2.3B, public share still TBD

access_time personNeil deMause

The proposed Tampa Bay Rays stadium at Hillsborough College’s Dale Mabry Campus in Tampa may not have a design or a funding plan, but it does now have a price tag: $2.3 billion, according to Tampa Sports Authority CEO Eric Hart. And that’s just the stadium itself, before the cost of a planned surrounding mixed-use development, or the cost of relocating college facilities to one corner of the campus to make room for the stadium district, or the cost of acquiring the land from the state in the first place (assuming Rays owner Patrick Zalupski plans on paying anything for that, which only he and his lame-duck pal Gov. Ron DeSantis know).

As for where the money for all this would come from, Rays CEO Ken Babby made clear that a bunch of it would be on taxpayers’ tab:

“We need a great public/private partnership where the community, whether it be the county or the city or both, the state, all come together to build something really special here for Tampa Bay. That’s how we’re thinking about it.”

Fox13’s Evan Axelbank has a little more on possible revenue sources: The Rays owners, he said, are “considering a host of options, including community redevelopment funds, hotel taxes, car rental fees and the creation of special taxing districts that would take money from the development itself.” (Note to Evan: A special taxing district doesn’t really take the money from the development itself.) There would also be the value of getting to use all that state land — somewhere between $250 million and $1.7 billion, according to economist Geoffrey Propheter — plus getting out of paying property taxes for 99 years and parcel fees, which he just guesstimated at $839 million in present value. Total public price tag: Who the hell knows, but “way over $1 billion” seems a fair bet.

Tampa and Hillsborough County elected officials, who would have to sign off on any stadium subsidies, are so far saying all the right things about how any plan has “gotta be good for taxpayers, it can’t just be good for [the Rays],” but there’s still a long ways to go. After Hart added that the Rays would provide an economic analysis of the stadium project, the sports authority voted unanimously Tuesday to recommend that the city and county conduct their own study. Hart again:

“That’s why you’re seeing me doing economic analysis, because I think that would give better answers to be able to answer all your questions,” Hart said. “So right now, I would tell you that there’s ingredients, but there’s no soup. So it might be premature for us to say they’re at a point or not. There’s nothing like that at that level.”

I’m not sure there’s even ingredients yet, really, but it’s your metaphor, go with it. One thing’s for sure: Whatever the mystery soup ends up having in it, it’s likely to be really, really expensive.

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Chiefs lawyer says spending $4B in tax money on stadium will cost nothing, because pie

access_time personNeil deMause

The commerce committees of the Kansas state house and senate spent an hour yesterday investigating the “real facts” of the Kansas City Chiefs stadium deal, as House commerce chair Sean Tarwater put it, and naturally enough they started by talking to … the Chiefs’ lawyer?

Korb Maxwell, the attorney representing the Chiefs, repeatedly asserted that the team’s move is all upside for Kansas taxpayers — a claim that experts have cast doubt on. “It’s a great day to be a Kansas taxpayer because we pulled . . . all of this off without raising taxes on Kansas taxpayers, without using any base revenues from the State General Fund, and without pleading the full faith and credit of our state to the bonds,” said Maxwell, who called Kansas’ STAR bonds “tried, true and tested.”

Maxwell is correct that the Chiefs stadium would not directly raise taxes — it would only siphon off future taxes as spending rises with inflation, forcing the state to raise other taxes if it wants to backfill to pay for the services that money would otherwise have covered. And he’s likewise correct that it won’t use “base revenues” from the general fund, at least unless the state chooses to backdate the baseline year for the tax increment in order to keep the STAR bonds from being underwater, in which case it absolutely will.

And Maxwell didn’t stop there:

Maxwell said that if the stadium were privately owned, the $1.8 billion in STAR bond funds would be subject to federal income taxes and 45% of the public incentive money would end up in Washington D.C. “That would blow a huge hole in the budget for this project, and frankly would not allow it to move forward,” Maxwell said. “The fix to that is having a public authority.”

What? No, that’s only if they funded the stadium using private bonds, it has nothing to do with who owns the building. Also, there hasn’t been a tax bracket as high as 45% since the Carter administration, are you drunk, sir?

State Rep. Rui Xu then pushed back on the “no new taxes” trope, pointing out that “even if we just have inflation — let’s say 3% over 30 years — that means prices in 30 years will be 150% what they are today, just with compounding. And if we’re not allowed to capture that full growth . . . I don’t see how it’s possible that the priorities can’t shift as a result of just that.” To which Maxwell replied, “This is really about growing the pie for our state, not just arguing over the current pie out there,” which is either missing the point entirely or grasping the point and attempting to redirect people’s attention through images of sweet, beautiful new pie.

These are all good reasons to call people for testimony who are not the mouthpiece for the entity lined up to get a $4 billion check from your state, but commerce committees gonna commerce committee. Fortunately, some other Kansas locals are asking other pointed questions:

  • Wyandotte County and the city of Kansas City, Kansas, which share government leadership, are still considering whether to kick in their own shares of sales taxes from the stadium district so the state isn’t on the hook for all of it. (Wyandotte and KCK would benefit by, I dunno, something about pie?) The city and county’s chief financial officer, Shelley Kneuvean, said her staff will be conducting an independent financial analysis to figure out how to devote future city and county tax revenues without adversely affecting public services, good luck with that.
  • State senator Kenny Titus expressed concern that the Chiefs could move again once their lease runs out in 30 years, leaving an empty stadium. “We absolutely plan to be there for the very long term,” replied Maxwell, though not in any kind of legally binding way.
  • The city and county are already redirecting more than $5 million a year to pay off four other STAR bond projects, including the Kansas Speedway, reports the Kansas City Star.
  • Speaking of the Kansas Speedway project, Rep. Lynn Melton has some thoughts on that: “I went to the community meetings, and we were told that once the bonds were paid off, there’s going to be no school bonds being floated, our taxes will go down because there will be all this revenue. And now we’ve seen the STAR bonds paid off early, that’s all fine and dandy, but we’ve not seen any of that.”

These are all issues that could use more attention, if Maxwell weren’t soaking it all up himself. Maybe first do the independent financial analysis, then ask the team spokesperson about the findings, rather than acting like a real estate lawyer understands how the substitution effect works? Just a thought.

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Rays owners probably demanding another $1b stadium subsidy in Tampa, counting free land and tax breaks

access_time personNeil deMause

The Tampa Bay Rays‘ proposed memorandum of understanding with Hillsborough College on a site for a new stadium is out, and the initial news coverage of same tells us next to nothing we want to know about who’ll actually pay for what. So let’s go to the actual document and see what’s what, then reconvene at the bottom to try to estimate a total subsidy cost:

The Property is an approximately 113 acre-site located in Tampa, Florida, bounded by W. Dr. Martin Luther King Jr. Boulevard, N. Lois Avenue, W. Tampa Bay Boulevard., and N. Dale Mabry Highway

This is Hillsborough College’s Dale Mabry Campus, which would largely be turned over to the Rays, with the college building new facilities on one corner of the property. How much room the campus will get to retain “shall be agreed to in the Definitive Agreements,” which are TBD.

HC and the Rays will negotiate in good faith to agree on an ownership and financing structure and the conditions precedent for the contribution of the Property by HC.

I.e,, final lease terms, including things like whether the Rays will pay any rent for the state-owned site, are also TBD.

The Rays will construct a mixed-use development that may consist of, but is not limited to, hotels, retail space, multifamily buildings, sports and health related buildings, commercial buildings, parking structures, restaurants and other related buildings (“Mixed-Use Development”). The Parties acknowledge that the Rays will have sole and exclusive control over the Mixed-Use Development, during and after construction. The scope of the Mixed-Use Development will be determined as part of the Definitive Agreements

In addition to a stadium, Rays owner Patrick Zalupski will get to build a whole new neighborhood, as former team owner Stuart Sternberg planned to do at St. Petersburg’s Gas Plant District before backing out of that deal early last year. All revenues from that project will go to Zalupski, nothing to the land’s state taxpayer owners.

HC will ground lease the entire Property, except for the College District, to the Rays or a Rays’ affiliate by long-term lease of not less than 99 years.

Since Hillsborough College is a state facility, the property will be exempt from property taxes, including the parcel the team plans to build its mixed-use district on. Also, hey, it’s another 90-plus-year lease, just like the Washington Commanders deal! Lease terms TBD, of course, but it means that any discounted rent could add up to one hell of a lot, as it did for the $6.6 billion Commanders subsidy.

(Economist Geoff Propheter, who crunched the numbers for the Commanders deal, delivers the mic drop on this via email: “If there’s an upside to all of these stupidly long land leases that are so common in sports, I won’t be alive to remind people that I told them so.”)

The Parties anticipate the prominence and activity generated by the Project that will significantly enhance HC’s visibility, strengthen its community presence, and create valuable opportunities for outreach, partnerships, and student engagement.

LOL.

The Rays will pursue various economic incentive programs at the local and state levels in connection with the Project

You didn’t think Zalupski would be content with getting to build his stadium on state-provided tax-free land, did you? Florida already has a sports slush fund that draws on state sales tax dollars, and Hillsborough County and the city of Tampa could always offer tax breaks as well.

The MOU has already been unanimously approved by Hillsborough College’s board of trustees and has the backing of Gov. Ron DeSantis, who has a long history with Zalupski, appointing him to the University of Florida’s board of trustees after Zalupski gave $250,000 to his Super PAC. DeSantis said yesterday that while he wouldn’t help fund the stadium itself, he would consider spending to move a juvenile jail currently on the site and, in the words of the Tampa Bay Times, “help pay for roads and sewers to prevent traffic jams,” which suggests some innovative mass transit solutions.

So, what are we talking about in terms of public cost? It’s hard to say until we see the final lease agreement, but Propheter does provide a figure for the value of the land itself: $250 million if the college were to sell it, between $582 million and $1.7 billion (in present value) if they leased it. Add in whatever Zalupski would get in tax breaks (Propheter can’t estimate those yet because he doesn’t know how much the stadium and development would be appraised at), state road and sewer spending, and any “economic incentives,” and it all seems very likely to exceed the $1 billion that Sternberg rejected one year ago. All this has to get approved by the state and likely Hillsborough County and the city of Tampa as well, of course, but never bet against team owners finding a greater fool.

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Friday roundup: Rays target stadium site, Bears seek Indiana stadium authority, Chiefs pursue local tax money

access_time personNeil deMause

Sorry for the late post today — I think all the images of people getting shot in the face and pulled screaming from their cars are starting to interfere with my sleep schedule. No matter what else is going on, though, the stadium and arena shakedowns continue, so let’s get to the news that we didn’t already cover this week:

  • Tampa Bay Rays owner and Gov. Ron DeSantis pal Patrick Zalupski is reportedly in advanced talks to buy the state-owned Hillsborough College’s Dale Mabry Campus in Tampa for the site of a new stadium and surrounding development. (The college’s 20,000 students would possibly get a new campus elsewhere as part of a “land swap” for something or other.) How the money for any of this would work is as yet a mystery — the Hillsborough board of trustees will meet on Tuesday to discuss the plan, at which point we’ll learn a bit more, maybe.
  • The Indiana state senate is considering a bill to create a stadium authority in Northwest Indiana to lure the Chicago Bears, which would have precisely the same effect as me opening a bank account to use to buy a yacht: nothing at all, until somebody puts some money in it. (The bill language would give the authority bonding capacity, but no set revenue streams to pay off any bonds.) Bears officials nonetheless called it a “significant milestone” in their talks of getting a stadium in Indiana, guess you gotta celebrate your achievements where you can find them, especially if you want to maintain your leverage.
  • There’s been talk before that Kansas’s $4 billion subsidy offer to the Kansas City Chiefs for a new stadium in Kansas City, Kansas (their current stadium is in Kansas City, Missouri) could involve kicking in future city and county sales tax revenues as well as state sales taxes, and now it’s an official ask: Both Wyandotte County, where Kansas City, Kansas is located, and the city of Olathe, where the Chiefs’ new training facility would be built, are being asked to chip in their share of any rise in sales tax receipts to help pay the Chiefs’ construction bill. (I don’t think this changes the overall public price tag, just displaces some of the money the state might otherwise struggle to come up with.) Why the local governments would want to commit their own tax revenue to pay for something the state otherwise plans to build with its own funds, who knows, but Olathe councilmembers did call the training camp a “wonderful transformational project for us” and “a very exciting announcement,” so maybe the hope is local lawmakers will be so excited they’ll contribute to the project’s GoFundMe.
  • Unite Here Local 49 has estimated that those billboards the city of Sacramento is erecting and giving the revenue from to the Sacramento Republic F.C. owners could end up costing the city $115 million over 34 years — which would be worth less in present value, but also it looks like the union didn’t account for future inflation in billboard rates, so maybe not less in present value? Maybe we’ll find out in the year 2060, if man is still alive.
  • There are new renderings of the planned Washington Commanders stadium on the old RFK Stadium site, and they look kind of like a plus-sized version of the Saddledome, surrounded by a whole lot of garages and buildings strategically shown so all you can see are their green roofs. (No fireworks or entourage at all, Josh Harris isn’t blowing any of that $6.6 billion on the clip art budget.) One thing they don’t show: Any of the homes in the nearby neighborhood, or the grocery stores and other small businesses that residents say they would like to see built there, but aren’t hopeful anyone will be able to afford to once the stadium opens.
  • The Houston Texans just hired a chief revenue officer who last worked on the Buffalo Bills stadium project, guess we’re going to start hearing again about Texans owner Cal McNair’s desires for a new or upgraded stadium.
  • $50 million in public bonds for a cricket stadium? In Oswego? It’s all supposed to be covered by stadium revenue, but I can’t find confirmation in the (checks notes) Fox River Valley press. Anyway, I’m done, have a good holiday weekend, see you back here on Tuesday, if woman can survive.
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