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D-Backs’ $300m stadium subsidy would actually cost taxpayers over $400 million, probably

access_time personNeil deMause

You may recall that at the end of January, a group of Arizona state legislators proposed siphoning off all the sales and income taxes collected around the Diamondbacks‘ stadium and kicking it back to team owner Ken Kendrick so he could make upgrades to the stadium. Estimated cost at the time: $230-300 million in present value.

Phoenix Mayor Kate Gallego has now done her own assessment of the value of the proposed tax kickback — or kickover, since it’s not really tax money the D-Backs ever paid, that’s the Casino Night Fallacy talking — and come up with a much higher number:

Gallego said Phoenix’s analysis showed a $720 million loss in tax revenue to the state. Phoenix specifically would miss out on $6.4 million in tax revenue each year under the bill, penciling out to $192 million over the 30-year term.

Factoring in income tax from MLB players, not including staff and spouses, would cost another $105 million, according to the state analysis, Gallego noted.

“After accounting for lost construction sales tax revenue, additional revenues that can follow a significant renovation to a major league sports facility, and inflation over 30 years, the bill in its current form will certainly cost more than $1 billion in public funds,” Gallego wrote.

As regular readers of this site know, one of the big headaches of figuring out the costs of benefits of stadium projects, or any kind of spending projects really, is the difference between nominal cost (all the payments made over time, added up) and present value (how much you could afford to buy now with all those future payments. It’s the difference between adding up all your future mortgage payments and how much you paid for your house — the first number is a lot bigger, but isn’t the “real” cost to you since a lot of those payments don’t have to be made for years down the road, meaning you can make it up by earning interest on the money until you have to write the checks.

Gallego’s letter to Arizona Gov. Katie Hobbs estimates the cost to Phoenix, Maricopa County, and the state of four different tax revenue streams that would be handed over to the Diamondbacks owner:

  • City sales taxes: $6.4 million/year
  • County sales taxes: $1.6 million/year
  • State sales taxes $16 million/year
  • State income taxes: $3.5 million/year

That comes to $27.5 million a year, which Gallego multiplies by a 30-year agreement to come up with $825 million. But that’s nominal cost — all the payments added up over time. How much is that actually worth to Arizona taxpayers right now?

There are lots of ways to estimate that, but plugging the numbers into a present value calculator at a reasonable discount rate (say, 5%, which is usually in the ballpark for how much interest you can earn on money over time) is usually a good start. We have one right here, and the answer is: $423 million.

That’s a fair bit less than $825 million, but also a fair bit more than $230-300 million. And either way, it is, to coin a phrase, starting to add up to real money.

The Diamondbacks tax subsidy bill passed the Arizona house last month, and is now slated to be voted on by the state senate, after which it would move on to Gov. Hobbs, who has expressed support for it. It would be nice if Arizona officials established first how much money they would be sending the D-Backs owner’s way, but no time for that when a team owner says he needs a new stadium because reasons.

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Ohio gov calls $600m Browns subsidy too pricey, pushes own plan for $2B in stadium subsidies

access_time personNeil deMause

Ohio Gov. Mike DeWine has come out against the Cleveland Browns owners’ proposal to funnel $600 million in state taxes (and $600 million in city and county taxes) to a new stadium in Brook Park, saying it’s too expensive. But wait, I hear you ask, didn’t DeWine just propose his own massive sports subsidy fund that could be worth $2 billion or more? The governor has an explanation, kinda:

“That bond that would generate $600 million will cost over $900 million. Every penny of that will come out of general fund dollars in the future to pay the bond down,” DeWine said. “That is a ton of money to be taking out of our budget that we need, to spend money on schools, that we need to spend money on mental health challenges. We have a lot of things that we need to focus on in this state.”

First things first: Saying $600 million in bonds will cost $900 million to pay off is technically accurate — same as a $500,000 mortgage could cost you $1.2 million in payments over time — but not all that helpful, given that you’re getting to make a bunch of those payments in the future, as a tradeoff for not coming up with all of the money now. So that extra $300 million is a financing cost, not a construction cost; the cost in present dollars of raising $600 million through future payments including interest is still $600 million. Using nominal dollars instead of present value can be a great way to make a project that relies on borrowing sound more expensive — 900 is bigger than 600! — but it’s really fiscal sleight of hand.

That said, DeWine is correct that the Browns plan would still mean taking more than $30 million a year out of the state budget. But what about his $2 billion stadium fund, to be paid for by raising sports gambling taxes to bring in an extra $130-180 million a year? It wouldn’t use existing taxes, but it would still use tax money — and that tax money would no longer be available to the state if it wanted to raise gambling taxes for some other reason down the road. Other states have used increased gambling taxes to help out their general funds, while Ohio until now has dedicated gambling tax money for K-12 schools; needless to say, at some point there’s a point of diminishing returns where if you start raising gambling taxes too high, gambling companies start leaving the state and your tax revenue will stop going up, so this is money you only get to spend once.

The best way to think about dedicated taxes like these is as two separate decisions: 1) Do we want to raise taxes? and 2) What should we do with the proceeds? Whether raising gambling taxes in Ohio is a good idea is one thing; deciding to spend the resulting $2 billion on sports venues vs. something else is very much another. DeWine is, notably, also looking to raise cigarette taxes by $1.50 to fund a $1,000 child tax credit and cannabis taxes from 10% to 20% to fund things like a suicide hotline and drivers’ ed programs, but he has not explained why the gambling taxes couldn’t go for those things instead of pro sports.

In any event, Ohio now has two competing stadium bills, one to spend $600 million for the Browns, the other to raise $2 billion and figure out which teams to spend it on later. Those are not likely to be the two best options for Ohioans, so if the compromise ends up being “let’s meet somewhere in the middle,” you might want to hold on to your wallets.

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Friday roundup: Rays, Coyotes, A’s fiascos keep on fiascoing

access_time personNeil deMause

All kinds of news of the week to cover this morning, and I already lost a couple of hours getting up early to yell at my senator’s window about this fiasco. Let’s start with the Tampa Bay Rays‘ own fiasco, and then work backwards:

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Browns owners pull out all the LOLarguments in demanding $600m in stadium cash from Ohio

access_time personNeil deMause

The Cleveland Browns owners the Haslam Sports Group sent their chief administrative officer and general counsel Ted Tywang to testify before the Ohio arts, athletics and tourism committee yesterday in favor of their $1.2 billion stadium subsidy demand ($600 million of it from the state, the rest from the city of Brook Park and Cuyahoga County), and it was everything you would expect it to be, and more. Tywang delivered all the greatest hits of the stadium playbook; let’s take them one at a time:

“This would be one of the largest economic development projects in Northeast Ohio History, and even in the state of Ohio.”

This is the glass-half-full way of saying our stadium will be very expensive. I can’t wait to hear Tywang explain why it would be a good idea for Ohio to build a space elevator.

“This idea of cash collateral doesn’t really exist in sports facility funding. This would be kind of the first time, as far as we know, that an upfront payment has been done,” Tywang said. “It is $38 million, which is the present value of $150 million at the back end of the lease.”

The $38 million figure refers to a “refundable deposit” that the Haslams would put in up front, which 1) isn’t really much of a sign of a firm commitment if it’s refundable, and 2) isn’t by any stretch of the imagination “the first time” that a team owner would put up the first chunk of cash for a stadium. As for “the present value of $150 million at the back end of the lease,” that seems to just be a way of making the number sound larger for anchoring purposes — sure, $38 million today would be worth $150 million after 30 years of 5% interest, but that doesn’t make it anything other than $38 million today.

“I would think about it not as, this $600 million could go somewhere else, because there’s going to be a return for the state, that $1.3 billion. Yes, it’s over time, but those can be used for other needs that the state deems appropriate.”

Here we have the argument that state taxpayers spending $600 million to move the Browns from one Ohio city to a neighboring one would somehow create a humongous increase in state tax revenues, which has already been shown to be the work of one LOLconsultant with a B.A. in architecture, asked and answered, moving on.

“There are no existing revenues that we’re taking. It’s not like we’re taking from a health and human services budget at the state or at the local level for our ask. It is only revenues that are generated by the project that wouldn’t exist but for this private investment.”

Casino Night Fallacy, everybody drink!

“We think in a market like Cleveland and Northeast Ohio that the project is only viable through a public-private partnership. So the $600 million is really critical.”

Translation: Either “this is a money-losing project without subsidies, the only reason we’re doing it is to get our hands on the state cash” or “we’re going to make money on this either way, but with an extra $600 million in subsidies we would turn $600 million more in profit,” further research needed.

Ranking member Dontavius Jarrells (D-Columbus), who described himself as “a recovering Browns fan”, asked if the project would just shift economic development from downtown Cleveland, not generate new activity. Tywang said the stadium is a game-changer.

“There’s so much else great that’s happening downtown that I think it’s frankly disrespectful when people imply that we’re going to cripple downtown when we leave,” Tywang said. “We want this to be complementary, not competitive.”

“It’s disrespectful to suggest that people can’t spend money in two places at the same time” is some next-level BS, props to Tywang for this one, give that guy a raise.

And what did Ohio legislators think of all this? News5 Cleveland asked some, and:

“It’s essentially escrowing money that would grow over time so that the Browns can kind of put their money where their mouth is,” [House Finance Chair Brian] Stewart told me.

Senate Minority Leader Nickie Antonio (D-Lakewood) said the tax changes are the much better option.

“It would solve these kinds of issues so every couple of years we don’t have some sports franchise, entity coming to the legislature with their hand out saying ‘you have to give us some money so that we can stay in the community,'” she said.

Yes, funneling all the taxes paid in and around stadiums to the sports franchise owners would “solve” the problem of how to pay for an endless stream of new stadiums, but much in the same way that bank robberies could be solved by leaving the bank door unlocked. There are still a lot of hurdles before the Haslams’ plan can become reality — it will have to clear both houses of the legislature plus the city and county, and Cuyahoga County reps are in particular hopping mad at being asked to help fund moving the Browns out of Cleveland proper — but going just by vibes from yesterday’s hearing, the level of debate is not going to be pretty.

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Friday roundup: A’s hire ex-Raiders stadium czar, Texans want renovations paid for by somebody

access_time personNeil deMause

It’s been another week, and, yeah, it sure has. Feeling this very strongly this morning, you all go on ahead and read this week’s bullet points while I get my second wind.

  • The Athletics have new Las Vegas stadium renderings (pretty similar to the last batch, only with more entourage) and a new president, Marc Badain, who formerly worked in the same role for the Las Vegas Raiders before abruptly quitting. Badain’s role in getting the Raiders’ stadium built (with $750 million in public money) and the fact that the Nevada legislature is coming back into session this year have people speculating that Badain could be on board to go back to the state for more cash to fill owner John Fisher’s budget hole; there’s no actual evidence that’s in the works that I can tell, but this entire project has been little more than tea-leaf reading for close to two years, why stop now?
  • New Houston Texans president Mike Tomon says he doesn’t want a new stadium, just renovations to the old one. The Houston Business Journal reports: “As far as funding potential renovations to NRG Stadium — which, coupled with projects around NRG Park and maintenance, could cost billions of dollars — Tomon said it’s too early in the process to determine what that would look like.” Lobbying strategy still hazy, ask again later.
  • The A’s and Tampa Bay Rays playing in minor-league stadiums this year are “cautionary tales of what happens when big, complicated challenges are met with half-measures and inaction,” writes ESPN’s Jeff Passan, who apparently missed the parts about how the A’s are in Sacramento because they alienated Oakland officials enough to torpedo talks of a lease extension there and the Rays are in Tampa because a hurricane blew their roof off, and neither of those things would be changed even if local officials hadn’t engaged in “inaction,” which they actually didn’t. Friends don’t let friends read Jeff Passan think pieces, is the lesson here.
  • San Antonio’s “Project Marvel” that would include a new Spurs arena, convention center expansion, and other crap has “tepid” 41-36% support, according to a new poll. The plan could be up for a public referendum as soon as this November, so that undecided 23% should start reading up on the details ASAP.
  • The San Jose Giants have agreed to extend their lease from 2027 through 2050 in exchange for $5 million in public stadium upgrades, and I’m going to go out on a limb and call this not that bad — the Single-A team has even agreed to double its rent payments from $20,000 a year to $40,000, which is next to nothing but not completely nothing. It’ll probably come out next week that San Jose has to turn over development rights to 10,000 acres of land or something in addition, but until then I’m filing this under “could have been so much worse.”
  • Someone wrote in to Cincinnati Enquirer sports columnist Jason Williams to ask if Hamilton County residents could have a re-vote on the tax hike that is paying off the Bengals stadium, and Williams replied, not a bad idea, it could be expanded to help fund a new arena, too. Pretty sure that’s not what the letter writer meant, Jason.
  • There’s actual video of actual cranes doing actual work to build Inter Miami‘s new stadium, maybe this thing will actually open eventually, even if the 2026 target date still seems ambitious. Or it could be the latest fake video, for all we know, hard to trust anything coming out of south Florida these days.
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Portland baseball booster releases fresh stadium renderings in hopes it’ll get him more tax money

access_time personNeil deMause

Portland Diamond Project, the people who want to bring an MLB team to Oregon, released new renderings yesterday of a 32,000-seat stadium along the Portland waterfront. We’ll get to the pretty pictures in a minute, but first, this:

[Portland Diamond Project CEO] Craig Cheek told a legislative committee Monday morning that Portland could break ground on a Major League Baseball stadium on the south Waterfront as early as 2027 if Portland is awarded a team.

Uh, sure? MLB isn’t likely to pick its expansion cities before 2027 — it still needs to settle the Tampa Bay Rays and Sacramento A’s stadium situations, and then hold a bidding war for both prospective owners and prospective cities. And “breaking ground” is typically just a matter of a bunch of elected officials showing up with hardhats and shovels, so it’s not really a sign of major construction activity. So this is mostly Cheek, an ex-Nike VP who runs the hey-Portland-let’s-put-on-a-baseball-team show, trying to get headlines by issuing checks his butt is never going to have to cover.

As for why Cheek was before a legislative committee, that’s because:

The group appeared in front of the committee to make an appeal to “modernize” Senate Bill 5, the 2003 bill lawmakers passed that would carve out $150 million for a stadium in income taxes paid by a team’s players and executives.

“Modernize,” eh? What’s that mean, exactly?

“We asked legislators to revisit SB5, originally passed in 2003, and update the law to better reflect the current revenue generated by players’ salaries and the rising costs to build a world-class stadium in downtown Portland,” Cheek said. “This would not be a new tax on Oregonians. We look forward to working with the legislature to make Oregon Better with Baseball.”

So, the modernized bill would presumably increase the amount of borrowing Oregon would take on, in anticipation of more state income taxes players would pay given that salaries are higher now than in 2003. Cheek doesn’t appear to have revealed details of how much tax money the project would require, other than saying that the stadium would cost around $2 billion total — and that this wouldn’t really be taxes that would cost Oregonians anything, because player income taxes would be free money the state treasury wouldn’t get otherwise, which is not exactly true.

Anyway, on to the vaportecture, I know you’re all excited to see that:

Daytime fireworks, gotta respect the classics! Also, that indeed appears to be some kind of sliding translucent roof, though whether it’s overlapping panels or some kind of accordion-like structure is hard to tell. Either way, when extended it would still leave large openings on the ends, which should be good to protect fans and players from most rainy weather, but not necessarily be the “365 days a year” experience that Cheek is promising.

Aside from fans displaying a weird affinity for waving flags in the middle of an inning and the only scoreboard being unseeable for fans in the left field corner, not much more to say about this one, so let’s move on to:

More flags! And a whole bunch of extremely het couples of various kinds and bicycle models. Are those people planning to bring their bikes into the stadium? I sure don’t see any bike parking before you have to ascend the steps to the turnstiles. Speaking of which, all those fans in wheelchairs are going to have a heck of a time with those steps, though there does seem to be some sort of ramp (with no railings) that they can use to wind their way up to the entry level, if they dare.

And while I get that showing rendered people mostly from behind avoids the problem of having to show particular faces, having all those fans wear t-shirts with giant Old English P’s on the back does imply some weird things about fashion trends in the year LOL2027.

This is a nice enough view showing the proposed stadium’s setting along the Willamette River, but I mostly appreciate it for its new innovation: daytime spotlights! Those are going to be really impressive, so long as you outfit them with 3.86 x 1026-watt bulbs.

So to recap: An ex-Nike executive wants to build a $2 billion stadium in Portland, Oregon for a team that doesn’t exist with owners that haven’t been identified using money that hasn’t been quantified, but in any case he wants the state legislature to allocate more of it than the last time someone made these promises 22 years ago. The daytime spotlights are probably still the most implausible part of this whole deal, but it’s close.

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Friday roundup: D-Backs tax kickback plan rushes ahead despite questions, Utah bill would let a hundred stadiums bloom

access_time personNeil deMause

Springtime is always a busy time for stadium and arena shenanigans, if only because it’s budget season for most states and cities. But still! Buncha bullet points today, is what I’m saying, and expect a lot more next week, and so on and so on until legislators break for the summer or come to their senses, whichever comes first (you know damn well which will come first):

  • An Arizona state legislative analysis says because Diamondbacks players pay $3.5 million a year in state income tax, that would over more than a quarter of the tax kickbacks team execs want for stadium renovations — asked and answered, move to strike. Phoenix Mayor Kate Gallego, meanwhile, says the state analysis doesn’t look at actual economic data but rather projections like calculating every fan buys two beers (first, assume a spherical fan). No worries, though, the bill still has to go through — oh, welp, looks like it already passed the state house and just needs to clear the senate, and House Democratic Leader Rep. Oscar De Los Santos has expressed “alarm” and said “we should not be rushing through this legislative process,” guess there’s no time to worry like the present.
  • Utah state senator Scott Sandall, figuring one MLB stadium with no team to play in it and no way to pay for it isn’t enough for a growing state, introduced a bill to let Salt Lake City’s stadium district build multiple stadiums as small as 18,000 seats for any sport, “to be proactive, just for the future,” not because he has any particular sports teams in mind that could use an 18,000-seat stadium or anything.
  • Kansas City Mayor Quinton Lucas is supporting a new Missouri state bill to raise money for Royals and/or Chiefs stadiums by providing … okay, Lucas didn’t say exactly how much money or from where, and the bill itself isn’t posted on the Missouri senate website yet, but Lucas says it’ll help Kansas City “host FIFA World Cup games,” please nobody tell him that it’s going to be decades before the U.S. gets another World Cup after 2026, I don’t want to spoil his day.
  • The proposed Cleveland Browns stadium in Brook Park is set to lead to the creation of a new Circle K gas station, maybe, if government bureaucrats don’t get in the way with their red tape about “residents” being “concerned,” can you believe those guys?
  • Phoenix Suns co-owner Justin Ishbia has pulled out of bidding for the Minnesota Twins and is instead upping his minority stake in the Chicago White Sox, which certainly can be read as positioning himself to become majority owner once 89-year-old Jerry Reinsdorf gives up either control or this mortal coil. Whether he would go ahead with with Reinsdorf’s current stadium plans, let alone rebranding the team as the Chicacago White Sox, remains to be seen.
  • The MLB cable empire keeps on crumbling, and at least one small-market owner, the Milwaukee Brewers‘ Mark Attanasio, says he wants a TV revenue sharing model more like the NFL’s where all the money is shared equally. This is worth watching since it would have a major impact on where teams could relocate to (Green Bay would suddenly be a viable MLB market), plus all sort of other things like how long the 2027 baseball lockout is likely to last.
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Deal to spend $500m+ in taxpayer money on new Spurs arena moves ahead, judge promises it won’t cost taxpayers

access_time personNeil deMause

Bexar County commissioners took another step toward approving at least half a billion dollars in tax money for a new San Antonio Spurs arena yesterday, voting 4-1 to approve a memorandum of understanding with San Antonio and team owner Peter Holt to start negotiating terms of an arena deal. Or perhaps that should be continue negotiating terms of an arena deal, because the initial framework of a deal is already in place:

The county’s so-called venue tax is made up of two taxes: one on hotel rooms and another on car rentals. It could yield up to $397 million in revenue if the hotel occupancy tax remains at 1.75%, or as much as $449 million if the county asks voters to raise that tax to the maximum of 2%, County Manager David Smith told commissioners early this month….

Aside from the venue tax, the new Spurs arena could be financed with other pots of public dollars, such as revenue from the city’s project financing zone and increases in property taxes within a tax increment reinvestment zone.

The hotel and car rental taxes appear to be headed for a public referendum, possibly in November, otherwise next May. The TIF district and project financing zone (basically a TIF for business and hotel taxes) wouldn’t have to go through a public vote, but would require the approval of the city council or county commission.

The total public outlay from all this is as yet undetermined. (The city is also considering gifting Holt a publicly owned golf course, market value likewise undetermined.) But it’s not stopping proponents of the arena project from saying it’s clearly better than the current situation, where the Spurs are forced to play in an ancient 23-year-old arena that is practically falling to bits, probably:

The county would need to pour about $78 million into improving the Frost Bank Center through 2029, Mike Wooley, co-founder of Venue Solutions Group, told commissioners Tuesday. The venue would require about $245 million worth of improvements over the next 20 years — if it continued hosting an NBA team.

The San Antonio Express-News doesn’t bother to ID Venue Solutions group, so let’s look them up: They were “launched in 2011 by three industry professionals with over 65 years of collective experience in the public assembly facility industry” (names of said professionals not included on the company website) and have done “facility condition analyses” for a bunch of different arenas, though when you click on “view case study” no actual studies are available. So while county judge Peter Sakai and county manager David Smith both said that’s $245 million the public wouldn’t have to spend on arena improvements if they built a new arena, there’s no way to tell how much the public would have to spend on improvements for a new arena, which in 20 years would be almost as old as the one the Spurs owner is desperate to get out of now.

But anyway, spending [insert large number here] dollars of tax money on a new Spurs arena to replace the one that was opened during Season 14 of The Simpsons won’t cost taxpayers anything, promises Sakai, because reasons:

Sakai made clear numerous times that putting this on the backs of County taxpayers is a non starter for him.

“For me to continue to have the county be invested, no homeowner property tax,” he said. “It cannot fall on the seniors. It cannot fall under disabled. It cannot fall on the veterans who are on fixed income. That’s that’s a deal breaker for me.”

Well, that’s okay then! Wherever the money comes from, it won’t take away from money for seniors or the disabled or veterans or adorable puppies, because they’ll have just as much public money at their disposal, from all the magic beans that will come with this deal, once it’s negotiated, for sure. Also, Sakai promises, the current Spurs arena will remain “sustainable and viable for the long term” and won’t “turn into the next Astrodome” — because that always works out well.

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Rays execs again blame city and county for stadium delays, while further delaying stadium

access_time personNeil deMause

Tampa Bay Rays co-presidents Brian Auld and Matt Silverman waded back into the stadium wars late last week, and the Tampa Bay Times scrambled all its reportorial jets to cover it. For those who haven’t been following, the Times has three writers who’ve been working on the Rays’ stadium story: baseball beat reporter Marc Topkin, who is historically a mouthpiece for Rays leadership; sports columnist John Romano, who is more a “can’t we just find a solution here” guy; and St. Petersburg reporter Colleen Wright, who actually reports the news. All three were on display over the weekend, and they did a classic job of describing the elephant:

  • Wright kicked things off on Friday by reporting on how Auld and Silverman went on a team-sponsored radio show Thursday night and again blamed St. Petersburg and Pinellas County officials for delaying their stadium financing votes from October to December following Hurricane Milton, which they said “effectively broke the deal.” City and county officials, in turn, were “expressing growing impatience” with Rays execs, wrote Wright, with County Commission chair Brian Scott, a strong supporter of the stadium deal, saying,  “If you can’t make a deal work with $600 million in public funding [Ed. Note: more like $1 billion actually], then you’ve got a business model that’s not sustainable. That’s not something that public dollars are going to fix.”
  • Romano followed up Saturday evening with a column on how “Mayor Ken Welch and a handful of city council folk were just about the last allies the Rays had in the universe and now they’ve managed to tick them off, too.” And while “to a degree” the Rays ownership’s anger was justified, he wrote, because the county commission did delay their vote until new members came on board, those new members “realized their error” and decided they didn’t want to be blamed for “the bungling of a $6.5 billion redevelopment deal” and approved the funding anyway. This is Rays owner Stu Sternberg’s last chance to get a stadium in the Tampa Bay area, Romano argued, and if that doesn’t happen, either 1) Sternberg will move the team, 2) Sternberg will sell the team to someone who moves it, or 3) Sternberg will sell the team to someone who gets a new stadium built locally. (The idea that maybe the Rays don’t actually need a new stadium, or at least a new stadium that costs $1.3 billion plus whatever the Trump steel tariff surcharge will be, seems not to have crossed Romano’s mind, despite his writing that it’s likely “the team will not see huge profits upon the opening of a new stadium” because nobody really wants to go see Rays games.)
  • A few hours later, Topkin chimed in by turning over all his column inches to Silverman, who said “we have four years to figure this out” and “we’ve always wanted to be here” and “we’re going to try to figure it out,” but that Rays execs are still deciding whether to go ahead with the new stadium deal by March 31, after which it turns into a pumpkin and everyone goes back to square one.

It was all really quite the case study in the breadth of U.S. newspaper coverage, running the gamut from straight-up team boosterism to even-handed reporting. And even more than that, it’s a reminder of how daily news outlets seldom convey a perspective that isn’t held by someone in a position of power: We have Topkin telling us how Rays execs see the stadium fiasco, columnist Romano expressing how Mayor Welch and other pro-stadium councilmembers see it, and Wright reporting on the perspective of city and county officials as a whole. The idea of consulting economists or budget experts, or just regular local residents who still haven’t been asked what they think of the deal, is crazy talk — who even are those guys?

Meanwhile, none of this gets us any closer to understand whether Sternberg and Friends are truly set to walk away from a $1 billion check because they just realized stadiums are expensive or Florida gets hit by hurricanes or something, or if they’re waiting to see if St. Pete officials will sweeten the deal if they hold out until March 31. That sure doesn’t sound likely given the latest statements by local elected officials — don’t forget, even Welch indicated two weeks ago that he’s ready to walk away from the stadium deal if Sternberg doesn’t live up to his end of things — but we’ll see. The power of “let’s just get things done” is powerful, especially when it’s posed as the sensible middle.

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Judge okays moving ahead on Spurs arena deal that could cost $500m+ in tax money

access_time personNeil deMause

One sports stadium patsy leaves, one enters: Bexar County Judge Peter Sakai, who last month declared that he would put a hold on any public referendum on using taxpayer money for a new San Antonio Spurs arena until somebody figured out how much it would cost, now says ah, hell with it, let’s get this show on the road:

The Commissioners Court voted 4-1 Tuesday to allow Sakai to negotiate a memorandum of understanding with the city of San Antonio and the Spurs that would create a framework for them to discuss holding a future venue tax election.

“This is just a starting point to collaboratively assess, explore and evaluate,” Sakai said. “There is no deal. There is no agreement.”

No, it’s not an agreement, but an MOU would be an agreement, so an agreement is very much what Sakai is now working on. The San Antonio Express-News reports that an arena deal could include two piles of tax money: county hotel taxes and county car rental taxes, which would be worth $397 million if the county hotel tas remains at its current 1.75% or $449 million if it’s raised to 2%. The newspaper neglected to indicate if those numbers are present value or cumulative over many years, and if so how many years. (RIP, editors, you had a good run.)

So let’s try to do some quick calculations: The county hotel tax amounted to $21.3 million in revenue in 2023, while the car rental tax was $12.2 million. Extend that out over 30 years, and you could pay off about $500 million in arena costs by siphoning off the taxes to pay for a new arena rather than keeping them to spend on other public needs — and likely more than that if hotel and car rental spending increases over time.

But wait!

Sakai and other county officials emphasized they also have a responsibility to maintain the Frost Bank Center and Freeman Coliseum, which are estimated to need at least $100 million worth of upgrades and help improve the surrounding area.

The tax has been used in the past for projects like San Antonio River improvements, performing arts and amateur sports facilities.

“That pool of money is the pool of money you have to do all of those things,” [Bexar County Manager David] Smith said.

Presumably all of that pool of money has until now been used to do other things, so really any money spent on an arena would come at the cost of not doing other stuff. It would be nice to have a list of where that money is going currently, but again, this is 2025 journalism we’re dealing with here, we need to temper our expectations.

All of this would still need voter approval in November, because Sakai missed the deadline for a spring referendum by waiting until now. At least that gives San Antonio residents nine months to ask some pointed questions — local journalists can start things off if they want, but I’m not exactly holding my breath.

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