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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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Boston women’s soccer stadium to cost taxpayers 2.5 times as much as value of team

access_time personNeil deMause

It’s been a few months since we’ve checked in on Boston’s plan to spend $100 million to rebuild White Stadium for NWSL club Boston Legacy F.C., how’s that going?

The city of Boston’s project to overhaul Franklin Park’s White Stadium will cost taxpayers $135 million, up from a previous $90 million estimate — an increase Boston Mayor Michelle Wu has attributed to inflation and the rising costs of materials and labor….

She also said that Boston Legacy FC, the new professional women’s soccer team that is partnering with the city to pay for the project and will share the space with student athletes, will put in more than $190 million for its portion of the redevelopment.

That puts the total cost of the project at more than $325 million — an eye-popping increase from the $200 million total the project was thought to cost last year.

Awesome. Wu’s criticism of New England Patriots heir Josh Kraft, who back when he was running for mayor last year claimed the stadium would end up costing the city $170 million, as not “grounded in reality” does not look so great about now — politicians of the world, you should have learned always to take the over on stadium cost predictions.

Wu didn’t only blame inflation for the rising price tag: She also said the “primary driver” was “we heard from community members that there were all of these dreams and hopes and goals and we decided to make the project better, and therefore more expensive, in response to that.” You little people with your big dreams for things like public water fountains, we did this for you! For you, I say!

Spending $135 million in public money toward a $325 million stadium could be worse — it could be $325 million toward a $325 million stadium — but it’s still pretty bad: The expansion fee for the women’s soccer team was only $53 million, meaning the city is now spending 155% more on a stadium than the franchise itself is worth. Boston will also get a snazzier place for high school soccer teams to play, sure, but the city could have skipped such Legacy-demanded expenses as a beer garden and just rehabbed the stadium for school sports for an estimated $20 million, so, yeah, not great. There’s still a lawsuit ongoing against the project, but given that vertical construction of the stadium structure is set to start next month, it’s going to take a ruling really soon to keep taxpayers from being on the hook for the full cost, whether that’s $135 million or wherever the bouncing price tag eventually lands.

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Friday roundup: Friends don’t let friends host the Olympics, and other cautionary tales

access_time personNeil deMause

Last week I teased a big project of mine that would drop this week, and it went live yesterday morning: a 57-page report, commissioned by Los Angeles economic justice advocacy group Strategic Action for a Just Economy, on whether L.A. can or should be trying to extricate itself from its hosting obligations for the 2028 Summer Olympics — something some local critics have suggested, especially in the wake of the city’s wildfire crisis and budget crisis and  immigration enforcement occupying force crisis. You can probably get a pretty good sense of the report’s findings from its title, “Damned If You Do, Damned If You Don’t,” but if you want slightly more details, here’s the nut graf:

While there are numerous unknowns—the history of the Olympics shows that budget questions are never resolved until it’s far too late, a path that L.A. has headed down with its agreements for the 2028 Games as well—the available documentation and history of international event hosting shows: Yes, if Los Angeles officials, or voters, decided to withdraw from hosting the Olympics, they could do so. This would come at the risk of potentially billions of dollars in damages from a breach-of-contract lawsuit and losses from expenses already undertaken. However, continuing as host also comes with a potential risk of losses that, if history is any guide, could similarly amount to billions of dollars.

The report also contains a wealth of information about Olympic financial history, including other locales’ attempts to back out of hosting major international sporting events for fiscal reasons (the Denver 1976 Winter Olympics that never happened, plus the 2026 Commonwealth Games that the Australian state of Victoria bailed on in 2023 amid concerns about snowballing costs), as well as mention of my new favorite Olympic factoid: that time they held a Winter Olympics in Nagano, Japan and nobody knows how much it cost because the local organizing committee literally set fire to its financial records. It’s all here, dig in if you’re in the mood for a long, enraging read — or if not, you can instead read the excellent summaries in Torched (which includes a quote from me on this week’s revelations about L.A. Olympics chief Casey Wasserman’s history with Jeffrey Epstein) and LAist.

And now that that’s off my plate, I have plenty of time for stadium and arena bullet points, and good thing, too, because this week brought craploads of them:

  • The Wyandotte County Commission followed suit with its neighbors in the city of Olathe and voted 7-3 to approve devoting local sales and hotel tax revenue to pay off part of the state’s $2.775 billion in bonds for a new Kansas City Chiefs stadium and surrounding development. The county, to be clear, gets absolutely nothing out of kicking in its own funding (total price tag still TBD), given that the state has indicated it will go ahead with the stadium deal regardless. Kansas City, Kansas mayor and county commission chair Christal Wilson, who didn’t vote because no ties needed to be broken, wrote on Facebook that she thinks kicking in county money is warranted because it gets the county “a seat at the table” — okay, though it’s questionable whether getting to sit at the table is worth having to split the check.
  • Indiana state Rep. Earl Harris Jr. on his bill to create a sports authority to build a Chicago Bears stadium in northwest Indiana with money from (feigns coughing fit until you go away): “Indiana does sports things like this very well. When you look at the Pacers, the Colts, the Speedway, we’re very good at figuring out a good financial plan that does not hurt the taxpayer.” Um, about that…
  • Will the Portland Trail Blazers move if the city and county decline to spend $600 million on upgrades to their arena? It’s an “urgent race against time” and “the clock continues to tick,” writes The Oregonian, citing a deadline of … huh, seems like they didn’t mention any deadline, must have run out of room. (Though there was room for “Are you ready for the Nashville or Kansas City Trail Blazers?” to cite two cities that are not particularly shopping around for NBA teams.)
  • Tampa sports radio host JP Peterson insists that spending upwards of $2 billion on a new Tampa Bay Rays stadium is warranted because it “will produce millions in tax revenue and bring major events, Super Bowls, National Championship games, World Baseball Classic, MLB All-Star games” — [citation needed], my man. Also, I can save you some time: Even if a new baseball stadium does bring in millions in tax revenue, from hosting, uh, football games, when it costs hundreds of millions a year in tax expenditures, maybe that’s … not good?
  • Speaking of the Rays, fresh Rays vaportecture! I’m sticking with my comment from yesterday: Glad to see the Rays acknowledge that even after a future stadium is built, fans still won’t buy jerseys with player names because they know they’ll be sold off as soon as they reach arbitration.
  • And if you want still more Rays commentary from me, I spoke with both WMNF radio and Tampa Bay 28 TV about the ongoing dispute this week; the former is much longer, the latter offers a view of what I have on my living room walls, pick your poison.
  • Just in time for the Super Bowl (what time does it start again?), here’s a Top 40 list of things the NFL demands from Super Bowl host cities. It’s impossible to pick just one favorite, but equally impossible to beat “three championship-level 18-hole golf courses and two top-quality bowling alleys, free of charge.”
  • Plans to build an Indy Eleven a soccer stadium for a new MLS team on Indianapolis’s former heliport are on hold because something about not rewarding a city that “continues to thumb its nose” at ICE; the FAA will soon be weighing in on the matter.
  • Washington Gov. Bob Ferguson has met with NBA commissioner Adam Silver, though not in the sense of actually meeting meeting like in person, and “offered to be helpful in bringing back the Sonics” as an NBA expansion team. Seattle already has a practically brand new arena, though by the time the NBA is ready to expand it could be pushing 10 years old, is that too soon to ask for upgrades?
  • San Antonio Mayor Gina Ortiz Jones says Spurs owner Michael Dell donating $6 billion to Donald Trump’s “Trump accounts” savings plan “really pissed me off” because “if you can give $6 billion for these accounts, you could have paid for your own arena.” But then Dell wouldn’t have those billions he saved by getting taxpayers to build his arena! Sounds like somebody doesn’t understand what the whole point of being a billionaire is. (Hint: It’s getting billions of dollars, not spending it.)
  • And finally on the Rays front, Frank Nockels of Land O’ Lakes, Florida asks: “If we pay for half of the Rays’ new stadium, can we get free tickets?” Ian Betteridge has some bad news, Frank.
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Hillsborough County considers raiding infrastructure fund to give $1.15B to Rays

access_time personNeil deMause

With the Hillsborough County Commission set to meet to discuss plans for a new Tampa Bay Rays stadium yesterday, on Tuesday Rob Manfred showed up in Tampa to meet with Florida Gov. Ron DeSantis and generally do Rob Manfred things. “Baseball belongs in Tampa Bay. Baseball can succeed in Tampa Bay,” DeSantis told reporters, while Manfred took on the more difficult jobs of trying to impose a sense of urgency in a stadium battle that’s been going on for decades, saying, “We’re at a point in the history of the club that something needs to get done.” DeSantis also said that he would be “looking to help” fund new Hillsborough College buildings on one portion of its Dale Mabry campus with state money, so the rest of the site can be handed over to the Rays.

As for how the public’s expected $1.15 billion share of the $2.3 billion stadium would be paid for, DeSantis didn’t breathe a word. So when the county commission sat down to discuss the plan yesterday, they had some questions. In particular, commissioners wondered if it would be kosher to use money from the county Community Investment Tax — a half-cent sales tax surcharge first approved back in 1996 — for a Rays stadium, given that when the CIT was renewed in 2024 two years before its initially planned expiration, it was designated “to fund infrastructure for transportation and public works, public safety, public facilities, public utilities and public schools” and the commission specifically promised that it wouldn’t be used for new sports facilities:

“We promised everyone on the public record that the CIT numbers would be ineligible,” [Commissioner Joshua] Wostal said. “We have not even began to collect that tax, and here is a suggestion that we already deceive the taxpayers that we made a promise to no less than two years ago.”

Commissioner Chris Boles echoed the concern.

“When voters approved the CIT, the discussion language primarily focused on maintaining the existing facilities, strengthening public safety and supporting core infrastructure,” said Boles, who was not on the board at the time. “And that, I believe, intent still matters today.”

Both Wostal and Boles stressed that they still might vote for a stadium deal, and indeed the commission voted unanimously to move ahead with negotiations with Rays ownership. But with Commissioner Ken Hagan already declaring that “this agreement does not happen without the CIT,” it looks like the first negotiations will be among county commissioners about whether it’s okay for a county without a ton of tax revenue streams to scrounge up $1.15 billion by first raiding the infrastructure and schools budget.

The Tampa Sports Authority, meanwhile, also met this week to discuss the Rays plans, and revealed that it will eventually release two, let’s call them “reports”, by their favorite consultants Skanska and AECOM — one on whether the $2.3 billion stadium will actually cost $2.3 billion, the other reviewing the Rays’ own economic projections for the project. (The AECOM report is expected to be ready by April 1, the Skanska one will be sometime later.) Board member Andy Scaglione also asked if anyone had appraised the value of the Dale Mabry campus (nope) and how much money was available in hotel tax funds for tourism spending that could go toward a stadium ($11-12 million, which won’t go far toward that $1.15 billion nut).

There’s still a lot to be worked out here, in other words, and while there’s no real deadline, presumably Rays owner Patrick Zalupski wants to get everything settled while his pal/$250,000 campaign PAC donation recipient DeSantis is still in his last year in office. Resolving a decades-old stadium demand by having a county with limited tax resources fund the biggest MLB subsidy in history will be no easy needle to thread, but you can bet that everyone involved is busy warming up their needle-threading fingers.

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Olathe council unanimously approves Chiefs subsidy after just two hours of discussion; Wyandotte County to follow tomorrow

access_time personNeil deMause

Both Wyandotte County, where a new Kansas City Chiefs stadium would be built under a proposal by the state of Kansas, and the city of Olathe, where a Chiefs training facility would go, held hearings yesterday to hear from residents on whether they should kick in local tax money to help the state pay off what could total $4 billion in subsidies for the combined project. Despite only having since Friday to look over the plans, residents turned out in force to speak their minds:

  • In Olathe, the hearing was “standing room only” as “many spoke against the ordinance, while a few spoke in support of the proposal,” according to KSHB, with many wondering if the city will be able to make up for the lost tax revenues and complaining about the rushed timetable for the proposal to give the Chiefs virtually all city taxes from a 165-acre sports district: “I feel this is not a public hearing, this is a presentation of what has already been decided,” said one resident, Pete Marsh. This proved to be foreshadowing, as the city council listened for two hours, then promptly approved the tax district in a unanimous vote.
  • In Wyandotte County, which under its proposal would kick in all of its future sales and hotel taxes from a 200-acre district around a new stadium in Kansas City, Kansas, more than 50 residents testified, many likewise expressing concerns about the cost in lost taxes and the lack of information on the hastily arranged deal: “I think the people need more information,” one speaker said. while another pleaded, “Please, be transparent.” Unlike in Olathe, Wyandotte commissioners said they would put off a vote — for two whole days, with a final decision on the tax district to be made in another hearing tomorrow at 5:30 pm.

To be clear, neither of the new local tax districts would increase the total amount of money going to Chiefs ownership. Rather, city and county tax money would defray some of the state’s costs of paying off $2.775 billion in bonds for the stadium and surrounding development, which otherwise will come from state taxes collected across a mammoth 293-square-mile swath of Wyandotte and Johnson Counties. (This is a different tax district from the Olathe and Wyandotte County tax districts, something one article in particular seems very confused about.) And while some may insist that redirecting all the tax money collected by the county and city in and around the stadium and practice facility for the next 30 years is bonkers, local officials insist that the lunch will be entirely free:

“As I see it, we’re not currently generating any sales tax on this otherwise empty spot of land, there’s really nothing to lose here,” Olathe Councilman Matthew Schoonover said.

Yes, it’s the Casino Night Fallacy again, where any money that is so much as touched by a team is considered to belong to the team, even if it’s tax money that any normal business would pass along to pay for government services. To follow Schoonover’s argument to its logical extreme, no one should ever pay any taxes, because if you didn’t exist, the government wouldn’t collect anything — try telling the IRS that “I should owe no income taxes this year, because if I had quit my job I wouldn’t have earned any income” and see how far that gets you, but when you’re a sports billionaire, suddenly this is standard business practice.

Instead of Schoonover’s “What if nothing were built?” thought experiment, let’s consider this in terms of two other hypotheticals:

  • What if the city and county held on to the land and it were used for something else? Once the Chiefs tax districts are carved out of local budgets, that land and any money it could generate is gone forever. Losing the opportunity to make future tax revenues off a parcel of land may be a bit more abstract than losing tax dollars that are currently being collected, but it’s just as much of a cost to local taxpayers.
  • What if spending in the Chiefs tax districts gets cannibalized from elsewhere in the local area? If somebody builds a restaurant across from a Chiefs stadium and the only people who eat there are fans who otherwise would have spent their money across the border in Missouri, that’s indeed a net positive; if anybody eats there who would otherwise be eating somewhere else in the county, though, that’s money coming directly out of local government’s existing budget, no future hypotheticals needed.

Or looked at yet another way: Chiefs owner Clark Hunt wants to get the benefit of intercepting all the taxes paid in and around his team facilities and spending it on himself, while all costs associated with any new development — roads, police and fire protection, any schools needed to educate the kids of new residents in a mixed-use district — will fall entirely on city and county taxpayers.

Exactly how much city and county tax money is at stake here? We don’t know, as neither Olathe nor Wyandotte County appears to have tried to calculate the total tax expenditure during the four whole days legislators had to think about it. Wyandotte commissioners promised more information at tomorrow’s meeting; hopefully residents will have time to read it before the commission votes to rubber-stamp the deal.

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Rays owner now demanding $2.25B in public stadium spending, land, and tax breaks

access_time personNeil deMause

We finally have a price tag on how much Tampa Bay Rays owner Patrick Zalupski wants in spending by Hillsborough County to help build a $2.3 billion stadium in Tampa:

A notice for the meeting says the Rays would pay at least half the cost of a stadium. The rest could come from tourist bed taxes or increases in property taxes collected from the surrounding area after a stadium is built.

So if Zalupski is asking for the county to cover half the cost of building a $2.3 billion stadium, that’s $1.15 billion. (Whether county hotel tax receipts plus increased property tax proceeds would be enough to raise $1.15 billion is a question no one appears to have asked yet, though I suppose they could always just make the stadium tax district the size of the entire county, as one does. WUSF also suggests several other funding options that could be on the table, including a Community Development District and hotel and car rental tax surcharges.) The cost of providing state-owned land has previously been estimated to be at minimum $250 million, plus the Rays would duck out of $839 million worth of future property taxes and parcel fees over the course of their 99-year lease. Add it all up, and you’re at something like $2.25 billion in taxpayer subsidies that Zalupski is requesting, which would be by far the biggest public spend on a stadium deal in MLB history.

Or, if you’re the Tampa Bay Times, you go with this glass-half-full headline:

Rays tell Hillsborough they’ll cover at least 50% of Tampa stadium cost

Focusing on the fact that the billionaire who just bought the local sports team plans to cover half the cost of a stadium that he’ll receive all the revenues from, instead of the fact that he’s asking the public to cover the other half, is certainly a choice. (As is describing the team as having “honed in on” Hillsborough College’s Dale Mabry campus, which is not the actual phrase, but that’s a separate issue.)

The meeting referenced above is tomorrow’s Hillsborough County commission meeting, which kicks off at 9 a.m. — the official agenda doesn’t actually mention anything about a Rays stadium, though it does helpfully include a link to a giant image of an American flag. With any luck, we’ll get some questions then about why the county should gift Zalupski more than $2 billion just so the baseball team he bought for $1.7 billion can increase in value; maybe we can even hope to get some answers, but we probably shouldn’t push our luck.

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Royals owner threatens to move team to counties that no longer want him

access_time personNeil deMause

What’s a sports team owner to do when his bidding war is running out of bidders? If you’re Kansas City Royals owner John Sherman, you just keep on pretending you have bidders anyway. Reports KMBC-TV:

Kansas City Royals owner John Sherman said the team is still exploring stadium options on both sides of the state line.

Sherman made the comments at a “Royals Rally” at Kauffman Stadium Saturday.

He said the team is focused on finding a place to develop a mixed-use site for year-round entertainment.

Sherman also said Clay County is still in play to be the home of the Royals.

Okay, sure, cool. Sherman can also still be “exploring” stadium options in Greensboro or the middle of Central Park or Antarctica, that doesn’t actually help if those places aren’t exploring giving him money as well. Unless, of course, he thinks that making this kind of statement will result in headlines about how his Royals could still move to Kansas and so Kansas City, Missouri needs to step up with subsidies … oh. Oh.

Just straight-up lying about whether you have other stadium offers is pretty shameless, but hey, it’s worked before. Though none of those involved Kansas City in any way, so (checks notes) … oh. Oh. In that case, give Sherman his Nobel Prize for Chutzpah right now, nobody’s going to top that this year.

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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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