Ohio Gov. DeWine wants to create a $2B+ stadium slush fund for Browns, Bengals

Ever since the Cleveland Browns owners let slip that they were looking for $1.2 billion in public money to help pay for a $2.4 billion domed stadium in suburban Brook Park, there’s been speculation about whether and how Ohio Gov. Mike DeWine would propose to come up with a pile of state cash. Yesterday, DeWine dropped one hell of an other shoe, proposing a new Sports Facilities Construction and Sports Education Fund that would collect between $130 million and $180 million per year to be used for stadium construction, specifically naming the Browns and Cincinnati Bengals owners as beneficiaries:

DeWine on Monday proposed creating a new stadium and youth sports education fund with money generated by doubling the state’s tax on sports gambling from 20% to 40%…

DeWine said the gambling revenues would be controlled by a newly created Sports Facilities Construction and Sports Education Fund, whose members would be appointed by the governor’s office and the legislature. He said fund proceeds could be used either on stadiums used by major or minor-league professional sports teams, or sports education. To illustrate what he meant by youth sports education, DeWine offered the example of helping needy families afford sports-related expenses that might otherwise prevent them from participating.

Oh, isn’t that nice, needy families, I’m glad they’re getting something ’cause they have a hell of a time! DeWine did not specify how the fund’s DeWine-appointed managers would determine how much to spend on each of its two disparate missions, though it’s hard to see the state of Ohio finding $180 million a year worth of family sports-related expenses to cover.

It’s still a bit uncertain how much money could be raised by doubling the state’s sports gambling tax, since no one knows how much sports gambling will take place in the future, especially once it’s saddled with a 40% tax. But if DeWine’s estimate of $130-180 million a year in tax revenues is correct, that would be enough to cover debt service on between $2 billion and $2.8 billion of stadium expenses — and potentially more than that if tax revenues rise over time. That would be enough to cover the public funding asks of both the Browns and Bengals owners, and likely leave room for more largesse in the future to other Ohio sports teams, who you know would be lining up once they heard about the DeWine handouts. [UPDATE ALREADY: The Columbus Blue Jackets have entered the chat.]

The governor focused his announcement on all the reasons why hiking the sports gambling tax is a good idea — “These sports gaming companies … they’re getting Ohioans to lose massive amounts of money every year” — while skipping past the bit about who he’s hoping to give the proceeds to. In fact, DeWine portrayed a proposal to dedicate more than $2 billion in tax money to pro sports team owners as a way to save taxpayers money:

“This proposal that I have outlined has the added benefit of no longer will we have to, at any time in the future, go to the people of the state of Ohio and say, your tax dollars will go for this stadium or that stadium,” DeWine said.

I’m sorry, that is incorrect, but we have some lovely parting gifts. Or rather, DeWine is part right: He would no longer have to go to the people of Ohio to say “we want your tax dollars to go for this or that stadium,” but only because he would have created his own slush fund so he would no longer have to ask.

In any dedicated tax funding scheme like this one, it’s important to remember that there are actually two decisions at work: One on which taxes to tap for the money, and the other on where to spend the proceeds. There’s nothing stopping the Ohio legislature right now from doubling the sports gambling tax and spending it on education, or spending it on roads, or just putting it in the general fund and letting future legislators decide what the state most needs at the time. Once the 20% gambling tax hike is dedicated to stadiums, though, that money is gone and can’t be tapped for any other public needs. And that’s assuming the gambling tax revenue even comes in at the rate you hope for: As Minnesota found out to its chagrin with its Vikings stadium funding deal, sometimes the gamblers don’t show up right away, and you have to tap other state funds to cover your budget hole.

All this is merely a proposal at this point, and has to be approved by the Ohio state legislature, some of whose members represent Cleveland and will be none too pleased to hear about the governor hoping to use state tax money to help Jimmy and Dee Haslam move the Browns outside city limits. (Though they’re Democrats and the state legislature is Republican-controlled, so that may not matter so much.) While we wait on word of state legislators’ response, we do have a reply from Browns COO Dave Jenkins, which comes down to thanks, but we like our tax kickback scheme better:

“We appreciate Governor DeWine’s commitment to looking at creative ways to solve sports facilities development while positively impacting youth sports throughout Ohio. … At the same time, we continue to work with the appropriate stakeholders and other experienced experts to develop alternative funding mechanisms for an enclosed Huntington Bank Field in Brook Park, knowing the importance of not tapping into existing taxpayer funds that go to other pressing community needs. The model we’ve proposed on the state level would leverage only the incremental tax revenues from within the development itself to enable the project.”

Everybody’s tax kickback scheme is really a way to save taxpayers money, apparently! Funny how that happens.

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Friday roundup: Hamilton County hires guy who negotiated Rays deal for St. Pete to help with Bengals talks, this should go just great

This has been a week, but it seems they all are these days. One glint of hope on the horizon: The second annual Sports Economics Conference has been scheduled for the University of Maryland, Baltimore County for April, which means I get to hang out with some of the smartest (and funniest) minds studying stadiums and other aspects of the sports business world, and you get more liveblogs like this.

Until then, the regular weekly news will have to suffice. Let’s open up the ol’ news bag and see what — oh dear oh dear, best to get started right away:

  • I have advocated before for local government to hire professional help in their negotiations with sports team owners over stadium construction and leases, so it’s potentially welcome news that Hamilton County, Ohio has hired David Abrams of Inner Circle Sports to help with its talks with Cincinnati Bengals execs — “potentially” because until now I had never heard of Abrams, or Inner Circle Sports, so it’s hard to say whether he’ll be bringing inside knowledge of how the opposite side of the table operates or just feed them the league line that pouring lots of public money into private projects is good, actually. I do see that Inner Circle was paid $1.25 million to work for St. Petersburg and Pinellas County on their stadium deal with the Tampa Bay Rays, and that couldn’t have turned out worse for the public despite the Rays owner having zero leverage, so maybe let’s hold our applause until we see the results here.
  • A Boston city council vote to block the demolition of White Stadium so it can undergo a $200 million rebuild, $100 million of which would be paid for by the city, mostly for the benefit of BOS Nation F.C., fell one vote short Wednesday when councilor Liz Breadon didn’t show up to the meeting, leaving the council deadlocked at 6-6. One of the “roughly three dozen” people who showed up to protest the stadium plan yesterday called the tie vote a “huge win,” which isn’t really how huge wins work; there’s still a lawsuit in progress that could block the plan, but it’s unclear if it will be heard in time to halt the demolition, which if it progresses would take off the table a cheaper rehab of the existing structure just for high school sports, as opponents are hoping for.
  • Speaking of the NWSL, Denver is getting a franchise! And a new stadium, maybe, the expansion team’s owners say they’re planning one, more details about things like cost and public cost later, don’t worry your pretty heads.
  • The first phase of renovation work on the Milwaukee Brewers‘ stadium that’s costing taxpayers close to $500 million has been approved, and it will include such things as a $10 million “public gathering space,” because there just aren’t enough places to publicly gather at a baseball game. There’s also plans for a future vote to spend $25 million on winterizing the stadium so concerts can be held there in the winter — something that would work a lot better if not for the fact that, as Holy Cross economist Victor Matheson points out, big stadium concert tours take place pretty much exclusively in the summer. See why I’m looking forward to this Baltimore conference? (Side note to newbies: Once you’ve read this site for long enough, you’ll recognize that for the sick burn that it is.)
  • New York Gov. Kathy Hochul watched the start of the Buffalo Bills‘ playoff loss at a Bills sports bar in Albany, because of course she did, and the Times is on it! “I am just going to bury my head in my hands for eight hours straight,” one fan said afterwards, presumably at the game result, but there are lots of other good ways to intepret that.
  • Season tickets to Salt Lake Bees games will jump from $9-18 to $17-47 when the team moves into its new stadium this year, thanks in large part to the team’s stadium capacity going from 15,400 to 8,000, and much of that being made up of luxury sections that can only be purchased on a season basis:
    (Salt Lake Bees) Daybreak Field suite layout.
    Truly, we are not far from that glorious future where sporting events will only have one seat, and it will be sold to the highest bidder.
  • I recently recorded an episode of the great Conversations With Sports Fans podcast, and if you want to hear me talk in great detail about being a New York Mets fan, as well as a sports fan in general in this current era, click that link back earlier in this sentence, you know the one.
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St. Pete to Rays: Actually, there’s no deadline for us to fix your stadium roof, read your damn lease

If you’re wondering what’s going on with repairs to the Tropicana Field roof, Tampa Bay Rays execs are waiting on the city of St. Petersburg to tell them when work will begin. Team co-president Matt Silverman wrote to city officials on December 30 declaring that a “partial 2026 season in Tropicana Field would present massive logistical and revenue challenge” and “it is therefore critical that the rebuild start in earnest as soon as possible.” City manager Rob Gerdes has now responded, and it looks like Rays management didn’t read their fine print too clearly:

We look forward to cooperating to attempt to achieve the mutual goal of making Tropicana Field suitable for Major League Baseball games by opening day of the 2026 season. However … the Use Agreement requires the City of St. Petersburg to diligently pursue repairs to Tropicana Field, but it does not establish a deadline for completing those repairs.

It’s true! According to the “force majeure” clause in the Rays’ use agreement, the city only needs to begin repairs within three months of damage that has made the building unplayable, which it has done. There’s no set date for it to finish, though — and the only consequence is that for any amount of time the Rays are homeless, their lease gets extended by an equal amount of time, which is surely no skin off the nose of St. Petersburg.

It’s kind of hilarious that Rays owner Stu Sternberg is falling victim to sloppy wording of a stadium agreement, which is usually city lawyers’ signature move. (To be fair, Sternberg didn’t hire the lawyers who wrote up this use agreement, former Rays owner Vince Naimoli did; still, you’d think he and his execs would have at least read it.) With Sternberg and the city still at loggerheads over whether the Rays owner will accept the offer of $1 billion in public money for a new stadium or demand even more, we’ll likely see more of this brinksmanship in the coming weeks and months and … years? There’s nothing stopping the city from dragging its heels for years, honestly. It’ll almost certainly be resolved before then by either negotiations or lawsuit, but it’s still fun to watch in the meantime.

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Have Chiefs/Royals stadium talks torpedoed K.C. border war “truce”? An investimagation

There was a lot going on yesterday, but Kansas City’s NPR station still had time to get out a big think piece — reprinted from local nonprofit news outlet The Beacon — on what the Chiefs and Royals stadium battles mean for the region’s eternal economic border war between Missouri and Kansas. How did KCUR and The Beacon do? Let’s drop in and see:

The two states had for years engaged in a bloodletting competition to lure businesses to their side of the Kansas City region — handing out lucrative incentives to move a corporate headquarters just a few miles across the state line.

These deals brought no new jobs to the region. They sacrificed millions in taxes that could have gone to hire more teachers, pave more roads or invest in public safety. They did nothing to improve the regional economy.

It was, as many called it, a race to the bottom.

So far, so good, though Kansas City is hardly alone in this regard.

Suddenly, that race came to a halt. In 2019, the governors in both states recognized the futility of these battles and agreed to stop the poaching. Since then, most economic development officials in the region say, the truce has worked.

Sort of? The 2019 truce only applied to payroll tax kickbacks, and even then was seen as fragile given that it was “binding” only until one state or the other chose to walk away, as reported at the time by oh hey look it’s KCUR!

A recent study conducted by Brookings Metro underscores why the states shouldn’t waste those resources. The study found that the Kansas City region’s economic output is almost evenly split on both sides of the state line, an anomaly among other multistate regions.

What’s more, the metro’s total GDP significantly boosts each state’s economy. Of Missouri’s total GDP, nearly a fourth comes from the Kansas City metro. Kansas, in turn, gets more than a third of its total from our region.

This is where the article starts to get weird: Kansas and Missouri shouldn’t be throwing public money to lure businesses back and forth across the state line because … the K.C. metro area is evenly split between the two states? Notably, that’s not even what the linked Brookings study says about the K.C. border war, which is the more lucid argument that “both states attempted to move jobs and businesses in the Kansas City metro area to their side of the state line, resulting in zero net new jobs for the region—at taxpayers’ expense.”

But if a place like Wyandotte County has a chance to use incentives to attract a business, why shouldn’t it? In fact, even with the truce, the county and its neighbors across the region still strike deals with businesses in nearby cities and counties.

Uhhhh, because it results in zero net new jobs for the region, at taxpayers’ expense? Also, what happened to “the truce has worked”? Can we get a fact-checker in here?

The difference today, said Greg Kindle, CEO of Wyandotte Economic Development Council, is those businesses are the first to broach the idea of a move. And even then, they aren’t, he said, asking for anything more than what the county typically gives to qualifying businesses.

Consider Mies Family Foods, a family-run business that will be moving from Missouri back to Kansas, where it got its start. Earlier this year, Mies was looking for a larger site and turned to Wyandotte County because that’s where the owners live.

The county offered Mies its standard 50 percent tax abatement. That, coupled with an attractive site near Interstates 70 and 635, was enough to convince Mies to make a $15.6 million investment and bring 51 employees to Kansas. When the abatement ends, the property will generate $200,000 a year in taxes.

“You look at that and say, does that qualify as a border war?” Kindle said. “Well, they had a connection to Kansas and wanted to move.”

Oh, okay, the county is handing out tax breaks to everyone, including companies owned by people who would want to move to your state regardless and are just happy to pocket the cash as a bonus. That’s … better? Kindle seems to be trying to go with “better,” I think?

If you’re wondering why The Beacon chose to ask the head of the local public-private pro-business advocacy group about whether giving public money to local businesses is a good idea, you clearly weren’t the editor of this piece, because that’s the only kind of source heard from here: People quoted include the CEO of K.C.’s regional business marketing arm, the CEO of the Greater Kansas City Chamber of Commerce, the aforementioned Wyandotte economic development council CEO, a Kansas state official who voted to spend $28 million on the 2026 World Cup even though it’ll be held in Missouri, the CEO of K.C.’s World Cup bid group, and one of the Brookings authors. Any other experts in or critics of interstate bidding wars or the economics thereof didn’t get a call for comment, so we’re left viewing the end (?) of this truce (?) through a lens of “actually, it’s all fine, probably.”

As for the Chiefs and the Royals, though they’re the hook for the headline, they don’t make that much of an appearance in the article itself, though it does note that “on balance, the subsidies offered to major league sports franchises rarely, if ever, deliver that boost.” That’s followed, however, by a digression about how stadium employees would likely live in both states either way — true enough, but kind of beside the point if the whole issue is that paying to move businesses back and forth across state lines is a net zero for the region as a whole — and then this:

And the region, certainly, does not want to lose either the Royals or the Chiefs. [Greater Kansas City Chamber of Commerce Joe] Reardon said that even if one or both teams move to Kansas, the truce will remain because the region will have kept its prized teams.

You heard it here first: Without tax kickbacks, the Chiefs and Royals could move to Greensboro or someplace, according to the head of the organization dedicated to obtaining tax kickbacks for its members. Great journalism, everybody — who needs meddling billionaires when we have reporters who’ve been trained to follow their lead on who is and isn’t worth talking to?

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Friday roundup: Chiefs hire clown consultants for fan poll, Bears try to conjure stadium money with magic words

It’s Friday of another week, and at this writing Los Angeles is still extremely on fire. For a good writeup that also has a sports spending angle, check out yesterday’s excellent article by the excellent Alissa Walker, in her excellent 2028 Olympics newsletter Torched. Her takeaway from the fires darkening her skies: “Here’s what residents should ask themselves when surveying LA’s ashen neighborhoods: if our leaders haven’t yet put together a coherent strategy for something we supposedly want to happen in LA in three years, how can we believe that they’re going to put together a coherent strategy to address the worst-case scenario that confronts us now?”

We don’t always get the life-changing megaevents we should have seen coming that we want, we get the ones we … no, “deserve” isn’t right, either. Maybe: All the world’s a stage, and all the men and women merely players, and if it’s not too much trouble I would really like to have a word with the playwright.

Meanwhile, in the parts of the country where only our hopes for an equitable, democratic system of government are on fire:

  • Kansas City Chiefs ownership is going to email its fans asking them whether they want a new or renovated stadium, and if that doesn’t already raise all kinds of questions like “How will they make sure it’s scientific?” and “Shouldn’t this be up to all Kansas City area residents, not just those on the Chiefs’ mailing list?”, wait till you see who’s conducting the survey. This is clearly a push poll, yet the K.C. media is reporting it as a way to “decide the stadium debate,” add journalism to the list of things that are on fire.
  •  Chicago Bears chair George McCaskey says “we’re making progress” on a new stadium while team president Kevin Warren says “downtown still remains the focus” but also “we have 326 acres of beautiful land in Arlington Heights” and “I remain steadfast that the goal we have is shovels in the ground in 2025.” Pretty sure that’s not how performative utterances work, but points for trying!
  • The Los Angeles Rams playoff game has been moved to Arizona because of the fires, and Newsweek is upset that the stadium there is named after an insurer that canceled insurance coverage for homes in areas at high fire risk. One would hope that the denial of coverage would discourage people from building (or rebuilding) in fire-prone areas, but the state of California provides insurance if private insurers won’t, and anyway you don’t need insurance if you buy a house with cash rather than taking out a mortgage so it won’t discourage the truly rich; trying to solve societal problems with economic incentives always seems to run into the problem that some people’s incentives are more economic than others’.
  • Cincinnati business and political leaders debated (at the local Rotary Club, of course) where the city should build a new arena, which is a nice way to avoid discussing the $560 million in sales taxes, alcohol/tobacco/cannabis taxes, and rideshare surcharges that it’s currently proposed the city spend on the project. Mayor Aftab Pureval said of the arena, which would be the new home of the Cincinnati Cyclones ECHL team, looks like, and that’s it: “We’ve got to do everything we can not to kick this down the road again, but to come together as a community, have a call to action and decide, ‘Yes, we’re doing it,’ and that needs to happen now.” Or, you know, “No.” “No” is also a decisive action!
  • Ohio state senate president Rob McColley says if the state is going to put $600 million into a new Cleveland Browns stadium, “There would have to be an ability to be paid back.” That’s a reasonable demand for state lawmakers to make, though McColley went on to say “I think there very well could be conversations regarding that going forward, but we’ll see,” which makes it sound less like a requirement than a thing that legislators will maybe ask for but not refuse to do a deal without, doesn’t anybody ever read my articles?
  • The Salt Lake Tribune ran a big article on whether history shows kicking back property taxes to a new Utah baseball stadium would require taxes to be raised elsewhere, and while I will freely admit I lost track of some of the fiscal details when it started talking about “mosquito abatement districts,” the answer is yes, obviously yes, cutting property taxes in one place either causes them to rise elsewhere or for services to be cut, that’s how math works.
  • There are new renderings for the Buffalo Bills stadium that is costing New York taxpayers $1 billion and costing Bills fans a pile of money in PSL fees, and they come with extra fireworks! Also a quote from NFL stadium consultant-for-life Marc Ganis about how the stadium will feature “airiness and interaction” and not for “a sophisticated urban environment where people want to get dressed up and go to the game” but for “fans who take great pride in showing up when it’s snowing,” all of which is a nice way to say “We could have built a roof but that would have been too expensive, you live in Buffalo, deal with it.”
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Friday roundup: Rays stadium back from dead, A’s Vegas stadium shambles forward

In case you missed the live recap of yesterday’s St. Petersburg city council meeting, the council approved selling $287.5 million in bonds for a new stadium for the Tampa Bay Rays, reversing their vote of two weeks ago to hold off on the move. What happened is pretty straightforward: The two councilmembers who’d flipped to “no” votes two weeks ago flipped back to “yes” — while their stated excuse was that they were content that team execs were no longer calling the deal entirely dead, presumably it was more the recognition that this was likely now or never, as starting in January there would be two new anti-stadium-funding members of the council, and they didn’t want to be accused of dawdling too long like the Pinellas County Commission.

So what happens now? The county commission still has its slim 4-3 majority against selling its $312.5 million in stadium bonds unless Rays owner Stu Sternberg renegotiates the deal; at the same time, Sternberg and his top aides are insisting that they need the pot sweetened to cover the costs of the bond sale having been delayed, even though the original deal said it didn’t need to happen until next April. Historically, this usually leads to some serious haggling between team officials and whichever commission member they think they can flip — the only question is which one would be willing to flip for the cheapest price, and whether “okay, we won’t ask the county to pay for the cost overruns that we’re suddenly claiming exist” would count as a concession. (Okay, there’s also the question of when and if the St. Pete council will sign off on repairing the Tropicana Field roof so the Rays would have somewhere to play in 2026 and 2027, as they didn’t vote on that yesterday, but even if that’s delayed a bit, the team could presumably extend its stay at Tampa’s Steinbrenner Field into early 2026 without too much trouble.)

Or the county commission could decide to hold the line at its December 17 meeting and delay the bond sale again, or even reject it altogether, at which point, understates Mayor Ken Welch, “that sets us on a different path.” We’ll find out a week from Tuesday, but right now, the odds of Sternberg getting his $1 billion public subsidy deal or something close to it look a lot higher than they did a couple of days ago.

But enough about the Rays, already — other stuff happened this week, let’s get to it:

  • The Las Vegas Stadium Authority Board gave its final signoff to an Athletics stadium in Las Vegas after team owner John Fisher submitted a letter vowing that “members of my family and I are committing to contribute up to $1,100,000,000” to the project. The Associated Press called this clearing “the last major hurdle” for a Vegas stadium, which isn’t really true: The Clark County Commission still needs to hold its own vote, something A’s exec Sandy Dean said the team was in early stages of talks for; and, of course, Fisher still needs to actually figure out where to get that $1.1 billion — he claims he’s still looking for new private investors, but those seem unlikely to materialize at this late date, so he may need to decide on whether it’s worth committing a large chunk of his family’s wealth to building a very expensive stadium in what would be easily MLB’s smallest market. If he does, and if the county signs off, construction could start as early as next spring with a stadium opening in 2028, but those are still fairly major hurdles.
  • The Cleveland Browns hired a real estate consulting firm, as one does, to determine the economic impact of building a new stadium in Brook Park, and announced that the county would see an added five squillion dollars in annual economic impact (give or take a squillion). Cuyahoga County Executive Chris Ronayne responded with a statement that “economic impact studies commissioned by organizations with a vested interest often present overly optimistic projections that do not reflect the financial realities faced by local governments and taxpayers” and that “we’re going to have to throw a flag on the play.” (And we were so close to getting out of this without any football metaphors!) Still, this allows the media to portray this as “Browns study says five squillion dollars, city claims only three squillion, truth must lie somewhere in the middle,” which is why real estate consulting firms get paid the big bucks.
  • A city council vote on the proposed Philadelphia 76ers arena is expected by December 19, and Chinatown groups made a last-ditch effort to demand that the team owners increase their community benefits agreement from $50 million to $300 million. (Sports economist Geoff Propheter says this would be close to what Sixers owner Josh Harris would be saving in property tax breaks, at least.) Developers said at a hearing Tuesday that $300 million would be too much, but were open to a smaller increase; with the council seemingly set on approving the deal, we look to have entered the haggling over the price phase.
  • NYC F.C. held a groundbreaking for their new Queens stadium, now to be called Etihad Park after a brief but memorable spell being depicted as Naming Rights Sponsor Stadium. The city’s Independent Budget Office recently issued its long-awaited report on the cost of city tax breaks for the stadium, and determined that team owners Sheikh Mansour bin Zayed Al Nahyan and the New York Yankees will save $538 million via the site being exempted from property taxes, though it also notes that it could have saved all but $74 million of that money through other city tax breaks anyway. So, yay?
  • Washington Commanders owner Josh Harris (yes, same Josh Harris) and NFL commissioner Roger Goodell went to D.C. this week to lobby Congress to hand over the RFK Stadium site to the district for a potential NFL stadium, and Maryland’s two senators responded that they would demand that one of D.C.’s two Air National Guard squadrons be transferred to Maryland in exchange. This is officially peak haggling over the price, I think we’re done here, have a good weekend and see you on Monday!
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Cleveland okays taking money from minority business program to give to Cavs, Guardians

The Cleveland city council voted 13-3 last night to provide $20 million in extra funding to the Gateway Economic Development Corporation for upgrades to the Guardians stadium and Cavaliers arena. Council president Blaine Griffin said that the cash will come from projects “in which we have already borrowed and do not need the money this year” — and if your ears perked up at that “this year,” you’re not alone. The money, which will be used for such things as upgrading elevators and broadcast equipment, replacing seats, and upgrading HVAC and video systems, will come from three sources:

  • $5 million in federal American Rescue Plan Act funding that was slated for a minority business program but not allocated yet.
  • $10 million from other bond proceeds that was intended for other projects that the council didn’t specify.
  • $5 million from Cleveland’s general fund, which one would think the city could have found something to spend it on.

The new spending is needed because the city of Cleveland and Cuyahoga County agreed in 2017 to give Cavs owner Dan Gilbert $70 million for arena upgrades and in 2021 to give Guardians owners Larry and Paul Dolan $285 million for stadium upgrades, both in exchange for lease extensions. While the money is coming from a ton of different sources, one slice is from the extension of cigarette and alcohol taxes (aka “sin taxes”) that were used to build the venues in the first place, and sin tax revenues are falling while construction costs are rising, resulting in a budget gap for Gateway that the city and county are left to fill.

Going by news coverage, it’s been unclear for some time now what exactly the team leases require the public to pay for — I’m digging around for the exact language and will report back here once I’ve located it. Crain’s Cleveland Business previously reported that if Gateway runs out of money and stops paying for required upgrades, however those are defined, “the teams could stop paying the $2 million in annual rent to Gateway or sue the city for breach of contract,” according to Gateway’s lawyer. (Again, it would help to see the actual lease language.) Griffin called the added $20 million in city spending approved last night “responsible” in order to avoid “having to pony up for expensive litigation” and ending up “with a stadium and trying to figure out an end user,” implying that the teams could leave if Gateway defaulted — though given the current Oakland A’s and Tampa Bay Rays situations, “leave for where?” is a worthy question.

The Cuyahoga County Council is set to vote today on more than $17 million of new spending of its own on Guardians and Cavs capital expenses. And this isn’t likely to be the end of it: There’s another ask for another $30 million in potential Gateway spending around the corner, and unless construction costs come down (ha!) or Clevelanders start smoking more, likely more budget gaps to fill beyond that.

City councilmember Jenny Spencer, one of the three “no” votes last night, put it this way at the council’s previous meeting last week:

“From the residents’ perspective, it always seems that when it comes to stadium funding, money just comes like a magic rabbit out of a hat. It just appears magically. Magically, we have $20 million in general funds available. But when it comes to other things the residents need, we don’t have the money.”

To which Griffin replied:

“Somehow, several years ago, this city made a commitment that they wanted teams as part of the economic engine in the central business district. There are some legal obligations that this city has with this lease.”

That “somehow” is doing a lot of work, huh? Griffin has been on the council since 2017, so presumably he knows at least a little something about how this sausage got made; instead, he’s staying focused on how Cleveland taxpayers will have to choke it down.

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Worcester’s stadium fund is in debt to the city, but that’s not the worst of it

The Great Worcester Andy Zimbalist Throwdown was so involved that I ended up writing a whole article about it elsewhere, but it ultimately came down to: Zimbalist, the former stadium subsidy skeptic who had started giving testimony-for-hire on both sides of the issue, insisted that Worcester would recoup its expense on a Red Sox Triple-A stadium via taxes generated by new housing that would spring up around it; and pretty much every other economist said it doesn’t usually work that way. “There’s a list a mile long of cities where it hasn’t worked. And there’s a really short list where it has,” said University of San Francisco economist Nola Agha at the time. “Is this development guaranteed? Is it going to happen regardless of if there’s a stock market crash or interest rates go up?”

So how’s that going, you ask, in the three-plus years since the Worcester stadium opened? Welp:

Following news that tax revenues for the independent Polar Park financing account fell short last fiscal year, with the account owing the city general fund $792,000, city councilors had harsh words Tuesday for a developer who appears to be falling short on his obligations to the ballpark district…

“They’ve gotten away with a lot and they’ve put us as a city in a pretty bad position at this point,” District 2 City Councilor Candy Mero-Carlson said.

The city’s stadium fund is supposed to collect property taxes, sales taxes, and building permit fees from development around the stadium, and use it to repay the city’s $146 million in stadium bonds. (It was supposed to be $106 million at the time Zimbalist endorsed the plan, but overruns happen.) But development has lagged as the result of rising inflation — which was largely thanks to Joe Biden’s sanctions on Russia and Bill Clinton’s deregulation of financial derivatives, if you’re keeping score — to the point where developers are now turning down the offer of tax breaks so they can walk away from properties entirely.

The good news, if Worcester city manager Eric Batista is to be believed, is that “we remain confident that the DIF will return significant funds to the municipality’s coffers as new development occurs and certain tax agreements expire.” The bad news is: Even that wouldn’t necessarily help ensure that Worcester taxpayers don’t lose their shirts on this deal. If some of the new housing construction that eventually arrives would have happened with or without the stadium; or if it cannibalizes housing construction that might have gone elsewhere in the city if not for the stadium; or if the cost of building schools for all those new residents adds more to the city expense budget than the new taxes add to receipts, then this could still be a money pit even if all the buildings around the stadium are eventually built, just like other TIF districts elsewhere.

The question now: Will the Worcester Telegram issue a retraction for the anonymous chamber-of-commerce-penned op-ed it ran last year (without fact-checking) claiming that Worcester will be different, because reasons? Your guess is as good as mine, and you can probably guess what my guess is.

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Cincinnati totally needs to spend $500m on new arena, say companies that build arenas

We spend a lot of time here looking at ways wealthy sports team owners lobby for public spending on new stadiums and arenas to make themselves richer, or at least give them fancier places to entertain their friends and make their competitors jealous, as one does. But then there are the cases where the sports-industrial complex takes on a mind of its own and demands subsidies for buildings that no team in particular stands to benefit from, on the general principle that all the other kids are doing it, so it must make sense.

One can usually depend on local chambers of commerce to lead the charge for public money to be used for this kind of thing, and sure enough, that’s who’s pushing for Cincinnati to spend around half a billion dollars on a new arena:

“What became clear through our work is that our region is an epicenter of cultural vibrancy, music, art, and sports in the Midwest,” said Brendon Cull, President & CEO of the Cincinnati Regional Chamber. ” In terms of assets, we are missing one key component: a modern arena. Our study makes clear that the opportunity before us is more concerts, more sporting events, more family entertainment, and more comedians that contribute to growth in population, the economy, and cultural vibrancy in our region.”…

“The results of this study mark a significant advancement in the ongoing conversation about the necessity for a state-of-the-art modern arena for Greater Cincinnati,” said Bill Baker, Vice President & Managing Partner of MSA Sport. “By being located in Cincinnati’s vibrant urban core, a new arena will attract more visitors and events, spur additional investment in the city, and further enhance our great region.”

Okay, there’s not no self-interest at work here: MSA Sport would be in line to design and build a new arena, so clearly they have their own reasons to want to drum up business. Other names on the study are the Machete Group, Turner Construction, and Populous, all big names in the sports construction world. (They say they consulted with the owners of the Cincinnati Cyclones minor-league hockey team, who have “expressed a willingness” to partner on the project if the city brings its checkbook; FC Cincinnati owner Jeff Berding has been hot for a new arena for years now as well, though it’s not clear if he thinks he could get operating rights to one or what.) The report’s authors argue that if the city puts up 70% of the money toward a $675 million–$800 million arena project, it could reap $829,000 a year in new tax revenues, which would only amount to a $30 million a year or so annual loss — hey, nobody said they were big names in math.

The study also includes a list of musical acts that toured nearby in recent years but skipped Cincinnati, with the clear implication that it’s because their arena is a dump:

Build a new arena, and Elton John will come! Or, well, maybe not, but somebody will, and who can put a price on that? Sure, pointy-headed economists probably, but who wants to listen to them when there are arena contractors with such nice clear plastic binders?

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Friday roundup: Rays to play 2025 in Tampa, and other things to make people mad

The verdict is in for where the Tampa Bay Rays will play the 2025 season while waiting for their roof to be (probably) repaired, and the answer is: Steinbrenner Field in Tampa, spring-training home of the New York Yankees and rest-of-the-time home of the Tampa Tarpons. I’m going to go ahead and call this a fine enough decision: The stadium holds 11,000 people, not too far off of the Rays’ average 2024 attendance of 16,515; as a spring training site, it has major-league amenities; and it’s still in the Tampa Bay region, so Rays fans won’t have to drive across the state or the country to get to games. Plus, there are multiple fields on the site, so there’s no worry about schedule conflicts, since the Tarpons can just play on one of the back fields while the Rays take over the main one.

Of course, it’s also not in Pinellas County, which is already ticking off Pinellas County commissioners who already held up a vote on approving bonds for a new Rays stadium last month amid concern that the team might play elsewhere for a season or three. Commissioner Chris Latvala, who voted against the stadium deal in July, called the decision “unfortunate,” saying, “there’s going to be over $1 billion public funds dedicated from Pinellas residents to the Tampa Bay Rays, and the thank you that the Rays gave them was to play the games across the bridge in Hillsborough County.” Commissioner Rene Flowers, meanwhile, who voted for the deal in July, told the Tampa Bay Times she’s now not sure if she’ll change her vote, saying, “I’m waiting to see how it looks for us financially” — spoilers, Rene, it still looks just as bad as it did then.

And then there’s this tidbit:

The Yankees will receive about $15 million in revenue for hosting the Rays, a person familiar with the arrangement told The Associated Press, speaking on condition of anonymity because that detail was not announced. The money won’t come from Tampa Bay but from other sources, such as insurance.

Um, Associated Press, you drunk posting? First off, “Tampa Bay” is not a government entity, it’s a collection of disparate municipalities and counties, so who isn’t the money coming from, exactly? And “such as insurance” is both awfully vague and puzzlingly specific, as the only insurance policy that’s been discussed is that held by the city of St. Petersburg, which is already committed to paying for a chunk of the estimated $55 million cost of repairing the Tropicana Field roof.

Still many questions, in other words. Anyone else want to chime in?

“I’ll be excited to set a record for rain delays in a season,” Rays reliever and union player rep Pete Fairbanks said.

And as for the week’s other news:

  • Orlando’s stadium formerly known as the Citrus Bowl is set to get $400 million in county-funded renovations, something that Orlando mayor-for-life Buddy Dyer first proposed last year and which the county gave preliminary approval to back in January. The money would come from the “tourist development tax” — the same pool of hotel-tax money that Pinellas County is currently debating whether to hand over to the Rays — which according to the authorizing legislation can be used for building stadiums, or building auditoriums, or funding aquariums or museums or zoos or beaches or advertising tourism or a whole lot of other things, so long as the purpose is to get more tourists coming to your county. It’s actually somewhat difficult to argue that renovating a stadium that hosts a handful of college football games each year in order to make it “fully symmetrical” is what’s needed in order to encourage tourists to go to freaking Orlando, but this is what the county commission is being asked to vote on in the next couple of weeks, with a straight face.
  • A report by consultant Econsult Solutions Inc. commissioned by the city of Cleveland claims that the Browns leaving downtown would cost the city $30 million in annual economic activity and $11 million in annual tax revenue, which on the face of it doesn’t make any sense since Cleveland doesn’t have any taxes that are at 36.7%. A quick look at the report itself doesn’t reveal any more methodological details, except that Econsult apparently calculated its estimate that Cleveland would lose 29% of Browns-related spending by dividing the population of the city by the population of Cuyahoga County, LOLconsultants.
  • Personal seat license prices at the new Tennessee Titans stadium are in some cases going up from $750 per seat to $10,000 a seat, and season ticket holders are not pleased. But at least the PSL money will help pay off the public’s $1.2 billion share of the construction — oh, what’s that, the seat license money is entirely going to pay off team owner Amy Adams Strunk’s share of the costs? The Hog Mollies didn’t mention that part!
  • The city of Oakland’s sale of its half of the Oakland Coliseum site to private developers is on hold, apparently because Alameda County is dragging its feet on the transfer of its half of the site which it had previously sold to A’s owner John Fisher. No, that doesn’t make sense to me either, it looks to involve a lawsuit in progress charging that the sale violates the state’s Surplus Land Act requiring that public land first be offered up for development as affordable housing — similar objections were raised about the Los Angeles Angels deal, you may remember, but that fell apart before it was ever resolved, so who knows what’ll happen here.
  • One long-rumored stadium site the Kansas City Royals definitely won’t be moving to is the old K.C. Star building, because it’s being converted into an “AI innovation facility.” A local wine bar owner called this “not the most exciting thing for the neighborhood” but at least a plan that wouldn’t require displacing local businesses, which is probably about right.
  • Diamond Sports Group, aka Bally Sports aka FanDuel Sports, has emerged from bankruptcy reorganization, with lots of consequences for the MLB, NBA, and NHL teams it formerly provided cable broadcasts of. ESPN has a rundown, but the main takeaway is that a bunch of teams are going to getting less TV money than they expected, which will effect everything from their player budgets to the relative importance of market size in terms of team profitability, while fans will get some new options including the ability to do pay-per-view of single games for a mere (?) $7 a pop. More on this as more dominoes fall, maybe, or check Marc Normandin’s Marvin Miller’s Mustache newsletter later this morning, if I know him he’ll be weighing in on this.
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