Search Results for: Spence-Jones on Marlins stadium payoff: I'll take whatever you got

KC mayor has piece of paper right here detailing how he can offer Royals $1B for stadium

access_time personNeil deMause

Kansas City, Missouri Mayor Quinton Lucas said a thing:

Kansas City, Missouri, Mayor Quinton Lucas said Tuesday the city has offered more than $1 billion to the Royals to help the team build a new downtown stadium or renovate Kauffman Stadium.

“We do have, I think, a very robust offer that combines state and local incentives,” Lucas said. “It’s my view that gets you to a $1.2 to $1.4 billion range with no tax increase. It doesn’t calculate or include the current Jackson County sales tax.”

What’s that, now? The last Royals stadium funding plan that Lucas mentioned was a state bill that would raise an amount of money Lucas didn’t disclose by means he also didn’t disclose, though apparently it’s a super-duper-STIF, funneling 50% of state sales and income taxes plus up to $100 million in state “matching grants” for “qualified entertainment facility projects.” The total state subsidy is limited to 33% of a project’s total cost, meaning Lucas must have city and county subsidies in mind as well, though — stop me if you’ve heard this one — he hasn’t disclosed what those would be.

Meanwhile, the owners of land in Overland Park, Kansas who had been reported to be negotiating the sale of their property for a possible new Royals stadium say they’re “NOT in discussions with the Royals about being a potential new site for their stadium.” Facts are passé, man, future stadium projects will be entirely based on vibes.

Share this post:

D-Backs stadium redo bill shuffles tax streams, still set to cost Arizonans $400m+

access_time personNeil deMause

The bill to funnel about $400 million worth of future taxes to Arizona Diamondbacks owner Ken Kendrick for stadium renovations took another step forward yesterday, passing the state senate finance committee by a 4-3 vote. (It’s already been approved by the state house.) The senate version, however, is what KJZZ-FM called, in a language almost but not exactly like English, “a paired down version” of the bill; what’s changed?

  • Removed: A provision to redirect Diamondbacks player state income taxes to pay for renovation costs. That was set to provide about 12.7% of the tax money, meaning the projected public cost would now be around $350 million.
  • Added: A provision that Maricopa County put in as much as the city of Phoenix does — something it wasn’t previously going to, because the county has no general sales tax. If the city cost remains $6.4 million a year, that would mean the county contribution would have to quadruple to keep pace, meaning we’d be back up to around $420 million in taxpayer costs.
  • Unchanged: Phoenix Mayor Kate Gallego’s request for a $15 million a year cap on public expenditures — which would keep the total subsidy value at around $220 million — was rejected, though the new bill does include an overall cap of $500 million “plus inflation,” which is to say not actually a cap of $500 million.

The bill still needs to get through the appropriations committee, then on to a full vote of the senate, then back to the house for a re-vote on the amended version. Then it would be up to Gov. Katie Hobbs, who has said she’ll sign the bill if it is “acceptable to all the parties,” which right now it is not if Mayor Gallego and Maricopa County leaders count. This one could go down to the wire — not that stadium deals don’t usually get hashed out at the wire, if necessary by a few concessions to key opponents, but “usually” isn’t “always,” so we’ll have to wait and see.

Share this post:

Ohio legislature proposes omni-TIF to funnel tax money to Browns and other stadiums

access_time personNeil deMause

Ohio’s Statehouse News Bureau has obtained the draft legislation that would provide $600 million worth of state tax dollars to Cleveland Browns owners Jimmy and Dee Haslam for construction of a new stadium, as well as potentially more money to other teams such as the Cincinnati Bengals, and an initial read reveals some interesting details:

  • The proposed state budget amendment would allow the state legislature to redirect all state taxes “attributable to the professional sports franchise,” after first subtracting out how much in state taxes were paid by the sports facility district in the year prior to the first year of a team’s lease. This would include taxes levied under chapters 5739, 5741, 5747, and 5751 of the state code, which are sales tax, use tax, storage tax, income tax, and commercial activity tax.
  • The district is defined as “the geographic area encompassing the land upon which the 19 transformational major sports facility mixed-use project is located,” with no apparent limit on the size of the area within which taxes will be kicked back.
  • The money would be available to any “transformational major sports facility mixed-use project,” which would be defined as any project that 1) includes a “major sports facility,” 2) includes any size of mixed-use development, and 3) “is expected to generate increased state tax revenues.”

This is, in technical budget terms, some damn sweeping legislation. By allowing the state to create stadium and arena districts of any size where all new sales, income, and other tax revenues are kicked back to the team to pay construction costs, the bill would effectively prioritize projects on otherwise vacant land — or at least land that can be made vacant by the year before the stadium lease starts. And there’s no provision for determining whether the “new” tax revenue in a stadium district would be new to the state as a whole — meaning Ohioans could end up paying a team to move its economic activities from one part of the state to another, then 20 years later paying them again to move it back.

There have been plenty of sports projects in the past funded by tax increment financing, or TIF, projects, which usually just mean kicking back increased property taxes; occasionally, other taxes are rolled in too, creating the less common mega-TIF. This legislation ups the ante even further, and really deserves a new name: “Omni-TIF” has a nice ring to it. The state legislature will be debating what’s in the final budget until next Tuesday, April 1, with a full floor vote slated for the following Wednesday, April 9 — we should get a sense by then how much this language would be expected to cost Ohio taxpayers, but with the ability to draw a circle of unlimited size around a stadium and kick back and any all taxes from it, looks like the sky’s the limit.

Share this post:

Friday roundup: Oregon considers upping MLB expansion stadium ante to $800m, baseball owners twirl mustaches in glee

access_time personNeil deMause

This week’s vibes.

  • An Oregon state senator has introduced a bill to increase the state’s spending on a possible Portland MLB stadium from $150 million to $800 million, provided Portland gets an expansion team whenever MLB next expands. The source would still be funneling player income taxes to pay off stadium bonds, yet another Casino Night–style funding scheme that is both risky and not really free money, for reasons we’ve covered here before. (The increased figure would rely on rising player payrolls since the initial $150 million plan was approved more than 20 years ago.) The $800 million figure is apparently meant to compete with Utah’s proposed $900 million in property tax kickbacks for an MLB stadium in Salt Lake City; expansion city bidding war, activated!
  • Denver’s NWSL franchise is planning to build a 14,500-seat stadium, and “the ownership group is paying for the stadium in its entirety,” according to the Denver Post. Also according to the Denver Post, four paragraphs later, a tax increment financing district is already in place on the team’s proposed stadium site, meaning the team would recoup property taxes worth some number that the Denver Post didn’t deign to mention. The city would also be on the hook for buying $24 million worth of land for the stadium project, but Denver Mayor Mike Johnston says “the city would always own that public space and that could come back to us for repurposing in 50 years from now if the stadium were to move,” so really it’s an investment, see?
  • Will the Tampa Bay Rays draw more fans this season, despite playing in an 11,000-seat minor-league stadium, thanks to now being on the side of the bay where more people with more money live? Doesn’t look like it, based on the fact that opening day is one week away and hasn’t sold out yet. It doesn’t help that Rays management raised average ticket prices by 30% in response to the smaller capacity, which could complicate efforts to use the 2025 season to answer the age-old question, “Is it St. Petersburg, or is it just Florida?“
  • Cuyahoga County Executive Chris Ronayne says the financing plan for a new Cleveland Browns stadium would require average ticket prices to rise to $800 over 30 years in order for the math to work, while a Browns spokesperson says this isn’t true, and nobody’s showing their math, that’s no fun! (Yes, this website is predicated on the notion that math is fun. I’m sorry if you’re learning about this late.)
  • A Massachusetts judge heard arguments this week in a lawsuit charging that a new stadium for BOS Nation F.C. (soon to be renamed, finally) violates a state law requiring a two-thirds supermajority of the state legislature to approve any new uses of land taken for conservation purposes. The Boston mayor’s office insists that tearing down a public school stadium and rebuilding it as a pro women’s soccer stadium that public school students would still get to play in is really the same use — cue the Ship of Theseus debates!
  • The Eugene Emeralds are absolutely, positively moving out of Eugene after 70 years, uh, just as soon as they find somewhere else offering to build them a new stadium. Until then, they’ll still be playing in Eugene. But they’re gonna leave, just you watch! Don’t call their bluff, voters who rejected giving them $15 million last May!
Share this post:

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.

Share this post:

Browns release video of proposed domed stadium, get immediately hated on by fans

access_time personNeil deMause

The Cleveland Browns owners released some fresh vaportecture yesterday, in the form of a CGI flyby of their proposed Brook Park stadium as viewed from a high-speed drone in a hellscape where cars and video boards move but most of the people are frozen in place. But all that aside, by choosing to debut it on X, team execs opened themselves up to comments, and oh, the comments:

Heckuva job, Browns.

“Win some games first!” is maybe not the most rational response to a $1.2 billion stadium funding demand — spending public money on a private sports stadium doesn’t become a better investment just because fans are happier about the standings — but it is a common one, as we’ve seen from all the owners who have waited until their teams were on a playoff run to issue stadium subsidy demands. “That thing is ugly” and “Not with my money” are somewhat more on point. And added together, this comes to a pretty thorough public denunciation of the Browns’ stadium plans, albeit from the self-selected sample of X users who follow the Browns account.

Meanwhile, speaking of self-selected samples, the Ohio House Finance Committee is “likely” to include Browns owner Jimmy Haslam’s requested $600 million in stadium cash, according to committee chair Brian Stewart. The money would, according to Browns lawyer Ted Tywang, come from “revenues that are generated by the project that wouldn’t exist but for this private investment,” though he didn’t explain how moving the Browns from one part of Ohio to another would generate $600 million in new tax revenues. Win some games first, Jimmy!

Share this post:

Somebody is insisting people want to buy minority A’s shares at top value to fund Vegas stadium, wonder who?

access_time personNeil deMause

Sacramento A’s owner John Fisher has reportedly updated his figure for how much additional money he needs, or at least wants, to complete his new Las Vegas stadium, and it now stands at $550 million:

John Fisher, managing partner of the Oakland A’s, is offering new shares in his Major League Baseball team at a $2 billion valuation, according to two sources with knowledge of the offering.

The Fisher family, which owns more than 95% of the Athletics, also known as the A’s, is looking to raise $550 million to finance a $1.75 billion, 30,000-seat domed ballpark in Las Vegas, according to the sources. In recent weeks, the A’s have had several investors that have been vetted by MLB who are willing to put in more than $200 million combined at an enterprise value of $2 billion, according to these sources.

That’s a lot to attribute to unnamed sources, but journalism these days, whatcha gonna do. If the reports are true, then Fisher is trying to sell off almost 30% of his ownership of the A’s to raise stadium money, so long as buyers are willing to do so at a price that assumes the entire team is worth $2 billion, which is 67% higher than Forbes’ $1.2 billion estimate. (Forbes isn’t always right with its value estimates, but it’s not usually quite that wrong.) And he’s found at least a handful of suckers willing to do so, according to sources, who are surely not Fisher cronies trying to drive up the sale price of minority shares by getting news articles saying “All the other rich kids are doing it!”

As for carving up your team’s stock to finance a stadium, there’s nothing wrong with it per se, though it does mean that Fisher would be left with only about 70% of the revenues he was counting on to pay off his share of the estimated $1.75 billion stadium cost — which even after accounting for about $600 million in state subsidies and that hoped-for $550 million in investor cash would still leave him on the hook for $600 million plus any cost overruns. It is so very difficult these days to tell legitimate business plans from shadow plays — you can watch a whole documentary about that — so we’re just going to have to wait and see whether somebody actually pays for the bulldozers or if the A’s stadium goes on the pile of Vegas sports projects that turned out to exist only in the minds, and press releases, of the people promoting them.

Share this post:

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.

Share this post:

Rays execs proposed staying until 2038 if taxpayers spent $400m to upgrade Trop, got shot down

access_time personNeil deMause

On Friday afternoon, news broke — or Tampa Bay Rays co-president Matt Silverman declared, which isn’t quite the same thing — that Rays management had proposed an alternative deal to building a new $1.3 billion stadium with $1 billion in public money: instead spending $600 million, $400 million of it from the city and the county, to upgrade their current home of Tropicana Field. As part of the deal, the Rays would agree to a 10-year lease extension that would keep the team at the stadium through 2038.

“It is one of many possibilities that has been discussed with the city and the county since the hurricanes,” Rays president Matt Silverman said Friday. “We are open to any and all avenues that results in the Rays thriving here in Tampa Bay for years and for decades.”

It’s kind of weird for Silverman to only publicly mention it now, when his boss, Rays owner Stu Sternberg, has officially stuck a fork in St. Peterburg stadium plans and been met by Mayor Ken Welch sticking a fork in his willingness to work with Sternberg. But setting aside for the moment whether Silverman is sincere or just trying to save some public face with a “well, we tried,” would this have been a good deal for St. Pete? And why did city and county officials reject it?

On the first question, spending $400 million in public money is a lot better than spending $1 billion, obviously. But we also have to keep in mind the length of the lease: If the Rays could demand a new stadium again in 2038, that’s a cost of $40 million per year of the team’s commitment to play in St. Pete, whereas the new stadium would have been $33 million per year. There is some benefit to kicking the can further down the road.

Plus, there are a couple of other potential reasons Welch in particular may have been unenthused about Sternberg’s offer:

  • Welch could have his heart set on a wider redevelopment of the Gas Plant District. All indications are that the bit about this project that truly excites the mayor is redeveloping the site of an old African American neighborhood that was demolished in the 1980s to make way for the dome. Just gussying up the Trop, even at a lesser price tag, might not have seemed worth it.
  • A lease extension would come with other pitfalls. If Sternberg’s renovation plan would have included a simple extension of the lease as-is, then he would have retained 50% of the stadium site’s development rights for another 10 years, whereas allowing the lease to expire in 2028 will mean the city can reclaim those then. That’s a significant amount of value, and handing it over to Sternberg along with $400 million would start adding up to a pile of money. It’s worth noting that Welch said on Thursday, “We need to get the termination [letter], if they’re going in that direction, to make sure that all the boxes are checked there. And we’ll talk with the council and with the community about the paths forward.”

St. Pete Chamber of Commerce CEO Chris Steinocher did express mild enthusiasm for the plan, saying, “I do believe those conversations will happen as everybody calms down” and “At some point, we can open the door to when and how a plan like this might work.” Steinocher doesn’t get a vote on the city council or county commission, though, and since the old stadium deal was decided last July both of those legislative bodies have gotten new members who are not so enthused about giving Sternberg a pile of public cash. There’s a whole lot of jockeying for leverage to come, it’s clear, so expect lots more gambits like these in the coming weeks and months — unless MLB really decides to throw a bomb into the proceedings by telling Sternberg to sell the team if he knows what’s good for him.

Share this post:

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:

Share this post: