Search Results for: Tales of city mismanagement: How the St. Louis Rams won their sweetheart lease

Houston sports venues need almost $3B in upgrades, if you’re not too picky about what “need” means

access_time personNeil deMause

The Harris County Houston Sports Authority’s building committee has estimated how much the Astros and Rockets venues will need in maintenance costs in coming years, and it’s a bundle: $836.5 million over the next 20 years for the Astros, and $635.81 million for the Rockets. The numbers, according to the Houston Business Journal, come from a study by Tennessee-based public facility consultant firm Venue Solutions Group, which previously estimated that the Texans‘ stadium needs $1.4 billion in renovations.

When price tags like these get floated, there are always two questions: 1) Is this for renovations the buildings need or just that the team owners want? and 2) Whose responsibility is it to pay for them? Buildings do need maintenance, but they also become what’s been called “economically obsolete,” which means they could make more money if they were schmancier — the second should reasonably be considered less a problem for the public landlord that owns the buildings and more a problem for the billionaire owners who’d like to be even more billionairey.

Let’s start with the need vs. want question: More than half of both the Astros ($448.27 million) and Rockets ($339.24 million) money is slated for “architectural renovations,” which means things like moving walls and rearranging layouts. It’s not something you do to keep a building from falling down, in other words, so much as to rejigger how you organize your building’s interior. Among other things, Chron.com reports that the Rockets’ “premium and legacy level need an upgrade to be more enticing,” which certainly seems to be edging more into “want” territory than “need.”

As for whose job it is to pay for snazzing up the venues, HBJ has this to say:

The Houston Astros and Houston Rockets are responsible for maintenance costs at their respective facilities.

However, leases for the Astros and Rockets require the sports authority to renovate Daikin Park and Toyota Center to keep them in first-class condition. In particular, the Astros’ 2018 lease extension requires HCHSA to obtain additional funding for renovations by Dec. 31, 2030. If the organization does not do so, the Astros have the option to terminate their lease effective March 31, 2035.

When the Astros moved into their stadium in 2000, they agreed to a 30-year lease, but that was extended to 50 years in 2018, with an additional $2 million a year in rent money to be used for maintenance and capital repairs. But somewhere along the way Harris County agreed to a state-of-the-art clause, meaning the lease binds the county to keep renovating the stadium along the way. That’s the same kind of subsidy-that-keeps-on-subsidizing that Hamilton County in Ohio is trying to get out of regarding the Bengals, so if Astros owner Jim Crane terminated his lease early, he’d arguably be doing Harris County a favor. (The Rockets’ lease already expires in 2034, so it’s not as clear what Harris County would be risking there by not giving their arena a $635 million facelift.)

What would really be nice here is a look at the VSG report itself, but if it exists anywhere online, it’s well-hidden. (VSG hasn’t even added the Houston venues to its online portfolio yet.) Until then, everyone please agree to report that the Astros and Rockets owners want almost $1.5 billion in upgrades, not that that’s what the buildings need — and that while denying it could mean having to renegotiate the team’s leases, it’s not like there are any other sixth-largest media markets in the U.S. out there that they could move to instead.

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Friday roundup: Arizona senate votes to give $500m to D-backs owner for stadium upgrades

access_time personNeil deMause

At 10 pm last night, the Arizona state senate voted 19-11 to approve spending $500 million in state money on stadium upgrades for the Arizona Diamondbacks. The bill had been passed by the state house in February but had stalled in the senate as Gov. Katie Hobbs and other bill proponents tried to round up enough votes for passage.

What did Hobbs agree to change in order to win over reluctant senators? Not a whole hell of a lot, at first reading:

  • The city of Phoenix’s contribution will be capped at $3.5 million a year in sales tax money, a little over half what Phoenix Mayor Kate Gallego had estimated her city would be on the hook for under the original bill.
  • An increase in Maricopa County contributions to match the city’s cost.
  • No use of state income taxes from team employees, as was proposed in the original bill.
  • A provision by which if the Diamondbacks owners don’t spend $250 million of their own money on renovations, the state legislature can repeal the stadium subsidy and leave the team responsible for paying the full debt.
  • Probably other stuff, I’m still reading the bill.

It’s a weird laundry list, especially all the rejiggering of which level of government will contribute what — Gallego apparently demanded a city cost cap before she would sign off on the bill and thus flip some Democratic senate votes to yes, but the contribution amounts needed to still be tied to sales tax receipts to maintain the Casino Night Fallacy, so instead we get this odd mishmash of set dollar figures and dedicated tax revenues.

In any event, the overall thrust of the legislation is the same: A half-billion dollars will be pulled from city, county, and state sales tax revenues that would otherwise go to the general fund, and will now instead be siphoned off and sent back to D-backs owner Ken Kendrick to use for renovations to Chase Field. In exchange, Kendrick will agree to a new lease to keep the team in Phoenix through … oh, sorry, that hasn’t been determined yet, he insisted on the state approving public funding first before agreeing to what he would provide in return, because that’s totally how reasonable negotiations work.

The bill still needs to go back to the state house for a re-vote on its amended form, and then on to Hobbs for her signature, but those look like mere formalities at this point. Add Ken Kendrick to the list of billionaires who got commitments for several-hundred-million-dollar taxpayer checks this year because local officials were either too afraid of the possibility the team would move, too besotted with the alleged economic benefits of a team, or too beholden to lobbyists and campaign contributors to say no. Representative democracy: It’s not going great!

Lots of other stuff happened this week before last night’s vote in Arizona, let’s get to that:

  • Oklahoma City Thunder owner Clay Bennett has finally agreed to lease provisions in exchange for the $850 million in arena money he got from the city a year and a half ago, and they’re pretty skimpy: The team will pay about $2.4 million a year in rent, rising with inflation, and agree to a $1 ticket surcharge to go toward a capital improvement fund; anything above that for maintenance and operations will be on the city to provide. Also, Bennett will keep all the proceeds from sale of the new arena’s naming rights, plus will get exclusive rights to buy and develop the arena site, with the sale price going back to him to pay for his arena. “Worst arena deal in history” is a high bar to clear, but Oklahoma City seems determined to be in the running for it.
  • The mayors of both St. Petersburg and Tampa say they’re happy the Tampa Bay Rays are up for sale, Tampa Mayor Jane Castor calling it “a very positive step” and saying her city’s “bid is dusted off and we’ve sharpened our pencils,” while St. Pete Mayor Ken Welch said he’s “excited about the possibility of new ownership” and focused on ” the fulfillment of the economic promises made to the historic Gas Plant District community.” The preferred Tampa site is also being targeted by the owner of the Tampa Bay Sun women’s USL team for a possible soccer stadium, but as nobody has the slightest idea how any of this would be paid for, it’s a little early to start worrying about competing stadium requests.
  • Cuyahoga County Executive Chris Ronayne and some county councilmembers are shouting at each other about whether a Brook Park Cleveland Browns stadium would be an affront to Cleveland or a windfall that’s too good for the county to pass up. Not that Cuyahoga County’s position matters all that much, but with the Ohio state legislature still in its staredown, somebody’s gotta provide the juicy quotes that drive the click machine.
  • The New York Times’ Athletic sports site is excited that sports stadium subsidies are now also for the ladies, if you needed any more reasons to stop reading the Times. (They offer games-only subscriptions, you don’t have to give up Spelling Bee!) The Kansas City Star editorial board, meanwhile, is worried that Missouri’s recently proferred (but not yet accepted) stadium subsidies for the Chiefs and Royals has too many unknowns and that spending public dollars on sports teams is “deeply regrettable” if also “sadly, the world in which we live,” if any of that makes you more interested in reading the Kansas City Star.
  • MLB commissioner Rob Manfred will be at the Athletics‘ stadium site groundbreaking in Las Vegas on Monday, this is gonna be the best Potemkin village ever!
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Rays for sale to new Florida-based owner, let the new stadium rumors fly!

access_time personNeil deMause

Back in March when Tampa Bay Rays owner Stu Sternberg officially backed out of the stadium deal he’d negotiated with St. Petersburg, one theory was that it was because MLB was pressuring him to sell the team to new local ownership that hadn’t burned its bridges with local government and would be willing to accept a $1 billion stadium check. At the time, Rays co-president Matt Silverman stated: “The team’s not for sale.”

Today, the team is officially for sale:

The Tampa Bay Rays are in advanced talks to sell the team to a group led by Jacksonville, Fla., developer Patrick Zalupski. The deal values the team at roughly $1.7 billion, according to multiple sources who asked not to be named because the details are private…

The Rays released a statement confirming that the team has “commenced exclusive discussions” to sell.

Jacksonville isn’t exactly local local, and Zalupski isn’t the kind of mega-billionaire who can buy a major league sports team with his spare change — his entire net worth from his construction company with a 4,300-member Facebook group for people to complain about it is only $1.4 billion — but he’s just the lead investor, with others including Jacksonville Jumbo Shrimp and Akron RubberDucks owner Ken Babby. The reported $1.7 billion sale price would be $450 million more than Forbes’ latest value estimate for the Rays and about the same as the Baltimore Orioles were sold for last year, so it looks like Sternberg’s stadium fiasco has still left him in place to walk away from the team with a nice windfall.

As for what this would mean for the Rays’ future home, that’s anyone’s guess. St. Petersburg Mayor Ken Welch said in March that he’d be willing to reopen stadium talks with “a new owner who demonstrates a commitment to honoring their agreements and our community priorities,” but it’s unclear whether that means the same $1 billion deal would be on the table, or whether the city council and county commission would necessarily be on board with it. St. Pete is currently spending $22.5 million to replace the Rays stadium’s hurricane-shredded roof, with hopes the team can move back in for the start of the 2026 season; at that point, the team’s lease will resume with three years to run, meaning the Rays will have until the end of 2028 to figure out where to play — though realistically, they’ll likely need to extend the lease since getting the team sold and a new stadium approved and built by 2029 is pretty unlikely at this point.

And all this still doesn’t answer the question: Would Zalupski & Co. still want a new $1.3 billion stadium in central St. Pete, even with that $1 billion subsidy? Not like they have many other options on the table, but they could try to restart talks with Tampa, or LOLOrlando, or even just stay put at a repaired Tropicana Field and stop telling fans what a terrible place it is to watch a game. Any new ownership group can take its time to figure all this out — except, of course, that MLB will be breathing down its neck to make a decision fast so the league can start fielding expansion team offers, which officials have said they won’t do until the Rays and Port Ruppert Athletics have resolved their stadium issues. It’s been a long three months without Rays stadium drama, I’m so glad this is getting renewed for another season.

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Behold, the future of soccer stadiums, Chicago Fire vaportecture edition

access_time personNeil deMause

It’s been a long, dismal spring of record-breaking stadium subsidies making their way through state legislatures (not to mention other even more dismal stuff), so let’s have some fresh vaportecture as a respite from all the horror! And it’s for the proposed Chicago Fire stadium, which will allegedly be built entirely with the team owner’s own money. (The overall development itself will get a ton of tax kickbacks, but we won’t think about that right now.) Roll it!

Okay, sure, that’s fine enough. The stadium looks like a stadium, the sun is actually setting in the west at game time, nobody spelled the city’s name wrong. I do have some questions about what appears to be a practice (or youth?) field next to the stadium and whether all those tents and people walking on it before the game won’t destroy the turf and make it unplayable, but as these things go, that’s a minor quibble.

Likewise, let’s look at everything the interior image got right: There are 11 players on each team, and no one is reacting to the exciting play on the pitch by standing up and holding a scarf to face the back rows. And what exciting play it is: A Fire player looks to have just dribbled an opposing defender so ferociously that the defender just straight-up face-planted on the pitch, leaving the Fire player open for a likely goal. Too bad so many of the photographers lining the field seem to be looking in the wrong direction to get any good photos of the play, but you can’t have everything.

Okay, now you’re talking! What on earth kind of act is this that involves one guitar player and one dancer (?) while a sparsely arranged crowd generally pays no attention to the stage, despite it being lit by multiple spotlights? Is this what future stadium shows will look like now that currently popular artists are all canceling stadium gigs because they can’t sell enough tickets?

Anything else? Overblown quotes from team officials, perhaps?

Fire president Dave Baldwin told the Sun-Times the team wanted the design to harken back to “the City of Broad Shoulders” and its “rich industrial manufacturing heritage.”

“It has that Chicago warehouse feel, but also has a little bit of an enduring elegance to it — the brick facade, the steel, the glass, those are all things that were really important to Joe as we designed this,” Baldwin said. “Whether it’s opening day in 2028, or you fast forward 50 years and you come back to the stadium, it should still feel relevant to Chicago.”

Sure, brick, glass, steel, all things that scream “Chicago.” Or, you know, Baltimore. It probably would be too much to expect a stadium incorporating deep-dish pizza or sausages made of dead rats into its façade, but we’ll have to take what we can get.

As Baldwin noted, the projected opening date is 2028. That’s pretty aggressive given that it’s already halfway through 2025 and Chicago isn’t exactly known for its balmy winters and all-year construction schedules, but we can’t entirely rule it out.

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Oregon okays $800m in stadium bonds for MLB team, to be paid for with player income taxes that may not exist

access_time personNeil deMause

The votes are starting to come fast and furious now, as state legislative sessions wind down and lawmakers finalize work on stadium and arena bills. The latest yesterday was Oregon, where the state house voted 46-6 to approve using tax money to fund a new MLB baseball stadium, should Portland be awarded a team:

The bill authorizes $800 million in bonds to help fund the construction of a professional baseball stadium on Portland’s South Waterfront.

Instead of pulling from current state revenue, the bill calls for paying off the bonds through income taxes on players and staff. Proponents say it would be on the team to figure out how to fund the rest of the stadium, expected to cost $2 billion.

That $800 million figure is a little uncertain: While the bill authorizes the state to sell $800 million worth of bonds toward a stadium, it proposes paying it off with state income taxes paid by players, team staff, and their families. (A lot of the reporting is calling this a “jock tax,” as if it’s a special surcharge, but it’s not: While Oregon does charge income tax on visiting players, everyone on both teams in games played in Portland would still pay the usual maximum 9.9% Oregon income tax rate.) If baseball salaries keep soaring — and if a Portland team has close to an average MLB payroll, which is questionable given the behavior of some other expansion teams in low-revenue markets — then this could amount to enough money to pay off $800 million. If they stay flat as they have in recent years, though, the stadium fund could end $600 million short — even the bill’s own projections of a 3% annual rise in salaries would seem to leave the state about $200 million in the red.

So what happens if Portland gets a team, Oregon sells $800 million in bonds, and then there isn’t enough income tax revenue to pay it off? Advocates for the stadium subsidy say the owners of the as-yet-imaginary team would have to cover the difference — but that’s not at all how bonds work. It’s conceivable that Oregon could try to get team owners to agree to cover any shortfall in tax revenue in their lease, but that would be a really tough negotiating point, especially since MLB could easily just step in and say “cover the full $800 million or else we don’t give you an expansion team,” at which point Oregon would have to roll the dice on future salaries soaring or give up on its MLB dreams.

Not that the exact amount of future player income tax revenue matters that much: Even if it enough does come in to pay off the state’s share of stadium bonds, 1) it’s not all new money to Oregon, since a large chunk of it comes from local residents spending money on baseball in place of other things, and 2) it’s not a great idea to kick back taxes to local businesses because soon everyone will want one. But with pay-your-taxes-and-eat-them-too plans all the rage, it is still somewhat worthwhile to look at whether the tax money being promised will actually exist, and in Oregon’s case the answer seems to be “let’s all pretend and hope for the best.”

But anyway, Portland baseball boosters finally have an $800 million IOU from the state that they can wave in MLB’s face to try to get an expansion team if and when MLB actually expands, so it should be smooth sailing from—

Organizers floated several possible locations before settling on the former Zidell Yards shipbuilding site on a narrow strip of land between the Ross Island Bridge and the Tilikum Crossing.

The property offers terrific views of the Willamette River and great access to public transit, but few routes to the ballpark for private vehicles. Beyond that, backers have acknowledged the soil may be toxic on the former industrial property. And the site is in a liquefaction zone, meaning the ballpark would need expensive supports to ensure it could survive a major earthquake.

Toxic soil! Could fall down in an earthquake! Questionable finances! Just go ahead, Oregon, and plan your stadium on a haunted burial ground, might as well go for the clean sweep.

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Will the Commanders deal pay off for taxpayers? A special TV investimagation

access_time personNeil deMause

NBC Washington’s Ted Oberg has done an analysis of the proposed Commanders stadium deal and claims that it will repay its taxpayer cost, and I watched it so you don’t have to. A quick summary:

  • “All sales taxes, food and beverage taxes, and ticket taxes generated at the stadium stay in a fund used solely for stadium expenses and upkeep.”
  • The resulting tax fund initially was estimated at $4 billion, but consultants Convention, Sports & Leisure later increased that figure to $5 billion. “The I-Team was told the consultant behind the report you paid for didn’t want to do press or answer our questions.”
  • D.C. administrator Kevin Donohue said the jump in projected revenue came from more aggressive assumptions about how fast restaurants and other businesses would open around the stadium.
  • The TV station filed an open records request for the initial projections and discussions between city officials and CSL around them — but were turned down.
  • D.C. Fiscal Policy Institute director of economic policy Shira Markoff says that district taxpayers deserve better answers about the full cost of the stadium deal.
  • NBC Washington also asked for a copy of the city’s master plan for the project, including 6,500 units of housing, but were turned down.

And that, pretty much, is it: The D.C. mayor’s office says this will be a great deal for taxpayers, NBC Washington asked for details, and the mayor’s office wouldn’t provide them. I’ll give it maybe a C+ — it’s fine as far as it goes, but when you have experienced sports economists willing to make estimates about the actual cost, not to mention plenty of damning history for those consultants, including screwing up a previous economic impact report in D.C. itself, there’s so much more you could have done with this than “we asked questions, we didn’t get answers.” As someone who has edited investigative journalists, I’ve got to say that this is the kind of work I would send back for more fleshing out — “you’ve got an idea for a story, but you don’t really have a story yet.”

Here are some questions that are worth asking, if either NBC Washington or any other D.C. journalists feel like going for a better grade:

  • Why was Convention, Sports & Leisure chosen to do the city’s economic projections, despite their terrible track record and close ties to the sports industry? Was there any kind of search conducted, or did D.C. Mayor Muriel Bowser just pick someone who could be relied on to provide a professional-looking clear plastic binder?
  • How was it decided that Commanders owner Josh Harris would not only get full development rights to the RFK Stadium parcel, he would get 30 years of free rent and 90 years of total exemption from property taxes, with no commitment even to make payments in lieu of taxes, as other developers have done?
  • How much of the tax spending “related” to the stadium would actually be new to D.C., and how much would be cannibalized from other spending in the city?
  • What new city service costs would be incurred to support 6,500 units of new housing plus new businesses, and how would those be paid for if the development wouldn’t pay property taxes and sales taxes would be kicked back to the team?

Those are just a few off the top of my head, but it’s a start. Maybe I should come up with 20 more and we could make a bingo card? I’ll get to work on that.

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Friday roundup: K.C. area officials debate throwing more tax money at Chiefs and Royals, as does San Antonio for Spurs, etc. etc.

access_time personNeil deMause

Six posts already in the first four days of the week, and still there’s more news that didn’t make the cut? Legislative season is brutal, man — I can’t wait for it to be over so we can get back to things like wondering if St. Petersburg is going to finish fixing the Tampa Bay Rays stadium roof by next season. (Probably maybe, apparently! There’s one item off the list already!)

And on with the show:

  • Kansas City, Missouri Mayor Quinton Lucas says he thinks he could fund the rest of a Royals stadium without having to go to voters to approve a new sales tax hike, by using “a different set of tools and entities, so much like you’ve seen the discussion in Kansas” — so that would involve kicking back existing sales taxes, presumably, instead of extending a sales tax surcharge? Meanwhile, Clay County Presiding Commissioner Jerry Nolte says if the Royals choose to build a stadium there, the county might hold a vote on a sales tax hike. None of this is going to get resolved by the end of the month, the time by which Kansas’s offer of state sales tax money for Royals and Chiefs stadiums expire; the Kansas legislature could vote to extend that deadline, but it looks like Kansas officials may be tired of being the teams’ spare-tyre lover: Kansas House Speaker Dan Hawkins says he doesn’t want to do that: “We gave them a year to get it done, and in a year, you know, they kind of keep messing around, going back and forth, and you extend it, and that’s what they’ll do. You know, the pressure is off. Then it could take another year and come back again.”
  • Bexar County voters could be asked to cast ballots in November on a 0.25% hotel and car-rental tax hike to raise about $175 million for a new San Antonio Spurs arena. This would only be one of many public revenue streams used to pay for it, presumably — the arena is expected to cost between $1.3 billion and $1.5 billion and Spurs owner Peter Holt won’t commit to how much he would chip in, just keep those subsidies coming until Holt says “stop,” thanks.
  • A 16-page slide deck from April on proposals for a new Cincinnati Bengals stadium lease has been revealed through a public records request, and some of the items include: $308 million in county spending on stadium upgrades from an existing escrow account, in exchange for the Bengals owners extending their lease through 2031; maybe a lease extension through 2036 if the county kicks in another $300 million by 2028; the Bengals paying $1 million a year rent either for the next five years (what the team wants) or for the rest of the lease (the county’s proposal); and a Bengals request to get half the tax revenue the city of Cincinnati gets from “stadium operations” to help cover stadium maintenance. And what about the question of extending that state-of-the-art clause requiring the county to build holographic replay systems if they’re ever invented, anything? No mention of that, really? Not that it matters, as this slide deck is two months old and there’s still a ton of haggling to go, but would have been nice to at least include one slide on it, just saying.
  • The Ohio Capital Journal describes the current debate over a Cleveland Browns stadium as state legislators and Gov. Mike DeWine “disagree[ing] on how to pay for it. Gov. Mike DeWine proposed increasing the taxes on gambling and Ohio House lawmakers favored issuing state bonds,” and no, Ohio Capital Journal, “issuing bonds” is not a way to pay for something, any more than taking out a mortgage is a way to pay for a house, it’s just a way to finance something but you still have to pay for it later, go back five spaces and lose a turn to think about what you have written.
  • The Connecticut state legislative session may have ended without passage of $127 million for a minor-league soccer stadium (plus other stuff) in Bridgeport, but the legislature did pass approval for Bridgeport to set up a TIF district to redirect its own tax revenues to pay for up to $190 million in development costs. This’ll surely go just great, remember how well the Bluefish worked out? Connecticut United is set to begin play in MLS Next Pro next season, probably not Bridgeport but somewhere.
  • This week was so hectic that I never got around t0 reporting on Marc Normandin’s excellent Baseball Prospectus essay from Monday about how Chicago White Sox owner Jerry Reinsdorf’s agreement to sell the team somewhere between 2029 and the time the sun burns out is timed to increase the savvy negotiator‘s leverage, since 2029 is when the team’s current lease expires, plus prospective buyer Justin Ishbia is a minority owner of the Nashville S.C. MLS team, and hint, hint, Nashville. The 89-year-old Reinsdorf seems determined to go to the grave leaving some juicy leverage for his son, or at least to cement his legacy as the most hardball extortionist of all time, guess you have to make your own fun when you realize you can’t take it with you.
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DC council could wait till fall to decide on Commanders deal, mayor insists it’s now or never

access_time personNeil deMause

The fight over whether to devote $7 billion or so in tax expenditures and lease breaks to a new Washington Commanders stadium has, for the moment, turned into a fight over when to fight over it:

  • D.C. council president Phil Mendelson said that he plans to “cabin” Mayor Muriel Bowser’s request for $850 million in the city budget, setting the money aside but not actually allocating it until there’s a full development agreement in place, likely in the fall. “It’s just ludicrous to me that we would even get it done by [July] 28th,” when the budget is due, Ward 1 councilmember Brianne Nadeau told WTOP. “We’ve never put together a stadium deal in less than seven months in this city, let alone one that subsidizes a billion dollars of investments.”
  • Bowser retorted that if a stadium deal isn’t finalized in July, “our agreement dies,” saying team officials are “outraged” and they “feel blindsided.”
  • Mendelson re-retorted that “it’s not even close to characterize their reaction as ‘furious,'” hey, the mayor said “outraged,” get your angry adjectives right!

Whether the Commanders deal gets voted on in July or waits till the fall is important, of course, because rushing stadium bills through legislative votes is a standard tactic of subsidy proponents, so deeply integrated into the stadium playbook that we gave it a name way back in the first edition of Field of Schemes (“the two-minute warning”). Delaying the debate until the fall would, if nothing else, allow for time for a full investigation of the actual costs and benefits of the proposed Commanders deal beyond what the clown consultants came up with, and possibly some debate over how to trim some of the craziest subsidies, like the 90-year deal for at least $6 billion in property tax breaks and discounted rent that Commanders owner Josh Harris would get as a side dish with his $1 billion in city stadium cash.

Meanwhile, yesterday the No Billionaire’s Playground Coalition held a press conference at which former D.C. Fiscal Policy Institute head Ed Lazere said “it’s a real contrast that we are focused on subsidizing a billionaire at a time when residents will be suffering as a result of these budget cuts” and University of Colorado Denver sports economist Geoffrey Propheter said the “20 acres of heavily discounted rent” was “the big pot of money” that D.C. would be giving up. Propheter also said that if the local economy does well, the lost future rent could amount to as much as $20 billion — I was part of the press conference, though my comments about how the Commanders stadium deal is like an iceberg with most of the subsidies hidden below the surface didn’t make the WTOP cut — making a $6 billion city cost ($7 billion counting direct stadium funding) the more optimistic scenario. Either way, it would be a record-shattering stadium deal, so you can understand why some city councilmembers might want to take a moment to breathe before deciding on it — and why Harris is eager to get it approved fast, before anyone takes a closer look at the fine print.

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Ohio senate approves $600m for Browns stadium, will go up against assembly’s and governor’s $600m subsidy plans

access_time personNeil deMause

Not to be outdone by Missouri, the Ohio state senate yesterday approved $600 million in state funding for a new Cleveland Browns stadium in Brook Park. This now gives the state three conflicting plans for how to throw money at Browns owner Jimmy Haslam:

Since the Ohio house and senate passed two different bills, they will now go to a conference committee of members of both houses to hash out a compromise. Then it will go to the governor for his signature — which could be tricky, because DeWine has said that he doesn’t like the stadium tax diversion scheme, and would much prefer his own gambling tax plan. State senate finance chair Jerry Cirino told the Ohio Capital Journal that he’s “pretty confident” that the governor “will look at our approach,” which either means he’s gotten word that DeWine won’t veto the bill or he’s performatively trying to conjure that result into being.

All this has to be decided by July 1 — and even then, there’s still the city of Cleveland’s lawsuit charging that moving the team to the suburbs would violate the state’s Art Modell Law requiring that teams that got taxpayer-funded stadiums be offered up for sale to local owners before being moved. There’s even more steps to go yet than in Missouri, in other words — but in Ohio as there, the disagreement is more about who’ll throw money at the local sports billionaire and how, not whether to do it at all.

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Missouri passes $1.5B in stadium subsidies, Chiefs and Royals say it’s a nice start, more please

access_time personNeil deMause

The Missouri state house wrapped up its special session yesterday by voting 90-58 to set aside around $1.5 billion in state money over 30 years for new or renovated stadiums for the Kansas City Chiefs and Royals. (Missourinet called this a “30-year tax break,” which isn’t really right: The state won’t be rebating taxes paid by the teams, but rather setting aside taxes collected on spending at the stadiums and on income by team employees and then using that to pay off state stadium bonds.) With the state senate already having approved the bill last week, the measure now heads to Gov. Mike Kehoe, who will undoubtedly sign it since it was his proposal in the first place.

Chiefs and Royals officials immediately responded to the prospect of $1.5 billion in state cash being dumped in their laps, and did so with a That’s nice, keep going:

From the Royals: “As we said from the beginning of the Legislature’s deliberations, their work is a very important piece of our decision-making process. Now that both houses have voted and the bill is headed to the Governor’s desk, we look forward to evaluating the plan in full detail.

“Our focus remains the same: to prioritize the best interests of our team, fans, partners and regional community as we pursue the next generational home for the Kansas City Royals.”

From the Chiefs: “We are grateful to Governor Mike Kehoe and the Missouri Legislature for taking this significant step forward. The passing of this legislation is an important piece of the overall effort. While’s there’s still work to be done, this legislation enables the Chiefs to continue exploring potential options to consider remaining in Missouri.”

Lobbyists for both teams have already said they will want additional state and county money on top of what the state is providing; this would likely require a re-vote on the Jackson County sales tax subsidy plan that was rejected last April, though such a vote — or votes, if the county decides to hold separate ballot measures for each team — is unlikely to happen this year.

That leaves Royals owner John Sherman and Chiefs owner Clark Hunt with a decision: Accept the state funding on offer from Kansas before it expires at the end of this month, or roll the dice on getting county money approved in Missouri. The Kansas bill would pay up to 70% of stadium costs, while the Missouri one is capped at 50%; however, city and county money in Missouri could bump up that figure to more than Kansas’s offer. (It’s also unclear if Kansas’s sales-tax-based plan would be able to generate enough money to cover 70% of what the teams want.) Also complicating things is that the teams haven’t even finished evaluating potential stadium sites in each state — Hunt says if the Chiefs stay in Missouri they will renovate their current stadium, Sherman says he wants a new stadium regardless, but hasn’t decided where — so it’s going to be a hard call which multibillion-dollar offer to accept.

Or, Hunt and Sherman could go to the Kansas legislature and ask for an extension on their deadline so they can keep weighing both offers. There’s nothing saying Kansas legislators would have to grant it, but the way things have been going, nothing is going to stop either state from continuing this bidding war until agreements for stadiums for both teams are signed, sealed, and delivered. What seems all but certain, barring an epic unexpected collapse of these deals as very occasionally happens, is that taxpayers in one state or another are going to be on the hook for a billion or two dollars in private stadium costs — all that’s left to decide is which side “wins” the race to be the ones to cut the check.

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