Category: College basketball

Louisville TIF generating next to no arena money

access_time personNeil deMause

Back in 2000, economic-subsidy expert Greg LeRoy of Good Jobs First said this to me about tax-increment financing, in which new tax money from a development is earmarked to pay off the development’s bond costs:

“TIFs are among the most problematic kinds of subsidies in America today. Right now we’re in the middle of this giant real estate boom, but real estate markets are cyclical. During the crash in real estate values in the early ’90s, some places got caught in the downdraft, and the increment evaporated. And you’ve got a situation where a liability that was supposed to be taken care of by the TIF is now eating the lunch of the general fund.”

From Wednesday’s Louisville Courier-Journal:

Paying for the KFC Yum! Center depends on more people spending money downtown, but the plan to use rising sales tax revenues to cover part of the arena debt failed to produce a single penny last year….

And if sales tax projections continue to lag, Metro Government could have to come up with an extra $3.3 million to cover arena costs as early as 2012….

Without any of the $4.5 million in projected sales tax revenues, the project received just $678,000 worth of tax rebates last year — nearly all of it from property taxes.

Now, the KFC Yum! Center — yes, that really is its name — doesn’t even open until next month, so it’s possible things will look better in coming years. Still, you can’t say Louisville wasn’t warned.

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Louisville study: New arena makes sun rise in east each day

access_time personNeil deMause

Here we go again:

Louisville’s downtown arena has helped generate more than $100 million in nearby investment and construction, according to an economic impact analysis released Monday.

If you’re a regular reader of this site, you’ve probably already guessed that this “analysis” was conducted by an entity with a stake in making the arena project look good (the Kentucky State Fair Board, which will run the place once it opens next year), and that the methodology was not quite as robust as one would like — in this case, they simply totaled up all the construction going on in the immediate vicinity, and then counted that all as “generated” by the arena, even in cases where developers told the Louisville Courier-Journal that they would have done the projects anyway.

Stay tuned for my own economic impact study showing how my purchase of new curtains helped lead to the construction of millions of square feet of new condo towers.

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KJ issues Kings move threat against self

access_time personNeil deMause

It often seems like local politicians act more like advocates for sports team owners than like negotiators for the public good, but this latest from Sacramento Mayor Kevin Johnson takes negotiating against yourself to new heights:

After learning that Arco Arena is considered unsuitable to host a major college basketball tournament, Mayor Kevin Johnson said Tuesday that Sacramento could lose the Kings if efforts for a new arena aren’t stepped up.

“If we don’t have a clear path to an arena in the not too distant future, then we as Sacramentans need to know that [the Kings] very well may look elsewhere,” Johnson said.

Johnson has stumped for a new Kings arena before — and he is, of course, a former NBA star — but learning that Sacramento was considered ineligible for the NCAA men’s basketball tournament (yes, that again) seemed to push him over the edge, as he declared, “I’ve got to be more aggressive, and I’ve got to move the timeline up in terms of the arena. The timeline has to include an Option B, an Option C, and I haven’t quite determined what we’re going to do.”

The most recent plan, you’ll recall, was for a $1.9 billion arena-and-“living-village” that has no developer and no financing. Sacramento’s downtown railyard may be back in play as well: The land’s owners say they’d “absolutely” like to see an arena there, but aren’t offering to build it or pay for it or anything.

Meanwhile, we can almost certainly look forward to more articles speculating where the Kings are headed without a new arena — though you can’t help wondering, if a move were so enticing, why the team owners didn’t skip town the last time we heard this kind of talk four years ago?

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Arena glut watch: No NCAAs for Wichita

access_time personNeil deMause

Another cautionary tale about the promises made by stadium and arena seekers: After spending $205 million to build a new arena, in part to have a shot at hosting a share of the NCAA basketball tournament, the city of Wichita has been told that it won’t get one before 2014 at the earliest. And the explanation, while meant to be reassuring, isn’t exactly:

“There was nothing wrong with Wichita’s bid,” [NCAA men’s basketball associate director David Worlock] said. “We just ran out of slots. We don’t want people to be discouraged by the announcement today. It’s ultra-competitive, especially in the Midwest.”

Of course, it’s entirely possible that Wichita will land a round of the NCAAs one of these years. But with Tulsa, Kansas City, Omaha (all of which landed parts of future tourneys), Oklahoma City, and Des Moines (which didn’t) all boasting new arenas as well, it’s likely to remain a rare enough event to wonder if it was really worth $205 million to have a shot at it. Though I guess Wichita Thunder fans will be happy about getting new digs … sort of.

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UCLA announces $185m Pauley facelift

access_time personadmin-neild

This afternoon, UCLA officials unveiled plans for the first overhaul of the 44-year-old Pauley Pavilion in Westwood, where a record 11 men’s NCAA championship banners hang from the rafters.

The school says the $185 million plan, which it expects would take two and a half years, would increase capacity (currently at 12,829) to nearly 14,000, bring fans closer to the court by adding seating behind the baskets, and modernize the scoreboard, restrooms, locker rooms, concession stands, and entrance ways, along with a number of other improvements. Judging by the rendering of the renovated arena, the plan would maintain much of the venue’s original character and feeling. Perhaps one motivation for the Bruins was its bitter crosstown rival, USC, which opened the Galen Center in 2006.

The Los Angeles Times reports that funding would come from a variety of sources:

The university hopes to raise $100 million of the construction costs through “The Campaign of Champions.” Annual fees that students already pay would provide $25 million and the remaining $60 million would come from external financing. At this point, the document said, UCLA has received $3 million in gifts, $14 million in pledges and $33 million in unconfirmed pledges. That leaves $50 million still to be raised.

The school did not specify what those “external sources” are.

As for the student fees, those were just raised last week, to help the University of California’s regents alleviate a recent $115 million cut to the system’s fund by the state, which is facing a $42 billion budget deficit.

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