Category: non-sports subsidies

Friday roundup: Coyotes suing Phoenix over arena suit, Bills agree to CBA with no oversight, and other adventures in fine print

access_time personNeil deMause

Lots going on this week, so let’s get right to it:

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Friday roundup: Titans inch closer to $1.26B in public cash, O’s looking to replicate Braves’ ballpark district somehow?

access_time personNeil deMause

Welcome to the end of another week, wherein I have bookmarked an article on why we never have enough time but haven’t found time to read it. I want to consider whether this qualifies as real irony or the Alanis kind, but I apparently don’t have time for that either, so it will have to be left as an exercise for readers — today’s comments should be fun!

And now, on to more things we didn’t have time for this week:

  • The Metro Nashville council passed a bill on Tuesday to issue $760 million in bonds for a Tennessee Titans stadium — part of a larger $1.26 billion public commitment for a $2 billion stadium— even though nobody knows exactly where the money would come from to pay off the costs. This is one of those things where the council has to vote multiple times on the same thing, though, so the real final approval vote is set for April 4, by which time maybe some of those questions will be answered, but I wouldn’t hold my breath. “I don’t even think we should be going through the farce of the first reading on a bill this massive with this big of a price tag when we have an administration that didn’t answer our most basic questions and give us the information that we needed,” said councilmember Ginny Welsch, one of 10 councilmembers to vote against the bill, which is more than the eight who voted against a similar proposal back in December but there are 40 members on the council total, hence the recommendation against breath-holding.
  • Maryland Gov. Wes Moore is preparing for lease extension talks with the owners of the Baltimore Orioles by visiting the Atlanta Braves‘ stadium district, which Maryland Stadium Authority chair Craig Thompson noted “is looked at and admired by some as a model.” Sure, okay, but it was also built on completely vacant land in the suburbs, while Camden Yards is in the middle of the city and surrounded by existing buildings, including a historic warehouse that was turned into an Orioles mall that is also looked at by some as a model, where are you going with this, guys?
  • The Richmond Flying Squirrels‘ stadium is getting $3.5 million in city-funded upgrades even though it’s set to be replaced by a new one soon because MLB threatened to annihilate the team otherwise, as MLB does. “Richmond is just on fire right now and we’re really, really excited,” said Flying Squirrels COO Todd “Parney” Parnell, which, too soon, Parney.
  • Hey, remember when Virginia “won” the race to host Amazon’s new second headquarters by offering up $750 million in subsidies? How’s that going? Oh.
  • Haven’t had enough bullet points yet? Please enjoy this list of bullet points about the many ways corporate subsidies in New Jersey are messed up! My favorite is how the state Economic Development Authority gets more money for its own budget the more tax breaks it hands out, what’s yours?
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Friday roundup: D-Backs threaten to move (somewhere nearby), and why MSG probably won’t be evicted

access_time personNeil deMause

Happy Friday, everybody! Or happy for everyone except Arizona Diamondbacks fans, who are going to be stuck buying souvenir jerseys with an extremely ugly shoulder patch for the foreseeable future after MLB decided to start selling ad space on players’ shoulders for the upcoming season. (Some other teams’ are not so bad, though the Houston Astros‘ might be even worse.) Or maybe, given the design of a stark black square, this is actually a memorial patch for an electronics company that tragically passed away during the offseason? R.I.P., Avnet.

And now for some other ways sports team owners are making life demonstrably worse for all concerned:

  • Speaking of the Diamondbacks, team CEO Derrick Hall spoke to the media this week about plans for a new or renovated stadium, which he didn’t actually say anything concrete about, though he did say “we’re still looking at what other options might be in Maricopa County, not outside of Maricopa County, and there’s been some interested parties.” Oh, do tell, some other cities in the Phoenix area want to build the D-Backs a new stadium? This isn’t going to be a Canadian girlfriend thing, is it? Hall also said “we’re prepared to spend hundreds of millions of dollars, we’re not looking for a handout,” which is amusing coming after the team lobbied the state to let it use a sales-tax surcharge for stadium improvements.
  • Madison Square Garden’s special operating permit expires on July 24, but even if that happens without a renewal by then, the New York Knicks and Rangers probably won’t be evicted, since the city would likely let the arena keep operating during a review process, reports The City. (Sorry to those of you who were getting your hopes up for the city parking a zamboni on center ice.) There was a public community board hearing on Wednesday on the operating permit, which according to AMNY’s report was dominated by sports fans shouting that they love their teams and rail station fans shouting that they’d love to see MSG gone so they could have a new Penn Station. There are probably better and even more democratic ways of solving policy debates than having people shout into microphones while power brokers largely ignore them and do what they want regardless, but that doesn’t seem the direction we’re headed.
  • St. Petersburg is spending $250,000 to hire an outside law firm to negotiate a term sheet for a new Tampa Bay Rays stadium, and know what, this probably isn’t a bad use of tax dollars: City lawyers are so historically awful at writing sports contract language that hired guns who know what they’re doing might actually earn back their pay and more. Unless city officials tell them to just get a deal done and not worry about the fine print, that could always happen, but as a glass-half-full kind of person I prefer not to think about what could go wrong — okay, my motto is actually “prepare for the worst, adjust if your expectations are exceeded” and it’s never steered me wrong, but sometimes things have to work out better than expected, it’s just the law of averages, right? Anyway, St. Petersburg is talking about building a billion-dollar stadium, at least it’s not cheaping out on lawyers to determine who pays for it, that’s better than nothing.
  • No, WIBC-FM, “Indy Eleven Owner, Ersal Ozdemir, Speaks on the New Indy Eleven Stadium” is not actually a news story, especially not when Ozdemir’s entire quote is “We do not need to go to the MLS to build a stadium the project should self-generate enough, we’re making a transformational impact to this area (downtown).” (“Transformational”! Everybody drink!) And no, Indianapolis Business Journal, it’s not any better when you give space to Ozdemir to say he would love to own an MLS franchise if someone gave him one, jeez, journalism people, are we going to start reporting on rich guys’ drink orders next? (Answer: You don’t want to know.)
  • The fight against the Philadelphia 76ers owners’ plan to build a new arena bordering the city’s Chinatown has reached the Miley Cyrus parody lyrics phase.
  • Sick of me always harping on about what a bad deal stadium and arena subsidies are without talking about all the other dumb things elected officials spend money on? Then you will enjoy my recent article for Hell Gate investigating what kind of bang for the buck New York state is getting for its film tax credits that Gov. Kathy Hochul wants to see increased. (Answer: Not a very good one!) Unless you are one of the commenters who works in the film industry and wonders why I didn’t focus on tax breaks for jet fuel for the airline industry instead — sigh, wait here, I guess I’ll be back in a couple thousand words’ time…
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Friday roundup: Arlington Heights officials love Bears (sorta), A’s TIF woes, NFL could forgive Snyder if he brings them a new Commanders stadium

access_time personNeil deMause

Apologies for the slow posting week — it was busy for me in other ways, so the site was a little quieter than I’d intended. But let’s make up for that now, since the stadium grifting industry doesn’t stop just because I have to step away from the computer:

  • Arlington Heights village trustees met on Monday to discuss the Chicago Bears‘ handwavy stadium proposal, and loved the stadium part but less so the handwavy blank white “mixed use district” part: “I am all in on getting this done for this redevelopment agreement, but I can’t buy into this site plan,” said trustee Jim Tinaglia. “I can’t buy into what it means and how detrimental I think it will be for our businesses downtown.” Trustee John Scaletta likewise said, “We want to keep our downtown and what we don’t want to do is create downtown part two.” Reading tea leaves furiously, that certainly sounds like downtown business (and/or real estate?) interests aren’t happy about a Bears development siphoning off consumer dollars from their neck of the woods, which is maybe a legitimate concern especially in a world where nobody needs the office space we have already, but also maybe shouldn’t be quite as big a concern as the government “funding and assistance needed to support the feasibility of the remainder of the development” that the team owners say they’ll be seeking. Those local electeds, always horse trading for pennies while leaving dollars on the table.
  • Here’s a whole San Francisco Chronicle article about the proposed Oakland A’s stadium’s $1-billion-plus public infrastructure costs and how TIF districts that use tax proceeds from new development to pay off the development almost never work. (It calls them “infrastructure financing districts,” or IFDs, which is Californian for tax increment financing, or TIFs, but same difference.) This is nothing new — check out Good Jobs First’s TIF FAQ for more details — and the Chronicle’s objection that if the promised development never happens, local taxpayers are left holding the bag is just one of the many pitfalls of TIFs: There’s also the issue of cannibalizing development from elsewhere in your city, of subsidizing projects that might have been built even with smaller or no subsidies, and so on. The lure of TIFs is to pretend that taxes from a new project are free money because they really “belong” to the developer who’s paying them — hello, Casino Night Fallacy! — but when one taxpayer gets taxes kicked back, that means everyone else in your city has to cover that taxpayer’s share of city services. (GJF calls this the “ravenous increment” problem; Oscar Madison calls it “That can’t be right. See, I’d be out all this money.”) We’ll see if this article ends up influencing either the debates of Oakland city officials over the A’s project or future news coverage — I’m not holding my breath — but it’s nice to see someone investigating this instead of just reporting on Dave Kaval’s tweets from Las Vegas or whatever Rob Manfred was paid to say this week, anyway.
  • A giant ESPN report on Washington Commanders owner Daniel Snyder says that as his fellow NFL owners slowly turn on him he’s “lost” the support of his #1 ally, Dallas Cowboys owner Jerry Jones, but also that “his fellow owners would forgive Snyder for the team’s financial woes and the toxic culture scandal if Snyder could build a new stadium.” Of course, Snyder still may not be able to convince anyone to give him money for a stadium due to that toxic culture scandal, etc., but that even a single NFL owner is saying “bring home a new stadium and all will be forgiven” is telling, to say the least.
  • Hey, remember when the Phoenix Rising F.C. USL team said it was going to build a new stadium on the Salt River Pima-Maricopa reservation complete with robot dogs and giant soccer balls, then announced it had broken ground on said stadium, probably without either thing, with no financial details? Phoenix Rising FC Stadium opened in 2021, and has decent attendance, but that isn’t stopping team management from sending a letter to season ticket holders saying, “We don’t have an update on the team’s location at this time, but as soon as we can communicate where we’re playing in 2023, we will let you know.” So Salt River built them a stadium, or at least let them build a stadium on their land, and didn’t make them sign a lease? Very much here that doesn’t make sense at the moment, but if I can find some reporting with more details, or at least more robots, I’ll report back here.
  • A coalition of 50 Buffalo community groups called the Play Fair CBA Coalition are asking for the Buffalo Bills owners to spend $500 million on community benefits in exchange for their $1 billion state and county stadium subsidy. Erie County officials probably aren’t going to play that level of hardball, but they are demanding “a lot more” than the “standard plus” CBA that the team owners offered, according to longtime NFL consultant/unofficial spin doctor Marc Ganis … okay, that could just be spin doctoring, but the final agreement between the Bills and the county is being held up for unexplained reasons, and where there’s delay there’s hope, at least.
  • The Philadelphia Phillies may want to spend $300 million on a new spring training complex in Clearwater, or at least have somebody spend $300 million on it (local officials got a presentation on the plan from team execs, but according to the Tampa Bay Times couldn’t say “when the Phillies will present their plan publicly, how much the team would pay or how much money the city, county and state would be asked to contribute”), all so players can have “batting cages with floor scales that track a player’s weight distribution through an entire swing”? Good, good, that definitely sounds like it would cost $300 million and be worth taxpayer dollars, no notes!
  • This site doesn’t usually delve too much into college sports because who has the time, but Jackson, Mississippi considering building a new football stadium for Jackson State College and justifying it as maybe convincing the team’s coach to stay at the school, and that coach is Deion Sanders? That is news gold, baby, even if it doesn’t have any robot dogs in it. (Yet.)
  • Speaking of things that could be a whole site of their own, New York state and the federal government are teaming up to give Micron, a $50 billion company owned by multibillionaire Sanjay Mehrotra, $9 billion in cash plus a 49-year property tax break to build a new computer chip plant near Syracuse. (Boondoggle newsletter author Pat Garafolo notes that even if Micron comes through with its promised 9,000 jobs, that’s “just the state’s subsidy payment comes in at a massive cost of more than $600,000 per job created. That’s …. a lot.”) We already knew that up-for-reelection Gov. Kathy Hochul was all about throwing crazy money at chip plants — I guess she figures it’ll win her the votes of all the people who think they might land one of those 9,000 jobs, or at least some campaign money from the chip industry — but $9 billion for just one is … a lot. Meanwhile, other states are spending $13.8 billion in public money on electric vehicle factories, which Good Jobs First notes is “unnecessary, because decades of federal and state investments and policies are driving a robust EV market surge. They amount to states taking credit for good news that is already unfolding.” The best way to get rich on the public dime without being a defense contractor may still be to be a sports team owner, but owning some kind of tech-y company with vague job promises isn’t too shabby either.
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Friday roundup: This post is all about the Bears (or the bears), even the parts with no bears

access_time personNeil deMause

What did we learn this week, class? We learned that bears are good for SEO, that elected officials can vote down democracy, and that rich people like public subsidies because it’s where the money is. In another sense, of course, no one has learned anything, which is why we are still here, 24 years into this website, still with the bullet points of outrage to mark the end of the week, every week, never ending or changing, oh now I see why you perk up when there are bears:

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Friday roundup: Billionaires all over get cash for their stadiums and arenas and car plants and movie shoots (I got a rock)

access_time personNeil deMause

Happy Friday! Ready for a heaping helping of news about America’s elected officials and business leaders working together to ensure smart investments of public dollars that will build a better tomorrow? If so, I am sorry to inform you that you have accidentally clicked on the wrong website, but if you stick around you may be rewarded with some grim laughs, or at least some links to old comic strips.

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Friday roundup: The only thing crumbling faster than the Saddledome roof is American journalism

access_time personNeil deMause

And so we come to the end of another week, one where I’ve been reading a lot about bears and consensual cannibalism. (But not among the bears. Bears are above considering such things, presumably.) But anyway, you want to hear about more pleasant things, like, uhhh, the terrible state of journalism in 2022? Maybe I should consider adding some more bears to these posts.

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Friday roundup: Jays plan $¯\_(ツ)_/¯ in SkyDome renovations, figure it out yourself, journalism can’t help you

access_time personNeil deMause

Happy Friday! I don’t know about you, but for me this was a great week: I got a new coffee mug, and also it’s now almost over! The week, I mean, not the mug. You’re smart, you probably figured that out already.

And now, how’s about some news:

  • The Toronto Blue Jays owners are planning $230 million in renovations to the stadium formerly known as SkyDome but now named for the team’s corporate owners, or maybe it’s $300 million in renovations, what is money, anyway, especially Canadian money? The CBC’s report says that the redo will include saying “goodbye to the nosebleeds,” as the top 500 level deck will be “completely removed and replaced with non-ticketed spaces,” and oh, here’s a rendering with the 500 level still very much visible, hmm. The stadium is owned by the Jays after Ontario built it and took a huge bath on it, so presumably the renovations will be funded by the team, though Jays president Mark Shapiro called this just a “medium-term solution,” so there’ll still be plenty of time to demand a new stadium later, don’t worry.
  • WPRI in Providence breaks down why Pawtucket’s new USL soccer stadium will cost taxpayers $60 milllion and not $45.5 million like its developers claim, which is helpful and all, except when you add up all the numbers it actually looks more like $80 million? ($46.2 million in state tax breaks, $10 million from the city, plus $27 million in additional money redirected from state infrastructure spending — yup, that’d be more than $80 million.) The fog of stadium wars is soupy indeed.
  • If the Philadelphia 76ers owners succeed in building their own Center City arena and no longer renting from the Flyers, “The companies that would benefit are Live Nation and AEG, because they would have two buildings in Philly to play off each other, so the rent expense would go down,” former Spectrum manager Ed Rubinstein tells Venues Now. “That’s the reason why we never wanted another arena built.” This would be the Sixers owners’ problem, on the one hand, but also Philly taxpayers’ problem if the idea of giving the Sixers arena a giant tax break would be to help the local economy when it would only end up shuffling concert spending around from one part of town to another.
  • There are new Tennessee Smokies stadium renderings, and — oh, come on, you’re not even trying! I get that the plans need to be downscaled some because the stadium is over budget, but at least you can afford some clip art fireworks or people playing random sports. Show some self-respect.
  • Somebody dug up this consulting report that everyone’s favorite economist-for-team-hire Andy Zimbalist did on mixed martial arts — okay, sure — and I must report that previous reporting that Zimbalist earns $225 an hour for his services is out of date: His “customary rate,” he wrote in the 2017 document, is actually $850 an hour. And that’s before any surcharges Zimbalist now imposes for supply-chain issues. Please draw your own conclusions as to whether that rate could be an incentive to report the findings that your client is hoping for, or at least look really hard for them.
  • Your occasional reminder that sports team owners don’t have a monopoly on getting billions of dollars in public money for no damn reason: Here’s a report on Kansas giving Panasonic $800 million in subsidies for a battery factory in exchange for a commitment of zero new jobs, and here’s Bernie Sanders talking about how a new bipartisan bill to compete with China on electronics somehow involves giving $76 billion to microchip companies. The New York Times called the latter “a remarkable and rare consensus in a polarized Congress,” which is both true and all too telling about what our elected representatives (and major newspapers) can agree on.
  • “It’s morally corrupt that new arenas for professional teams worth billions of dollars are majorly publicly funded — especially when the tax dollars could be going to other areas in the city in actual need of the money,” writes Norman Transcript sports reporter intern Clemente Almanza of devoting public dollars to a new Oklahoma City Thunder arena like the team’s owners want, “but” — you knew there was a “but” coming — “that comes with the territory of having a franchise. 18 of the 29 NBA arenas are owned by a government multiplicity” — he’s an intern, he can’t be expected to own a dictionary — and “losing the Thunder would cause catastrophic levels of damage that the state would never recover.” Um, you don’t want to recover the damage … hey, Norman Transcript, don’t you have any copy editors? No? I guess “let the intern sit down and keyboard out a column on why a new arena is necessary” is just how journalism goes these days — that coffee mug gets righter and righter every day.
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For Hochul, rushing through $1B in stadium money for Bills owners was just the beginning

access_time personNeil deMause

Back in the spring, as the New York state legislative session was winding down, Gov. Kathy Hochul inserted a last-second addition into the proceedings. The new legislation would funnel an unprecedented torrent of tax dollars to a preferred industry in her upstate home base, with no time allowed for even a single hearing, let alone significant public debate.

If you think you know where this story is going — Hochul’s $1 billion public subsidy for a new Buffalo Bills stadium that was passed in April — you haven’t read enough surprise twist ledes. The last-second bill addressed above was an entirely different spending plan that Hochul pushed through in early June, one that, as the New York Times reported on Monday, is likely to end up costing New York taxpayers many times more than the football stadium:

Gov. Kathy Hochul was asking them to fast-track legislation authorizing billions of dollars in corporate subsidies to lure semiconductor plants to New York, according to the message from Democratic leaders in the State Senate.

The chip subsidy bill, which would designate $10 billion in state tax breaks over 20 years for microchip makers, was passed by the Senate on its last scheduled day after Ms. Hochul invoked emergency procedures, known as a “message of necessity.” The Assembly quickly followed suit.

The chip plant subsidy bill isn’t exactly ten times as expensive as the stadium bill, as the Times asserts — its $10 billion will be spread out over the next two decades, while the Bills’ billion is in present-value dollars. Though as state Sen. Liz Krueger, who voted against the chip bill, noted to the Times, matching subsidies from counties could end up making it a $20 billion subsidy, which even if part of it is in 2041 dollars is starting to get into some real money. In exchange, Hochul promised that the chip plants would create jobs — though according to the actual legislation, each plant must promise to create only 500 net new jobs to be eligible for tax breaks.

The money is being provided through the state’s Excelsior Jobs Program, the same program that was going to be the centerpiece of then-Gov. Andrew Cuomo’s multi-billion-dollar lure for Amazon to build a headquarters in New York City before that deal imploded under public opposition. Excelsior — Cuomo just loved naming things this — effectively underwrites up to 7.5% of a company’s payroll with state dollars, though at least this means that if the jobs evaporate, so do the tax breaks.

That this money is being allocated for semiconductor plants is appropriate, or maybe “ironic” is the better term, since computer chip factories were one of the first industries to be targeted by large-scale state and local subsidies after these first really took off in the 1980s, in part of the wave that soon after spread to the sports world. This has seldom worked out well, in part because computer chip plants are even more footloose than NFL teams, with factories constantly closing, being bought, moving offshore, and so on. Under Excelsior, if a plant closes, at least it doesn’t get any more tax breaks, but it does get to keep the old ones it collected, while any jobs for New York residents end up being transitory.

The even more ironic aspect to all this — or maybe “hypocritical” is the better term — is that Hochul came to office promising to bring a new era of transparency to state government, then immediately set about replicating the bad old days of behind-closed-doors legislating. From that Times piece again:

Ms. Hochul had [promised] “a new era of transparency.” She said that the “days of three men in a room” — shorthand for the star-chamber-like decision-making in Albany — were over. There would be “accountability and no tolerance for individuals who cross the line,” she said…

“Given the pronouncements that Hochul made when she took over, about these profound changes in transparency and ethics in Albany, it’s very hard to see her being sincere about any of that,” said John Kaehny, executive director of the watchdog group Reinvent Albany. “It’s a different kind of politics, but it’s still the exact same result, which is the governor is working for extremely powerful interest groups that are the same ones that were prevailing under Cuomo.”

All this is some excellent reporting by the Times, and should help New York voters decide which policies they want to support when they go to cast ballots in the Democratic primary — sorry, what’s that, the primary was last month, and Hochul already won in a landslide? Oh, well, at least voters will have a clear choice in the general election between Hochul and this guy who supports “the reduction of corporate taxes and the elimination of harmful, job killing red tape and regulations” and, uh, yeah. Maybe voting harder isn’t the solution after all.

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Friday roundup: At least your state isn’t giving $1.5B in tax breaks to an electric-car factory (unless you live in Georgia, in which case I’m sorry)

access_time personNeil deMause

We made it through another week! Well, if you’re here reading this, you did, anyway. Let’s celebrate with some mostly depressing news:

  • The Erie County legislature hasn’t voted to spend $250 million on a new Buffalo Bills stadium yet, but deciding how to vote is for suckers, they’ll just be focusing on which $250 million to spend. (If you’re wondering why the linked article says that Erie County plans to somehow save money by adding a quarter-billion dollars in debt, that seems to be because the state is pouring in $160 million toward future operating expenses that the county was on the hook for at the old stadium; I can’t be bothered to try to parse the Buffalo News’ “reporting” this morning, but suffice to say that spending $250 million still costs $250 million in this part of the multiverse, at least.)
  • The Atlanta Journal Constitution is concerned that if more Cobb County areas form their own cities and take hotel tax revenues with them, the county will have less money to pay off its $300 million in Atlanta Braves stadium debt. This feels like mostly a bookkeeping issue to me — if new cities siphon off tax revenues, that’s bad for the county whether they have to pay for a stadium with it or not — but I’ll leave it to the next J.C. Bradbury paper (or tweet) to figure that out.
  • The Arizona Coyotes are officially moving into Arizona State University’s new 5,000-seat arena! Which, yes, was already announced as official back in February, but now it’s officially official. ASU will get to keep parking, naming-rights, and sponsorship revenue, while the Coyotes will get ticket and merchandise sales and a cut of concessions, plus is working on ideas for raising money via “branded content” and “fan activation” and, okay, they’re just making up marketing terms now, let them have their fun.
  • The San Francisco Bay Conservation and Development Commission has granted its approval to the new Oakland A’s stadium plan … or maybe just released a staff report recommending that it be approved? It all depends on whether you trust Front Office Sports’ unsourced reporting as far as you can throw it, which I don’t particularly recommend, just look at that shifty acronym!
  • The Chattanooga Lookouts owners are getting a pile of state sales tax money to help pay for their new $86.5 million stadium, so much for the pandemic forcing the team to stay at its 22-year-old stadium for a minute longer.
  • In non-sports news, Georgia is giving $1.5 billion to an electric-car manufacturer to open a plant east of Atlanta, which is a record for a public subsidy for an auto plant. But don’t worry, it’s supposed to create 7,500 jobs, which is only a cost of $200,000 per job, which is a terrible ratio compared to literally pretty much any other thing you could spend public money on, where’s my helicopter?
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