Category: Arizona Diamondbacks

AZ gov: D-Backs’ $300m tax kickback plan sounds good to me if it’s good to everyone else

access_time personNeil deMause

Arizona officials are starting to take sides on the proposed $300 milliion-ish tax fund for Diamondbacks stadium renovations, and it comes down to: Gov. Katie Hobbs is for it so long as city and county leaders are, and city and county leaders are all hell nah.

Hobbs first:

“If they can reach an agreement that is acceptable to all the parties, then yes,” Hobbs said when asked if she supported the plan. “I want to keep the Diamondbacks here in Arizona.”

Nice job, governor, both ducking the specifics of the public spending (don’t look at me, I’m just the governor, I’ll do whatever everyone else wants!) and reframing this as keeping the Diamondbacks in Arizona when the team hasn’t threatened to leave. (The closest D-Backs owner Ken Kendrick has come to a move threat is declaring that unnamed “cities” would be happy to have a team, without mentioning that none of the cities currently without a team is anywhere close to the market size of Phoenix.) Now what about Phoenix and Maricopa County officials?

A spokesperson for Phoenix Mayor Kate Gallego said the mayor opposes the plan.

“Mayor Gallego supports the Diamondbacks’ commitment to staying in downtown but opposes diverting essential tax dollars — funds crucial to Phoenix’s police and fire departments — to finance sports facility renovations, particularly without an end date,” spokesperson Arielle Devorah said. “She believes the public deserves a voice in any decision to redirect their tax dollars.”

And:

Assistant County Manager Zach Schira told lawmakers last week that if the bill was amended so it did not draw on voter-approved taxes for transportation projects and jails, the county would shift its position to neutral on the bill.

What Hobbs means by “acceptable to all the parties” could be key, as apparently the state can siphon off sales and income taxes from the stadium and give the money to Kendrick without requiring city or county approval, even though this would include city and county taxes.

State Rep. Jeff Weninger, meanwhile, has co-penned an op-ed in the Arizona Republic (with the head of the state chamber of commerce, as one does when one is a sandwich shop magnate) declaring that it’s all good, because this tax money isn’t really tax money:

The plan doesn’t create a new tax — it reinvests revenue that Chase Field is already generating. If you don’t attend games, your tax dollars won’t, either.

Yes, it’s the Casino Night Fallacy, everybody drink! Weninger and his chamber pal double down by declaring that the Diamondbacks are a “powerful economic engine” and citing a claim that the team’s 2023 playoff run generated $107.6 million in local economic activity, according to the Seidman Research Institute at Arizona State University, a business consulting firm that previously insisted spring training games are worth a bazillion dollars despite actual data showing they don’t increase the economy at all. “We fact-check commentary as we would a news story,” says the Arizona Republic’s op-ed policy — if that’s true, I’m suddenly concerned about the fact-checking standards of Republic news stories…

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Top AZ lawmakers propose $300m tax kickback to D-Backs to pay for stadium upgrades

access_time personNeil deMause

It was hinted at earlier this month, and now the legislation has officially landed: A bipartisan group of Arizona state legislators has proposed funding renovations to the Diamondbacks‘ Chase Field by adding up all the sales and income taxes collected at the stadium and handing them back over to the team:

It calls for collecting the sales tax revenue from all purchases and transactions at the stadium and income tax paid by people who work there, including the team’s players.

Those taxpayer dollars would go toward stadium improvements, instead of funding state and local government services as they do now. At the state level, those tax revenues fund education, health care for low-income residents, prisons and other programs.

D-Backs CEO Derrick Hall stressed that this plan, which was devised by team execs before being introduced by Republican state rep Jeff Weninger, “avoids any new taxes,” which is only true if Arizona either doesn’t bother to fill in the resulting funding gaps for schools, etc., or finds some other way of producing money out of thin air. Cutting the D-Backs a check in the same amount as the check they would pay in state and local sales and income taxes has a kind of Casino Night logic to it, but to quote myself two weeks ago: No, no, no, no, no. That is not how taxes work at all.

As to how much money Weninger and his legislative pals — 12 state reps and 7 state senators, including house speaker pro tem Neal Carter and majority leader Michael Carbone, plus senate president pro tem Thomas Shope, majority leader Janae Shamp, minority caucus chair Lela Alston, and assistant minority leader Flavio Bravo — hope to generate with this sleight of hand, team execs project $15-20 million a year, which would be enough to pay off maybe $230-300 million in renovation costs. That’s a fair bit more than I estimated two weeks ago, when, after some initial math stumbles, I arrived at an estimate of just $2.7 million to $5.6 million a year in sales tax receipts; the final bill rolls in team income tax kickbacks as well, though, and it’s possible I underestimated total team sales, so maybe.

Three hundred million dollars is a sizable chunk of change, even if it pales in comparison to some other recent baseball renovation subsidies. But it’s needed in order to cover … what was it Diamondbacks owner Ken Kendrick needs again?

“I’m a businessman who understands basic economics,” [Weninger] said. “There’s hundreds of millions of dollars in maintenance and repairs and upgrades that need to be done. And it’s not their building. So to me, this was improving a public asset while also preserving all the massive amounts of sales tax and hotel stays in and around the stadium.”

Yeah, it’s not their building only because they got the county to pay for it, then got the county to hold on to the deed so the team wouldn’t have to pay property taxes. In all other meaningful terms  — collecting all the revenues from it, including naming rights — it is 100% Kendrick’s building, but he would only be putting in half the cost of an estimated $600 million in upgrades, while reaping all the revenues.

The full state legislature still needs to hold hearings and vote on this, as presumably do the city of Phoenix and Maricopa County, since their taxes would be getting kicked back to the D-Backs as well. There’s no timetable for all that just yet, though the Arizona Republic stressed that “the clock is ticking” — the team’s lease expires in 2027, not that there’s anything stopping Kendrick from signing an extension if he has to, and not that he has any other real options to move to if he doesn’t. But, yes, clocks tick, that’s how they do, well observed, Republic.

Meanwhile, there’s still the question of what a lease extension would look like, how much if anything Kendrick would have to pay in rent for the mixed-use development he wants to build around the stadium, etc. The total subsidy could end up quite a bit more than $300 million — or less, if Arizona lawmakers play their cards right. There’s a first time for everything!

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D-Backs owners want sales tax kickback to fund stadium renovations, confused lawmakers think this is free money

access_time personNeil deMause

One giant sports subsidy proposal leaves, one enters: Two Arizona Republican legislators and a spokesperson for Gov. Katie Hobbs all say that Diamondbacks representatives have approached them about kicking back city, state, and county sales tax receipts from Chase Field to pay for future renovations of the stadium. And state representative Justin Wilmeth says that’s just fine by him, because:

“I have no problem with that. If you don’t want to go to a DBacks game, then you’re not going to pay for it.”

Nooooooooo. No, no, no, no, no. That is not how taxes work at all. Fans at Diamondbacks games will be charged exactly the same amount in taxes whether local government hands it over to D-Backs owner Ken Kendrick or keeps it to spend on things that the 7,431,343 Arizonas not named Ken Kendrick need; the only difference is in where the money goes. Pretending that adding up how much money is collected in sales taxes and writing a check for that amount is “fans paying for the stadium” is pure Casino Nightism, and should be responded to by taxpayers hastily gathering up their money and glaring at Felix in horror.

As for how much money Kendrick wants, nobody’s saying:

It was unclear what portion of the 5.6% state sales tax was proposed to be placed in a fund for the team, how much money was projected to be collected, or how long the redevelopment fund would be active.

We can calculate, or at least guesstimate, the most that could be provided to Kendrick this way, though. The combined Phoenix sales tax rate is 8.6%. The Diamondbacks have an estimated $314 million a year in revenue; Forbes no longer breaks that out by type of revenue, but back when Financial World did, venue revenues were typically about 10-20% of overall revenues. That means kicking back sales tax receipts from sales of stuff at D-Backs games could provide $30-60 million a year in funding, enough to easily pay off, say, a $500 million renovation. [CORRECTION: Aaaugh, I skipped a step in the math! Taking 10-20% of $314 million a year in revenue and applying the 8.6% tax rate is, as reader Brad correctly points out below, a total of $2.7 million to $5.6 million a year, which is only enough to pay off about $40 million to $80 million in renovation costs. I sincerely regret the error.]

None of this has gotten as far as legislation yet, and we also still don’t know if D-Backs execs are working on other public funding sources as well. It looks like Kendrick and Co. are trying to take advantage of Arizona’s new super-conservative state legislative leadership to finally land the stadium money they’ve been angling for for years; yes, some conservatives oppose tax kickbacks for sports teams because it’s public spending, but both Kendrick and his wife have worked to fund local Republican campaigns, and from the sound of things legislators are looking to return the favor, with public tax dollars.

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Friday roundup: NYCFC unveils images of Naming Rights Sponsor Stadium, A’s reveal plans to blow a/c at fans’ feet

access_time personNeil deMause

And so we have reached the end of another programming week, one mercifully without Jerry Reinsdorf’s stadium subsidy demands going up yet again. That’s just about the only thing that didn’t happen this week, though, so let’s hit the news recap:

  • NYC F.C.‘s $780 million soccer stadium plan cleared another hurdle this week, getting the okay of the City Planning Commission, the last stop before a final city council vote. It also got some fresh renderings depicting how fans would enter the stadium through a giant cube-shaped entryway (dubbed The Cube, this team has a way with words) that would be covered in a giant video board that display the names of all five New York boroughs, in case you forget where you live. (The stadium is depicted bearing the name Naming Rights Sponsor Stadium, while the entryway in one image says “New York City FC” while in another it’s “Cube Entrance Sponsor,” pick a lane, guys.) Still up in the air: how the affordable housing component would work, where fans will park if Mets owner Steve Cohen refuses to let the soccer team use his parking lots across the street unless he gets a state casino license, and, oh yeah, how the whole thing would be paid for, someone should really look into that.
  • The Oakland A’s “spherical armadillo” stadium in Las Vegas would have “the highest number of suites, clubs and other high-end seating products” relative to size of any MLB stadium, according to Venues Now, which spoke to A’s president Dave Kaval on the subject. In addition to hardly any affordable tickets, Kaval promised that the air-conditioning would blow out from under people’s seats, something that’s used at the Sacramento Kings arena and in some Middle East soccer stadiums, and which the site reported Kaval said he’s “working with Henderson Engineers to find a way to make it work in MLB.” Also a work in progress: The A’s are playing an exhibition game in Las Vegas tonight, and plenty of good seats are still available.
  • The Virginia legislature has officially passed a budget without money for an Alexandria arena for the Washington Wizards and Capitals, though Gov. Glenn Youngkin could still try for an amendment or a special session. State senate finance chair Louise Lucas, who has the power to kill budget bills by denying them hearings in her committee, doesn’t seem real amenable to that, though. One Alexandria restaurant owner tells D.C. News Now that he’s upset not because he wants arena traffic for his businesses, but because spending over $1 billion in public money on an arena would “alleviate some of the tax burden from the residents,” somebody’s been reading too many clown documents!
  • Two members of the Jackson County legislature will be holding a public hearing this Monday at 3 pm on the Kansas City Royals‘ $2 billion stadium plan and $1 billion public subsidy plan. While attendance at these things is never representative of the public as a whole — it’s almost guaranteed there will be a throng of construction workers bussed in to cheer the project on, for example — it will at least give us some hint of the public mood as we approach the April 2 deadline for voting on the 0.375% sales-tax surcharge extension that would fund the first chunk of the project. (The Kansas City Star editorial board is a no, at least until Royals owner John Sherman explains more about how the money, lease, and provisions for relocating businesses would work.)
  • The Chicago Bears owners are reportedly “close to” announcing a lakefront stadium in Chicago and are also still haggling with suburban cities over property tax breaks for a stadium there, never take seriously rumors that are spread by team execs themselves, just don’t.
  • Maricopa County and the city of Phoenix are considering a “partnership” to address the Arizona Diamondbacks owners’ stadium demands, which would … do something? Also this was just a letter that the county sent to the city council last August, and the council never replied, guess the Arizona Republic was having a real slow news day.
  • Would a new Tampa Bay Rays stadium increase the team’s attendance? Yes at first, then no after the honeymoon wears off in a few years. This report is not remotely new news, but it comes with lots of stats and charts! Guess the Tampa Bay Times opinion section was having a slow news day.
  • Sure, New York taxpayers are spending over $1 billion on a new Buffalo Bills stadium, but who can put a price on 16-foot-tall bison statues? ESPN reports that “there was some disappointment on social media among fans” that the statues aren’t bigger, since the “World’s Largest Buffalo Monument” in North Dakota is 26 feet tall, that does it, time to tear down the new stadium and build one with state-of-the-art bison.
  • New Mexico United‘s new stadium “costs the city nothing,” according to team president Ron Patel; KOAT-TV checked, and it’s actually nearly $29 million in public money, about half the total cost. Never take seriously cost estimates that are put forward by team execs, just don’t.
  • The Hawaii legislature is set to consider a bill to scrap a $350 million plan to rebuild Aloha Stadium so that the money can be used for wildfire recovery and housing instead. Rep. Gene Ward said he opposes the bill because “it’s not going to get anybody to come to the football games, regardless of how bad you are as a football player,” no, I don’t know what he meant by that either.
  • Finally, back on the A’s front, I was on this week’s Rickeyblog podcast, where we talked about all aspects of the team’s stadium situation, not least why fans in the Vegas stadium renderings are waving the flag of Gaddafi’s Libya and what that could mean for tourism. Give it a listen, you’ve got all weekend!
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Friday roundup: Opposition builds (somewhat) to sports subsidy plans in Virginia, Kansas City, elsewhere

access_time personNeil deMause

It’s been a rough week, what with new stadium demands dropping every couple of hours, half of them from Jerry Reinsdorf. But there have also been signs of new organized opposition from all corners, some of them involving heavy hitters:

  • The Northern Virginia AFL-CIO came out against the proposed Washington Capitals and Wizards arena in Alexandria after being unable to reach an agreement with the teams and the state on whether a hotel that would be part of the $2 billion project would employ union workers. “If they’re against it, then the arena deal is probably going to have a very difficult time,” remarked Virginia House Speaker Don L. Scott Jr. afterwards, as the arena bill heads for reconciliation talks between the house, which passed it, and the senate, which didn’t even give it a hearing. “If it dies, it dies.”
  • Virginia state Sen. Louise Lucas, meanwhile, upped the ante on her opposition to Alexandria arena plans, challenging D.C. Mayor Muriel Bowser on Twitter to “compete by both offering $0 in taxpayer dollars to these teams and let them decide where they want to pay to build their own arena.” (Bowser’s account did not respond, unless this counts.) Former Alexandria mayor Allison Silberberg, who is part of the Coalition to Stop the Potomac Yard Arena campaign, was so pleased that she brought Lucas a cake.
  • After the Kansas City renters’ group KC Tenants came out against the upcoming April 2 referendum to renew Jackson County’s 0.375% sales tax surcharge and give the money to Royals owner John Sherman as part of a potential $1 billion in public money for a new downtown stadium, calling it “$167 per household, per year, all to pay for a playground for the wealthy and for tourists,” a group of city residents have formed the Committee Against New Royals Stadium Taxes to likewise oppose the tax hike. The group has “little to no money in its bank account,” according to the Kansas City Star’s account of campaign manager Tim Smith’s characterization, but it does have a parked domain name and its organizers are members of the extremely active Save Kauffman (Royals) Stadium at Truman Sports Complex Facebook group, which is a recommended follow if you want to see how extremely angry many Kansas City residents, and Royals fans, are about this whole state of affairs.
  • Arthur Acolin, a real estate economics professor at the University of Washington, released a three-page report on the proposed downtown Philadelphia 76ers arena that found that disruptions to existing businesses during construction and operation could cost the city and state between $260 million and $1 billion in lost tax revenues. The math is a little rough — it looks like Acolin just added up all the economic activity in the area of the proposed arena and calculated what would happen if it fell by sample round numbers — but as he writes, “the 76ers have provided nowhere near this level of details nor any of the analysis behind their figures.” It was enough to get the 76ers to respond by calling the report “fatally flawed” and “another attempt by those who oppose the project to obfuscate the truth by pumping out misinformation and half-baked theories instead of engaging in productive dialogue,” in a CBS News article that repeatedly refers to Acolin as “Albert Alcoin,” which should get all their copy editors immediately fired, if they had copy editors, which they probably don’t.
  • Arizona Republic sportswriter Greg Moore wrote a column about Diamondbacks owner Ken Kendrick’s threat to leave town if he doesn’t get public stadium money that includes the subhead “I don’t like bullies,” and really the rest of the column is just icing on that four-word cake.
  • I brought my mighty rhetorical weight to the airwaves, or at least the internetwaves, by going on the Sox Machine podcast to talk about why giving Reinsdorf $1.7 billion in tax money for a new Chicago White Sox stadium development (since upped to $2 billion) would be crazytown.

So that’s it, then, the tide is finally turning, and maybe soon we can all stop pushing this damn rock back up this damn hill day after day? Hahaha of course not, the forces of vacuuming up money and giving it to rich people so they can have more money (because that’s what makes them rich people) continue unabated:

  • The Utah legislature advanced a bill to hike sales taxes in Salt Lake City by 0.5% to generate $1 billion for an arena for a nonexistent NHL team, with the backing of Mayor Erin Mendenhall. This would be on top of $600 million or more in proposed hotel tax hikes to help pay for a stadium for a nonexistent MLB team. Hockey bill sponsor state Sen. Dan McCay denied that this was giving in to threats by the Jazz ownership that they could move out of the city limits without a new subsidized arena, then added, “you’d hate to see downtown lose the sporting opportunities they have now,” so, yeah.
  • Chicago Mayor Brandon Johnson delivered up a fresh bowl of word salad about whether he’ll endorse city money being used for a new White Sox stadium: “As far as public dollars, we haven’t gotten into any of those specifics just yet. But I will say that we’re gonna explore all options. … Everything is on the table here. But again, I want to make sure that there’s a real commitment to public use and public benefit. … There’s no guarantee that they’ll get it from the city. What I’ve said repeatedly is that we need to make sure that our investments have real public benefit and that there has to be a commitment to public use. Those conversations are being had, and there are some promising developments that eventually we’ll be able to talk about out loud.” He has it right here on this list…
  • The new $27 million Rhode Island F.C. soccer stadium in Pawtucket will now cost state taxpayers $132 million over 30 years, because the Pawtucket Redevelopment Agency got a terrible bond rate. State commerce secretary Liz Tanner defended the pricey borrowing by pointing out that even though the state legislature could have just appropriated the money and saved taxpayers a ton of interest payments, “there would’ve been a level of uncertainty without knowing whether the legislature was going to pass those dollars or not,” and we can’t have that, now can we?
  • The Dodger Stadium gondola project — surely you remember the Dodger Stadium gondola project — lurched forward again on Thursday when the Metro Board of Directors signed off on its environmental impact report. The gondola still needs approval from the city of Los Angeles and parks and transit officials, plus to figure out who exactly will pay for its potential $500 million price tag, but if nothing else it lives to gondola another day.
  • Oakland A’s owner John Fisher is reportedly focused on staying in Oakland until a new Las Vegas stadium is open in 2028, and also Sacramento is the frontrunner to be the temporary home of the A’s, this is way too blind-men-and-the-elephant for me, maybe let’s all calm down about the latest rumors you heard, guys.
  • And in non-sports news, Louisiana Gov. Jeff Landry defended signing a bill to remove the requirement that recipients of state development subsidies report how many jobs they’ll be creating, because “this program is about capital investment. It is not about job creating.” Just gonna sit here and let that roll around in my brain for a while, have a great weekend and see you back here Monday!

 

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D-Backs owner: There’s lots of cities I could move my team to, if I believed in threats, which I do not

access_time personNeil deMause

Oh, is somebody upset that they didn’t get in on the Friday news dump stadium subsidy action? Fine, you in the back there, Arizona Diamondbacks owner Ken Kendrick:

Diamondbacks Managing General Partner Ken Kendrick expressed disappointment over his organization’s inability to secure public funding to renovate Chase Field, suggesting that despite a desire to remain in Arizona the club could eventually look to move elsewhere if an agreement cannot be reached.

“We may run out of time in Phoenix,” Kendrick said. “We hope that won’t happen.”

So where is Kendrick threatening to move to exactly? To a neighboring city, or outside of the Phoenix region entirely?

Kendrick said he was not trying to issue a threat to the state about moving, saying multiple times the Diamondbacks were not currently engaged in discussions with other markets about leaving town…

Kendrick added: “I don’t think, in the world that we live in, threats are the right way to do business.”

Oh, okay, not a threat, got it—

“Cities are letting MLB know their interest; their interest in getting a team is specific. They would be happy with a brand new franchise, but they would certainly be very happy, you know, with, frankly, a successful, existing franchise.”

It’d be a terrible thing if someone was to set fire to the Diamondbacks, wouldn’t it, Colonel?

While talk of the Diamondbacks relocating to one of the cities seeking an MLB expansion team is a new twist, talk of shopping the team around isn’t particularly: D-Backs CEO Derrick Hall said last spring training that team execs were “looking at what other options might be in Maricopa County … and there’s been some interested parties.” (But not actually engaging in discussions with the interested parties, presumably, just looking at them longingly across the room.) It’s still not clear whether Kendrick and Hall are looking to get a new stadium or renovations to their existing one, or how much money it would cost or how much they want the public to kick in, or really anything beyond “give us what we want, or else.” No, wait, not “or else,” that sounds threat-y. “Give us what we want, and nobody gets hurt”? Note to self: Keep workshopping this.

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Friday roundup: No public ballot for Rays stadium, more questions about A’s Vegas move

access_time personNeil deMause

Before we get to the week’s stadium and arena news, let’s pause to appreciate that New York’s nutso mayor Eric Adams‘ campaign staff have been revealed to be under investigation for illegally accepting donations from the government of Turkey. Which I guess sort of qualifies as stadium news given Adams’ boosterism of that NYC F.C. stadium that could cost city taxpayers $800 million in infrastructure spending and tax breaks, but mostly: Yes, Turkey. Also his chief fundraiser and campaign consultant who is at the heart of the investigation is apparently 25 years old? This is going to make a great Netflix documentary in a couple of years.

But enough about my city, how’s yours doing?

  • The St. Petersburg city council voted 5-3 yesterday to hold a public referendum on spending about $600 million on a new Tampa Bay Rays stadium — which means the referendum won’t happen, because the motion required a two-thirds supermajority. Also it would have been only advisory, anyway. Council chair Brandi Gabbard, who opposed the public ballot measure, said she was afraid it wouldn’t be possible to explain the stadium deal in the 75 words available, which is certainly a novel line of reasoning.
  • Former Miami Marlins president David Samson says there is still “a deal to be done to keep the A’s in Oakland” because Las Vegas has “several issues that are not worked out yet” like whether A’s owner John Fisher actually has the money for his share of the project. Meanwhile, former Oakland A’s VP Andy Dolich says it would be a mistake for MLB to approve the relocation of the team from a large market to what would be baseball’s smallest. Not that either of them holds clout with the current crop of MLB owners, or they would still have jobs with them, but it’s keeping hope alive in Oakland, anyway, in advance of a likely vote by owners on relocation sometime this month.
  • Here’s an article about how a special tax district for Indy Eleven‘s new $1 billion stadium wouldn’t really cost taxpayers anything because it would just be a “special tax” that will be levied on soccer fans. And here’s an article explaining that the district would actually divert existing sales and income tax revenues from a large swath of downtown toward the USL team. The city-county council is set to vote on the tax district later this month; let’s hope they’re reading all the news coverage first and not just WRTV’s.
  • The Arizona Diamondbacks just got blown out in the World Series, and former team owner Jerry Colangelo thinks this makes it an excellent time to build them a new or renovated stadium, because “there’s a good vibe.” Gotta capitalize on vibes like this!
  • The Oklahoma City Thunder arena has been “the centerpiece of OKC’s innovative self-help effort, producing energy and economic impact that academic studies cannot predict, but 30 years of OKC success prove,” according to some downtown business development dude who was given a “guest column” in the Oklahoman to make this case. He adds that tearing it down and building a newer one would “create new and currently unimaginable opportunities,” which, that’s certainly an interesting choice of adjectives there.
  • Kansas City Chiefs CEO Clark Hunt says he’s waiting to see what the Royals decide about a new stadium before deciding what to ask for in terms of a new or renovated stadium for his team. “If the Royals do decide to stay in Jackson County, that’s going to be an issue that we’ve got to resolve,” Hunt said, which is maybe a hint that he’s hoping they’ll move to the county next door so he can get all of the future sales tax proceeds? That would have been a good followup question, if the reporters covering this had asked any, oh well.
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Friday roundup: Leaked analysis says Royals stadium could cost taxpayers $6B wut

access_time personNeil deMause

Gonna be a bit of a weird roundup today, gang, because the Kansas City Star dropped this bombshell last night:

A new Royals ballpark in downtown Kansas City would cost Jackson County taxpayers far more than its $1 billion sticker price.

It’ll be more like $4.4 billion to $6.4 billion, if the stadium sales tax and other payments required by the current lease agreement extended 40 years beyond its expiration date in 2031, as the Royals have suggested.

6.4 what now? Is this one of those stress dreams where I’m going to laugh about how I could ever have found it believable once I finally wake up?

If you don’t feel like reading the whole Star article, or just can’t see it through all the pop-up ads, here are some of the main points:

  • The 0.375% sales tax surcharge that funded the most recent Royals and Chiefs renovations currently generates about $53.4 million a year. [CORRECTION: The $53.4 million includes the parks tax and other payments listed below. I’ve adjusted the rest of the calculations that follow — the overall math doesn’t change much.] If that is extended by 40 years like Royals owner John Sherman wants, and sales tax receipts rise as expected, that would generate between $1.3 billion and $2 billion for the Royals alone according to a financial analysis that County Administrator Troy Schulte conducted last week and which someone “associated with the Legislature” leaked to the Star.
  • The Royals would get another $170 million, again over 40 years, from its half of a county parks tax and other payments from the city and state.
  • “What shocked Schulte,” writes the Star, was that Jackson County would face a projected $2.9 billion in increased insurance payments over the next 40 years if a new Royals stadium were built. The Royals’ current stadium comes with an annual insurance bill of $800,000; for a new stadium that would start at an estimated $4.5 million, then rise by a staggering 10% a year.

Some immediate caveats: None of the numbers above are in present value, meaning spending in the year 2070 is counted the same as spending now, which is not really kosher at all. And that 10% a year insurance hike sounds crazy on the face of it, plus also wouldn’t that imply that insurance on the Royals’ current stadium would rise as well, making the incremental cost less?

Still, even if it’s not $6.4 billion, we’re talking about a shit-ton of taxpayer money here. Using my best back-of-the-envelope scribbling and this present value calculator, it looks like the future tax surcharge diversion would be worth something in the range of $500-700 million in present value. The insurance bill, depending on your assumptions, could be up to $500 million. So it’s very likely well over $1 billion worth of taxpayer costs here, and that’s without any public infrastructure spending or property tax breaks or anything else that might eventually get rolled in as well.

If nothing else, this certainly explains why County Administrator Frank White sees $300 million paid out over 20 years as a preferable counteroffer: It very much is. It’s still maybe not a great counteroffer, since that’s almost $200 million in present value, but it beats $1-billion-plus all to hell.

So, yeah, that happened. And other things happened this week too, so let’s get to them as well:

  • Tampa Bay Rays execs presented their $600 million-ish stadium subsidy demand to the St. Petersburg city council yesterday, with city consultant David Abrams beaming that “You only have to look to the Battery in Atlanta to see how there was nothing there, the amount of economic impact that has happened in Cobb County for the Atlanta Braves has been nothing short of astounding.” Sorry, that is incorrect, but we have some lovely parting gifts. Rays exec Brian Auld also told the council that it has to approve a stadium deal by next spring in order for the stadium to be open in 2028 because “if we miss that opening date, this entire endeavor becomes impossible,” an assertion he backed up with I’m sorry, my time has expired.
  • Meanwhile, the Tampa Bay Times editorial board wrote an editorial this week that praised the city of St. Petersburg for its “transparency” by getting the Rays to share economic projections for their new stadium project with the city council by promising not to let the public see them, which is a new twist on the meaning of that word. “This marks a good start in what could be a beneficial new era for area residents and the Rays alike,” wrote the board; it will be left as an exercise for readers to determine what innovative definition the Times is using for “beneficial.”
  • The African-American Sports and Entertainment Group, which was announced with great fanfare a couple of years back as the city of Oakland’s choice to redevelop the Oakland Coliseum site, isn’t doing too well, with two of its eight owners suing the others for something about unfairly diluting their shares by creating multiple LLCs in Delaware. The group has already seen its plans for a WNBA team in Oakland get derailed by the league granting an expansion franchise to San Francisco instead, and getting a new NFL team for Oakland has always seemed kind of pipe-dreamy, so yeah, definitely not doing too well.
  • It’s been a couple of years since we’ve heard about the Minnesota Timberwolves owners — yes, A-Rod and that other guy — and their desire for a new arena to replace their renovated-in-2017 old one, but somebody asked Minnesota city council candidates what they think of paying for one, and they’re not crazy about the idea. “Subsidizing billionaires’ hobby investments is not a responsible use of taxpayer dollars — especially when there is no evidence that these tax outlays provide a return on investment,” said councilmember Elliott Payne.
  • Add Country Club Hills to the list of Chicago suburbs interested in being home to a new Bears stadium if the team’s owners want to pay to build one themselves, which they don’t.
  • The Arizona Diamondbacks are in the World Series, which means it’s time for more articles about why their owners think they need a new stadium. Also pitcher Merrill Kelly cast aspersions on Chase Field’s air-conditioning, saying, “I’m definitely sweating more here than I am other places”; there might just be other reasons for that, Merrill.
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Friday roundup: Tempe faces probe for spying on arena opponents, WI trims Brewers subsidy ask to mere $557m, plus new adventures in logical fallacies

access_time personNeil deMause

 

 

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Friday roundup: D-Backs owners sad no one is throwing money at them like in Milwaukee

access_time personNeil deMause

The tchotchkes are in the mail! Repeat: The tchotchkes are in the mail! If you don’t get yours by the end of next week, please drop me a line and I’ll look into it.

And speaking of next week, I’m going to be traveling then, so expect to get your news updates somewhat irregularly and possibly at odd hours. In the meantime, here’s a pile of rounded-up news to slake your thirst for stadium and arena knowledge:

  • The Arizona Republic reports that the Diamondbacks owners still want to renovate Chase Field, but that “the organization thus far has been unable to find the sort of public/private partnership to make that happen,” which is a very creative way of saying “we keep waiting for somebody to leave a suitcase full of unmarked twenties on our doorstep, but it hasn’t happened.” Team CEO Derrick Hall told the paper: “We don’t have our hand out, but if you look at some of the other situations very similar to ours — like Milwaukee, Cleveland, Pittsburgh, Baltimore — in each case they are getting strong investments from the public, from a mixture of city/county/state, and we just aren’t.” Hall added: “I’m starting to get concerned with the timing. I don’t think the city officials in particular understand the urgency of our lease, which expires in 2027.” That’s urgent for someone, clearly, but it’s not the city of Phoenix that would face having to go play in the street. Hall did say that the team would put in “more than” 75% of a potential $500 million price tag, though he also said he’d be interested in getting “land we can develop,” so be sure to read the fine print of any eventual proposal.
  • The state of Wisconsin and city of Milwaukee are now looking at spending $600 million in public money over 20 years to upgrade the Brewers stadium that a 2018 study found needed a maximum of $84.5 million in improvements, reports Urban Milwaukee’s Bruce Murphy. Milwaukee residents overwhelmingly oppose the plan, but the Republican leadership in the legislature is currently looking at just taking tax money away from the city and giving it to Brewers owner Mark Attanasio, which is exactly how democracy is supposed to work, A+ work there guys.
  • The House Oversight Committee approved a bill to let Washington, D.C. keep control over the RFK Stadium site, while defeating an amendment that would have prevented D.C. from using public funds to build a new Commanders stadium there. The politics is a little complex here, though, with some Congressmembers arguing against using public money while defending D.C.’s right to use public money, so there’s a lot more haggling to go where this came from.
  • The development team behind the Philadelphia 76ers arena plans released a report it commissioned on the economic impact of the project; please pick a random three-digit number and add six zeroes to it and you’ll be as close to accurate as the report. In related news, the 76ers’ developer partner is apparently kind of a dick.
  • Missed this one last week: The New York city council has approved a new operating permit for Madison Square Garden, but only for another five years. This can will apparently be kicked down the road until Penn Station gets renovated, or the sun burns out, whichever comes first.
  • The temporary cricket stadium in a Bronx public park is dead, with the 2024 men’s T-20 Cricket World Cup matches now to be held in a temporary cricket stadium in a Long Island public park instead.
  • The Associated Press declares the four front-runners for eventual MLB expansion to be Charlotte, Nashville, Portland, and Montreal, though then also mentions Salt Lake City and Austin, so it looks like they’re mostly going by Googling “baseball expansion cities” and taking whatever’s on the first page of hits.
  • “Local tourism agency releases PowerPoint on how cool a new sports arena would be” is exactly the kind of journalism I expect from 2023, deep sigh.
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