Category: Philadelphia 76ers

Adam Silver is behind the Sixers-Flyers arena deal, sure, maybe

access_time personNeil deMause

I figured eventually we’d get one of those insider journalism articles about why the Philadelphia 76ers owners switched from a planned Market Street arena of their own to sharing a new building with their current landlords, the Flyers, I didn’t figure that “eventually” would mean two days, but here we are. And the answer — or at least one answer — appears to be “NBA commissioner Adam Silver got his billionaire friends together to have them kiss and make up”:

On the afternoon of Dec. 1, Sixers managing partner and co-owner Josh Harris, who is also managing partner of the NFL Washington Commanders, hosted a group of sports business heavyweights at the football team’s home game against the Tennessee Titans.

The group included two other Sixers co-owners — David Blitzer and David Adelman — as well as NBA commissioner Adam Silver and Comcast chair and CEO Brian L. Roberts…

Silver, who has served as NBA commissioner since 2014, believed that having two competing Philadelphia arena projects in the same timeframe would be detrimental to both the city and the teams, according to the sources.

There’s some logic to this: Silver has an interest in the health of the Sixers, obviously, but his league is also business partners with Comcast, the Flyers owner, which just signed an 11-year broadcast deal with the NBA. Having the two teams each fighting for Philadelphia arena supremacy could only end up with one side or another losing, so by brokering a deal Silver is just shoring up ruling class solidarity and monopoly power.

The question remains, though, why Sixers owner Josh Harris took the bait. He seemed all-in on a Market East arena as recently as last month, so either something changed his mind about that, or that was always a dodge to get Comcast (and Silver, as it turned out) to the negotiating table, or Silver truly has the power to cloud men’s minds. The Philadelphia Inquirer article laying out the commissioner’s role doesn’t include any quotes from Harris other than those from his press conference on Monday, which are PR mush along the lines of “We didn’t really change our mind. Actually, we were really committed to Market East, but … our north star was doing the right thing by Philly.”

The Inquirer article is evasive about its sourcing for the entire chain of events, citing only “sources familiar with the matter,” which could always mean that this story is what somebody wants to push as a narrative more than actual, you know, reality. The closest to a named source it provides is Philadelphia Building and Trades Council leader Ryan Bower, who says Silver “put [the team owners] together” and “I’m sure that that partnership [between the NBA and Comcast] played a lot in this decision that you see now.” This all amounts to intriguing hints, but is far from the deeply investigated timeline that one would really want; maybe once the Athletic has successfully gotten its union recognized, it can devote some time to putting together all the pieces here.

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Joint Sixers-Flyers arena declared “win, win, win, win,” but for who exactly and at what cost?

access_time personNeil deMause

It’s Tuesday morning, and here’s what we know about the plans for a joint Philadelphia 76ers–Flyers arena in South Philly:

  • Sixers owners Harris Blitzer and Flyers owners Comcast Spectacor have entered into a “binding agreement” to go halfsies on a new arena to replace the Wells Fargo Center, which Comcast owns (and recently renovated) and Sixers rent. The new arena, which doesn’t yet have an announced price tag, is planned to open in 2031.
  • The two companies will also work together on the “revitalization” of the Market East site near Chinatown that the Sixers had previously targeted for a new arena of their own.
  • Comcast will buy a minority stake in the Sixers, and will get full ownership of the naming rights to the new arena.
  • The Flyers owners will join the Sixers owners in seeking a WNBA team to play in the new arena.
  • Mayor Cherelle Parker called this development a “win, win, win, win for Philadelphia” and a “curveball that none of us saw coming” and “exciting” and “unprecedented” and “a celebration for the city” and said as the city’s “CEO, I don’t have the luxury of wallowing in this 180.”
  • Parker said the city will still spend $20 million on affordable housing initiatives in Chinatown, though it sounds like the $50 million in community benefits promised by Harris as part of his original arena deal is now kaput.

All this still leaves a lot of questions: What will the “revitalization” at Market East look like, and will it still be eligible for the property tax breaks that were approved for the previously planned arena? What will the previously announced arena district in South Philly look like, when will it be built, and will Comcast and Harris seek any tax breaks or public infrastructure money for that? Who’s paying who for what in all these new cross-ownership deals, and how certain is it that any of these new plans will come to fruition? (City councilmember Mark Squilla, who played a key role in approving the now-suddenly-dead Market East arena plan, said when asked how he knows the new arena will actually happen, “I mean, you don’t. I mean, they say their commitment is there, there’s a little trust building that needs to be done.”)

In an editorial late yesterday afternoon, the Philadelphia Inquirer called the last four years spent on the Market East arena plans “a giant waste of time and money for everyone.” That’s not quite true: It was clearly time and money well spent for the Sixers owners, who were able to use the threat of their own arena to get Comcast to the table to work out this new deal. Whether it can now really be a “win, win, win, win” for the city, Sixers, Flyers, and whoever else Parker had in mind is going to depend on a lot of details that are currently unknown; once the excited press conferences die down and we start seeing financial details, we’ll know better who exactly got played here, and for what.

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Sixers abandon Chinatown arena plan, pivot to sharing South Philly venue with Flyers

access_time personNeil deMause

This was not on anybody’s bingo card: Officials with the Philadelphia 76ers revealed to Philadelphia city council members yesterday that they were turning their back on the planned arena adjacent to the city’s Chinatown that they had spent the last four years getting approved. Instead, the Sixers will be throwing in with their hated landlords, the Flyers-owning Comcast, on something at the teams’ current South Philly site, though what exactly and when remains a little unclear this morning:

After the Sixers announced their desire to leave South Philadelphia, Comcast Spectacor began aggressively courting them to stay in the stadium district. As part of their campaign, they revealed an ambitious and sprawling proposal for a $2.5 billion complete redevelopment of the area that would add thousands of apartments, restaurants, and more entertainment options.

And, with an “eventually” that is doing a lot of work:

Ryan Boyer, president of the Philadelphia Building & Construction Trades Council, told NBC10’s Lauren Mayk that instead, the team plans to demolish Wells Fargo Center and will eventually build a new arena in South Philadelphia for the Sixers and Flyers.

If the plan is for one combined arena in South Philly, this could end up a win-win all around: Philly taxpayers get out of the $96 million to 273 million in property tax breaks the city was planning to give Sixers owners Josh Harris and David Adelman for their new Market East arena, Chinatown residents escape the threat of arena-related redevelopment displacing part of their neighborhood, and the Sixers owners, Comcast, and the city as a whole escapes the likelihood of two competing arenas eventually driving one to shut down from lack of business. (Former Philly mayoral candidate and local power broker Sam Katz had previously said a second competing arena was “never privately financeable,” though it’s worth noting he was consulting for Comcast when he said that.) Major emphasis on “could,” though: One unnamed councilmember told the Philadelphia Inquirer that the Sixers still plan to move ahead with “some of” the Market East development, so there Harris and Adelman could yet end up having his tax breaks and eating them too. And when Comcast first announced plans for that arena district last March, the company hedged on whether it would require public money, which should have everyone on the lookout for an additional city funding ask.

For the moment, though, the only clear loser here is Comcast, which is looking at (maybe) having to demolish and replace an arena that it just spent $300 million on renovating, plus (definitely) going halfsies with its former tenants on ownership in order to keep them from setting up their own shingle. The obvious question is whether Harris and Adelman planned this all along: Was the entire Chinatown arena plan just for leverage to get Comcast to agree to new terms in South Philly? Did they fully intend to move, but were lured back by a sweeter offer from the Flyers owners? Or, as is so often the case, did they push ahead with new arena plans not knowing or caring how it would work out, but figuring that having another option in their pocket could only be to their benefit?

Whichever way, Philadelphia city officials who spent the last four years working with the Sixers owners on what turned out to be just a stalking horse are feeling played, because they were. At-large councilmember Jimmy Harrity has been especially vocal, telling the Inquirer that “I’m so livid right now I don’t even know what to do” and “I feel as though I was used as a pawn”; he told NBC Philadelphia, meanwhile, that “I feel completely bamboozled” and that he’s upset that city schools won’t get the proceeds from new taxes that the arena would bring — which doesn’t make any sense since the tax breaks the Sixers arena would have gotten were going to come out of the schools budget, but cut the man some slack, he’s bamboozled.

Chinatown activists, meanwhile, are ecstatic, saying in a statement that “the nightmare of a Center City Sixers arena will not haunt our city any more” and thanking citizens and elected officials who opposed the deal. In the end, though, it seems like public opposition to the plan was less important than corporate bigfooting — as we saw, for example, when Madison Square Garden’s owners killed the plan for a Manhattan New York Jets stadium, sometimes when elephants fight, the grass ends up being spared.

There are reports that Mayor Cherelle Parker plans to hold a press conference today at 11 am to address the unfolding situation, which hopefully will at least have better production values than her last one. For now, it looks like Philadelphia may have dodged a bullet, but let’s hold off on that assessment until the shooting stops.

 

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Friday roundup: Sixers arena OKed after protests, RFK site transfer KOed by Elon Musk

access_time personNeil deMause

Weekly news roundup, special abbreviated travel edition:

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Friday roundup: Rays stadium, Sixers arena could both get final approval on Tuesday

access_time personNeil deMause

No time to waste this week on a lengthy preamble, let’s get right to the news roundup:

  • It looks like we may have an answer to the question of how much Pinellas County commissioners will demand from Tampa Bay Rays owner Stu Sternberg to approve $312.5 million in county bonds, and that is: nothing. Or at least nothing more than a promise that he’ll accept the $1 billion in cash and tax and land breaks he agreed to back in July: Commissioners Dave Eggers is looking like the likely swing vote at next Tuesday’s commission meeting, saying he wants to see proof that Sternberg will go ahead with the original deal before okaying the bonds, adding, “It’s really on them kind of to be moving this deal along, and maybe they can show us that’s what they’re doing.” (The county legally can’t sell bonds until the Rays provide more documentation of their own progress on the stadium, though it can approve selling bonds.) If the Rays execs are successful at responding to “We don’t know if we want to give you a billion dollars after we were hit with two hurricanes” with “Well, maybe we’ll ask for even more money” before settling on “Never mind, a billion dollars is fine,” then maybe there was a method to their madness after all.
  • The St. Petersburg city council moved slightly ahead on repairing the Tropicana Field roof as well this week, approving spending $1.7 million on architectural designs. Can, kicked.
  • The Philadelphia city council voted 12-4 on Thursday to approve the $60 million community benefits package for a new 76ers arena near Chinatown, signaling that they will almost certainly approve the entire arena deal at their final meeting of the year on Tuesday. That’s better than nothing (and marginally better than the $50 million originally proposed), but still a whole lot less than the $96 million to 273 million that Sixers owner Josh Harris will be getting in tax breaks, which sports economist Geoffrey Propheter sums up as “pretty f’ing stupid.”
  • Ohio Gov. Mike DeWine has weighed in on the question of whether the state should put up half a billion dollars toward a new Cleveland Browns stadium in suburban Brook Park, and his verdict is that he’s still “in a fact gathering process” and “I want what is best for Cleveland” and “This would be a decision that would have to be made by the legislature, and of course, I will weigh in on that as well.” Reply hazy, try again.
  • Diamond Baseball Holdings, which has been buying up every minor-league baseball team it can get its hands on, just announced that it’s moving the Modesto Nuts to San Bernardino, where they will become the Inland Empire 66ers. The new 66ers will take the place of the old 66ers, also owned by DBH, who are moving to Rancho Cucamonga to take the place of the Quakes, who are moving to a new stadium in Ontario that that southern California city is paying about $100 million to build. Having the ability to move franchises around like chess pieces would be one advantage to monopoly control over all of MiLB, but it’s still not entirely clear if that’s DBH’s main gambit or if they have even more ambitious plans.
  • Boston’s plan to renovate White Stadium to be the home of the NWSL’s new BOS Nation FC women’s soccer team (yes, that is officially the worst team name ever) has risen in cost to $200 million, with the city’s share going from $50 million to $91 million. “We are going to pay for our half of the stadium, no matter what it costs,” vowed Mayor Michelle Wu, which critics are calling a “blank check.”

I’m going to be traveling for much of next week, so expect posts here to be a bit more sporadic than usual, though I will make sure to at least check in after the Pinellas County and Philadelphia votes on Tuesday. We will resume our regularly scheduled firehose of news after the Christmas log has pooped out its nougat.

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Friday roundup: More Rays scuttlebutt, Sixers arena advances, nobody’s buying pricey Bills PSLs

access_time personNeil deMause

It’s been three whole days since we checked in on the Tampa Bay Rays stadium situation! Do you feel bereft? Do Rays execs and Tampa Bay–area elected officials feel bereft? If a press statement falls in a forest and there’s no one around to aggregate it, does it make a sound?

None of this, and more, will be answered in this week’s news roundup:

  • The Tampa Bay Times sports desk has certainly been chiming in on the Rays situation, with columnist John Romano, who first reported on Rays owner Stu Sternberg’s threats to move the team if he didn’t get stadium bonds approved ASAP, declaring that what is needed is “a hero” or “a savior” or “a fairy-tale knight” to “step up and purchase a large hunk of the franchise and pay for a stadium, or at least provide a stadium financing plan that does not involve more than a half-billion in public dollars.” Why a half-billion? Who knows! Where does Romano think Sternberg will go if no buyer steps in? Dunno, though he predicts the team will “be on the move, at least temporarily, when 2026 rolls around and Tropicana is still not fixed and the Rays do not want to be stuck in an 11,000-seat spring training stadium.” (The number of cities that could have significantly larger stadiums ready to go by 2026 is zero, or maybe one if neither the Athletics nor San Francisco Giants have territorial rights to Oakland.) The most logical short-term solution is for Sternberg and local electeds to get together and agree to pay the $55 million it would cost to repair Tropicana Field for the short term, with Sternberg agreeing to extend his lease a few years in exchange; it would take a lot of pride-swallowing, especially on Sternberg’s part, so it probably won’t happen, but the alternative looks like it’ll be a whole lot of baseball seasons in minor-league parks somewhere.
  • The group that wants to bring an MLB team to Orlando — formerly led by former Magic executive Pat Williams before his death this summer — also chimed in, saying that while they would never interfere in the business of St. Petersburg, if the Rays did want to move to Orlando, they’re confident that Orange County political leaders “can provide an attractive public/private partnership stadium financing structure that benefits all stakeholders involved.” The last time they brought this up, the “public” part involved $975 million in hotel tax money, one of the same revenue sources that St. Petersburg had been looking to use on its new Rays stadium. (Though it’s often said that Florida counties can spend this on tourism promotion and building things like stadiums and convention centers, it can also use some of it for zoos and beaches and river cleanup and even transportation and sewer infrastructure, something lots of Floridians would like to see counties do.) The Orange County Commission has passed on this idea in the past; we’ll see if it goes over any better with the Rays as a potential target.
  • The Philadelphia city council voted 10-3 to approve creating a tax-kickback district for a new 76ers arena and a new “arena district” to manage neighborhood impacts, which are expected to be extensive. More arena votes are scheduled for the next council meeting on Tuesday.
  • Cleveland and Cuyahoga County are each being asked for $20 million for Guardians and Cavaliers stadium and arena repairs, with another $30 million ask on the table right behind that. If there’s a small silver lining, it’s that this is money the city and county already agreed to spend, it’s just that the cigarette and alcohol taxes that were supposed to fund it are coming up short, so now taxpayers will have to dig into another public pocket.
  • How are those super-pricey Buffalo Bills PSLs selling? Extremely poorly: Only 10% have sold so far, and the rate of purchases is slowing. If they don’t sell out, the Bills owners are on the hook for coming up with the money elsewhere, at least, so at least it won’t be an additional public disaster like the 1990s Oakland Raiders PSLs were.
  • The Chicago Bears owners and Arlington Heights have finally agreed on a property tax valuation for the land the team wants to build a stadium on in that Chicago suburb, but also they say they still really want to build a stadium in Chicago, raising the question, as the Chicago Sun-Times puts it, of “whether the Bears’ latest announcement is [just] a push for leverage in stadium negotiations that have now stretched over three years.”
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Friday roundup: A’s exec says Fisher really does have Vegas stadium money (no, you can’t see it)

access_time personNeil deMause

Before we get to the bullet points, and I know how much you all love the bullet points, there is pressing news we have to discuss first, which is that Athletics owner John Fisher has the billion-dollars-plus he needs to build a stadium in Las Vegas. Sort of. Maybe. According to a guy:

Athletics owner John Fisher and his family will invest $1 billion into the construction of a stadium in Las Vegas and U.S. Bank and Goldman Sachs will offer a $300 million loan, club executive Sandy Dean said Thursday.

Dean made his remarks to a special meeting of the Las Vegas Stadium Authority board.

Dean said four letters will be presented at the Dec. 5 authority meeting asserting construction details and financing will be in place. Final approvals are expected to be made at that meeting to allow construction of the $1.5 billion, 30,000-seat domed ballpark with a capacity for up to 33,000 fans.

So it’s official: Fisher has financing in place for his Vegas stadium … well, no, he will have financing in place by December … or he’ll have a letter (or four) stating that financing is in place?

[One] letter, Dean said, asserts the Fisher and his family have the ability to meet their financial commitment. Dean said [another] letter from U.S. Bank will show that through a review of the owner’s finances that it “concludes the Fisher family has more than sufficient resources to fund the equity investment that’s required to build the stadium.”

Except! Here’s video of Dean saying that one of the letters will be “from John Fisher indicating that his family will invest a billion dollars in support of the project here in Las Vegas.” So which is it: Is the Fisher family committing to spend $1 billion on a Vegas stadium, or just avowing that it  is worth $1 billion? We already knew the latter — Vegas convention center authority chief and unregistered A’s lobbyist Steve Hill keeps saying it, among other things — but that’s not the same as actually figuring out what the family would liquidate to pay for the stadium: the San Jose Earthquakes? The Gap?.

(Dean also said Fisher is still looking to sell minority shares of the team at inflated prices because “it would be good coming to Las Vegas to have outside partners from Las Vegas,” but not because he needs the money, oh no: “The ability to finance the stadium is independent of that.”)

The question all this keeps coming back to isn’t “Where can a billionaire find a billion dollars?” but rather “Is the Fisher family ready to throw a billion dollars of its own money down a stadium hole?” The number of stadiums that can cover their own construction costs is slim; the number that have done so that are in their leagues’ smallest market and include a pricey dome is zero. Which is why people are eager to see Fisher put actual money on the table; promises of a letter next month that will maybe describe actual money on the table is not quite the same thing.

Sorry if all that was anticlimactic. And now, this week’s bullet points:

  • Ohio Attorney General Dave Yost wants to intervene in the Cleveland Browns‘ lawsuit against the city of Cleveland seeking to block the use of the Art Modell Law to block the team from moving to a new stadium in Brook Park. Yost says the team’s claim that the law, which requires that teams be offered up for sale to local owners before being relocated from their current home city, is “unconstitutionally vague” is “wrong,” and since Browns owners Jimmy and Dee Haslam only sued the city, he needed to file a motion to intervene on behalf of the state. Feel the excitement!
  • Philadelphia councilmember Mark Squilla may have come down in favor of letting the 76ers owners build an arena next door to Chinatown, but he has an idea for ensuring that the neighborhood isn’t disrupted: a zoning overlay to “require affordable housing, restrictions on types of businesses, and limits on the size of new storefronts to discourage chain restaurants from crowding out traditional Chinatown retail,” in the words of the Philadelphia Inquirer. Adds the Inquirer: “The precise language mandating how any of this would work has yet to be added to the bill.” This is on top of proposing a tax increment financing district to kick taxes collected in Chinatown back to local businesses to offset any rise in rents as the result of increased property values — pretty sure that would only risk encouraging landlords to increase rents more knowing businesses would be getting subsidies to help pay them, need to go back and check my Intro to Economics textbook chapter on microeconomics.
  • The World Series is over and I didn’t get around to discussing the New York City Economic Development Corporation’s claim that each Yankees and Mets home playoff game generated $20-25 million in economic activity, but suffice to say I talked to an EDC spokesperson who told me (on background, so I’m not supposed to quote them directly so I’m not) that the analysis was based off a previous model from 2022 that puts together assumptions from the city tourism board plus assumptions from the Yankees and then applies a multiplier. Also, they look at “anonymized cell phone data”? No, you and I are not allowed to see the actual model, so no further details about WTF this means will be available.
  • Spotlight on America has a piece on how Tempe, Arizona said no to funding an Arizona Coyotes arena and how other cities could follow its lead, which is all well and good until it concludes by lauding late Seattle Seahawks owner Paul Allen for his commitment to Seattle, when Allen actually paid the city to hold a referendum so he could get $300 million in public money for a football stadium, then refused to open his books like he promised in exchange for the money, seriously, what?
  • Perhaps you would prefer a deep dive into the toilets at the Los Angeles Clippers‘ new arena? Perhaps you would prefer I hadn’t phrased it that way? Sorry, you’re getting both!

 

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Friday roundup: Browns owners sue to block Modell Law, still no Vegas stadium finance plan from Fisher

access_time personNeil deMause

We have a lot to cover today, but first I would like to encourage you to donate to Matthew Sweet’s GoFundMe for stroke recovery if you’re a fan of his music and haven’t yet — he sounds like he’s in a bad way, he couldn’t afford health insurance on a musician’s income (especially being off the road for much of the last four years thanks to the pandemic), and needing to have health insurance is still a thing in the U.S. for some reason. Here’s hoping that the money raised will help allow him to make a significant recovery, and that someday even people without hit songs will be able to afford medical care and the Pentagon will need to hold a bake sale.

But enough about the unfairness of the modern American economic system, on to … well, you know:

  • With the city of Cleveland considering whether to file suit under the Art Modell Law to force Cleveland Browns owners Jimmy and Dee Haslam to offer the team for sale to local buyers before decamping to suburban Brook Park, the Haslams have taken the preemptive step of suing to block the Modell law on the grounds it violates the U.S. Constitution’s Commerce Clause and is too vague and probably a bunch of other things, the typography on the PDF is really hard to read. “Today’s action for declaratory judgment was filed to take this matter out of the political domain and ensure we can move this transformative project forward to make a new domed Huntington Bank Field in Brook Park a reality,” said Browns COO Dave Jenkins, which is a nice way of saying, “These damn ‘laws’ and ‘democratic procedures’ were getting in the way of our stadium plans, that could not be allowed.”
  • Speaking of things getting in the way of the Browns’ Brook Park dome plans, Cuyahoga County executive Chris Ronayne has reiterated that he doesn’t want Ohio taxpayers footing $1.2 billion of the stadium bill, saying, “We have looked at the facts, and the facts are that, and I said it before, that the Brook Park play just doesn’t work. It doesn’t work from a financial standpoint, and it’s frankly very detrimental to our future.” Added Cleveland city law director Mark Griffin: “I want to say this to our state legislature … and to this court system: If you make moves to try to gut this city of one of our key corporate partners and money maker, all of us will remember. You will be up for reelection. You would have to deal with the city of Cleveland in some way, shape, form, or fashion, and none of us will ever forget it.”
  • John Fisher will not be presenting any financial details of his Las Vegas Athletics stadium plan at the Las Vegas Stadium Authority’s October 31 meeting, I’m sure you’re all shocked to hear. The authority will discuss his proposed lease agreement for the stadium, but the actual language doesn’t appear to have been posted yet on the authority’s website, guess it’ll be a surprise! Marc Normandin has more on the Vegas clown show at Baseball Prospectus.
  • The Green Bay Packers have agreed to future rent increases at Lambeau Field after previously demanding a rent freeze so it could instead put the rent savings into paying for stadium upgrades. The Green Bay council unanimously rejected that proposal, and Packers execs agreed to annual 2.75% rent increases worth about $30 million in total present value — turns out sometimes pro sports franchise owners do take “no” for an answer, though obviously the Packers are a bit of a special case in terms of franchise ownership.
  • WTOP-TV quotes University of Maryland business professor Michael Faulkender as saying a renovated Washington Capitals and Wizards arena could benefit the surrounding Chinatown because “Generally when people come down for an event, they’re not just going to go straight to the event. They’re also going to, perhaps, come in early, go to restaurants, maybe stay afterward, go to bars,” which 1) they really don’t that much, 2) those that do are already there, since the arena is already in place. Faulkender added, “It may, on the margin, attract people to live closer to it, if they’re regular fans of one of those teams,” and attracting new residents to displace existing ones is exactly why people say the arena has been bad for D.C.’s Chinatown, Faulkender can just stop now, I think.
  • If you were wondering what former Arizona Coyotes owner Alex Meruelo was up to and had your money on asking for tax kickbacks for a proposed $1 billion minor-league and college hockey arena in Reno, Nevada, you’re a winner!
  • New York Gov. Kathy Hochul says her $1 billion Buffalo Bills stadium subsidy was necessary because five other cities were trying to steal the Bills otherwise. She didn’t name any of the cities, of course, but we know what one of them must have been.
  • I wrote a long explainer for Defector this week on where the proposed Philadelphia 76ers arena deal falls on the bad-to-awful spectrum, if you’ve been wanting a long explainer on that. And I did an interview with ABC Tampa about where the Tampa Bay Rays might play next year with their stadium roof in tatters, if you want to hear me expound on that, or just missed seeing what I have on my living room walls.
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Philly mayor reveals Sixers arena details, including tax breaks and 33-cents-a-year rent

access_time personNeil deMause

As promised when she made her initial announcement last week, Philadelphia Mayor Cherelle Parker released a pile of documents yesterday relating to the proposed 76ers arena that she now endorses. I’m still going through them, but here are some of the highlights:

The pieces making all the headlines, presumably because they’re the ones that Parker is calling attention to and that are easiest to understand, are:

  • a promise by the arena developers to use “best and good faith efforts” to hire diverse contractors and workers on the construction project, and
  • a Community Benefits Agreement under which Sixers owner Josh Harris would provide $50 million over 30 years toward various education and small business projects

While the CBA is being described as going primarily to “impacted neighborhoods” — read: Philly’s Chinatown, which overwhelmingly opposes the arena project — the only pieces that directly deal with the impacts of the arena are $1.6 million in grant to “assist small businesses impacted during the construction” and $3 million in loans (available starting in 2030) to “stabilize and help expand Chinatown businesses.” A look at the timeline in the CBA payment schedule shows that the bulk of Harris’ CBA spending would come in the year 2032; the irregular spending makes it hard to calculate how much it’s all worth in present-day dollars, but I’m going to guesstimate around $30 million.

Meanwhile, the potentially bigger piece is a Rube Goldberg device of nested property transfers, in which the city would acquire the Sixers’ mall property and lease it to the Philadelphia Authority for Industrial Development, which would in turn sublease it to the team. This is the same plan that Harris first proposed last year, and it would have a bunch of immediate effects, some more clear than others:

  • By putting the arena site in public hands, it would immediately become exempt from property taxes. Currently the site is under a tax-increment financing agreement that caps its property taxes at around $1 million a year; under the new plan, Harris would pay $5 million a year (scaling up by 10% once a decade) in payments in lieu of property taxes on the whole $1.55 billion development.
  • Sports economist and property tax superexpert Geoffrey Propheter, after a quick look at the agreement last night, calculates that Philadelphia would get a total of $109.3 million in present value from the future PILOTs, which he says is “pitiful” for a project that size.
  • Harris would pay $10 in rent for the entire 30-year lease term.
  • It’s not immediately clear if the city would be paying anything to Harris for the arena property, or if he would be handing it over for nothing in order to get the tax exemption and PILOT deal.

With this many moving parts, it’s tough to say exactly what the total public subsidy to the Sixers arena project would be, but it’s certainly more than the Sixers “financing [the] project with no city funds,” as Parker put it.

Parker is promising a month of public town halls on the arena proposal, the first of which was last night’s — which Chinatown leaders skipped on the grounds that it was a dog and pony show announced with little warning. (The civic association of the adjacent Wash West neighborhood also came out against the arena last night.) City councilmember Mark Squilla has likewise promised a 30-day public review period. Parker says she’ll submit the legislation to the council on October 24. That’s not much time to suss out the fine print of the arena plan, but it’s better than nothing: sports lease experts and Philadelphia journalists, time to get cracking.

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Friday roundup: Florida Panthers’ lease extension could be one of the priciest ever for taxpayers

access_time personNeil deMause

I’ve been trying to write about this all week, but stuff kept happening: Broward County commissioners agreed to a term sheet that would give the Florida Panthers a five-year lease extension through 2033, and the money part is so convoluted that it calls for its own set of bullet points:

  • Panthers owner Vincent Viola will give the county $51.5 million to pay off the remaining debt on the arena where the team plays, which cost the county $185 million to build in 1998.
  • The county will continue to spend $25 million a year in hotel tax money on operations, maintenance, and upgrades to the arena, for the life of the lease extension.
  • The county has two five-year options to extend the lease. If it doesn’t do so, it has to return some or all of Viola’s $51.5 million debt payment.
  • Viola gets development rights to land around the arena, which he had given up as part of a 2015 deal to get access to the hotel tax funding and get the out clause in his lease that is the whole reason why the county is renegotiating his lease now instead of waiting until 2028.

I’m hesitant to put a dollar figure on the whole thing, but it looks like if Broward County picks up the two five-year lease extensions it gets the $51.5 million while spending $25 million a year over 15 years, which comes to around $250 million in present value, plus gives up development rights to 140 acres of land, which is worth who knows — let’s guesstimate it as $250-300 million in subsidies from the county to Viola. On the other hand, if Broward doesn’t do the extensions, it doesn’t get the $51.5 million, but also its annual arena subsidies go down to more like $100 million, so that’d be more like a $150-200 million subsidy — but also it would need to redo the Panthers’ lease a decade sooner.

So on a per-year basis — math’s almost done, I promise! — that’s either $17-20 million a year for a 15-year extension, or $30-40 million a year for a 5-year extension. That would still be less than the current record $43 million a year lease extension that Charlotte gave the Carolina Panthers (no relation), but it’s a chunk of change regardless.

The Broward County Board of Commissioners still needs to give final approval to the deal, so maybe if we’re lucky we’ll get some hearings or something that will shed more light on the bouncing dollar signs. In the meantime, we had more news this week, let’s get to that:

  • Illinois House Speaker Emanuel “Chris” Welch says if Chicago White Sox owner Jerry Reinsdorf wants a new stadium, he should mostly pay for it with private money. Welch also revealed that the White Sox greats at that private ballfield event Reinsdorf held this week for elected officials included Bo Jackson, Ron Kittle, Harold Baines, and Ozzie Guillen, and they didn’t even play catch — though given Kittle’s career –7.5 defensive wins above replacement, you probably don’t want to let him throw many baseballs your direction anyway.
  • Frisco, Texas approved that $141 million-plus renovation for the F.C. Dallas stadium that it was set to vote on Tuesday, as expected. At least the new sun roof looks cool, even if the provided rendering shows lots of fans still sitting in the sun.
  • My former employer Gothamist, continuing its race away from quality journalism that saw it earlier this week write about New York police shooting a bystander on a subway car in the head by only asking former cops whether it was justified, opines that the Philadelphia 76ers not moving to Camden is a loss for New Jersey officials who proposed the idea. Not mentioned: All the other things New Jersey can do with $400 million if it doesn’t give it to Sixers owner Josh Harris. Guess this is what happens when keep laying off your news staff.
  • The design of the Oakland Athletics‘ proposed Las Vegas stadium is 50% complete, and no, I don’t know what that means either. It would only have 30,000 seats, with another 3,000 in standing room. If you don’t count the Tampa Bay Rays stadium, which only holds 25,000 because its upper deck has been closed since 2019, this would be the smallest MLB ballpark since the 1969 Seattle Pilots played at 25,000-seat Sick’s Stadium, which went so well that the Pilots moved to Milwaukee the next spring.
  • Cleveland.com asked some sports economists if a new Cleveland Browns stadium would be good for local jobs or tax revenue, and got the expected answer. It’s a good overview of the existing economic findings, though, and worth reading if you want to dive into the details of why sports subsidies don’t pay off for taxpayers, not even if you count the value of keeping a team from leaving town.
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