Category: Washington Wizards

Friday roundup: Royals, Chiefs owners turn up heat before sales tax vote, VA gov tries to revive arena by insulting state senate again

access_time personNeil deMause

Time to open up the ol’ Instapaper and see what this week’s leftover news items hold — seriously? Okay, better get started:

  • So much is going on in Kansas City in advance of Jackson County’s April 2 voting deadline for a referendum to extend the county 0.375% sales tax surcharge and give the resulting $500 million or so to the Royals and Chiefs for stadium upgrades that for the first time I’m having to break out a second level of bullets:
    • Chiefs president Mark Donovan went on TV and was asked if the teams would leave town if the tax hike is rejected, and replied, “for us the Chiefs; we would just have to look at all our options” and “I think they would have to include leaving Kansas City. But our goal here is, we want to stay here.” It’d be a shame if someone was to set fire to the football players, wouldn’t it, Luigi?
    • The two teams have doubled their campaign spending to $1 million each, with more presumably expected.
    • A coalition of low-income workers and residents of the Crossroads district where the Royals owner John Sherman wants to build a stadium with around $1 billion in public money says they’re giving Sherman until Tuesday to provide a community benefits agreement for the neighborhood or else they’ll advocate for a “no” vote.
    • And Chiefs mascot KC Wolf and Royals mascot Sluggerrr handed out “Vote Yes” stickers outside the city’s arena yesterday, and I had to dig through the Fox4KC video for photographic evidence but here it is:
  • Virginia Gov. Glenn Youngkin’s own internal analysis of the proposed Washington Capitals and Wizards arena deal for Alexandria finds that in order for it to raise enough money to generate the taxes needed to pay its construction costs, fans would have to pay $75 for parking, the arena would have to host 53 more events each year than the teams do now in D.C., and the project’s hotel would have to be able to charge $731 a night. Youngkin says he’s “working on” reviving the arena plan and that the problem is “the Senate didn’t do the work,” he really hasn’t learned his lesson about how to win friends and influence people, has he?
  • Three members of the St. Petersburg City Council remain opposed to Tampa Bay Rays owner Stuart Sternberg’s maybe–$1.5 billion stadium subsidy deal, and it would only take four to vote it down. The nearest anyone else is coming to opposing it is Gina Driscoll’s “undecided but optimistic,” though, so don’t hold your breath, but there’s at least a non-zero chance this thing might not sail through without more haggling.
  • Two weeks after Wisconsin assembly speaker Robin Vos pushed through $471 million in stadium renovation subsidies for the Milwaukee Brewers, five team executives each donated the maximum $1,000 to Vos’s reelection campaign. Probably just a coincidence, though, as they doubtless give money all the time to all sorts of — oh, this was their first donations to any candidate in the state ever? Well then.
  • Why don’t pro women’s teams get as much public subsidies as pro men’s teams? That’s the question being asked by Karen Leetzow, president of the Chicago Red Stars NWSL soccer team, which is owned by Laura Ricketts, who co-owns the Cubs with her brothers Tom, Pete, and Todd, something USA Today utterly fails to mention in its article.
  • The Seidman Research Institute at Arizona State University (which, despite its name, is actually a business consultant) reports that spring training games in Arizona generated more than $710 million for the local economy in 2023, enough to pay Shohei Ohtani’s entire 10-year contract, and this breaks so many rules about not comparing economic activity with actual tax receipts and not comparing present and future value that I almost can’t muster the energy to point out that previous studies show that the actual number is closer to zero.
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How dead is the Alexandria Caps/Wizards arena? An investimagation

access_time personNeil deMause

The Virginia legislature adjourned on Saturday without taking action on a bill to spend $1 billion(ish) on a development project in Alexandria that would include a new arena for the Washington Wizards and Capitals. But does that mean the arena is dead, or just mostly dead? Let’s assemble the evidence:

  • Gov. Glenn Youngkin could either propose a budget amendment that the legislature could consider when it reconvenes on April 17 — apparently Virginia has a cockamamie legislature that doesn’t actually adjourn when it adjourns — or call a special session in hopes of using the extra time to do what Nevada Gov. Joe Lombardo did for the Oakland A’s last summer. Could that happen, state Sen. Mamie Locke? “We’ll see. Anything can happen.”
  • State Sen. Louise Lucas, who singlehandedly blocked the arena bill from getting a committee hearing it needed to move forward, rejected a personal appeal from Caps and Wizards owner Ted Leonsis last Wednesday, telling Leonsis he had done a lousy job providing financial details and selling the project to legislators, complaining that he “treated me as if I was invisible” from when the project was first announced in December to this past week, when he finally invited her to coffee.
  • If Youngkin wants to revive the plan, he would need to win over Democratic legislators like Lucas, and so far he’s not off to a great start, vetoing or sending back for changes 20 out of 84 bills that the legislature sent him, and complaining that the legislature sent him “backward budgets that need a lot of work.” Democratic Del. Mark Sickles, who supports the arena plan, told WJLA-TV that the governor has “some work to do. They’re not used to doing this. This is their third year, and they really haven’t developed many relationships, meaningful relationships, over here until now. … When the governor goes out and says, ‘Democrats don’t think the United States is exceptional and we don’t want to be the strongest country in the world,’ that doesn’t help because we disagree with that. He just endorsed Donald Trump.”
  • Richmond Times-Dispatch politics columnist Jeff Schapiro writes: “What Youngkin may not appreciate — and this is yet another reminder that, as a government newbie, he is alternately confused by, or contemptuous of, how Richmond works — that senators have little fear of him. That’s because their terms extend beyond his; that they’ll still be here after he’s gone in January 2026.”
  • Alexandria Mayor Justin Wilson recently drew attention after it was revealed that he had sent a text detailing that his plan to pay for the city’s share of the development was to “tax the crap out of” its users. That doesn’t even appear to be true — there’s no provision for a tax surcharge on the arena development, while there are about $380 million in local property tax breaks — but “tax the crap out of” is never a phrase you want appearing in the paper next to your name.

So to recap: Gov. Youngkin could still try to haggle his way to getting an arena bill approved, but right now the whole legislature is mad at him and the state senator he needs to win over is really mad at him, and Youngkin is signaling that he’s going to make them even madder by vetoing a bunch of the bills they just sent him. Plus, the legislature can always just wait him out, since he’s term-limited out at the end of next year. There have been plenty of miracle comebacks in sports subsidy deals, and I would never rule out the ability of politicians to horse-trade, but it seems it’s getting awfully close to time to go through the arena bill’s clothes and look for loose change.

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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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Wizards/Caps execs release glowing arena impact report, or as economists call it, a “clown document”

access_time personNeil deMause

And finally, let’s get to that economic impact study of the proposed Alexandria, Virginia arena project for the Washington Wizards and Capitals, which could include more than $1 billion in public costs. After the public waited nearly two months for the release of anything more than a brief summary, team owner Ted Leonsis and his staff finally provided a fuller version on the Friday before a holiday weekend. The resulting news reports said that the numbers showed the arena would have an enormous economic impact on the city and state, so let’s dive in and see—

Monumental Sports & Entertainment hired CSL International (CSL) in 2023 to develop a business model related to the operations of a new arena in Alexandria, Virginia.

Oh, those guys, the ones who were last seen presenting Milwaukee Brewers stadium projections that one local economist summed up as “it’s pretty easy to make arguments in favor of an idea if you ignore the cost.” But wait, maybe this time CSL and HR&A, the company that did the actual number crunching based on CSL’s projections, actually took into account all the factors—

HR&A utilized the IMpact analysis for PLANning (IMPLAN) input-output model, created by MIG, Inc., to analyze the project’s economic impacts from both construction and annual ongoing operations at full build-out of Potomac Yard.

Oh, that model, the one that economist J.C. Bradbury said “can best be described as garbage in garbage out.”

And yet! We really should look at the numbers themselves that are contained within the report. No, not the “economic output” numbers, economic output is a garbage stat, what we want is to see if either the city or the state can somehow recoup their $1 billion in costs through real tax revenue. Okay, these look marginally more promising:

“Baseline” is what HR&A expects would be built on the Alexandria site without arena subsidies; what we’re interested in is the right-hand section, which is what the consultants project the fiscal impact would be from the arena district plan. And there we find a staggering public cost — $1.6 billion between the city and state — plus an even more staggering flow of new tax money: $2.8 billion, most of it from state income taxes and city property taxes.

Even if you take IMPLAN’s LOLmath at face value, there are two obvious huge problems here. First off, HR&A doesn’t look to have done any calculations of whether this new tax revenue is really new tax revenue: If people paying income taxes in a new arena district would otherwise be living somewhere else in the state, that’s not a net gain to Virginia’s coffers. (As Aaron Gordon points out, it would also mean having “workers pay their employer for building their workplace, funneled through their income tax revenue.”) Plus, there are other costs that aren’t included here: City property taxes, for example, are generally used to pay for schools for the people who move in to a development, but here they’re being treated as if they’ll be available to repay Alexandria’s share of the construction costs, and you can’t spend the same money twice, that’s illegal.

The report includes lots more unhelpful charts — some of them with the numbers actually blacked out — but let’s see what actual economists are saying about it:

Spokespersons from the clown industry were not immediately available for comment on Bradbury’s characterization.

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Friday roundup: Bears set arbitrary stadium deadline, A’s now have three different sets of stadium renderings they won’t show you

access_time personNeil deMause

A reporter asked me this week if I thought there was one particular thing driving the current wave of stadium and arena demands, and I said not really, though there are a few factors influencing it — lots of ’90s stadiums hitting the end of 30-year leases, local governments feeling a little more flush thanks to federal infrastructure and COVID relief money, baseball teams rushing to get deals in place before expansion takes move threat targets out of play. But at the same time, man is the sports subsidy news ever a firehose right now: This site is seeing multiple posts a day right now, and still I feel like I’m leaving more news than ever for the Friday roundups.

Which is all fine and good and I’m happy to do it, it can just be a little exhausting to write. If it’s not too exhausting to read as well, and you want to throw some additional coins in the tip jar to help me shoulder this increased workload, that’s always appreciated. I’m sure things will die down some once we get to the end of various legislative sessions in the spring and early summer, but right now we should all be taking our vitamins to keep our stamina up.

And speaking of the firehose, let’s turn it on and get blasted:

  • Chicago Bears CEO Kevin Warren says as far as a new stadium goes, “the timeline has to be in 2024,” adding, “Time is money. It takes probably three years once you put a shovel in the ground. ’24 should be the focal point.” Oh hey, it’s our old friend the Two-Minute Warning from the standard stadium playbook! As is de rigueur, Warren did not indicate what would happen if his team didn’t get a new stadium approved in 2024, but given that right now he doesn’t have a lot of viable alternatives, I’d wager that holding his breath until he turns blue is not off the table.
  • And speaking of arbitrary deadlines, St. Petersburg is pushing back a council vote on Tampa Bay Rays stadium funding until May, so there’s enough time for committee meetings first. Rays president Brian Auld warned back in October that “any delay is going to fundamentally alter the entire agreement”; nothing yet from Auld on whether he has a problem with this delay now, but given that it looks like relatively smooth sailing right now for Rays owner Stuart Sternberg to get a potential $1.5 billion in public cash, I’m expecting he won’t complain too much about waiting a few extra weeks for the check to arrive.
  • MGM Resorts International CEO Bill Hornbuckle, who previously said he had seen the mythical Oakland A’s Las Vegas stadium renderings and that they were “spectacular,” now says he’s seen three different versions of where the stadium would go on the current Tropicana resort site, and it’s holding up his plans to renovate his resort across the street until he sees the final design. “I have to believe, in the next 30 to 60 days, we should find out more,” Hornbuckle said; maybe he has to believe it in order to sleep at night, but with the stadium renderings now overdue by two and a half months and counting, we are under no such obligation.
  • The meeting between A’s execs and Oakland officials about a potential short-term lease extension at the Coliseum were “really positive” according to an unnamed team official and “very open and frank” according to Alameda County supervisor David Haubert, who added, “No food fights.” I read somewhere that I can’t find now that the whole thing only lasted about 30 minutes; more meetings are expected, at which there should be plenty of time for food fights.
  • For the many of you expecting Joe Lacob to ride to the rescue and buy the A’s from Fisher and keep them in Oakland, Lacob has an update of sorts: “I’ve not checked in recently. It’s his team. If he decides he wants to sell, he knows who to call, that’s all I’ll say. We might be interested, obviously. We’ve said we were interested in the past. But I don’t think he’s doing that. I think he’s very committed to continue to own the franchise. Looks like he’s committed to Las Vegas. We’re always there. But I’m not calling anybody, it’s his team. I want to stay out of the way. We’ll cross that bridge if it or another team comes available.” Read those tea leaves as you prefer.
  • Jacksonville mayor’s office lead negotiator Mike Weinstein says Mayor Donna Deegan is considering paying the public’s share of $2 billion in Jaguars stadium upgrades by using money in the city’s pension funds, which would be repaid by (scroll, scroll) nope, he didn’t say how, so this is very much the equivalent of explaining how you’ll afford a new purchase to your spouse with “I’ll put it on our credit card.” Note to First Coast News headline writers: This is not what “paying for” means.
  • Virginia state Sen. Louise Lucas says her finance and appropriations committee will “absolutely” strip funding for the proposed Alexandria arena for the Washington Wizards and Capitals from a 2024 budget bill: “I’m not changing my mind.” We certainly seem headed for a scenario where the state house approves an arena bill while the state senate does not, though there’s still lots of speculation that Senate Democrats are just haggling over their price, possibly for cannabis legalization, an increased minimum wage, more affordable housing, or possibly a pony.
  • An analysis of the Virginia arena deal by the D.C. city council, which obviously isn’t impartial, estimates that it would actually cost taxpayers more than $5 billion counting maintenance and debt service. That’s not entirely fair since a bunch of that money would be paid out in the far future — it’s the old fallacy of calculating how much your house costs by adding up all your mortgage payments over 30 years — but the report does note that the arena plan includes a publicly covered $12 million a year repairs slush fund that would grow at 2% a year, so that’s maybe another $250 million in cost that hasn’t been accounted for by the first $1 billion or so in public money, add it to the list.
  • Another stadium playbook standard is the Home Field Disadvantage, claiming that the old place is just too decrepit ever to stack up with modern buildings, and the Kansas City Royals deployed that one this week, having Populous stadium designer Earl Santee say it’s “just not feasible” and “not realistic” to renovate the team’s current stadium, on account of it having what’s called “concrete cancer.” Oh, really, Earl? This didn’t come up when the Royals stadium was just renovated last decade? Do you have an engineering report to show us, or a price tag on what it would cost to subject Kauffman Stadium to concrete chemotherapy? Hello, Earl, we have followup questions! Earl!
  • Buffalo Bills execs say that their new stadium will have a steeper upper deck that will allow it to bring fans closer to the field, so that, in WGRZ-TV’s words, “fans who sit in the last row of the general concourse will be 54 feet closer to the field than they are at the current stadium.” Yes, that’s how geometry works, and yay for them for applying it — except that the old stadium holds 71,608 fans and the new one will hold only 62,000, so really a lot of the improvement is just from lopping off the farthest 10,000 seats, so not so yay after all.
  • The city of Pawtucket sold $54 million worth of bonds last week to fund a new Rhode Island F.C. stadium, and while that’s a lot for a minor-league soccer stadium and double what taxpayers were supposed to be on the hook for less than a year ago, perhaps most alarming is the news that the bonds were sold at “a yield of 8.24%, equivalent to almost 14% on taxable securities.” Nothing tops off massive public cost overruns like the worst interest rate imaginable, that’s what I always say!
  • I was on the radio in Chicago this week to talk about the new White Sox and Bears stadium proposals, and props to WBBM’s Rick Gregg for leading with my juiciest quote: “I think we went in fairly skeptical, and we came out of our research horrified.” Click the link above to give it a listen, and have a good long weekend for those who celebrate!
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VA senate Dems declare Caps/Wizards arena mostly dead after governor disses their party, calls $1.05B bond plan “untouchable”

access_time personNeil deMause

So a lot happened yesterday in the Virginia legislature regarding plans for a new Washington Wizards and Capitals arena in Alexandria:

  • State senator L. Louise Lucas said “as far as I’m concerned” the arena bill was dead, after she indicated over the weekend that the senate finance and appropriations committee that she chairs wouldn’t give it a hearing.
  • Senate majority leader Scott Surovell extended the metaphor to its breaking point, saying while the bill wasn’t all dead, “something is going to have to change pretty soon for the patient to get off the surgery table here.”
  • The Virginia state house voted in favor of the arena bill, and is expected to cast a final vote today to send it to the senate, which is expected to let it quietly die for this session.

What’s going on here appears to be a throwdown between Gov. Glenn Youngkin, a Republican, and senate Democrats, over everything from the governor’s rhetoric — Lucas specifically called him out for saying Democrats do “not believe in — nor do they want — a strong America,” which is admittedly not the best way to win friends and influence people — to issues like cannabis legalization and an increase in the minimum wage, with Surovell questioning whether Youngkin is willing to consider supporting those issues in exchange for an arena vote. Plus, both senators said they were opposed to using state-backed bonds to fund $1.05 billion worth of construction costs; Surovell said all Democratic requests to revise the financing plan were met with the insistence that “that piece of the bill is untouchable.”

(D.C. Mayor Muriel Bowser also jumped into the fray on Friday, vowing to enforce the teams’ lease and saying, “Let me be clear: The city owns the land under the Capital One Arena and will own the building should Monumental break its lease.” Citation needed as to whether that’s actually a clause in the lease, and it’s also TBD whether team owner Ted Leonsis would even want to keep the D.C. arena if he got one in Virginia, but that’s one additional saber rattled, anyway.)

Could the zombie bill still rise up and shamble its way toward passage? This is America, why do you ever feel it’s necessary to ask that question? Deeper political rifts have been healed to get behind subsidies for the local sports billionaire — hey there, Milwaukee! — but sometimes they aren’t, so far be it from me to predict which way this one will go. Any final words, Sen. Surovell?

“To quote Eric Idle — it’s not dead yet,” Surovell said in a text message to The Washington Post on Monday.

That’s not even Eric Idle’s line, revoke that man’s poetic license! Unless he means that he plans to hit the bill over the head with a club and kill it, in which case: Well played.

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Friday roundup: Browns rattle suburban move saber, AZ gov met with Coyotes before land bid

access_time personNeil deMause

Before we get to the news, please take a moment to vote in yesterday’s poll on the fate of the Oakland A’s if you haven’t already done so: So many of you responded that Survey Monkey made me pay an obscene amount of money to see the results, so may as well get my money’s worth! I’ll close the poll and present the results on Monday.

While we wait for the returns to come in, how about some nice, crunchy news?

  • The Cleveland Browns owners are reportedly “looking at” land in the southwestern suburb of Brook Park as a possible stadium site, though the mayor of Brook Park says he has heard “nothing” from the team. “As part of our comprehensive planning efforts, we are also studying other potential stadium options in Northeast Ohio at various additional sites,” the team said in a prepared statement, which either means 1) we’ll consider a stadium anywhere that we think we can get a pile of money for it, 2) we don’t want to move to the suburbs, but if it helps throw a scare into the city to give us money, that’ll work, or 3) either way works, we’ll take what we can get.
  • Arizona Coyotes CEO Xavier Gutierrez met separately with both Arizona Gov. Katie Hobbs and her chief of staff before filing an application to buy state trust land for a new arena at auction, and the chief of staff used to be a lobbyist for the Coyotes, and this is just a rat’s nest of conflict of interest. “That is just one of those fundamental principles that you can’t go into government and then help your former employer,” said Richard Painter, a University of Minnesota Law School professor who co-authored an ethics guide for public employees, and it’s possible he has mistaken “can’t” for “shouldn’t,” because [gestures at the entire history of U.S. politics].
  • MLB commissioner Rob Manfred said Thursday that he’ll be “disappointed” if a new Las Vegas stadium for the A’s isn’t open by 2028, and that a decision on the team’s temporary home will be made “in the next few months,” adding, “it’s clearly going to be someplace in the West.” No word at press time on whether Manfred indicated how many syllables it will have, or what it rhymes with.
  • Speaking of commissioners commissionering, NFL commissioner Roger Goodell says if a new Chicago Bears stadium, wherever it may be, has a dome, it could host “additional events,” and even if he didn’t say “Super Bowl” you know he meant the Super Bowl. And you get a Super Bowl, and you…
  • Now economists J.C. Bradbury and Geoffrey Propheter are tag-teaming all the misinformation Washington Capitals and Wizards owner Ted Leonsis is spreading about the economic benefits of his new $2 billion Alexandria, Virginia arena project that would cost the public more than $1 billion, and it’s kind of awesome.
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Stadiums and arenas are set to collect $18B in property tax breaks over their lifetimes

access_time personNeil deMause

It’s been a year since I excitedly got my copy of Geoffrey Propheter’s book Major League Sports and the Property Tax, so I figure it’s maybe time that I actually review it. (What can I say, a lot of shit happened last year.) Propheter is one of the most active researchers and commenters on sports venue deals, and was a property tax analyst for the New York City Independent Budget Office for three years, so he’s the perfect person to investigate the knotty question of how much exactly local governments are subsidizing sports team owners via property tax breaks.

As Propheter says at the outset, “property tax exemptions are government spending by another name”: There’s no functional difference between a government cutting a sports team owner a $100 million check and one granting them $100 million in tax breaks. (Propheter notes one economist’s quip that you could easily eliminate the entire defense budget by replacing it with a “Weapons Supply Tax Credit.”) But where it’s easy to calculate cash allocations, it’s a lot more contentious to establish how much taxpayers are giving up in tax money they would have gotten, if a stadium or arena had been subject to normal tax rates.

Previous attempts at coming up with property tax subsidy numbers — most notably by Rod Fort and Roger Noll and by Judith Grant Long — were general estimates without delving into the nuances of tax assessment. Assessments are more art than science at the best of times, as they require figuring out how much a building is worth to its owner; for sports venues, it’s doubly problematic given the problem of finding other examples to use for comparison, thanks to each city only having a handful of stadiums and arenas, and most of those being tax-exempt.

As of 2022, 79% of the 126 stadiums and arenas for the NFL, MLB, NBA, NHL, and MLS were fully exempt from real property taxes, according to Propheter, the same as in 2000 and up only slightly from 1970. After running through a whole lot of math, he concludes that the 105 current stadiums and arenas receiving tax breaks would have owed an additional $654.3 million in property taxes in 2022 if they’d paid like normal property owners. Topping the list by far: the Minnesota Vikings‘ stadium ($25.1 million in property tax breaks in 2021) and the New York Yankees‘ stadium ($24.2 million) — the latter of which double-dipped on its tax savings by then calling the team’s own bond payments “payments in lieu of taxes” in order to get access to cheap loans.

When Propheter extends those exemptions over the life of the buildings’ current leases, he comes up with a total public cost of about $18 billion (using a 3% discount rate for future value; it’s a bit less if you bump that up a couple points) that governments are handing over to sports team owners by letting them off the hook for full property tax payments on their current stadiums and arenas. The average sports venue that gets property tax breaks, then, gets about $171 million in public money from that source alone, on top of any actual budgeted cash, diverted tax revenues, free land, operating subsidies, or development rights that a team owner is likely to rake in.

So, what’s that to you, if you’re not a team owner or a city budget analyst? As Propheter explains, “Like all spending decisions, allocating $1 to good X means not allocating that dollar to good Y.” In this case, the opportunity cost of giving up that tax money is far from theoretical: Of that $18 billion in tax breaks, he calculates that $7.5 billion comes straight out of money for K-12 education, the most common use for property tax revenues.

There’s lots more in the book to sink your teeth into, especially if you love lots of charts and tables laying out the tax status of each stadium and arena. (You know I do.) It is admittedly priced for the academic market, so if you just want some distilled wisdom from Propheter, follow him on Twitter, where just in the last week he’s written a thread of top research insights on tax increment financing and reported that Virginia’s “72% privately financed” Washington Capitals and Wizards arena actually comes in at 63% public, for a final taxpayer bill of $1.64 billion. Did he include a spreadsheet? Of course he did.

 

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Friday roundup: More shouting about Virginia arena traffic, plus rumors of A’s (temporary) death and Coyotes-to-Utah

access_time personNeil deMause

Happy Friday! (Happiness provided separately.) While I have you here, is it a good time to remind you that Field of Schemes is on Facebook, Bluesky, Mastodon, Post, and whatever Elon Musk is calling his thing these days? And that by following FoS in any or all of those places, you can get notifications of new posts as soon as they happen — and not only that, by reacting to posts on those sites, you can help get more attention for Field of Schemes, because that’s how social media likes work, it’s a popularity contest where your votes make the things you like more popular? No, that isn’t what you want to hear right now, you just to read the weekly news recap? Okay, ignore all that for now, you can always come back to it later.

 

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