Category: Houston Texans

D.C. approves $200m or more in spending on Nats stadium upgrades, calls this “no new cost” to taxpayers

access_time personNeil deMause

Tomorrow is Thanksgiving, the day when the United States celebrates the ancestors of some of its ruling class accepting lavish gifts from local residents, while famously providing in exchange smallpox and pain and degradation.

In completely unrelated news, the Washington, D.C. council voted yesterday to approve $515 million in upgrades for the Capitals and Wizards arena that we’ve known about since April, and while doing so they also approved funneling a large but unspecified amount (more on that momentarily) of tax money to the Nationals for upgrades to their stadium, in exchange for the team continuing to play in D.C. for an additional 13 seasons:

On Tuesday, the D.C. Council passed legislation to create a dedicated stream of revenue that the Nationals could use for upgrades and maintenance at Nationals Park, with no new costs to D.C. …

“We’re talking about a site that is generating 150 events per year,” [councilmember Charles] Allen said of the ballpark. “That type of return on investment is what we want, the same way the arena is a place where 250-plus events is creating the investment and the return that comes back on that. It’s a bit ironic we’re voting on both these things on the same day — we don’t want to find ourselves in a position like we did last year.”

Allen did not mention that although the district paid to build the stadium and owns it, Nats owner Mark Lerner gets to keep all the revenue from those 150 events a year. D.C. does get $5.5 million a year in rent from the team, plus whatever sliver of sales tax money it gets from those events that would not be spent in the city otherwise, but that’s nowhere near enough to cover the roughly $30 million a year D.C. is on the hook for in stadium debt. The rest is covered by district business and additional sales taxes that are being diverted to pay off stadium bonds.

Those bonds will paid off soon, though, thanks to tax proceeds coming in — and going back out to pay for the stadium — faster than expected. Which means those tax streams will soon be available to D.C. to pay for other public needs. Or would be, if Lerner weren’t angling to get it for future stadium upgrades instead. As a previous Washington Post article from January noted:

[D.C. Council Chair Phil] Mendelson’s legislation would create the Ballpark Maintenance Fund, ensuring a steady stream of dedicated money — with no new costs to D.C. — that could go toward repairs and improvements that the Nationals had been asking for under the terms of the team’s lease at the ballpark with the city….

“We made a commitment to the team we would build the stadium and we would maintain it, and we just don’t need these stories about deferred maintenance and failing scoreboards,” he said. “So let’s provide a certain path that we’re going to maintain our facility and maintain it as a very attractive ballpark in the major leagues.”

That’s two separate Post articles saying the new funding would be at “no new costs to D.C.,” which is wrong on two counts: 1) D.C. already shelled out the money it promised the Nats owners to pay for stadium construction, so handing over any leftover tax money as well is absolutely a new cost, and 2) the Mendelson legislation would continue to kick back stadium sales tax proceeds and Nats rent payments after the team’s current lease expires in 2037, which is even more a new cost.

How much in new public subsidies this would add up to is unclear: Ol’ “Democracy Dies in Darkness” didn’t bother to calculate a figure, and the D.C. council website doesn’t appear to have entered the bill into the record yet. But if we assume it would amount to at least 13 more years of the same $5.5 million a year in rent and roughly $12.5 million in sales tax money, plus whatever is left over in the current stadium account … let’s estimate the total at upwards of $200 million and leave it at that, though it obviously could end up much more. Lerner still has to okay a lease extension through 2050 to cash his check; one hopes that the D.C. council will post any new lease terms for the public to read, but one probably shouldn’t hope too hard.

This kind of last-minute-before-holiday-weekend stadium renovations approval is going around: Harris County, Texas just approved $35 million in fresh spending on new scoreboards for the Houston Texans to avoid “an embarrassing, unrecoverable failure mid-season.” (No, it wasn’t explained what kind of scoreboard failure would be “embarrassing [and] unrecoverable”; they just can’t get spare parts for the old displays, so presumably we’re not talking about something like this.) And that’s only part of potentially $264 million in upgrades the county is looking at making over 20 years, quintuple its current operating budget for repairs. The grift that keeps on giving is a nice benefit, if you can convince the natives to cough it up.

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Friday roundup: Houston readies stadium upgrade cash, Oakland Coliseum buyers seek new payment plan

access_time personNeil deMause

Thanks for your patience while I’ve been traveling this week (and watching Mets playoff games at 3 am), though honestly it’s been a pretty slow news week as well. Not completely dead, though, so let’s get to the weekly roundup:

  • The Houston city council is refinancing its bonds for the Astros and Texans stadiums and Rockets arena, which will let it spend an additional $150 million on renovations. The Houston Chronicle says the money is expected to be allocated as part of lease negotiations — the Texans’ is up in 2031, the Rockets’ is up in 2033, and the Astros’ not until 2050 — but also that the bond money is expected to “be split between the three venues evenly,” so maybe the city plans to set aside $50 million for each team, then see what it can get in lease extensions for that? The Houston Business Journal also reports that the Astros and Rockets leases require “renovations to maintain the first-class status of the venues” — the Astros can terminate their lease in 2035 if the additional spending isn’t made, though there’s no estimate provided of how much maintaining “first-class status” is expected to cost. Friends don’t let friends sign state-of-the-art clauses, let’s just leave it at that.
  • The city of Oakland has rearranged the payment schedule for the African American Sports and Entertainment Group to supply $105 million for the city’s half of the Oakland Coliseum, and the Oakland police union wants answers, calling the change in timetable “strange and weird.” Apparently the new payment schedule also still needs to be approved by the city council before it’s final, so I’m going to go ahead and say that the whole thing is strange, though “weird” will have to wait until we have further information.
  • Destruction from Hurricane Helene is expected to cut into hotel tax revenues earmarked for paying off the Tampa Bay Rays‘ new $1.3 billion stadium, though it’s too soon to predict by how much. Sports economist Geoffrey Propheter notes that if bond buyers balk at purchasing bonds because the tax revenues don’t seem sufficient, Pinellas County could have to allocate more public money to reassure them and keep interest rates from soaring, this should be fun.
  • If the prospective owners who want to get an expansion franchise in Portland, Oregon are successful, and if they then are able to build a stadium where they want, it could have the side benefit of shoring up the approach ramps to a neighboring bridge so they don’t collapse in an earthquake. Neither the earthquake nor the expansion team appears imminent, but this is still news, apparently, so consider yourself informed.

If there’s anything else up, it can get discussed in the comments, or else wait till Monday when I’m back on a normal schedule. See you then!

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NFL and MLS about to start letting fans in, is this a terrible idea or what?

access_time personNeil deMause

So far, the restart of sports in the U.S. has gone reasonably well: Sure, there were a few embarrassing pratfalls like the Miami Marlins having to stop playing games for a week after they had a dozen players test positive for Covid when they played a game right after initial positive tests because their shortstop said it was okay, but overall, things are working out much better than one might have feared. No league has actually had to stop play entirely (yet) as the result of outbreaks, and leagues playing in “bubbles” like the NBA and NHL have avoided even interruptions for individual teams.

The one thing that major North American leagues haven’t tried yet, though, is allowing actual fans to attend games. That’s about to change big-time, though, as two MLS teams — Real Salt Lake and Sporting Kansas City — are about to join FC Dallas this week in holding games before limited-capacity crowds. (FC Dallas played its first home game before a reported 2,912 fans two weeks ago, though it didn’t look like no 2,912.) And then the floodgates are set to open September 10, when the NFL season kicks off with the Kansas City Chiefs, Indianapolis Colts, Dallas Cowboys, Miami Dolphins, and Jacksonville Jaguars all set to play before about one-quarter-capacity crowds, with a dozen other teams either considering letting fans in or not yet having announced plans. In each case, there will be rules in place to protect fans — staggered entry times, mask requirements (except when eating or drinking), buffer zones between groups of seats, etc. — or at least to make fans feel more reassured that they’re being protected.

The question everyone wants to know the answer to: Is it safe? The answer, unfortunately, isn’t easy to determine: Sure, lots of overseas sports leagues have readmitted fans without ill effects, but those were all in nations with very low Covid rates — if you collect 13,000 people in one place and none of them are infectious, that’s not much of a test of how fast the virus can spread at a sporting event. The new-case rate in the U.S. has fallen by about a third over the last three weeks, but it’s still higher per capita than anywhere other than Peru, Colombia, Brazil, Argentina, or Spain. And certain states remain far worse than that: Texas would have the third-worst numbers of any place on the planet if it were its own nation, yet the Cowboys are preparing to reopen to fans for their first game, and the Houston Texans possibly for their second home game starting in October.

The science behind viral transmission at sporting events remains the same as it’s been since the spring: The more time you spend near someone, the closer you get, the more indoors with poor ventilation, and the less effective mask wearing, the more likely you are to get sick. So in theory, all the measures being taken by sports teams should help reduce risk, though item #1 suggests that if the NFL is really serious about fan safety, it should reduce the length of games to one quarter.

Trying to determine the exact risk level from attending one of these games is impossible, and in any case kind of beside the point. Will you get sick from Covid by going to an NFL game, even if fans don’t strictly obey all the new rules? (Sporting K.C. is talking about a “three strikes you’re out” rule, which isn’t exactly reassuring given that security will have to be policing more than ten thousand people while also keeping track of their card count.) Probably not — even during the Atalanta-Valencia disaster plenty of people didn’t get sick.

But in epidemiology, what’s important isn’t whether you get sick but rather whether somebody gets sick, and sticking 13,000 people in one place, even one socially distanced place with masks on, is a whole lot of dice to roll at once. And the risk then isn’t even just if you go to the game — check out the Maine woman who died after a Covid outbreak at a packed indoor wedding that she didn’t even attend, after she caught the virus from one of the 30 people who caught it there.

Really the question, then, is less “Is it safe to go to an NFL game in the middle of a pandemic?” than “Is it safe for a nation in the middle of a pandemic to allow people to go to NFL games?” The only way to know for sure is to do a huge experiment, with human subjects — and for better or for worse, that’s what we’re about to get.

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Houston has needed new dams for decades, built stadiums instead

access_time personNeil deMause

I may have noted to The Nation’s Dave Zirin last week that building tons of sports venues and giving the surplus ones to megachurch operators who balked at opening them up to disaster victims was an inefficient way for Houston to get hurricane shelters, but I didn’t suggest that Houston’s flood damage could be directly linked to its stadium spending spree or anything. Washington Post sports columnist Kevin Blackistone, though, has no such qualms:

Two Januarys ago, the City of Houston, after a delay of at least seven years, finally started a critical long-term project. It was patchwork on two dams constructed during the post-World War II era to protect the city from catastrophic flood and deemed by the U.S. Army Corps of Engineers to have fallen into as dangerous state of disrepair as possible. The cost: $72 million in federal funds.

Two decades ago, Houston found itself without a professional football team for the first time in seemingly forever. There was no holdup. There was no skimping.

Okay, so it’s not like Houston had a simple choice between fixing dams and building stadiums, and decided, “Stadiums it is, on the double!” But as Blackistone points out, there’s been no shortage of editorials and the like pointing out that aging dams needed to be shored up — or else “floodwaters could submerge downtown, west and south Houston and the Texas Medical Center,” in the words of one Houston Chronicle editorial last year — but the city’s response has been to wait for federal money to pay for the work. Meanwhile, Houston area taxpayers have spent around $1.4 billion on new buildings for the Astros, Texans, and Rockets in recent years (per the numbers in Judith Grant Long’s book with the really long name). As the kids today say, that’s not a good look.

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Harris County demands repayment for Houston Super Bowl costs, told “sorry, too late”

access_time personNeil deMause

Harris County spent $1.3 million on security and other support for Super Bowl LI in Houston, and now county officials are asking that the NFL — or really, the Super Bowl Host Committee, a nonprofit that acts as conduit for Super Bowl spending — reimburse them. Which, unfortunately, they didn’t think to ask for in their contract for the event, and the host committee says no backsies:

Super Bowl Host Committee officials say they would like to reimburse taxpayers but are not obligated to because the county did not, in its offers of support for the weeklong event, negotiate that it be compensated or repaid by organizers. The city of Houston did and has been repaid $5.5 million by the host committee…

“It is very shortsighted,” said Harris County Precinct 4 Commissioner Jack Cagle. “There will be future events, future Super Bowls.”

Yes, there will! And Harris County is welcome to try to negotiate repayment of costs for future events, though given the NFL’s typical demands for being allowed to host the game, good luck with that. (Really, the city of Houston should be applauded for even getting repayment for its security costs, as well as for turning down NFL demands for $50 million in renovations to a nearly-new stadium and still landing the game.)

Meanwhile, does the Houston Chronicle’s report include unverified claims of the massive windfall Houston allegedly received from the game? Of course it does:

Super Bowl organizers tout some $347 million in economic impact from the game, the amount visitors spent while in Houston.

And how much would have been spent by the would-be visitors who steered clear of Houston because of the Super Bowl? You know, like happened the year before in Santa Clara? Nah, it says $347 million in a popup right on the host committee’s website, it’s gotta be true, right?

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Idiotic lease clause could force Houston to spend $50m on upgrading Texans stadium for Super Bowl

access_time personNeil deMause

To the list of crazy things that the NFL demands in order to allow cities the honor of hosting the Super Bowl (free billboards, free police officers, free bowling alleys), add spending $50 million to make the luxury suites more luxurious at your 13-year-old stadium. That’s what Houston was told for its plans to host the 2017 Super Bowl:

Peter O’Reilly, the NFL’s senior vice president of events, said Monday that upgrading the stadium’s WiFi is something the bid committee has agreed to do. In terms of sprucing up the seating, he said he noted on a recent visit that NRG “is in a very good place at this stage in its stadium life, but there are opportunities to upgrade that are common across Super Bowl stadiums as they prepare and continue to make sure they are state-of-the-art.”

So far, no Houston government officials have stepped up to offer $50 million to the cause — in fact, Harris County Commissioner Steve Radack swore earlier this week that “I’m not about to vote to spend a single dollar of county money updating these luxury suites” — and it doesn’t appear that the Super Bowl bid committee actually committed to it as a condition of hosting the big game. So the NFL seemingly doesn’t have a leg to stand on, unless there’s something in the Texans‘ stadium lease:

A clause in that lease agreement says the county must maintain the facility in “first class” condition and “a manner comparable to other stadiums.”

Noooooooooooo! Don’t you people ever learn?

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Texans debut biggest taxpayer-funded scoreboard ever

access_time personNeil deMause

The Dallas Cowboys‘ video screen is no longer the benchmark for humongous sports video screens:

Less than eight months after announcing their approval, Houston’s Reliant Stadium has unveiled its new HD digital video boards, surpassing the Cowboys’ NFL-best 160-foot screens. Houston was previously the only team in the league without digital screens.

The AT&T Stadium video screens set records in 2009 for their 11,520 square feet. That title was claimed two years later by the Charlotte Motor Speedway and is now being surpassed by Houston’s 14,549 square footage of pixels.

The Dallas Morning News notes that the Houston Texans‘ new scoreboards are “100 percent taxpayer funded,” but quotes Harris County Judge Ed Emmett as saying that they’ll totally pay for themselves:

“The Super Bowl alone will attract revenue far in excess of that,” Emmett said. “We’re talking about Final Fours. We’re talking about all the other events that will come to the stadium where you get the best fan experience.”

Oh, dear. Do you want to tell him or should I?

 

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As goes AIG, so goes Houston’s sports authority?

access_time personNeil deMause

The disarray of the world financial system continues to hit the stadium world: The latest victim looks to be the Harris County-Houston Sports Authority, which could see huge hikes in its bond payments on Minute Maid Park, Reliant Stadium, and the Toyota Center thanks to the collapse of the esoteric financial instruments known as credit default interest rate swaps. (You may recall CDSs for bringing down a little company called AIG.) Without going into all the technical details — which, frankly, I’m not sure I understand even after reading more about default swaps than is really healthy [UPDATE: Apparently I really didn’t understand, as I mistook credit default swaps, which sunk AIG, for interest rate swaps, which threaten to sink the Sports Authority; everything else I wrote here is still valid, though] — the upshot is that in order to undo the bad financing, the sports authority will have to pay off its stadium debt early, with annual debt service expected to rise from $62.3 million to $83.7 million over the next two years.

That’s troublesome, because the authority only collected $79.3 million total in 2008 — and tax revenues, which depend on things like car rental and hotels that are highly dependent on a booming economy, look to be dropping. “I’m deeply concerned about the financial stability of the sports authority and all its bonded indebtedness,” former authority chair Jack Rains told Bloomberg News (which somehow managed to give Janet Jackson’s “wardrobe malfunction” equal mention in its article). “When you borrow for 30 years, you have to do prudent things, and they didn’t.”

If the shortfall comes true, the sports authority could end up having to go to the county for a bailout. And we know how well that’s worked in the past.

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