Friday roundup: Moreno re-ups Angels lease, plus sports leaders mumbling incoherently

So this happened:

That’s it, I’m done, I can’t top that. RIP comedy (???? – 2025 AD), reality has finally become too absurd even to laugh at.

If anyone still cares about the rest of the news, here’s some:

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Tempe officials called arena opponents “CAVE people” when they thought no one was listening

Tempe Mayor Corey Woods and the city council have not been coming out looking good after their failed campaign to give Arizona Coyotes owner Alex Meruelo about $500 million in tax breaks for a new arena: After Tempe residents resoundingly voted down the plan, the state attorney general found the city officials had illegally conducted private meetings with a consultant that it paid $32,258 to investigate arena opponents. And now that it’s been ruled those meetings should have been public, recordings of them are subject to public records requests, and the results have really made Woods and the councilmembers not look good:

The Tempe City Council assumed it was protected from prying ears when it went into a closed-door meeting on Dec. 15, 2022. According to the minutes from the meeting, councilmembers needed secrecy to discuss “their personal observations of Tempe residents conveying support” for a new arena for the Arizona Coyotes. What the councilmembers and Mayor Corey Woods actually said was a bit more colorful than that.

According to an audio recording of the meeting, the officials used their shroud of secrecy to disparage arena opponents. Citizens who campaigned against the arena were “cave people,” while arena opposition ringleader Ron Tapscott was a “crazy uncle.”

Further down, the Phoenix New Times reveals it was actually the consultant, Troy Corder of Strategy 48, who called opponents of the plan “folks who just like to yell at each other” and “cave people” — something New Times described as a “belittling acronym,” though it didn’t explain for what. (“Citizens Against Virtually Everything,” presumably.) Still, Vice Mayor Jennifer Adams then responded by saying, “Yes, exactly,” though, so she deserves credit for the phrase as well.

This, apparently, is how elected officials talk when they think no one can hear them. There were two other illegal closed meetings that weren’t recorded — the one that turned up was only recorded because a fill-in clerk wanted a way to check her notes — so unless someone else present decided to take advantage of Arizona’s status as a one-party consent state, we’ll probably just have to imagine what was said there.

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

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?

It’s Tuesday morning, and here’s what we know about the plans for a joint Philadelphia 76ersFlyers 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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Arizona official forms “advisory committee” to raise Coyotes from dead

The Arizona Coyotes don’t have an arena to play in or an actual NHL franchise or an owner, really, but they have one thing you haven’t got: a friend in Maricopa County Board of Supervisors chair Tom Galvin, who plans to form an “advisory committee” to “explore options” to bring the Coyotes back from the dead:

“I cringed when local politicians took glee in the demise of our hockey team,” Galvin said. “I think of Wayne Gretzky’s quote: ‘You miss 100% of the shots you don’t take.’ So, I’m forming an advisory committee of visionary leaders.”

Local politicians didn’t actually take glee in the demise of the Coyotes, and it was actually Wayne Gretzky’s dad that said that, but whatever! The point is, Galvin is forming an advisory committee, which will have people on it, “smart, credible people who know how to do things the right way” — you know what, let’s just let Galvin keep going on this, he’s on a roll:

Galvin said two big questions need to be answered for hockey to return to the Phoenix metro.

“Who would be the owner? And, where would this building be? It would have to be a world class building,” he said…

Galvin said the situation with the NHL is “different” [from its talks with the Diamondbacks about a potential new stadium]:

“We are not owning a hockey stadium,” he said. “This is about helping promote and convening community leaders to help see how we can get hockey back.”

If you’re a visionary leader who would like to serve on the committee, or maybe have a billion dollars in your pocket and would like to build and own a “hockey stadium,” you can call Galvin’s office at 602-506-7431. He doesn’t actually say he’s interviewing candidates, but it’s pretty clear he needs all the help he can get.

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Was the Carolina Panthers’ $650m renovation deal really the worst of 2024? An investimagation

The Center for Economic Accountability, a friend of this site, announced its annual “Worst Economic Development Deal of the Year” award for 2024 this week, and the winner was the city of Charlotte, for giving $650 million to Carolina Panthers owner David Tepper for renovations of his team’s stadium. CEA said in a press release that “Charlotte’s Bank of America Stadium deal stood out from the rest of the competition for a combination of factors that included its high cost, lack of transparency, poor returns, questionable economic justifications and the Panthers ownership’s checkered history with subsidized projects.”

There’s certainly a lot to be said for the Panthers deal as a terrible one: The city of Charlotte put up $650 million out of $800 million for renovations to a 28-year-old stadium it didn’t build and doesn’t own, in exchange for Tepper extending his lease for just 15 years and getting to open “good faith” negotiations for a new stadium as early as 2037. Still, it’s worth looking at some of the other contenders from 2024:

All worthy candidates, even if there can be only one winner. The lesson here isn’t that Charlotte is singularly bone-headed when it comes to handing out public money to local billionaires; it’s that siphoning off public money for private profit is a pandemic with no end in sight, and even the less-bad deals would be scandalous in a saner world.

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Friday roundup: Rays stadium deal falls apart more completely than their roof, San Antonio considers massive tax subsidy for new Spurs arena

Sorry that this has turned into Tampa Bay Rays week here, but stuff keeps happening. And last night, perhaps the most happeningest stuff happened, with the St. Petersburg city council meeting and 1) voting 4-3 to approve spending $23 million toward repair of the Tropicana Field roof; 2) voting 5-2 to put off selling $450 million in bonds for a new stadium and surrounding infrastructure; then 3) voting 7-0 to undo the vote to spend on fixing the roof, after Rays co-president Brian Auld declared “our agreement effectively died” with Tuesday’s county commission vote to delay issuing bonds and “I don’t believe we can make the economics around this arrangement work any more.”

A new council vote on the city bonds is now possible for January 9, assuming the county re-votes to approve its own bonds on Dceember 17. But even in the unlikely event that that happens, two new anti-stadium city councilmembers will have taken office by then, making city approval unlikely. Plus there’s increasing expectation that Rays owner Stu Sternberg will officially cancel the stadium plan anyway in the interim; Auld said that he didn’t even care about the roof repair vote, saying wasn’t confident repairs could be completed by 2026 he would “have more certainty” working out a settlement with the city instead. (Auld also apologized for “the tone” in which team execs’ letter before Tuesday’s county vote declaring the stadium deal “suspended” was received, saying it wasn’t meant to be a threat — whatever it was, it clearly backfired.)

This is crazytown, especially when you consider that this whole thing was set off by the four county commissioners who joined two prior stadium deal opponents in voting to delay the stadium bond sale in October, in order to be all respectful of the losses to Hurricane Milton and everything, apparently without considering that they might lose their pro-stadium majority on election day before their next meeting. As unlikely as it may have seemed at the time, it looks like unless Sternberg and his cronies can find a way to flip one county commissioner by December 17 — and threatening to move the team sure didn’t do the trick — everything is going back to square one now, with Sternberg shaking trees to see if anyone else wants to give him $1 billion for a stadium somewhere, while MLB has to go back to sitting on its hands waiting for this mess to be resolved before discussing expansion. Not to mention that without a repaired Trop, the Rays could be playing indefinitely in a minor-league stadium in Tampa, even as the Oakland A’s are playing indefinitely in a minor-league stadium in Sacramento. Cutting off your nose to spite your face comes at you fast.

Meanwhile, that wasn’t even the only big city council meeting about sports venues yesterday: In San Antonio, the city council held hearings on using tax money to help fund a potentially $4 billion redevelopment including a new Spurs arena. I didn’t watch the meeting, but fortunately University of Colorado Denver sports economist Geoff Propheter did and liveposted about it on Bluesky, so let’s just revisit some of his highlights:

Leading finance mechanism for the district will be a hotel tax and sales tax TIF that will span 3 mi from the district center. The zone can capture all of the 6% hotel tax and 6% sales tax. Holy sh*t that's a lot of money that can be captured. Doesn't mean they will use the full amount.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T17:02:39.800Z

Without evidence, the assistant city manager says that most people that went to a Bad Bunny concert at the Alamodome weren't from Bexar County. Did they survey every attendee and double check their addresses against IRS or DMV records?

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T17:12:25.690Z

"locals bring visitors because of the authenticity"…I don't understand what this means.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T17:17:22.930Z

Showing potential funding sources…and as usual, tax expenditures aren't on the list. When you give tax breaks, you are spending money. We know the team and others will end up with tax breaks. Those should always be part of funding discussion.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T17:18:51.102Z

courage: how does more tourists lead to better homelessness solutions? better housing solutions? better paying jobs–not just low wage ushers or retail workers? How many residents will be able to attend a spurs game compared to today or stay at a hotel in the district? great questions.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T18:30:35.069Z

courage strikes me also as cautiously optimistic, which puts the council tally at 8-3 if a vote were held today is my guess. I'm assuming the mayor would support.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T18:33:16.645Z

and the special session is over. Overall thoughts: lots of ideas, nothing concrete, and a lot of silly reasoning. A sport entertainment district is not a novel idea despite some members believing so. Members seem to believe that diverted tax dollars to the project don't hurt existing services.

Geoffrey Propheter (@gpropheter.bsky.social) 2024-11-21T18:38:41.620Z

 

After all that, do we still have the stamina for the week’s bullet points? Let’s try a couple, at least:

  • Athletics owner John Fisher pulling out of his stadium deal with Oakland to instead move to Las Vegas (maybe) might have blown up his plans to get discounted land in Santa Clara for a San Jose Earthquakes practice facility as well, with the city board of supervisors slamming the brakes on the deal after retiring supervisor Joe Simitian said he’s “not convinced [the Earthquakes] would be a good-faith partner” and warned that the sweetheart land deal represented “essentially a $100 million giveaway to a private enterprise.”
  • Speaking of Oakland, the city finance department issued a warning last Friday that the city is on the brink of bankruptcy and can’t count on money from the on-hold sale of the Oakland Coliseum to bail it out — then reversed course and quietly replaced that report on the city’s website with a new, less apocalyptic one.
  • This week was so nuts that a piece of the Dallas Cowboys roof falling off barely even makes the small print. Team owner Jerry Jones doesn’t want a new stadium, at least, or else we know where this would be headed.
  • And we haven’t even gotten to voters in Forsyth County, Georgia approving a TIF district to kick back tax revenues to pay for $225 million in bonds toward an NHL arena, assuming Forsyth County, which is 30 miles north of downtown Atlanta, can land an NHL team. We will revisit this if an Atlanta expansion team gets past the dreaming stage, or if this firehose of Rays stadium news ever stops, whichever comes first.
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Friday roundup: A’s exec says Fisher really does have Vegas stadium money (no, you can’t see it)

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 Brownslawsuit 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

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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DC arena lease-back deal isn’t as bad as it first looked, at least

An email from Anu Rangappa, senior VP for communications for Ted Leonsis’ Monumental Sports & Entertainment, rolled in this morning, claiming a bunch of inaccuracies in yesterday’s post about the proposed arena sale and lease-back deal between Washington, D.C. and the Wizards and Capitals. Some of his objections were correct, some were not, and some are in between, so let’s address them one by one (all of the italic quotes below were provided by Rangappa and cited to Monica Dixon, President of External Affairs & Chief Administrative Officer for Monumental Sports):

DC mayor’s lease-back plan could add $110m in public costs to Caps/Wizards arena

Inaccurate: this is not additional funding on top of the $515M. That $515M was split across 3 payments: Year 1 = $117.8M, Year 2 = $171.8M and Year 3 = $171.3M. Upon approval by Council, $87.5M would be counted as funds to pay for the sale, and added to that is the remainder $84.3M ($171.8M total), which is the Year 1 disbursement amount.

After going back and forth with Rangappa and reading over the proposed sale legislation, which he kindly sent over, I can confirm: He’s right, the $87.5 million sale price would be part of the $515 million already approved by the city council, not on top of it. This is explained in the legislation in the most obscure way possible:

It is understood and agreed between DCALP and the District that, except as set forth below, the Project is being funded pari passu by the District Contribution and the Minimum Developer Contribution in accordance with the Project Budget (up to the respective limits of each), and the District shall have no obligation to disburse any amount of the District Contribution until a corresponding amount of the Minimum Developer Contribution has been spent by DCALP for Costs of the Project.

In other words, the district will indeed pay $87.5 million to Monumental — but not until Monumental first pays $87.5 million (“a corresponding amount”) back to the district as a “Minimum Developer Contribution.” That term “Minimum Developer Contribution” doesn’t actually appear to be defined anywhere in the legislation, but Monumental has confirmed that this is the upshot of what would be happening.

Obviously, removing that $87.5 million as an added cost makes this deal a lot less detrimental to D.C. Whether it’s actually good, let’s wait until we’ve reviewed some of the other pieces:

Economist Geoffrey Propheter, the guru of all things sports and property tax, notes that by a previous agreement, all of the arena’s real property (the building itself) is already exempt from property tax. What would be exempted would be personal property (all the stuff in the arena), which Propheter estimates would make the new tax break worth about $1-1.5 million a year, or $18-27 million in present value.

Inaccurate: Geoffrey Propheter assumes that tangible personal property is included in the possessory interest exemption under the lease. A tangible personal property exemption is part of neither the Existing Lease nor the A&R Lease’s real estate tax exemption. Transferring ownership of the personal property to the District will not reduce MSE’s liability under the tax since it applies to leasehold property.

Propheter replies: “Finally I get an answer to this question??” As he said to me in his original email — and I should have made clearer above, which was my bad — he was speculating about what the personal property tax exemption would amount to if there was one, which multiple people with knowledge of the deal hadn’t been able to provide him with an answer about. Monumental has now confirmed that it won’t be leasing back any personal property (the stuff in the arena), so there’s no additional tax break here.

Propheter further notes that Leonsis would get rights to an alleyway and a strip of street frontage as part of the deal, plus arena air rights. Total value: “chump change but still non-zero.”

Inaccurate: This is not free. MSE is paying additional rent. The strip of street frontage is the only new air rights being granted to MSE. The lease always included air rights to the extent on the Arena land.

Nobody said it was free. Both the existing air rights and the new strip of street frontage would be provided to Monumental in exchange for no increased rent, so the subsidy here is indeed “chump change but still non-zero.”

Also, though the teams’ rent would go up under the new deal, it would go up slightly more under the old deal, costing the city about $5 million in present value.

Inaccurate: The math is wrong. From 2024 through 2047 (the end of the Existing Lease term including renewals), the total Rent is $37.2M. From 2024 through 2047 under the A&R Lease, total Rent is $43.6M.

Propheter says this is apples and oranges: The $5 million discount in the new lease is because the lease term is reduced by five years, so the city gets less money overall. Whether that’s a benefit or not depends on whether you think the teams are likely to sign a deal that’s better for taxpayers for years 46-50, or an even worse one.

There’s also the issue of how much of a sweetheart lease Leonsis’s teams were set to get in their existing deal — Propheter estimates they’re getting about a $22-74 million discount in present value dollars over the course of the lease compared to other comparable teams. Most of that, though, Leonsis would be getting under either the new sweetheart deal or the old one; the main difference is that the teams would be getting more square footage now for roughly the same money.

Add it all up, and you’re probably only talking a few million additional dollars that Monumental would gain from D.C. as part of this latest deal. So that’s certainly not terrible, but it still may be WTF: The district has now approved $515 million in taxpayer renovation spending on Leonsis’ private arena — plus around another $50 million in rent breaks —in exchange for a new lease deal that at best is no better for city taxpayers than the one it replaced. Verdict: Mayor Muriel Bowser isn’t throwing good money after bad, but she does appear to be doubling down on making sure the bad money stays bad.

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