Curious how a 32,000 seat stadium with 81 homes games can "pump $130 million a year into the local economy"?

I really hope the answer involves the Keystone XL pipeline.

How do they come up with such figures? As the inimitable Frank Rashid said years ago during the Tiger Stadium fight, "A dart board and the suffix 'million dollars'".

"it's going to be a while yet before we can make an A's spreadsheet" -- indeed it will be. Most probably the voters of San Jose will not be able to judge the entire deal until after the election, which makes one wonder what they have to hide !
.
"land subsidy (...) not a huge deal": it actually is a huge deal compared to the City's budget deficit of something like M$60 and cops being laid off, libraries being closed etc.
.
Also just yesterday the paper reported about the City's Department of Transportation considering a ballot measure for an annual $400 parcel tax to fix the crumbling roads. But somehow there is enough money to put in /right now/ the Autumn Parkway infrastructure that is required per the S-EIR !? And they call that "no new stadium related taxes" ?!

@stadiumNo,
Being completely @#$% dishonest are we! This has no relevance whatsoever to SJ's budget woes, as the land can't do anything about it. The irony is that the millions of dollars generated by the ballpark and ancillary developments (see sales tax receipts) could go toward such things as police, libraries and roads. But who cares about reality, right?!

TonyD-

Presumably if the land has value they could sell the land and use that money to reduce the levy. On top of that a stadium will almost certainly involve incurring other costs most of which will not be recouped for decades if at all.

Do you actually know how city finances work?

I work in economic development and financing and there is no doubt in my mind the Stadium would be a net loss for the city for years to come unless the owner is going to pay for almost all of it on his own dime? Does that strike you as likely?

couple more points:
.
this agreement creates "blight", i.e. it reduces the value of the land by ~50%: valuation is M$13.9 for use as shops and offices but only M$6.9 for a ballpark. Wonder what that does to the property values of the two remaining privately owned parcels on the ballpark site.
.
regarding what to expect: the agreement is an option agreement. For the soccer stadium for the San Jose Earthquakes the sale price was reduced *three* times after the agreement was executed between the same players (Wolff and City of San Jose). So we have no idea what in 2 or 3 years the deal actually will be. Also we the tax payers are paying interest over the full M$25.1 for the next few years. Wolff pays $25,000 a year for the option, is that something like 0.1% APR ?!

Neil - The A's would avoid property taxes, but they would be subject to property tax on the stadium and/or possessory interest tax on both land and stadium. The actual difference between the two is probably far less than a million dollars annually.

Is that down on paper somewhere that we know of, or just how it would typically work under California law? There are plenty of ways to compensate Wolff for this through a lease if they choose to go that way.

Neil - The A's would avoid property taxes, but they would be subject to property tax on the stadium and/or possessory interest tax on both land and stadium. The actual difference between the two is probably far less than a million dollars annually.

@Joshua,
Yes, the A's would be paying for the ENTIRE ballpark on their own dime. A net loss to the city? Ever heard of HP Pavilion? And has AT&T Park been a net loss for the city of San Francisco? And you supposedly work in economic development and financing? WOW! I rest my case.

@Joshua,
Yes, the A's would be paying for the ENTIRE ballpark on their own dime. A net loss to the city? Ever heard of HP Pavilion? And has AT&T Park been a net loss for the city of San Francisco? And you supposedly work in economic development and financing? WOW! I rest my case.

Every county in CA has the right to assess possessory interests and charge athe appropriate tax.

www.sccgov.org/portal/site/scc/faq?path=%2Fv7%2FAssessor%2C%20Office%20of%20the%20%28ELO%29%2Fsite_level_content&contentId=09417b1fe4f34010VgnVCMP2200049dc4a92____&faqTopic=Taxes&faqSite=Assessor%2C%20Office%20of%20the%20%28ELO%29&scrollTo=A09417b1fe4f34010VgnVCMP2200049dc4a92____&cpsextcurrchannel=1#A09417b1fe4f34010VgnVCMP2200049dc4a92____

TonyD-

In stadium financing ATT ballpark is the exception not the rule. Even there I doubt the picture is half as rosy as you imagine it.

They are not paying property taxes. So really you are just relying on sales tax revenue and the lease revenue, but you also need to provide city services. Think of the city as a business with inflows and outflows.

Stadium proponents only ever want to count the inflows.

@TonyD:
The HP Pavilion is indeed well booked, but saying that it makes the City's general fund any money is like me renting out my mortgaged house and only accounting the rental income without accounting that the RDA bonds (the mortgage) are still being paid off ...
.
just last year we the tax payers had to pay for a new expensive high tech score board, and some ice machines in the locker rooms.

DSN, then what do you suggest? That cities don't have large community venues like stadiums and arenas to host events for their citizens to enjoy? That we all go back to reading around the fire for entertainment? Venues such as these have more than just a dollars and cents valuation to them. Without such community gathering places the concept of a community as a whole takes a hit.

I sent that in before I finished my thought. Look at it this way. Many people object to tax money being spent on funding for stadiums. That's great. I object to my tax funds being spent on 20th century anachronisms like libraries. I object to my tax funds paying for health care for people who aren't here legally. I object to my tax funds going to schools since I have no kids. I object to my tax funds paying for public transit because I never use it and it has no value to me... I could go on but you get the point. Where you see no value in a stadium, I see no value in many things others don't as it benefits people I don't think should be reaping benefits from what is essentially "my" money. Yet that funding still happens and I sit down, shut up, and live with it. So should stadium and arena opponents.

Earth to Joshua,
Uhh..sales tax revenue and lease revenue would go directly into the general fund. We could argue how much money it would feed into city coffers, but saying the ballpark would be a loss for the city is quite frankly a straight up lie. Did you know that Petco Park in San Diego (which wasn't privately financed) helped attract $5 billion in private investment to downtown San Diego; new restaurants, bars, shops, and condos. Folk want to be around critical mass creating ballparks. Yet you still don't think a privately built ballpark in downtown San Jose would be a good thing? @sears NoStadium, just cease with your strawman arguments against the ballpark while you're already way behind. You're sounding pretty ridiculous.

Dan;

They do indeed have "enjoyment value" for some (and in some cases, a majority of) citizens.

The question is not whether or not any such facility should be built, but how much public money (if any) should go towards them.

An owner who might legitimately argue that the city itself should pay a portion (say, 10-15% of total for infrastructure improvements that "facilitate" the stadium and other development) should be prepared to pay the rest himself.

The only reason $750m-$1Bn stadia are being built is that the taxpayer is contributing heavily toward their construction cost. If the owners had to carry a mortgage on these facilities we'd find that most of their "needs" are actually wants. In other words, they wouldn't be willing to pay for 750 HD screens in unoccupied hallways themselves.

"Did you know that Petco Park in San Diego (which wasn't privately financed) helped attract $5 billion in private investment to downtown San Diego; new restaurants, bars, shops, and condos."

If you have a source for that, Tony, I'd really like to see it.

Dean wrote: "Curious how a 32,000 seat stadium with 81 homes games can "pump $130 million a year into the local economy"

An excellent question Dean... my guess would be Mr. Wolff is counting in that benefit the tens of millions a year he will be putting in his own pocket... which is, after all, to be located mainly in the "local economy".

@JB,
For the umpteenth time, NO PUBLIC FUNDS WOULD GO TOWARDS THE BALLPARK! It would be privately financed, with the team even buying the land from San Jose, albeit with a small discount. Lets look at it this way: how many times has any city sold land to a developer at a discount, with said developer then privately financing a shopping center, housing development, or commercial office space? Probably hundreds of times, with no citizen outcries whatsoever. But make it a sports venue, and all of a sudden the worlds gonna end for some here.
@Neil,
I had the article in print regarding San Diego, Petco but need to dig it up (believe it was AAA Via Magazine article). I'll try to Google it as well.

@JB,
For the umpteenth time, NO PUBLIC FUNDS WOULD GO TOWARDS THE BALLPARK! It would be privately financed, with the team even buying the land from San Jose, albeit with a small discount. Lets look at it this way: how many times has any city sold land to a developer at a discount, with said developer then privately financing a shopping center, housing development, or commercial office space? Probably hundreds of times, with no citizen outcries whatsoever. But make it a sports venue, and all of a sudden the worlds gonna end for some here.
@Neil,
I had the article in print regarding San Diego, Petco but need to dig it up (believe it was AAA Via Magazine article). I'll try to Google it as well.

@JB,
For the umpteenth time, NO PUBLIC FUNDS WOULD GO TOWARDS THE BALLPARK! It would be privately financed, with the team even buying the land from San Jose, albeit with a small discount. Lets look at it this way: how many times has any city sold land to a developer at a discount, with said developer then privately financing a shopping center, housing development, or commercial office space? Probably hundreds of times, with no citizen outcries whatsoever. But make it a sports venue, and all of a sudden the worlds gonna end for some here.
@Neil,
I had the article in print regarding San Diego, Petco but need to dig it up (believe it was AAA Via Magazine article). I'll try to Google it as well.

Well don't count me as one who considers libraries "20th century anachronisms". They are part of a great tradition in this county of enhancing citizens efforts to educate themselves.

If you had kids Tony D I'm sure you wouldn't be happy to pony up say $60-70 to Amazon for each book report your child has to do on say, Captain Cook, Niels Bohr, or even Babe Ruth.

Marine Layer: How do your reason the difference between regular property tax and possessory property tax is less than $1M?

My understanding is that possessory tax is levied for the actual dates the stadium is used, this would obviously be higher for a baseball than a football stadium, but on a land and structure costing hundreds of millions this should certainly be higher than $1M.

@ j. Keehan,
Uhh, OK...and what the hell does a privately financed ballpark got to do with libraries anyway?!

Tony D:

Repeating an "answer" to a question that was not asked three times doesn't make your response any truer, nor more relevant. I assume you've already tried all capitals and bold typeface?

Please point to the section of my post that indicates that "public money" will go to Wolff's proposed stadium? That's right, there isn't one.

So your rage is directed at what, exactly?

I love how the people who are going to profit from this venture are first the say what a great deal it is but forget abuot the more than $140,000,000 million in infrastucture. the servicing of the bonds, loans, gift of land ect. The also try and pretend RD money is not real monty. RD money is not money meant to be given to rich men. Its not rich development is it? at a taxpayer i expect to get something of use out of that money not just funneled into a developers pockets. Reed says the stadium will earn 1.7 at that rate it will take how many years to pay off that initial investimen? who i pay for all of the services needed to run this park? my guess is the park will be tax exempted so it will be the little guy paying ? Go ask a council person if they city is spending money today on the ball feild. its one big scam . waste of tax dollars waste of public trust.

In the history of MLB stadiums I ask how many have been privately financed out of 28?

Answer: 2, San Francisco in 2000 and Los Angeles in 1962.

2.....Think about that for one second. That means 28 other stadiums that were built from scratch or renovated with public handouts that were given out by the taxpayers.

In this case San Jose lost a ton of money on the properties from buying them years ago because of the recession.

There is so much office space in San Jose and with BART and HSR so far away that land would be useless anyways.

Selling it at discount to the A's so they can build a ballpark that they will pay for themselves is the least we can do as citizens to attract an MLB team.

The A's will privately finance this thing with ease and give Downtown San Jose an identity that it sorely needs.

Being from San Jose I can speak in general about the people....we will not subsidize a ballpark with our hard earned tax dollars.

But we will spend our money all day at the stadium and support the team once it is built. People in San Jose have tons of money....richest large city over 500k per capita by far in the US.

The citizens shot down the Giants years ago before the dot com boom narrowly for a publicly financed stadium.

But to sell land at discount so the A's can build it with their own money will pass 65%-35% minimum. It may even be a 70%-30% split....not even close, even in this day and age.

One can argue "we are subsidizing a billionaire"...that is a bad argument considering how good of an overall deal San Jose is getting.

San Jose in the history of MLB is getting the best stadium deal of all time....hands down.

San Francisco pales in comparison as they had to built a muni line to ATT Park with public money.

Therefore you have to compare San Jose to other cities before casting judgement.

That is a big problem I see on sites like this. We do not live in a bubble, look around and see what other cities have had to do and you can see the citizens of San Jose are getting the deal of a lifetime for a pro sports team.

"In the history of MLB stadiums I ask how many have been privately financed out of 28?"

Of current stadiums, Fenway Park and Wrigley Field were also privately funded. And if you include stadiums no longer in use, there are many others, including one as recent as the Minneapolis Metrodome (built 1982), which used government bonds that were completely paid off by rent payments from the Twins and Vikings.

I really love your blog, it is very informative. Keep up the good work!!