Category: Cleveland Guardians

Inside why Cleveland keeps having to throw good stadium money after bad

access_time personNeil deMause

One day after the Cleveland city council approved an additional $20 million in Cavaliers arena spending and Guardians stadium spending because the team’s leases say the public has to pay for it and the public repair fund had run dry, the Cuyahoga County council followed suit last night, approving $17.35 million in county money to buy the Cavs new elevators and a broadcast control room and buy the Guardians new HVAC units and repairs to a “subroof,” whatever that is:

Cuyahoga County will borrow $14.5 million to help Gateway Economic Development Corp. pay the repair bills at Rocket Mortgage FieldHouse and Progressive Field.

On top of that, the county is giving $2.85 million in General Fund dollars to Gateway, the nonprofit that owns the ballpark and arena and oversees repairs.

Those with advanced degrees in how money works will recognize that “borrowing $14.5 million” is not actually a way of explaining how one plans to pay for something, but it fills Gateway’s budget hole for the moment. Future generations of county officials will get to figure out how to pay it off, though one got a head start by explaining that really, at least paying for constant upgrades is better than build a whole new stadium, amirite?

County Council Member Dale Miller, in a committee hearing on the proposal in November, argued that spending on repairs was preferable to building new stadiums.

“The key to our continuing to be a big-league sports town is that we maintain facilities in good condition, so that we don’t have to replace facilities every 25 years or so,” he said. “I know they’re doing that in some other cities, but we don’t have that kind of resources here.”

(Ed. note: Cuyahoga County is currently considering whether to replace a Browns stadium that is exactly 25 years old.)

Yesterday I wondered aloud why Cleveland and Cuyahoga County are paying for constant upgrades, and today I have a partial answer to that: Former Gateway chair Ken Silliman kindly provided copies of the Guardians and Cavs leases, and it turns out they each have slightly different definitions of what the public is on the hook for:

This, needless to say, raises a lot of questions, some of which Silliman was able to shed some light on:

How come Gateway pays for all routine maintenance, capital repairs, and major capital repairs for the Guardians, but only major capital repairs for the Cavs? Both teams, Silliman explains, were on the hook for maintenance and minor repairs as of 2021. That was when the city and county approved spending $17 million a year on stadium upgrades in exchange for Guardians owners Larry and Paul Dolan extending their team’s lease through 2036; as Silliman puts it, “the Guardians were successful in assigning ALL ballpark capital repairs to Gateway as a byproduct of the lease extension.” So a blank check got considerably blanker, in exchange for the Guardians owners agreeing to stay put for an extra 13 years.

Why does anything over $500,000 count as a major capital repair? Doesn’t this 1) incentivize the Cavs to bundle repair items into bigger projects, in hopes of making them the public’s responsibility, and 2) mean that as inflation kicks in over time, more and more repair items would be expected to fall under “major capital repairs”? The $500,000 threshold dates back to the teams’ 2004 leases, and Silliman says he doesn’t know how that distinction between major and minor repairs was decided on. He says the team cheating by piling up small repair projects hasn’t been an issue — Gateway’s engineering consultant has to approve expenses — but inflation absolutely is.

Silliman also forwarded a memo he wrote last fall to the Gateway board in which he said:

This “elephant in the room” is the unprecedented post-pandemic two year spike in construction cost inflation which unfortunately coincided with Gateway’s obligations to fund two of its costliest capital repairs (Cavaliers’ vertical transportation/video production room and Guardians’ lower and upper bowl seat replacements). This perfect storm of events is a major contributor to Gateway’s present cash needs.

That’s potentially good news in that the post-pandemic inflation spike is now over. However, construction costs continue to rise, and sin tax revenues continue to fall, and that $500,000 threshold for which Cavs expenses the public is on the hook for is going to be a lower and lower hurdle, so, it’s not all that good news.

Finally, the leases say the teams can sue Gateway for damages if they don’t get their repair money on time. However, if Gateway runs out of money — which it would if the city and county stopped giving it more cash — it doesn’t appear that the Guardians and Cavs owners can sue the city and county, so it’s within the governments’ power to shut off the money spigot and dare the teams to break their leases and try to find better ones elsewhere, if they wanted.

Tl;dr: Cleveland and Cuyahoga taxpayers aren’t on the hook for all upgrades to the Cavs arena and Guardians stadium, but they are responsible for paying for an unlimited amount of a limited number of items. (Think of it like different infinities.) The city officials who first set this up back in 2004 are mostly no longer around, though the ones in 2021 who took on “ALL ballpark capital repairs” for the Guardians should be getting questioned about that, early and often.

Share this post:

Cleveland okays taking money from minority business program to give to Cavs, Guardians

access_time personNeil deMause

The Cleveland city council voted 13-3 last night to provide $20 million in extra funding to the Gateway Economic Development Corporation for upgrades to the Guardians stadium and Cavaliers arena. Council president Blaine Griffin said that the cash will come from projects “in which we have already borrowed and do not need the money this year” — and if your ears perked up at that “this year,” you’re not alone. The money, which will be used for such things as upgrading elevators and broadcast equipment, replacing seats, and upgrading HVAC and video systems, will come from three sources:

  • $5 million in federal American Rescue Plan Act funding that was slated for a minority business program but not allocated yet.
  • $10 million from other bond proceeds that was intended for other projects that the council didn’t specify.
  • $5 million from Cleveland’s general fund, which one would think the city could have found something to spend it on.

The new spending is needed because the city of Cleveland and Cuyahoga County agreed in 2017 to give Cavs owner Dan Gilbert $70 million for arena upgrades and in 2021 to give Guardians owners Larry and Paul Dolan $285 million for stadium upgrades, both in exchange for lease extensions. While the money is coming from a ton of different sources, one slice is from the extension of cigarette and alcohol taxes (aka “sin taxes”) that were used to build the venues in the first place, and sin tax revenues are falling while construction costs are rising, resulting in a budget gap for Gateway that the city and county are left to fill.

Going by news coverage, it’s been unclear for some time now what exactly the team leases require the public to pay for — I’m digging around for the exact language and will report back here once I’ve located it. Crain’s Cleveland Business previously reported that if Gateway runs out of money and stops paying for required upgrades, however those are defined, “the teams could stop paying the $2 million in annual rent to Gateway or sue the city for breach of contract,” according to Gateway’s lawyer. (Again, it would help to see the actual lease language.) Griffin called the added $20 million in city spending approved last night “responsible” in order to avoid “having to pony up for expensive litigation” and ending up “with a stadium and trying to figure out an end user,” implying that the teams could leave if Gateway defaulted — though given the current Oakland A’s and Tampa Bay Rays situations, “leave for where?” is a worthy question.

The Cuyahoga County Council is set to vote today on more than $17 million of new spending of its own on Guardians and Cavs capital expenses. And this isn’t likely to be the end of it: There’s another ask for another $30 million in potential Gateway spending around the corner, and unless construction costs come down (ha!) or Clevelanders start smoking more, likely more budget gaps to fill beyond that.

City councilmember Jenny Spencer, one of the three “no” votes last night, put it this way at the council’s previous meeting last week:

“From the residents’ perspective, it always seems that when it comes to stadium funding, money just comes like a magic rabbit out of a hat. It just appears magically. Magically, we have $20 million in general funds available. But when it comes to other things the residents need, we don’t have the money.”

To which Griffin replied:

“Somehow, several years ago, this city made a commitment that they wanted teams as part of the economic engine in the central business district. There are some legal obligations that this city has with this lease.”

That “somehow” is doing a lot of work, huh? Griffin has been on the council since 2017, so presumably he knows at least a little something about how this sausage got made; instead, he’s staying focused on how Cleveland taxpayers will have to choke it down.

Share this post:

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

access_time personNeil deMause

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

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

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

Friday roundup: Everyone’s building soccer stadiums, no one’s sure how to pay for them

access_time personNeil deMause

This was a rough week for anyone in the U.S. who is an immigrant or looks like they might be, is trans, might ever need an abortion, is Palestinian, is a federal government employee, is a local government employee, is an employee of anything that depends on international trade, lives near sea level or in places that get hot or are at risk of hurricanes, likes democracy, or cares about a relative, friend, or neighbor who does. Not that it would have been an amazing week for most of those people if the presidential election results had gone another way, but a whole lot of folks are somewhere on the spectrum from anxious to terrified right now, so if you need to check in with each other right now before getting back to life as we know it, that’s not only reasonable, it’s a fine tradition.

And now, whenever you’re ready, back to sports stadium and arena life as we know it:

  • The owners of Sacramento Republic F.C., who now include the Wilton Rancheria Native American tribe by are still led by minority owner Kevin Nagle, announced plans for a new stadium, and almost none of the news coverage bothered to provide details of how it would be paid for, even those that reported on how it was announced to the tune of “Don’t Stop Believin’.” Finally, way at the bottom of a KCRA-TV report, we learn that the city of Sacramento is expected to put up $92 million in infrastructure money from property taxes on 220 acres surrounding the stadium, plus provide free police, fire, EMS, traffic, and other services for the next ten years. The city council is set to vote on the plan Tuesday, so that leaves three whole days to gather feedback, two of which are weekend days and the third is a holiday when city offices are closed, this is fine.
  • Bridgeport is considering a minor-league soccer stadium that would cost at least $75 million and which would likely include public funds, and Baltimore is considering a minor-league soccer stadium with no known price tag or details on how to pay for it, and Fort Wayne is considering a minor-league soccer stadium that is promised will be “100% privately financed” but we’ve heard that before.
  • Cleveland and Cuyahogo County are continuing to look for ways to fill their budget gap for paying for future upgrades for the Guardians and Cavaliers, and county executive Chris Ronayne says options are “not yet concrete” because “it’s a conversation that’s probably also going to have to include the public.” Signal Cleveland speculates that this could include going back to voters to approve another tax increase, unless Clevelanders go back to drinking and smoking at their old rates, which might not be as likely as you would think.
  • Nearly 95% of campaign donations by U.S. sports team owners went to Republican candidates or causes, according to a Guardian review of donor filings, which, duh, Charles Barkley could have told you that.
  • How are Inglewood business owners around the Los Angeles Rams‘ new stadium and Los Angeles Clippers‘ new arena loving all the new foot traffic? Not so much! “One of my lowest sales days was on Super Bowl Sunday” because of street closures, said a local bakery owner at a press conference this week. “I literally made under $600 for the day. I had to send employees home, and you’re just looking around like, ‘What in the world?'” Checks out!
  • Did a major news site just run an item reporting wild economic impact projections for a proposed Buffalo soccer stadium without saying who conducted the study, while the byline partly credits a City Hall press release? Sure did! Please give to support your independent nonprofit or collectively owned news media, we might just be needing them the next year or four.
Share this post:

Guardians, Cavs owners ask for $40m in added public cash for upgrades, because Clevelanders aren’t smoking enough

access_time personNeil deMause

When Cuyahoga County voters in 2014 approved extending a cigarette and alcohol surcharge for 20 years to provide $13 million a year to the Cleveland Guardians, Cavaliers, and Browns for stadium and arena repairs and upgrades, they were told it was necessary to keep the teams from breaking their leases and moving elsewhere. (They were also told it would “Keep Cleveland Strong,” via stickers that Guardians stadium ushers had to wear on their uniforms under penalty of firing.)

Unfortunately, Cleveland area residents aren’t sinning like they were projected to, and earlier this year it was reported that Cavs owner Dan Gilbert had been fronting money to pay for such “repairs” as upgraded elevators and escalators and a film on the arena’s new glass wall to keep birds from flying into it, while waiting for tax proceeds to come in. And now the Guardians and Cavs owners and the Gateway Economic Development Corp., the quasi-public agency that owns the sports venues, have asked the city of Cleveland and Cuyahoga County for an extra $40 million to fill in for the missing tax money:

Cleveland’s share of the money would come from the general fund, which covers basic services. The city can afford to pay the $20 million thanks to numerous unfilled vacancies, Finance Director Jim Hartley said.

Share this post:

Friday roundup: Rays promise “intimate” stadium with ginormous upper deck, Cleveland running out of tax money to pay for Cavs and Guardians upgrades

access_time personNeil deMause

Happy end of the week! Surely some other news of note happened in recent days, but you chose to come to this website, so you’re looking for different news, maybe some bleak Utah minor-league baseball renderings? And that is but the beginning of the smorgasbord of stadium and arena items on tap! (Yes, you can have a smorgasbord on tap, I’m a professional wordsmith, you’ll just have to trust me on this one.)

  • Reporting live from Tampa Bay Rays owner Stu Sternberg’s colon, the Tampa Bay Times’ Marc Topkin has a love letter to the Rays’ new stadium design, gushing about how much more “intimate” it will be thanks to only having 30,000 seats and “70% of the seats in the lower two of three seating levels.” Getting rid of the worst seats doesn’t actually make the view from the remaining seats any better — getting rid of intervening luxury seating might accomplish that, but there’s no indication Sternberg plans to do that — and having 30% of the seats in a third deck actually sounds like a lot for a 30,000-seat stadium (the Pittsburgh Pirates‘ stadium holds 38,000 and doesn’t have a third deck at all), but team officials blurted all this stuff out and Topkin wrote it down and printed it verbatim, that’s the job of a journalist, right? (UPDATE: FoS reader Andrew Ross points out that the Times actually squeezed this story onto its front page alongside the other notable news of the day.)
  • Cleveland’s stadium agency is on the hook for nearly all upkeep of the Guardians stadium and Cavaliers arena, and the alcohol and cigarette taxes that are supposed to pay for them are running dry, so someone is going to need to find more money to spend on the teams. (Right now Cavs owner Dan Gilbert is fronting his team’s arena costs, and the city and county will have to pay him back.) Some of the work includes upgraded elevators and escalators for the Cavs, kitchen equipment upgrades and new in-stadium TV screens for the Guardians, and a special film on the new glass wall at the Cavs arena to keep birds from flying into it which will have to be replaced every five years, not all of which really seem like “capital repairs” to me, but from the sound of things whoever negotiated these leases on behalf of Cleveland and Cuyahoga County did an absolutely horrible job that is allowing the team owners to bill the public for any and all upgrades, can lawyers be found guilty of malpractice? Make a note to check into that.
  • Speaking of malpractice, the Baltimore Banner managed to write about the Ravens‘ new stadium upgrades with only the briefest of mentions that state taxpayers are picking up the entire $430 million tab, and not mentioning at all that Ravens owner Steve Bisciotti can avail himself of another $170 million or much more after that. The headline the Banner chose to roll with: “M&T Bank Stadium’s premium areas will soon reach new level of luxury.” Turns out corporate-run nonprofit journalism isn’t necessarily any better than corporate-run for-profit journalism, maybe we need a better model?
  • I’ve been sadly neglecting the throwdown in Indianapolis between Indy Eleven owner Ersal Ozdemir, who was planning to build a new stadium for his USL-but-wants-to-be-MLS team with $112 million in state money, and Mayor Joe Hogsett, who now wants to use the money for a different soccer stadium on a different site for a different wannabe MLS ownership group. The City-County Council is set to vote on authorizing legislation for a new “professional sports development area” (read: super-TIF district) on June 3; if it’s approved, it would then go to the state legislature for a final vote.
  • New York Mets owner Steve Cohen’s plan to build a casino in his stadium parking lot, despite it being public parkland, is likely dead after state senator Jessica Ramos said she won’t support any casino project in her district when 75% of residents say they don’t want one. The state legislature could still pass casino authorizing legislation over the local representative’s objections, but that rarely happens, and anyway the state casino location board is unlikely to hand out a casino license to a project on such shaky ground, so probably New Yorkers will get to gamble somewhere other than the Mets parking lots, which Cohen is vowing will remain parking lots until the sun burns out, because it’s the prerogative of a sports team owner to throw a hissy fit.
  • A stairway flooded during heavy rains at the St. Louis Cardinals stadium, time to build them a new one, that’s how it works, I don’t make the rules!
Share this post:

Friday roundup: Anaheim ex-mayor faces prison over Angels land deal, Sixers owner calls public arena input “harassment”

access_time personNeil deMause

Ah, the dog days of summer, when news slows to a trickle and [opens up Instapaper and is hit by a firehose of saved items] BLEEAARGH!

Twenty-five years, people. I’ve been writing this stupid blog for 25 years, and the only thing that’s changed is now there are fewer decent outlets providing actual news, and the number of zeroes on the subsidy price tags keep going up. I hope you’re enjoying continuing to read this stuff, because it seems like we’re going to have to keep on rehashing the same tired absurdities even longer than The Simpsons, and nobody’s ever going to learn not to build the monorail.

Anyway, it’s Friday, let’s do what we do:

  • Former Anaheim mayor Harry Sidhu has agreed to plead guilty to obstruction of justice charges and will face up to 40 years in federal prison following an FBI investigation for soliciting bribes around a new Los Angeles Angels stadium land deal as well as something about illegal helicopter registration. (In classic getting-Al-Capone-for-tax-evasion fashion, the guilty plea is for the coverup, not for the initial alleged crimes.) That land deal is now dead, along with Sidhu’s political career; it’s possible that the Anaheim city council could even void the Angels’ sweetheart stadium lease extension on the grounds that Sidhu negotiated it, though given that no current council members would comment on the possibility when asked by the Voice of OC, probably best not to hold your breath there.
  • The Philadelphia 76ers held the first of five online forums about their new arena plans this week, one that some people criticized for only showing team executives on camera while not allowing the public to speak live. Sixers co-owner and lead developer David Adelman replied during the event, “Some people are disappointed that they can’t harass us on Zoom,” and the team subsequently rebranded the forums from “community meetings” to “community info sessions,” all of which went over about as well as you’d expect.
  • MLB commissioner Rob Manfred, in trying to argue why the Kansas City Royals need a new stadium either in downtown K.C. or North Kansas City, declared that it would be “a tremendous opportunity for this community — forget the Royals,” and then in the next breath said that “new facilities provide a ballclub with an opportunity for revenue generation that simply doesn’t exist in older footprints.” All evidence continues to be that Manfred is very bad at this, but also that he doesn’t have to be very good at it to be successful.
  • The Clark County Commission has voted to spend $440,000 in pandemic recovery money on bringing corporate CEOs to the Super Bowl in hopes that they’ll move their businesses to Nevada. Apparently neither spending $750 million on an NFL stadium for the Raiders nor being Las Vegas was enough to put the city on the corporate relocation map, but once the billionaires have been wined and dined at a Super Bowl, that’ll surely do the trick.
  • Longtime Cleveland city official Ken Silliman has a new book out about the city’s sports deals, and Signal Cleveland’s review includes some enticing snippets, including that Silliman shielded details of Guardians subsidy talks from public records requests by briefing public employees verbally but not in writing, and that he thinks Congress should “resurrect 1998 legislation written to curtail what’s known as ‘franchise free agency,'” which maybe means Rep. David Minge’s Distorting Subsidies Limitation Act that would have made sports subsidies subject to a federal excise tax, though that was actually 1999. [UPDATE: Silliman writes to say it’s actually this bill, which would have exempted sports team relocations from antitrust law.] Clearly I’m going to have to read the book before reporting fully on it, this journalism thing is a lot of work!
Share this post:

Friday roundup: New bill would give Bears a giant tax break, nobody knows how big because U.S. journalism is broken, guys

access_time personNeil deMause

Hey, everybody! I’m finally back from my trip, where I got to visit stadiums large and medium and small, among many other things. Let’s blow the cobwebs off the remaining news from this week, and get ready for a return to a regular posting schedule next week, because it sure seems like a lot is brewing:

  • Crain’s Chicago Business reports that a bill in the Illinois legislature would grant the Chicago Bears  owners a tax break for their Arlington Heights stadium project in the form “payment in lieu of taxes, or PILT,” which, it’s usually called PILOTs, guys, but whatever floats your boat. None of this is especially new — it’s just like tax increment financing in that the Bears would still be getting their tax bill frozen and the rest kicked back, except that here the money would be called “payments” instead of “taxes” — and is what Bears execs have been going on about with “tax certainty.” Also Crain’s hasn’t calculated how much the tax kickback would be worth to the Bears, or maybe the legislation hasn’t figured it out yet, give me the weekend to get back up to speed and maybe I can get you a number.
  • “Is Kauffman Stadium in as poor shape as Royals say?” Ian Betteridge can answer that.
  • “Time is running out for Oakland Athletics to get a new stadium,” according to an Associated Press story that cites exactly one person in support of that thesis, a Las Vegas-based marketing consultant, and several people saying there’s no rush, maybe it actually would have been better to go with a question mark headline here, guys.
  • How does St. Petersburg plan to pay for a new Tampa Bay Rays stadium? Fox 13 News looked into it and found that “the city is unable to identify a source” and “it’s all on the table but nothing is certain yet,” maybe “looked into it” is overstating things.
  • And rounding out the bad reporting quadfecta, Cleveland’s NPR station looked into the economic impact of upgrading the Guardians‘ stadium by consulting only one source, and for some reason it was sports columnist Terry Pluto, who wrote a very good book on the history of the American Basketball Association but so far as I know hasn’t studied economic impact, which would explain why he says things like “81 home games. That’s a lot of activity there.” (For readers unfamiliar with the Gregorian calendar, there are 365 days most years, which means a baseball stadium is dark more than 280 days a year.)
  • Glendale’s arena had record revenue in 2022 after the Arizona Coyotes moved out, which I can’t tell if the article means gross or net revenue, but either way it’d be hard not to do better after kicking out a tenant who paid negative rent, so no surprise there.
  • Oh wait, I lied about being done with the reporting on bad reporting: “Super Bowl 57 is less than three weeks away from bringing big-time spending and exposure to Arizona!” is the actual first sentence of an actual news article, yes complete with the exclamation point. And, oh god, here’s another one! I’m going back to bed to catch up on my jet-lagged sleep, see you on Monday when things will probably still be just as screwy, but at least we can tackle them one at a time.
Share this post:

Friday roundup: Guardians issue screwy new seating plans, NYCFC tax breaks hit $516m, Illinois blocks some Bears subsidies

access_time personNeil deMause

All kinds of news for you this week! If you don’t like any of this news, you just don’t like any news at all!

  • Cleveland Guardians management has released some details of how they plan to spend their new $435 million renovation fund ($285 million of it from city, county, and state taxpayers), and the answer is: on $202.5 million of renovations now, then bank the rest for future maintenance and upgrades. Progressive Field Reimagined is focused on creating new “social spaces,” which from the looks of things include some kind of seating terrace where fans will sit on sofas, some of them facing away from the game, plus, if you look real fast at WKYC’s video, turning much of the outfield upper deck into a giant sun-shaded outdoor concessions plaza that you can’t actually see the game from. (Right now much of that area is currently taken up by giant shipping containers that serve as ad boards because nobody wants to sit there, so maybe this isn’t too much of a loss.) It’s also amusing to see that some of the “Terrace Hub” weird-facing sofas will be behind, yes, pillars, that favorite bugaboo of stadium designers that many a team owner has declared to be the reason they need to replace existing stadiums, but apparently set to make a comeback now that a team owner realizes they need them to hold the upper deck up, physics FTW!
  • Turns out when sports economist Geoffrey Propheter estimated that NYC F.C.‘s full property tax break on its new stadium would cost taxpayers between $132.5 million and $197 million, he was lowballing a bit; his former colleagues at the New York City Independent Budget Office have now crunched the numbers and come up with a total tax-break cost of $516 million in present value. Add in city infrastructure costs that will likely top $100 million and whatever the benefits are of getting the use of city land for 49 years for just $30 million in rent, and we’re looking at well over $600 million in subsidies for a stadium that Mayor Eric Adams touted as “100% privately financed.” But then, that’s kind of a tradition in New York.
  • An Illinois state bill to create a $400 million “large business attraction fund” has had an amendment added to bar any of the money from going to “a professional sports organization that moves its operations from one location in the state to another location in the state,” which it doesn’t take a lot of reading between the lines to see means the Chicago Bears. A Bears stadium in Arlington Heights could still receive other state subsidies, as well as local subsidies like the property-tax kickbacks they’re reportedly considering, but at least it’s an indication that Illinois state legislators aren’t quite so dumb that they think paying a sports team to relocate from one part of the state to another is good policy. (Them thinking that paying other businesses $400 million to relocate to Illinois is anything other than wasted money is another story, but one baby step at a time.)
  • What should Miami Heat fans call their arena now that their crypto naming-rights partner is going out of business and its founder is in jail? The Arena, says a spokesperson for Miami Mayor Daniella Levine Cava, “with a capital A.” No, I don’t know how one pronounces a capital A differently either, but I guess this counts as Branding™, whereas just letting people call it “the arena” would be a failure of leadership or something.
  • What do you do when a local sports team owner, in this case the Detroit Red Wings‘ Ilitch family, gets $400 million in public money to build a new neighborhood and then just doesn’t? Why, give them another $797 million to not build more development, of course! Detroit Mayor Mike Duggan must figure he doesn’t have much choice, given that the rest of his city is just a blank gray void.
  • Opposition continues to build to the Philadelphia 76ers owners building a new arena right next to the city’s Chinatown, with 87 of around 100 local business owners signing a petition opposing the plan, and the Asian American Legal Defense and Education Fund looking into legal action. “This is something that will destroy Chinatown,” said Steven Zhu, head of the Philadelphia Chinese Restaurant Association, and given what happened with Washington, D.C.’s arena, he may have a point.
  • Virginia Governor Glenn Youngkin says he’s ready to talk about building the Washington Commanders a new stadium in Virginia as soon as Daniel Snyder sells the team, because doing so while Snyder still owned the team turned out to be a non-starter.
  • Las Vegas Raiders owner Mark Davis is reportedly “embarrassed” that so many visiting-team fans are flying in to Vegas to watch Raiders games, which, has he forgotten that the whole pitch for Nevada building him a stadium was so that it would bring more tourists to town? Or, now that Davis has his $750 million in state cash in hand, he just doesn’t care about economics and only wants to see more fans rooting for his team? Almost certainly one of those.

I’ll be traveling the next two weeks, so if posts here are a little irregular or appear at weird hours of the day, don’t worry yourself over it. Have a good long (if you’re in the U.S.) weekend, and see you back here on Tuesday or thereabouts!

Share this post:

Friday roundup: NFL funds its teams’ stadiums too, but still wants plenty of public cash

access_time personNeil deMause

It was the NFL owners’ meetings this week, which meant a whole lot of headlines about how the league is providing money toward new or renovated stadiums for a bunch of its teams: $295 million for Dallas Cowboys upgrades, $200 million toward a new $2.1 billion Tennessee Titans stadium, and $100 million for Denver Broncos upgrades. All this is coming via the NFL’s G-4 program, funding that is often termed loans but, since it gets “repaid” with ticket sales money the teams would normally have to share with the league, it’s really grants.

If you’re wondering why the NFL goes through the trouble of shuffling money around this way — asking for a cut via revenue-sharing and then handing it back for stadium projects — it’s complicated. G-4 evolved from G-3, which was originally created way back in 1999, when Robert Kraft was threatening to move the New England Patriots from Boston (well, Boston-ish) to Hartford. The NFL, which had recently seen the Houston Oilers move to Nashville and the Los Angeles Rams move to St. Louis in search of new stadium deals, appointed a committee to see if there was a way to discourage owners from abandoning larger cities for smaller ones, thus hurting the league’s ability to demand top dollar for national TV rights. To lead this committee, the league appointed one Robert Kraft.

You can probably see where this is going: Kraft’s committee approved a plan whereby the NFL would allow teams to withhold some revenue-sharing money if it used it to build new stadiums — but only for teams in the top six markets. The 6th-largest market at the time just happened to be Boston, and Kraft became the first recipient of funds under the league’s new G-3 provision.

Immediately, other team owners claimed it wasn’t fair that the Patriots, one of the richest teams in a league full of rich teams, were getting to use their money to build a new stadium that would benefit mostly them, and so G-3 (and its successor, G-4) was expanded to the entire league. This didn’t make a ton of sense in terms of keeping teams in big markets, but it did make for lots of spending on upgrades, so it was in the league’s interest, maybe, at least if the upgrades brought in more money than they cost, which was more likely to be the case when there was a pile of public money involved too.

To that end, G-3 and G-4 were designed to require “public-private partnerships,” meaning the NFL would only kick in if local taxpayers did first. But somewhere along the way, the league started bending that rule: While the Titans, for example, are supposed to get more than a billion dollars in tax money for their new stadium, the Broncos are getting just $12 million, and the Cowboys nothing — so a more accurate reading of the rule might be “public-private partnerships, or be Jerry Jones.”

And that’s The Story of G-4, or How NFL Stadium Funding Got Weirder Than Mere Billionaires Ripping Off Taxpayers Would Have You Expect. It’s not great news, exactly, since it doesn’t mean team owners are asking for any less public money, but it does go to show that sports leagues do have ways of funding new venues without demanding tax dollars, if they wanted to, which they don’t, because why wouldn’t you want tax dollars? Never spend more for an acquisition than you have to.

Was there other news this week? You betcha:

  • The Buffalo Bills stadium still hasn’t gotten a final environmental signoff from the New York state legislature or a community benefits agreement between the team and the county, but it has over a billion dollars in state and county money, so the rest can (and will) wait till 2023 sometime, don’t you worry.
  • The state of Ohio just got around to approving its $30 million share of spending on stadium upgrades for the Cleveland Guardians, to go along with $255 million from the city and county. That’s been expected all along, but it’s still worth taking note of, especially when building the stadium in the first place only cost $350 million (in 1994 dollars, but still).
  • Speaking of the Titans, their newfound antagonist, metro councilperson Bob Mendes, has proposed reducing the state’s spending on their stadium from $500 million to $450 million and spending the other $50 million on children’s services. That’s probably mostly a rhetorical gambit to show that, no, this isn’t money that has to be spent on a stadium, it could go to kids if the state decided to do that, but also a way of pointing out that if a stadium would really generate $3 billion in future tourist taxes like its advocates claim, why not spend the upfront money on more pressing needs and give the Titans owners any surplus that comes in later? That’s not likely to go over well with team execs, but like I said, rhetorical gambit, it’s more to make a point than actually get approved, so well enough played, Bob Mendes.
  • We Are NY Horse Racing released an economic impact study claiming that upgrades to Belmont Park will produce “billions of dollars in economic impact” and I’m sorry, I can’t finish this sentence without laughing, go read the stenography journalism yourself.
  • More new Tampa Bay Rays stadium renderings, this time for a proposed stadium on the Tampa side of the bay, though they’re not detailed enough to make much fun of. The roof does have some weird wrinkly thing going on, which presumably has something to do with skylights, but given that we’re extremely likely never to hear of this proposal or this design ever again, I’m having a hard time getting into it.
  • And finally, enjoy this story of a St. Louis suburb that destroyed its bond rating by building a practice rink for the Blues then ran out of money to pay for it, because of COVID or something, definitely not because a $55.7 million hockey practice arena could never possibly pay for itself. (If the article is paywalled after the first few paragraphs, just let a bot write the rest for you, it’ll probably be as reliable as most local newspaper reporting anyway.)
Share this post: