Category: Columbus Crew

For some somewhat better journalism, let’s head over to Columbus, Ohio, where the Columbus Dispatch reports that the $50 million the city had promised toward a new Crew soccer stadium will actually amount to nearly twice that, thanks to a secret second budget:

Starting early this year, as city department heads planned for the stadium, documents show they didn’t have one budget, but two: costs included in the $50 million and those outside of it, spread across various departmental budgets and funding sources…

In one spreadsheet circulated among city officials in March titled “Updated Project Budget and Timeline,” City Auditor Megan Kilgore tallied up what at the time were the project costs — almost $98 million, split between two “buckets”: ”$50 million” and “Other Projects.”

“This is our best effort at keeping track of projects,” Kilgore said in the March email to which she attached the spreadsheet. “The above will dictate how we continue to push expenditures that EXCEED the above amounts into the ‘Other Projects — outside of $50 million bucket’ pot.”

The “Other Projects” budget includes such items as building a 600-car parking garage for the stadium and moving electrical lines underground, items that a city spokesperson insisted would be happening with or without the stadium. (Burying the electrical lines, for example, has been assigned to the costs of a Chipotle Mexican Grill headquarters a half-mile away.)

This is all some great reporting that required digging through piles of public records requests, and could have been improved only by including the total public cost of the project to city and county taxpayers: The Dispatch itself previously reported this as $140 million plus land costs, and while I got $130 million with my adding machine, this would still mean the total public cost of the project is now more like $178 million. Or, if you prefer, $130 million, plus $48 million for a really vital Chipotle headquarters.

One of the most confusing parts of calculating stadium subsidy costs is accounting for the present value of future expenses: It’s how F.C. Cincinnati‘s $213 million in taxpayer largesse is really more like $81 million once you factor in that a lot of the spending doesn’t need to take place for decades.

(Note, by the way, that this isn’t directly about inflation: Even if inflation were zero, a dollar spent 30 years from now would still be less of a cost than a dollar spent now, simply because you can put a fraction of a dollar in the bank now and end up with a dollar in three decades.)

Anyway, all of this is to say that when the Columbus Dispatch reports that the public cost of the new Columbus Crew stadium has risen from $115 million to $140 million, it’s important to determine whether this requires an asterisk, if some of that cost is in the future. My previous calculation of the present-value public cost was $88 million; the new total is, per the Dispatch:

• $28 million in cash payments from the city of Columbus, plus $12 million to build a new public sports park.
• A county contribution of $2.5 million a year for 30 years, which comes to $45 million in present value.
• A state contribution of $20 million.
• $25 million in property taxes that will be diverted to the stadium.
• ???????? for purchasing the stadium land, which is supposed to be figured out by August 15, though that deadline could be extended.

The Dispatch actually seems to have done a good job of accounting for present value, but unless I’m missing something, they’ve done a less good job on addition: $40 million + $45 million + $20 million + $25 million = $130 million, not $140 million. Which isn’t to say the public cost won’t reach $140 million — the public land costs could easily drive it that high — but it seems like the current price tag should be “$130 million plus land,” so that’s what I’m going with.

The Crew, meanwhile, would according to the Dispatch “market, control and have the rights to all revenue from the new stadium,” including naming rights, paying just $10 a year in rent. You might think that with the public putting up about half the cost of the building, they should get something like half the revenues — but if so you clearly haven’t read the subtitle of the book that launched this website. Silly you!

The Columbus Crew‘s new downtown stadium, which is getting $90 million or so in cash grants and tax breaks to replace the Crew’s 20-year-old non-downtown stadium, now won’t open until at the earliest July 2021, instead of at the start of the 2021 season, because reasons. (“Some paperwork needs to be finished,” according to the Columbus Dispatch.) Which is maybe interesting to diehard MLS fans, but far more interesting to me is what team president Tim Bezbatchenko said about the new stadium’s impact when it finally does open:

″[The stadium is] going to change the trajectory of this club forever,” Bezbatchenko said. “There’s going to be so many ancillary positive consequences to this that you can’t even approximate and can’t guess about in terms of the culture change that the fans are going to go through.”

That is a lot of buzzy words; let’s attempt to unpack them:

• Change the trajectory of this club forever: This sounds like a vague promise that the Crew will stop losing quite so many games once they get a new stadium, which is questionable in any sport, but doubly so in one with a single-entity ownership model where team owners don’t get to plow profits directly back into improving the club.
• So many ancillary positive consequences to this that you can’t even approximate: “Ancillary” means “subordinate” or “supplementary,” so here Bezbatchenko is presumably talking about things outside of actually playing and watching soccer. Or not talking about them, as the case may be, since he says he can’t even begin to guess about them! Though there will be very many of them, of that he is sure!
• The culture change that the fans are going to go through: “Culture change” is one of those terms that business management types love to throw around, and here is presumably a reference to the shift to a more urban location. How exactly that would significantly change things from the “drive to game, watch game, drive home” model isn’t entirely clear — Columbus is famously the largest American city without a rail transit system — but again, clearly it’ll be yuge!

All of these would have been outstanding followup questions for the Dispatch, or really for any other reporters interested in reporting and not just taking stenography. It really can’t be overstated how much the functioning of anything like a democratic system depends on robust media outlets to shed light on what’s going on. In the absence of that, we just get a whole lot of press releases, and I guess comment sections of people complaining about the press releases, which is okay but not precisely the same thing. So if you have a local (or even non-local) media outlet that is doing a decent job, please send them some money, because just imagine what it would be like if news coverage got even worse than it is already.

The Franklin County Board of Commissioners toppled the final domino for a new Columbus Crew stadium today, voting unanimously to hand over $45 million in public funds over the next 30 years — that’s about $23 million in present value — to pay for … stuff. Not stadium stuff, because everyone involved has agreed that public money shan’t be used for actual stadium construction, but all kinds of other stuff that the developers want, because that’s totally cool.

This is one of the more difficult stadium deals to evaluate in recent memory, in part because there are so many different funding streams and so many super-vague things they’re being spend on (“infrastructure,” “public improvements”), and in part because all this money is just getting dumped into a New Community Authority with a broad mandate to spend on … stuff. (“The Deposit shall be paid to the NCA to be used by the NCA, as determined by the NCA in cooperation with Franklin County, to fund or assist in funding any qualifying community facilities.”) Almost certainly, by the time anyone knows where the money is going, it will be far too late to do anything about it — I mean, after today’s vote it’s already too late to do anything about it.

This is a very good thing if you’re Crew and Cleveland Browns owner Jimmy Haslam or someone who thinks spending more than $88 million — the county Memorandum of Understanding notes that the stadium will be exempt from property taxes, too, so that’s an added cost — to move the local MLS team across town and stay there for … okay, the county’s MOU says the team will have a 30-year lease, but it’s still to be “mutually agreed upon by the parties,” so no clue if it’ll have an out clause or what. It’s a bad thing if you don’t think this particular pig in a poke is worth that as-yet-unspecified sum, or if you’re just a fan of local governments figuring out what they’re buying before promising to provide the money. At least Crew fans will get to enjoy MLS’s crappy new playoff system while waiting to find out how long Haslam waits to threaten to leave again!

A funding plan for a new $230 million downtown stadium for the Columbus Crew began to come into focus this week, though admittedly not very much focus. The plan as constituted involves cash from new team owner (and Cleveland Browns) owner Jimmy Haslam, money from the city, money from the county, and money from the state, which Columbus Business First helpfully lays out as follows:

• $50 million from the city, for “land acquisition, infrastructure and public improvements,” plus turning the old stadium into a “community sports park” (which would also serve as a training ground for the Crew).
• $45 million from the county, paid out over 30 years, for “infrastructure and public improvements” around the new stadium.
• $15 million from the state, also for infrastructure and public improvements.

This is hazy enough, given that “infrastructure” traditionally can mean lots of things, from stuff that the government does for pretty much anyone (say, extending sewer lines) to things that more normally would be on the developer’s tab (say, building parking garages).

But it gets even more confusing from there, because Haslam and his partners would only put up $150 million of the $230 million cost, with the rest coming from a new state authority (in Ohio amusingly dubbed an NCA, for “New Community Authority”) that would collect the county and state money. Which doesn’t add up to $80 million, you will notice. Plus, the NCA would have to backfill any property taxes due from the surrounding private development, which is in a Community Revitalization Area and so eligible for 100% tax abatements.

That is an opaque fiscal soup, one that makes it nearly impossible to come up with a dollar figure for how much of a subsidy the Crew owners would be getting from taxpayers. Which is to the Crew owners’ benefit, no doubt, but it’s the kind of thing that hopefully we’ll get more clarity on before any governmental votes on — whoops, looks like the Columbus city council and Ohio state house already voted to approve their share of the money. Well, maybe we’ll learn more about where the money will be coming from and what it will be spent on before the Ohio state senate [UPDATE: too late!] and Franklin County board of commissioners vote, anyway. Or they can always vote first and ask questions later, that always works out great!