Wednesday, January 2, 2013

How Stadium Deals Go Bad

While successful stadiums don't always get tons of press, the unsuccessful ones do.  But after reading about the MLS debacle outside Chicago and the NHL/MLB/NFL problems in Glendale, Ariz., we may wish the bad deals got MORE press.

Neil deMaus from Field of Schemes explains:
As you may recall from past reports here, Bridgeview (Ill.) borrowed $100 million in 2006 to build a new stadium for the Chicago Fire, with the expectation that it would pay it off from stadium revenues. Except that the lease said that all soccer revenues would go to the team, leaving the city with only money from concerts and the like, which haven’t been enough to pay off $100 million in debt. So now Bridgeview keeps borrowing more money to pay off the existing loans, and as the Chicago Tribune reports, “The move comes as Bridgeview officials try to reassure residents in newsletters that do not detail how the downward spiral will be reversed.”
Businessweek also delves into Glendale's problems, called its sports stadiums a "Trojan Horse":
Glendale, Arizona’s bet on becoming the Phoenix area’s sports and entertainment hub is resulting in higher taxes, fired workers and rising penalties on its debt.
The city confronts new budget cuts after agreeing last month to pay $308 million over the next 20 years to keep the National Hockey League’s Phoenix Coyotes, which had the worst attendance in the NHL last season. After downgrades by both Standard & Poor’s and Moody’s Investors Service that cited the hockey payments, investors demanded a 7.5 percent higher penalty on city debt compared with 11 months ago.

8 comments:

  1. LOL, we were talking about saving money and creative ways around public financing for the new ballpark in Tampa, and we get another glass-half-empty article about a soccer stadium 20 miles west of downtown Chicago, a 1/2 billion dollar football field in a dessert out side of a city with less population then St. Pete, and the lack of success for hockey in the same dessert. Maybe your just trying to cover up you own motives, but wouldn't articles of interviews about cheaper ways to build roofs for stadiums, building green to save on stadium bills, jobs impact for Hillsborough co., and independent economist opinions on the impact of having out of towners spending at a new stadium in a new city? Besides, I thought WTSP was affiliated with CBS, not FoxNews, it's OK to write an article about positive and creative things about a staium, oppose to posting the same old "new stadiums suck" articles written by small time small minded people, thanks...

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  2. I just think that Tampa has a golden opportunity to create not just a stadium in some random bad location, but a Disneyland-like entertainment hub anchored by 2 of ESPN's top ranked franchises. And, maybe it might cost the county a few bucks, maybe it won't, either or Channelside has the potential to become the second most popular spot for the next 100 years at the west end of Florida's projected most future growth area of i4...
    Brent

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  3. Put the pom-pom's down folks, when sports franchises try to be the tail that wags the dog it's good to see someone who points out the follies of other places so maybe those mistakes won't happen here.
    There aren't cheaper ways to build these mega-structures, if there were somebody would be doing that by now. The "economic impact" of mallparks has been heavily overblown by those who profit from them - sports franchise owners, labor unions, politicians and material suppliers. Fact is that mallparks generate few full-time good paying ($20k or more) long-term jobs in all the places where taxpayer $$$'s have subsidized sports franchises.
    The Rays are the force behind this only because they bought the franchise without a get out of jail (Trop) free card and know that they are stuck in this market. If they had a viable alternative market to use to get what they want they would have played that card by now, so the "OMG! if they don't get what they want they'll leave!" hysteria isn't gonna work.
    The 2 "anonymous" postings come off as "beards" for other motives or just rants by those who want to satisfy their egos with a mallpark that will cost taxpayers a lot more than "a few bucks"
    BTW - spell check come in handy also.

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  4. Then answer us 2 questions, 1- Why is Tampa and St. Pete fighting to get'em OR keep'em? I find it hard to believe it's because having a Major League team in there city causes future debt! 2- And, if it did, would there even be sports? Besides, don't be blinded by bad examples in the article about soccer in a town the equivalent of Zephyrills, and NHL in the the dessert...

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  5. Who is "US"?
    Pol's in Hillsboro want to count on construction union votes and campaign contributions from those same unions and the few businesses that would benefit from a new mallpark - not to mention the ego factor.
    Pinnelas pol's don't want to be the ones to have the "let them go" tag hung on 'em. In both cases it's simple self interest.
    The debt comes from having to back (tax-exempt for the franchise) the financing and inevitable cost overruns that the Rayz won't take on.
    All big league pro sports biz have evolved from being a part of a locale to dominating it - the tail wagging the dog. Free spending in the late 80's till recently by pol's who may or may not have had strong tax bases that have now dried up while overall costs continue to rise helped to bring the "irrational exuberance" for bailing out sports franchises that only help those franchises.
    It's obvious that no matter how clearly I can portray this you are not gonna' get it.
    BTW Phoenix is in the desert.

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  6. LOL, you can twist it anyway you'd like, most sports franchises are profitable for cities...
    And, "Phoenix is in the desert.", no duh!

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  7. DESERT no DESSET
    You should try spell check, it comes in handy...

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