Tuesday, May 31, 2016

Hillsborough, Rays Talk Stadium Locations; Still Pretend $200+M isHiding in Sofa Cushions

The Times' Richard Danielson reports today that the Rays continued their secret, undocumented meetings with Tampa-area community leaders today, ultimately bringing the conversation around to nine possible (undisclosed) new stadium locations, and the (undisclosed) tax dollars they may tap into to help pay for their new park.

And even though Rays President Brian Auld once promised total transparency on the process, and Hillsborough Commission's resident tax pledge flip-flopper Ken Hagan suggested the same, details from these meetings have been hush-hush.

Sounds about right.

Pro teams love when the headlines avoid the difficult financial talk, for they want to maintain tight control over the conversation and how it's perceived by the public. (See super-secret blueprints in Atlanta and Texas). But Danielson did include one financial nugget:
Based on where a stadium was built, officials have said there could be up to 10 different sources of funding. Along with money from the team, those could include a share of the property taxes that are already earmarked for community redevelopment in areas like downtown Tampa, rental car surcharges, a portion of local hotel bed taxes, money authorized by the Legislature, ticket user fees and foreign investment available through the federal government's EB-5 visa program.
Since the Times' Steve Contorno eloquently pointed out in a different article this morning, "There are winners and losers whenever government creates incentives," allow me to fulfill my watchdog duties by pointing out the losers for each of these possible pro sports incentives Hagan and Tampa Mayor Bob Buckhorn are discussing:
  1. Property taxes earmarked for community redevelopment: Other local projects that receive CRA/TIF money lose, from transit to parks to arts to roadways to the Ybor City Redevelopment Corporation to safety improvements.

  2. Rental car surcharges: Aside from the folks who rent cars in Hillsborough Co - regardless of whether they've even heard of the Rays - the airport also loses, as car rental taxes could help pay for more airport improvements like expansion, modernizations, or even cheaper parking!

  3. Local hotel bed taxes: Everyone seeking money for arts, beaches, museums, and other tourism-driving events lose, since tourist taxes are eligible for a wide-range of expenditures.

  4. Money authorized by the legislature: Taxpayers would lose, since this general revenue money could go to any other educational, social service, or infrastructure need in the state.

  5. Ticket user fees: The Rays lose, since this comes out of the price of a ticket...so don't expect that one to fly.

  6. Foreign investment through EB-5: Some would argue hard-working, middle-class immigrants looking to come to America would lose...while others would argue a lot of Americans lose out too.  Either way, it hasn't yet proven itself a reliable - or robust - way to fund private stadiums. 
It's worth pointing out the rental car & state money would require favors from the legislature, which has denied every stadium subsidy application that's come its way in recent years, amazingly enough.

So to summarize, Hagan hasn't figured out how to pay for a new Rays park in Tampa; he hasn't figured out how to redirect general revenue funds toward baseball without anyone noticing; and he hasn't figured out how to weasel his way out of his "no new taxes" pledge. 

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Sunday, May 29, 2016

Still Shocked by New Texas Rangers Stadium Handout...but Probably Not as Much as Texas Teachers

If you thought the Braves lucked into a generous, super-secret, behind-closed-doors stadium deal to replace a 20ish-year-old facility...wait until you read up on what the Texas Rangers did!

It takes a lot of gall to demand replacing your already-modern stadium with a billion-dollar replacement...except it seems the Rangers didn't even have to try that hard. The city of Arlington worked (in secret) to negotiate paying half of the $1B price tag on a new stadium...plus property tax breaks - for The Roofed Ballpark at Arlington, or whatever they'll call their newer, better, beast that will protect them from having to play baseball outdoors.

Then, just four days later - because clearly, that's sufficient time for the public to vet and debate the deal - Arlington's city council unanimously approved the package (which even came with the traditional boilerplate questionable economic impact study!).

ALSO READ: Hillsborough Co.'s chief stadium negotiator wants a secret deal too

When it came to the Braves' super-secret deal, the silver lining is that it didn't take long for the handouts to threaten the jobs of the responsible politicians. And the silver lining in the Rangers' deal is the voters will still have a say on it at the polls...albeit it, a referendum where the deck can now be stacked against them by the team, columnists, and countless other political forces.

But, as Field of Schemes' Neil deMause writes:
This is a textbook case of “How to game a stadium vote,” and kudos to Rangers owners Ray Davis and Bob Simpson for pulling it off — though the Arlington council really deserves an assist for making it as easy as possible for them to do so. Next time you’re wondering if the real cause of the sports subsidy scam is greedy owners or craven politicians, the answer is: yes.
There wasn't enough good analysis on the deal from the shell-shocked Dallas/Fort Worth media, but one column worth reading is from Star-Telegram columnist Mac Engel, who frankly sends mixed signals on the $500M in handouts....but at least he acknowledges how silly it seems to do this deal right now, long before it became necessary:
This deal is another example of our maddening paradox that makes up a large chunk of the U.S. economy; we are told to save and not buy “stuff we don’t need” and yet our financial system cracks and stalls because we are not buying “stuff we don’t need.”
A new baseball stadium in Arlington is more stuff we don’t need.

For Arlington, keeping the Rangers is always good for morale and pride, both of which have value. But at this price? Arlington plans to commit its taxpayers to a toy costing them $450 million when it already had a perfectly good one paid off.
I am only 500 percent certain, if you ask Arlington ISD school teachers and administrators, that their respective buildings and classrooms are in actual need of supplies and upgrades, but to hell with them. The Rangers need a roof.

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Friday, May 27, 2016

The Value of Another Bolts Playoff Run

Tampa Bay hockey fans may still be licking some wounds from a heart-wrenching seven-game playoff loss, but it's a good time to remember why cities invest in sports:

1) Because if we don't, some other community will and we'll lose our team(s). Crappy reason, but that's unfortunately just the way it is...

2) Because sports teams make us feel good.

I've written before about the intangible value of rallying around a home team, quoting Pete Kerasotis:
"How about that game last night?"

It was my mailman, with me standing at the end of my driveway, chatting about the Orlando Magic's dominating Game 1 win against the Atlanta Hawks the night before.

This, I thought, is what a sports team does. It brings people together with a common topic, and even a common sense of pride. It does it in boardrooms and family rooms, at the water cooler and at the checkout line.
And Joe Henderson:
Some people say Tampa is not rich enough, large enough, or passionate enough to support three pro sports teams. I think they’re wrong. People used to say hockey would never work here, either. These teams are part of the city’s fabric and identity. And when times are flush, like now, they bring people together like nothing else can.
I also recently discovered this passage from Bob Sturm with Sportsradio 1310, The Ticket (Dallas):
A favorite team is the only thing a male human feels the same about when he is five and when he is 45 and when he is 75. You will change your mind on everything else. Girls, money, hobbies. But you will always still feel the adrenaline rush of a win, and the gutting sadness of a horrible loss.
Of course, despite the public benefit of these private corporations existing, there's no reason teams should lean on the public for money...but hey, it's America!  Greed is good!

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Tuesday, May 24, 2016

The 2019, 2020, and 2021 Super Bowls Go To...

UPDATE: Super Bowl LIII (2019) goes to Atlanta, with Super Bowl LIV (2020) going to Miami, and Super Bowl V (2021) going to Los Angeles. Tampa appears next in-line for the 2022 game, but that depends on a 2018 or 2019 owners vote...and how many other teams may build new digs by then.

Three years ago, this blog pointed out that Florida cities were denied all bids for Super Bowls because not enough tax dollars went to stadium projects here to "earn" the "honor."

Since then, Shadow of the Stadium has tracked all the tax dollars that (needlessly) have continued to flow to the NFL, and the ensuing likelihood of the 2019 and 2020 Super Bowls going to Atlanta and Miami, respectively (even though the Dolphins suggested they wouldn't be able to land Super Bowls without the state money they never got). And, with the addition of a new billion-dollar LA stadium, Tampa's "turn" could get delayed another year.

But given the mixed economic analyses surrounding Super Bowls, losing out on the game may not be such a big "loss" for Tampa Bay.

FLASHBACK: I agree with some of the claims from the good folks behind Tampa's bid, since Super Bowls do net "heads in beds" and lure tourists to town for a week in February. But it's also not all that hard to lure people to Tampa in February; so does the game really bring hundreds of millions of dollars to town? Of course not.

Never trust an economic impact report that makes a hundred-million dollar claim from a week-long event. And never trust elected officials who make crazy claims about those studies, either.

FLASHBACK: ALSO READ: New York Hosts a Much Better Super Bowl Than Tampa*

Super Bowls are publicly-supported events where the amount of tax dollars paying for them are anything but public. We learned in 2014 that the NFL's secret demands range from significant to outrageous, and cities like Tampa, who are perceived to be underdogs in the 2019/2020 bidding, are more likely to make even more ludicrous concessions in their attempts to land a game.

I'll update this post later on today when we find out which cities "win" the bids.

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Thursday, May 19, 2016

That's a Lot of Stadium Campaigning

How long have I been covering new stadium campaigns?

This long.

Update: the Red Sox didn't leave Boston, as they threatened.  And an aging Fenway didn't devastate the franchise, also as former owners threatened.

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A Few Tweets of Caution About Counting on EB-5 Financing

And finally, a good one from last year:

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Tuesday, May 17, 2016

Bigger Drain on Tax Dollars: Pro Sports or Walmart?

The Tampa Bay Times editorial board penned a piece this weekend condemning a corporation that was relying heavily on public resources and dollars to preserve robust private profits.

Of course, it wasn't an editorial about the Tampa Bay Rays or the four big pro sports leagues, which rely on more than a billion tax dollars each year in the U.S.; instead, it was an editorial about Walmart's reliance on police resources that could be used better elsewhere.

Strange, though, how many similarities we could draw between the retail giant's reliance on public resources...and those relied on by pro sports:

Walmart: A retail business that makes questionable claims about jobs & economic impact
MLB: A retail business that makes questionable claims about jobs & economic impact

Walmart: Most of the jobs created are part-time jobs for low wages
MLB: Most of the jobs created are part-time jobs for low wages

Walmart: Drains public resources that could arguably be spent better elsewhere
MLB: Drains public funds that could arguably be spent better elsewhere

The Times wrote "the evidence is overwhelming that Walmart is exploiting the use of the public's human and financial capital to hold down its costs" and that local governments should stand up to the 800-lb. guerilla.

"Local governments...have to keep the public safe...but they also have a responsibility to prudently spend public money and appropriately manage limited resources," the Times wrote.

Why don't we seen many editorials calling on local politicians to do the same on possible stadium spending?

Walmart: Uses tax loopholes to reduce its "fair share" of contributions to public coffers
MLB: Uses tax loopholes to reduce its "fair share" of contributions to public coffers

Walmart: Share profits w/the public that helps subsidize them? Ha!
MLB: Share profits w/the public that helps subsidize them? Ha!

The Times editorial board pretty regularly criticizes corporate welfare.  And while there are certainly some cases to be made for smart subsidies...it really is a head-scratcher why tougher questions aren't more frequently asked about the hundreds of millions of Tampa Bay tax dollars expected to go toward a new retail complex for the Rays to play.

ALSO READ: How the Rays are like Bass Pro Shops
ALSO READ: How the Rays are like BP
ALSO READ: How the Rays are like our national debt

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Saturday, May 14, 2016

Eleven Years Ago, Stu Sternberg Made a Promise

A couple weeks ago, Rays owner Stu Sternberg issued a "non-threat threat" that basically said the Rays may be outta here if local corporations don't start buying up tickets.  He suggested that only when corporations meet the challenge, can the Rays move forward with finding a new stadium solution. This makes total sense from a business standpoint.

It was a similar tone Sternberg struck back in 2005, when he purchased majority ownership of the franchise and put unknown "Harvard Business School graduate Brian Auld" in charge of duct-taping together the Trop:
"If we can't make it work at Tropicana Field, I don't believe - and I could be proven wrong - but I don't believe it automatically works because of some panacea of some other ballpark."
But the preceding paragraph in that same 2005 article seems at-odds with everything Sternberg has done in the 11 years since.  He makes this promise to Devil Rays fans:
"You will never - and I will say it now and hopefully I can say it and you'll follow up - you will not hear the words, "We need to have a new stadium,' " Sternberg told a group of Times editors. "We might like to have a new stadium. We can work with the authorities to have a new stadium and work with businesses to have a new stadium, but it won't be from a sense of "need.'
Stu, I'm following up, as you requested.  I should have done this in 2010, when you told the region you "need to be in a location that's convenient (and) attractive" and "the discussion needs to begin soon" if the team is going to stay in Tampa Bay long-term.

To your credit, you didn't stand behind that 5.5-year-old non-threat threat any more than you stood behind your 2014 non-threat threats that the franchise was "doomed to leave" without a new ballpark soon, or that you'd walk away from the negotiation table after St. Pete's council voted down one of your proposals.

Yet, your flip-flop is pretty evident, even if the "need" for a new stadium isn't the team's only "need."  READ HERE - 2011 post - "Is new Rays stadium a 'need' or 'want?'"

So what prompted the broken promise?  It would seem, Stu miscalculated his investment.

"We have learned (attendance) is not just about winning," Sternberg admitted in 2010, five years after assuming control of the Rays.

But the miscalculation should not be Tampa Bay's cross to bear.
If SeaWorld built a new orca tank the week before Blackfish came out...then claimed a business miscalculation in smaller-than-expected profits...how do you think taxpayers would feel about requests to build them a new state-of-the-art orca tank?

Or if Pitbull had a reputation-damaging scandal that threatened his "Mr. 305" brand...how would taxpayers feel about a request to subsidize his next tour so that he could continue to rain economic impact on Florida?

Similarly, the Rays/MLB miscalculations - and changing business models - aren't the fans' fault.

Furthermore, isn't the "we aren't making enough profit" line a tough sell around here, in a time where Pinellas County is struggling to get its schools in-order and Hillsborough County can't properly fund transportation?  All the while, as MLB closes in on $10 billion a year in revenue?

Sternberg did say when he bought the team the ballpark may need replacing before 2027...but he was not officially asking for public help; just a "partnership" with local governmental and business interests:
"I would expect it to be cooperative, and I think cooperative always works best. Now is it 90-10, or 10-90, or 50-50? You have to look at it and get a sense of where the benefit is coming and where it's going," he said. "We are not going to build a stadium at whatever point in time that comes to line our pockets. If it's necessary to do, and it will be necessary to do at some period of time, it will be done because it works for the community, it works for the area, it makes a lot of business sense and it makes a lot of sense for something that will create a lasting showpiece. "Even if we pay for the whole thing, it will be cooperative. But I don't anticipate us having the ability to ever pay for an entire stadium."
But just as Sternberg didn't forecast attendance struggles like the Rays have experienced, he probably also didn't forecast the MLB revenue boom, largely on the back of its digital properties.  So yes, MLB & the Rays do have the ability to pay for their own stadium.  They just won't.

And they won't officially ask for public money, either.  Because asking for public cash is so 1990s. Nowadays, it's much more en vogue to rely on the non-threat threat of possible relocation!

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Sunday, May 8, 2016

Shadow of the Stadium's 7th Anniversary

May 8 is that special day each year I sit down to eat cake (by myself) because Shadow of the Stadium has survived another 12 months!
It's been another consequential year...unless it hasn't. We're still pretty much at eight years without real developments in the Rays' Stadium Saga...but boy has it been fun chronicling it!

As always, I remind you that the blog's goal is to provide some big-picture perspective on where, when, how, and if a new Rays stadium should be built in Tampa Bay (along with other local sports business news).

Just in recent months alone, this blog has consolidated countless articles about possible Montreal relocation, debunked a ridiculous economic impact claim from the Yankees, and documented Ken Hagan's double-talk on taxes.  But we shall not forget the following stories, among the blog's most-read through 1,300+ posts since May 8, 2009:

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Wednesday, May 4, 2016

Hillsborough Stadium Cheerleaders Trying to Hide All the Other Great Things Bed Taxes Could Pay For

Hillsborough County's politicians are lying in an effort to get a baseball stadium built...and it could cost Tampa a chance to build some really great community assets.

The Times' Steve Contorno has an exclusive story today (now that the Tampa Tribune doesn't exist anymore) indicating Hillsborough Co. is surging toward the $30M/yr mark in bed tax collections, which would allow it to add the magical sixth cent of taxes on any tourist stay in the county.

That could means another $6M/yr in bondable cash (about $75M total) toward construction of a new stadium.  While $75M may be a drop in the $500M bucket, it's a start for cash-starved Hillsborough.

However, that money could go toward a number of other projects, and politicians with baseball on the mind (looking at you, Ken Hagan) don't want you to know it.  They're spreading mistruths, suggesting those bed tax revenues can only be spent on tourism promotion (like ad campaigns) or pro sports facilities. This is a lie.
There's a destructive attitude in Hillsborough (and other places) that if bed tax money can't be used on anything important, you may as well give it to pro sports teams. But productive conversations about the county's future require transparency.

Here's just a few of the things Hillsborough's bed taxes have paid for in the past:
  • The Tampa Riverwalk
  • The Florida Aquarium
  • MOSI
  • Lowry Park Zoo
  • The Straz Center
  • Tampa Bay Black History Fest
  • Local chambers of commerce
And here's a few more things the bed taxes could pay for if they didn't go to pro teams:
  • Arts, as St. Pete has done at the Dali Museum
  • Redeveloping Channelside Bay Plaza
  • Improving Ben T. Davis - or any other Hillsborough beach - into something tourists might want to visit
  • Building a new multi-modal transit center (may require some financial creativity)
  • Any major event that draw out-of-towners
  • Any other project that increases the number of tourists visiting the county
So bookmark this link, and prepare to educate your elected officials on the topic. Because they're going to be fed a lot of mistruths about the bed tax in the next few months.

UPDATE: Here's audio of Commissioner Hagan glossing right over the fact that tourist taxes can go toward any capital project that draws tourists. Then throws out total B.S. number on Steinbrenner Field economic impact.

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