I was on Bill Smith's Internet radio show on Thursday night when the conversation turned to public financing of sports stadiums and arenas. Bill asked whether I thought if we are seeing the end of public financing for sports venues. The quick answer was just look at what has happened this week. Sacramento's city council is entertaining offers from 11 vendors who want to win the right to lease the city's parking spaces (which bring in about nine million dollars in revenue) in exchange for hundreds of millions of dollars so the city can have a down payment to build a new arena.
Santa Clara elected officials went ahead and approved the contracts for the construction of a football stadium that probably will end up costing more than a billion that will be used by the San Francisco 49ers. Santa Clara is going ahead with plans despite a petition drive by local residents who want a referendum on the funding of the stadium. This is a tricky call for Santa Clara elected officials who point out that a June 2010 referendum on building a stadium with some municipal funding was approved by voters and should stand. But the protestors (who managed to get 11,000 signatures calling for a new vote or twice the required number) claim that the terms of the deal have changed since the last vote and that the question should be put to voters again.
A court will decide if Santa Clara residents have a legitimate beef and should go to the polls again.
On Thursday, there was word that elected officials in Minnesota were close to striking a deal with Zygi Wilf for a new Minneapolis football facility for Wilf's Vikings. No details were available during the time of Bill Smith's radio show. On Friday there were more reports that a deal was imminent.
Minnesota in the past half dozen years has found money for a new baseball stadium for the Twins and a new football stadium for the University of Minnesota. The state and local municipalities have spent billions on sports facilities in the past 56 years. The National Basketball Association's Minneapolis Lakers franchise could not get a suitable arena built in the Minneapolis-St. Paul region in the 1950s and the owners threatened to move to various cities including Houston and Kansas City.
In 1960, Lakers owner Robert Short moved his franchise to the year old municipally built Los Angeles Sports Arena. The city had paid $7 million to build the arena. Short is the only owner to move franchises in two different sports. In 1971, Short signed an agreement to move his baseball team, the Washington Senators, into a publicly financed renovated stadium in Arlington, Texas, a city between Dallas and Fort Worth.
Minneapolis officials seemingly were not interested in building an arena for the Lakers franchise. In 1956, Minneapolis jumped into the stadium building business and built a facility knowing that Major League Baseball and the National Football League were interested in the market. In the mid-1960s, an arena was built next to the stadium in Bloomington. St. Paul also built an arena. In the 1970s, the Bloomington stadium was too small for the NFL Vikings and not good enough for the baseball Twins. Vikings ownership threatened to move. Eventually the Metrodome was built for the two teams.
In 1987, the National Basketball Association decided to expand and chose Minneapolis as a home for an expansion franchise. Harvey Ratner and Marvin Wolfenson put up $32.5 million for the franchise fee and decided to build a Minneapolis arena with their own money. By 1994, they could not afford the venture and they sold the franchise to a group led by boxing promoter Bob Arum and the franchise was to be relocated in New Orleans. The NBA blocked the sale and found a local owner who would keep the team in Minneapolis. The arena debt was transferred to government entities and Minneapolis took over the building. The new owner Glen Taylor has been with the franchise since 1995 and is looking for a new or renovated arena as the venue is reaching the end of a productive life span or is in need of major rehab because the high ticket seats may not be of the same quality as a newer facility and more corridor space for restaurants, stores may be needed.
In the early 1990s, the National Hockey League's North Stars owner Norman Green wanted out of Bloomington and talked to Anaheim officials before settling in Dallas. In 1997, St. Paul Mayor Norm Coleman flew to New York and promised NHL official's a St. Paul building. Coleman delivered a building and the NHL returned to the Twin Cities in 2000. The Mall of America sits where the old stadium and the old arena once lived in Bloomington.
In the mid-2000s, elected officials found money for a new baseball park and a college football facility. The football stadium idea has been talked about for years. Once the football stadium deal is complete, Minnesota politicians will tackle the Minneapolis arena situation. That’s how it is when government and sports are partners.
While the Minnesota lawmakers were putting what appear to be the final touches on a new football stadium deal, Seattle officials were reviewing an arena proposal from a San Francisco hedge fund operator Christopher Hansen. Apparently Hansen is willing to put up money for an arena and buy an NBA franchise but no one seems to know just how much public money will be needed even though the plan allegedly calls for no public money. Hansen wants an NBA team and is willing to rent the building at an NHL owner if that owner wants to tap into the Seattle market. That is a problem because most owners want access to revenue streams and may not be workable as people who are behind football stadium proposals in Los Angeles are finding out. Hansen will have to be very creative financially to get an NHL owner interested in his building.
The ongoing saga of Charles Wang's New York islanders and Nassau County elected officials continued. Nassau County doesn't really know what to do with the 77 acres of land that features the Nassau Coliseum and a parking lot and is looking to develop it. Wang has the rights to develop the property but his arena-village concept has been shot down by local politicians. Yet those same politicians are hoping Wang builds an arena with his own money. Wang wants out of the building by 2015 and is playing a leverage game as he has signed an agreement to play a pre-season game against the New Jersey Devils (if the NHL owners don't lockout the players) in October at a new Brooklyn arena which is accessible to Wang's Islanders fan base by train.
There is very obvious interest in a Wang-Brooklyn arena partnership as both sides seem to be talking about bringing the Islanders to Brooklyn as some sort of partner in a strategic alliance with the National Basketball Association's New Jersey Nets franchise. The Nets franchise will be rebranded as the Brooklyn Nets next season.
Not to be outdone, a Canadian city has jumped into the stadium renovation game. On Thursday, Ottawa, which used to be a Triple A city in baseball's minor leagues, put up $5.7 (Canadian) to renovate the city's baseball park so the field is up to Double A standards for the 2013 season. Ottawa elected officials would like to get a franchise in the stadium in 2013.
The answer to Bill Smith's question is easy. Politicians have no problem spending money on stadiums and arenas on the public dime and running up a debt. Whatever financial consequences from that spending will get kicked down the road and the collateral damage may result in the loss of municipal jobs as police, fire, teacher and services may have to be cut to pay debt a facility's debt. Smith lives in Ohio and the best example of irresponsible stadium spending is nearby in Cincinnati and over in Indianapolis with a hospital sold in Hamilton County, Ohio to pay down a debt and layoffs and hikes in taxes in Indianapolis.
But the games must go on.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com and Amazon.
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