Franchise Owners Revive Stadium Games
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If you haven’t been scanning the real box scores, that is keeping track of who’s winning and losing in the stadium/arena games in the last week, then you might have missed a shift in the standings. Two National Football League owners are seeking about $1.9 billion to fund new stadiums. John York needs the capital for his San Francisco 49ers in Santa Clara, Calif., and Zygi Wilf for his Minnesota Vikings. In Florida, the National Basketball League’s Orlando Magic ownership is looking to replace the 18-year-old city-built arena with a new facility. The owner of the Magic, Rich DeVos, and Orlando-area government officials have an agreement on the table for a $1.1 billion package that would include $480 million for a new arena, as well as money to renovate the aging Citrus Bowl Stadium, and to add a performing arts center. The problem is securing funding for all the projects.
DeVos is willing to put up some money for the arena, and he appeared to have scored a big assist April 27 from the Florida House of Representatives, which granted preliminary approval for a second $60 million sales tax rebate for the team; this would have provided some funding for a new downtown arena. (The legislation would also have given the ownership of the NHL’s Tampa Bay Lightning and of MLB’s Florida Marlins the same sales-tax rebate for improvements to an existing arena, and to fund a new ballpark, respectively.) But the Florida Legislature’s 2007 session ended on May 4, and the state Senate failed to bring up the House bill, instead leaving the issue for 2008.
The major reason that the stadium game was pushed into the foreground is the calendar. The year’s legislative sessions in Florida and Minnesota were coming to a close, and proponents of stadium/arena projects made obtaining public funding for proposals a major priority.
Although York would welcome state funding, he is not relying solely on California state dollars for his $850 million proposal. He recently began a campaign to lobby for local Santa Clara public money for his dream stadium. The first draft of the proposal calls for York to raise 80% of the tab with money earned from the sale of stadium naming rights, sponsorships, personal seat licenses, and other revenue streams. Santa Clara would in turn put up $160 million as a partner in the project. The city of Santa Clara could potentially earmark a portion of its electric utility’s $387 million reserve fund for stadium construction costs. Santa Clara officials have pledged not to raise local taxes in support of a new stadium for the 49ers, but dipping into the electric utility’s reserve fund could force an electric price hike.
Santa Clara would also be on the hook for the cost of between $20 million and $30 million for moving an electric substation that sits on the proposed stadium site as well as building a parking garage — expenditures that are not part of the 49ers’ stadium plan. (A garage could cost as much as $40 million to construct.)
York and Santa Clara officials would like to see a facility opened by 2012, but approval, and ultimately, funding is going to be a major obstacle.
Meanwhile, Wilf will need the political equivalent of a Hail Mary pass to get funding for his $954 million dream stadium in 2007. Wilf went before the Minnesota Senate Taxes Committee on April 28 armed with a pile of fancy color drawings and sketches of the stadium that would replace the Metrodome in downtown Minneapolis, but he did not specify how much money he wanted from state coffers to help fund his stadium village concept. The new football facility would be the centerpiece of a massive development project that would rack up a $2 billion price tag. Wilf is willing to contribute $250 million toward the stadium and has, if nothing else, laid the groundwork for a 2008 legislative push as the clock runs out on the 2007 session.
Although Wilf is probably already taking his place in line for the 2008 legislative session, the owner of the NBA’s Minnesota Timberwolves, Glen Taylor, may be jockeying for position as well. The Timberwolves have put out word that the team’s 17-year-old Minneapolis arena is aging and may have to be replaced in about five years. In 1994, the Minnesota Legislature approved a takeover of the privately owned facility, and it has been owned by the city since 1995.
Seattle SuperSonics owner Clayton Bennett struck out in his attempt to get money for a new arena from the Washington Legislature before its session ended. He is threatening to move his team from Seattle after the 2007–08 season. Bennett is contractually obligated to Seattle through 2010, but should he decide to leave before then, the city’s elected officials can look to a similar case for guidance. The owners of the Milwaukee Braves baseball team wanted to relocate the team to Atlanta in 1965, but the Braves’ minority owner, Bud Selig, sued to block the move, and a judge granted an injunction preventing the Braves from relocating that season. The Braves attendance was awful during that lame duck season and the team moved in 1966.
Some observers speculated that Bennett, a native of Oklahoma, might seek to move his basketball team to Oklahoma City, where the market has opened in the wake of the departure of George Shinn’s Hornets to New Orleans. But Bennett is not sold on Oklahoma City, where the five-year-old arena may not have enough built-in revenue streams to support an NBA franchise on a full-time basis.
The stadiums/arena race continues unabated, and the sky seems to be the limit on sports spending. Just look at this April’s and May’s box scores.