Notices
General Discussion and Debate Discuss, Debate, and Converse with other Honda-Tech members in a mature, intelligent manner.
Sponsored by:
Sponsored by:

On Taxpayer-Funded Arenas

 
Old 03-05-2019, 06:32 AM
  #1  
Honda-Tech Member
Thread Starter
 
tron_'s Avatar
 
Join Date: Jan 2012
Posts: 642
Default On Taxpayer-Funded Arenas

I've seen people in here debate taxpayer-funded arenas and cities bending to corporations in a race for jobs and development that generally becomes a race to the bottom in regards to corporate subsidies and tax breaks. Here's a great article that I found yesterday, personally I'm glad this kind of thing is getting more exposure and I know Detroit isn't the only city dealing with this issue.

Has anyone's city gone through something like this? Should taxpayers be on the hook for stadiums if the developer promises to develop the surrounding area? If they fail to deliver, what course of action should be taken? Why do people continue to think that more stadiums = more and better development?

It's a long-ish read so I encourage you guys to click the link and read it there since the graphics help break up the sea of tex.

Cliffs: Corporations demanding taxpayers fund their "developments" which they ultimately fail to deliver on.

https://www.crainsdetroit.com/real-e...oit-delivering
  • When The District Detroit project was first unveiled, it was a 50-block plan billed as transforming the city north of downtown
  • Failure to deliver five years after the district concept's initial unveiling, especially housing, has fueled criticism
  • The DDA was unable to refinance its own $250 million in arena-related construction bond debt last year as easily as it originally thought it could



In May 2017, six men took turns speaking before a wide patchwork of building renderings.

The key speaker, Christopher Ilitch, boasted of a half-dozen new and rehabilitated buildings intended to bring nearly 700 apartments to downtown Detroit in coming years.

Ilitch was speaking at a press conference about the residential launch of his family’s District Detroit project, the sprawling sports and entertainment development unveiled in July 2014 and anchored by a new hockey arena that would be surrounded by what were branded as five distinct new neighborhoods to be created concurrently. They would be robust new residential, retail and office developments.

“The District Detroit will be one of the most unique and exciting places in the country to live,” said Ilitch, scion of the powerful billionaire family that owns the Little Caesars pizza chain along with a casino and the Detroit Tigers and Detroit Red Wings. Ilitch and his family’s Detroit-based Olympia Development of Michigan real estate company had teamed up with a pair of developers on the projects, three of which were to begin in 2017 and three in 2018 for a total of 686 new apartments.

Today, more than 18 months later, there are no shovels in the ground, and it’s unclear if there will be any time soon.

At least two developers have tried to work with Olympia on developing the district, and walked away.

The Ilitches say they have invested $1.4 billion in the district and that it will have an economic impact of more than $2 billion by 2020 and bring thousands of jobs, but the lack of progress on housing is among the things that feed into a growing narrative that Olympia makes big development plans but are only truly committed to delivering on the pieces tied directly to their existing businesses, such as Little Caesars Arena, the new Little Caesars pizza headquarters, along with parking garages and lots.

When The District Detroit project was first unveiled in 2014, it was a 50-block plan billed as transforming the mostly vacant swath of the city north of downtown from empty lots and derelict buildings — many long Ilitch-owned — into a bustling hub of entertainment, shopping, restaurants, housing, offices and public green spaces.

The plan was a veritable city-within-a-city, and it was to be built concurrently with the arena by the Ilitch family, which owns much of the property in the area, and third-party developers.

The promised neighborhoods that had names such as Cass Park Village and Wildcat Corner don’t exist, at least not yet. One, Columbia Park, was going to be busy streets and public green space behind the Fox Theatre. Instead, that area remains the expanse of Ilitch-owned parking lots that it’s been for decades. Those neighborhood names have been stripped from The District Detroit website, and Olympia hasn’t explained why.

Failure to deliver five years after the district concept’s initial unveiling, especially on housing, has also fueled criticism that the Ilitches took $200 million in public money to get a hockey arena built, but largely haven’t yet delivered on most of the rest of what was pitched to the public in the colorful renderings: housing, hotels and revitalized historic buildings.





Wall Street, as revealed in interviews and within Detroit Downtown Development Authority documents, has noticed. Financiers’ apparent lack of enthusiasm for development delivered so far meant the DDA was unable to refinance its own $250 million in arena-related construction bond debt last year as easily as it originally thought it could. Simply put, the bankers thought there would be more to The District Detroit, and thus more tax revenue to pay back the bonds, by now.

Crain’s has examined documents and interviewed developers and other key figures over several months to construct an account of why The District Detroit has not yet become the bustling, vibrant residential and entertainment district promised.

Multiple requests for interviews with Ilitch or other executives with the family’s Olympia Development real estate business weren’t granted.

Olympia issued a statement that says, in part: “Several years ago, we painted a conceptual vision of what would become Little Caesars Arena and The District Detroit. In the past 18 months, the award-winning Little Caesars Arena opened, numerous other projects have been completed or are underway, and The District Detroit is a reality. We are very proud of these accomplishments. As our vision continues to evolve, grow and expand, so does our confidence and excitement about the future of The District Detroit. We look forward to sharing these plans at the appropriate time.” (Read the statement in full.)




Those familiar with the Ilitch real estate development and business strategies laid out some simple explanations for why the district does not yet look like the original renderings.

In the most generous of terms, the housing has been waylaid and hampered by delays in securing financing and because of disputes about Ilitch control and micromanagement of projects and abrupt changes in plans. That prompted at least one developer to abandon its participation in the district.

Other developers have privately said they either steered clear of working with Olympia Development, part of the Ilitch Holdings Inc. business empire that says it had $3.8 billion in revenue last year, because of the Ilitch control they said is involved and terms Olympia has demanded, or they have tried to work with Olympia and failed.

An eyeball test of the district shows several completed pieces, such as the arena, but there are the ubiquitous parking lots — well-maintained, fenced and nicely paved — that punctuate block upon block north of Grand Circus Park. That’s where the original vision encompassed bistros, cafes, shops and green spaces.




Historic, solidly constructed buildings that the Ilitches have accumulated over the decades in the blocks surrounding the arena generally remain boarded up or, in at least one case, entirely exposed to the elements. Others had been windowless for years until recently.

While District Detroit progress seems slow to take shape, rival developers such as Dan Gilbert and others have projects actively coming out of the ground around it.

“All of us have multiple projects going on, especially Dan Gilbert, The Platform, Sachse,” said developer Mike Ferlito, whose company built the ground-up $6 million Selden condominium development that houses the popular SheWolf restaurant north of The District Detroit. He’s also putting the finishing touches on the $13 million redevelopment of the Lawyers Building on Cadillac Square into the 45-unit The Randolph apartment building.

The president of Detroit-based developer Ferlito Group praised the Ilitch family for the work they’ve done in the city, including the Fox Theatre redevelopment, moving Little Caesars downtown and building Comerica Park and Little Caesars Arena.

“They should continue their promise to the city and the taxpayers and start building these residential and office buildings, because there is a huge hole between downtown and Midtown that needs to be filled,” Ferlito said.

Olympia said it has delivered on many of its promises, but what it points to is mainly inside the arena itself. The 2014 renderings suggested that far more than the arena and nearby offices and parking garages were coming to downtown.

“Our initial plan was to open Little Caesars Arena and the development immediately surrounding the arena at one time,” the company said in its statement. “This was largely accomplished when the arena opened in September 2017, as well as the Via Concourse, dining and shopping opportunities (like Mike’s Pizza Bar, The District Market and the Team Store), Chevrolet Plaza, Budweiser Biergarten, and the surrounding office buildings at 2525 Woodward and 52 Henry Street.”

The M Den and Frita Batidos have also been announced as tenants near the Fox Theatre.

Prior to the 2014 district launch, Olympia paid University of Michigan professor Mark Rosentraub for a report that estimated the mammoth arena project would create 8,300 construction jobs and 1,100 permanent jobs, along with $1.8 billion in economic impact for the city, region and state. Such reports are commonplace to justify tax dollars for private projects, but decades of academic study nationally cast doubt on the economic sense of public subsidies for sports stadiums.

Francis Grunow, chair of the Neighborhood Advisory Committee for what at the time of its formation was called the Arena District, said Olympia Development has “unequivocally failed” at delivering on what was sold to the public.

“The District, as it has been dubbed, has not fulfilled the promises that were presented with the renderings and words of Olympia Development,” Grunow said. “We have fewer residents than we did since the Ilitches have been involved. We have fewer small businesses in the district since the Ilitches have been involved. ... Regardless of what you may think of the Red Wings or Tigers this year, they have unequivocally failed at delivering on the vision they presented, which was a livable, walkable community with local retail, businesses and a place where people want to be after the games and shows are over.”

That perception of a lack of tangible momentum is having consequences not just on Temple or Charlotte streets, or Cass or Second or Adams avenues. Wall Street has noticed, too, when it came time to refinance bonds.

At the 2017 event where Ilitch’s projection of 686 apartments was rolled out, Detroit Mayor Mike Duggan and a top deputy, Arthur Jemison, talked about the importance of affordable housing. The aim in a city fighting poverty was to prevent a widening gap between “the haves and the have nots” as rents rise downtown.

At the event, longtime Detroit developer Emmett Moten Jr. and affordable-housing development specialist Gerald Krueger discussed their efforts as part of plans to develop Olympia-owned property.

Moten’s team is still working on lining up financing for its project, said Scott Allen, a seasoned developer who is also one of the investors along with Moten attempting to turn the historic Olympia-owned United Artists Building, a hulking structure at 150 Bagley St. into 148 apartments with first-floor retail.

“We are hoping to begin construction some time this year, probably the fourth quarter,” Allen said. “It’s a complicated deal to finance, and we’ve had to work through and jump through some extra hoops. We think we are on the right track. It involves HUD 221(d)(4), and it just takes a minute.”

The Housing and Urban Development 221(d)(4) program is a 40-year multifamily construction loan that requires HUD evaluation of the market, demand and other issues pertaining to the project.

But while Moten’s Bagley Development Group LLC is confident it can pull off its plans for the United Artists, what happens with the other three buildings targeted for renovation is uncertain.

Detroit-based American Community Developers, Krueger’s company, bolted before finalizing agreements with Olympia over what has been portrayed by those close to the negotiations, in part, as tensions over control of the five projects it was handling and changes in plans: The redevelopments of the Hotel Eddystone into 96 apartments; the Alhambra Apartments into 46 apartments; Hotel Fort Wayne into 163 apartments; and construction of two new apartment buildings, One Eleven Henry with 80 apartments and Arena Lofts with 153 apartments.




“For the two new construction buildings, Olympia decided that those building pads were best-suited for office rather than residential, so they elected to do that and end our involvement in those two developments. On the three historic properties, we could not reach an agreement on certain terms with Olympia which affected our ability to move forward,” ACD Vice President Mike Essian said in a statement to Crain’s.

Little progress has been made on the Hotel Eddystone, the Hotel Fort Wayne and the Alhambra since ACD’s departure.

The Eddystone’s twin, the Park Avenue Hotel, was imploded in 2015, which the city permitted only because the Ilitches promised to redevelop the Eddystone within a year of the Little Caesars Arena opening. That deadline was in September 2018, with no apparent consequences to date. (ODM said in its statement that work on the Eddystone is “currently underway.”)

The base of the building at 120 Henry is partially built, but winterized; it is now slated to be office space when it’s completed. Next door at 111 Henry, the project formerly known as Arena Lofts has also been reprogrammed as offices and is also wrapped in white tarps to keep out the weather.




The lack of residential development has affected business owners in the district that had planned on having residential nearby. John Lambrecht, co-owner of Bookies Bar & Grille and owner of Grosse Pointe Farms-based Lambrecht Realty LLC, relocated his tavern to Cass Avenue, within a couple blocks of the future arena site, in 2009.

The spot was picked, in part, as a bet on future Red Wings and concert crowds. Lambrecht said the business has enjoyed a nice revenue uptick since Little Caesars opened in September 2017, but there would be even more had the rest of the district been built — especially the housing.

“Having the arena three blocks away has been good for business,” said Lambrecht. “But there are more pieces to the puzzle that need to get filled in, especially right now where the city has a great demand for people to live and work downtown. We should take advantage of the momentum that the city has right now. The Ilitches obviously have a vast amount of real estate holdings in prime development areas. And to a point, there is a responsibility they have to see those areas get developed because it will help the neighborhood and the city as a whole.”

Meanwhile, housing is being built east of Woodward — but not by Olympia or its partners.

A handful of towering construction cranes dot Detroit’s dark February skyline. Cherry-pickers, road closures, fencing, structural steel and insulation, streets marked with muddied tracks from construction traffic — that’s all in the Brush Park neighborhood, directly across Woodward Avenue from the district.

East of Woodward, the city’s spine, crews have been working for more than two years to build a 410-unit residential development on 8.4 acres of what was largely vacant land. Gilbert and other investors are behind the City Modern project, which expects to have some units ready for occupancy this year. Gilbert also has his eyes set on building more than 900 units on the former Brewster-Douglass housing projects site, as well, totaling 23 acres.

All told, a couple of thousand apartments and other residential units are in the works, plus tens of thousands of square feet of retail space.




Yet it’s not only Gilbert’s hefty wallet that’s paying for it.

Six months before Olympia Development announced its residential launch, Detroit-based developers Broder & Sachse Real Estate Services Inc. and Woodborn Partners LLC completed the $65 million Scott at Brush Park a couple of blocks north of the arena, which brought nearly 200 apartments to the market before LCA opened.

And American Community Developers — which exited its plans to create 538 new units in the District Detroit — now has a separate $46 million project to build 180 residential units in Brush Park.

Half of those units will be designated affordable, and half of those deeply affordable, for those making about $16,000 to $28,000 a year with rent starting around $400 to $700 per month.

(When the project was being announced in July on the vacant Brush Park land, Mayor Duggan pulled ACD’s Essian aside and lamented that his company was no longer working with Olympia on its projects, a person with knowledge of the conversation said. Essian declined comment.)

ACD also has projects in neighborhoods including southwest Detroit, downtown, Midtown, New Center and around Oakman Boulevard.

“ACD continues to work on many other exciting developments in the city of Detroit, and we look forward to several announcements in the near future. We wish Olympia Development nothing but the best and are supportive of their continued efforts on all their projects and to make The District Detroit a success,” Essian said in a statement.

Other developers are working in the area, too, including Detroit-based City Growth Partners LLC and the Nyman family, which is working in the area straddling Midtown and Brush Park.

Closer to the hockey arena, another group, also not working with Olympia Development, that includes Christos Moisides, David Sutherland and Gretchen Valade has commenced at 640 Temple. Unlike ACD, however, the 640 Temple group did not work with the Ilitches.

Nor did Ferlito, whose Selden condominium project north of the District wrapped up last year. Nor did Joel Landy, the longtime Detroit developer who has completed the redevelopment of the nearby Scott Mansion into multifamily residential after years of decay.

The six residential projects that appear to have stalled are emblematic of a broader pattern for The District Detroit: Grand visions, but only partial execution.

There have been serious discussions about high-rise buildings with Baltimore-based Cordish Cos. in the past. But that was before the developer of what it calls “Live!” mixed-use districts around sports arenas quietly stopped working with the Ilitches last year, according to sources familiar with the matter. Crain’s reported Cordish’s departure in September.

In an interview last year, Chris Granger, group president of sports and entertainment at Ilitch Holdings Inc., said Cordish was still working with Olympia but didn’t go into detail. Multiple emails sent to Cordish over the past several weeks seeking an update weren’t returned.

There were plans for a pair of residential high-rises overlooking Comerica Park in collaboration with Cordish, Crain’s reported a year ago.

The Adams Tower would be on an Ilitch-owned surface parking lot and effectively wrap around the Grand Valley State University building — blocking its CoPa view — next to the Detroit Athletic Club. A source briefed on the plans said last year that the new tower would have baseball stadium-style seating for residents on its rooftop. The Montcalm Tower would be at Woodward and Montcalm Street, next to St. John’s Church.

But so far, there has been no forward momentum on those projects now that Cordish has bowed out.

Detroit-based Ventra LLC, former Detroit Economic Growth Corp. chief George Jackson’s company, had been serving as The District Detroit multifamily residential consultant but stopped working with ODM last year.

In addition, there was to be a hotel that took the place of the Hockeytown Cafe across from CoPa, as well as one immediately across from the new hockey and basketball arena.

Retail space that has been expected to line the Woodward overpass over I-75 has not moved forward.

“The reality is that major development often takes time,” said Jemison, the city’s chief of services and infrastructure. “There are projects outside of The District Detroit that were announced several years ago that are still not under construction, due to a variety of unexpected factors. When you take on a 50-block redevelopment, it’s not surprising that some aspects will move more quickly than others.”

Crain’s reported in August that the company hired Keith Bradford, a former Walt Disney Co. executive who had been vice president of the rebranded and expanded Downtown Disney, to oversee The District Detroit and help it move along as senior vice president of operations and development. Olympia has also been on a hiring spree, seeking to woo real estate professionals from other companies in the region with pay 30 percent or greater than what they were making at previous positions along with other perks.

New buildings are one thing, and preserving existing buildings is another.

Historic preservationists have had a complicated, and at times testy, relationship with the Ilitch family over the last several decades.

While they give credit to the family for the $12 million renovation of the Fox Theatre in the late 1980s, which won the National Preservation Award from the National Trust for Historic Preservation in 1990, in more recent years, the two sides have been at odds over tearing down old buildings instead of restoring them.

That is a thread that has manifested itself in The District Detroit effort, largely as the Ilitches have sought to demolish more buildings in the area. Those moves have largely been stymied by Detroit City Council or administrative action.

Two sources familiar with Olympia operations speaking on the condition of anonymity said Olympia’s decision matrix on whether a building should be torn down come to whether the property will be more profitable as parking or if it’s redeveloped. “Ninety-nine out of 100 times,” one source said, Olympia chooses parking.

In 2017 it sought to tear down the Hotel Ansonia and Atlanta Apartments on Cass Avenue at the Fisher Service Drive, as well as a vacant apartment building at 427 Henry St. A house at 664 Charlotte St. also was slated for the wrecking ball. Ed Saenz, Olympia’s manager of communications and media, said in a statement at the time that the Ansonia and Atlanta “have been considered by numerous residential developers and found to lack viable redevelopment potential.”

“Going forward, this area is envisioned for the type of high-density, mixed-use development that will contribute to Detroit’s globally recognized comeback and create additional construction and construction-related jobs.” Six months ago, it sought to tear down the Alden Apartments at 145 Temple St. next to where Olympia erected a new parking deck, arguing the building is “structurally unsafe and not viable for redevelopment.”

The Ilitches still take heat from preservationists for the 2005 demolition of the Madison-Lenox Hotel across from the Detroit Athletic Club in the run-up to Super Bowl XL, although that demolition was conducted by the city after the Ilitches had twice tried to gain approval from the Historic District Commission to level it. The city deemed it structurally unsound.

Adams Theatre/Fine Arts Building on Grand Circus Park and the Chin Tiki restaurant in Cass Corridor, which was far less historic, are other examples of Ilitch buildings being razed to the ire of the preservation community.

And more recently, in July 2015, the Ilitches’ Olympia Development of Michigan imploded the historic Louis Kamper-designed Park Avenue Hotel — which had “ZOMBIELAND” spelled out in graffiti across its top story.

That demolition was allowed only because the Ilitches promised to redevelop the Hotel Eddystone by the time the arena’s one-year anniversary was marked. The building, however, still sits windowless, although crews were seen cleaning it out late last year and Detroit-based Kraemer Design Group has been hired to serve as a historic consultant on the project.

City Council member Raquel Castañeda-López has asked the city’s legislative policy division for a report outlining a list of commitments made by the Ilitches and to see what recourse the city has.




In addition, ODM received approval from the Historic District Commission to start work on the Women’s City Club building at 2110 Park Ave. and the Detroit Life Building at 2210 Park Ave., which are in the Park Avenue Historic District.

The Women’s City Club building is being turned into 47,000 square feet of office space along with 10,000 square feet of first-floor retail in a project slated to cost $25 million, while the Detroit Life Building is slated to get a $17 million renovation to turn it into 32,000 square feet of office and 6,000 square feet of retail.





“The Detroit Life building on Park Avenue is undergoing active construction and an architect and construction firm are now under contract for the renovation of the Eddystone,” Jemison said. “We expect to have an agreement in place in the near future to establish a firm timeline for this project.”

Robert Gibbs, managing principal of Birmingham-based Gibbs Planning Group Inc., praised what Olympia has done so far with the district and predicted it will take a generation for the district to fill out but is critical of the destruction of historic buildings as part of redevelopment.

“It is unfortunate that some of the historic buildings are being razed for parking and other uses,” he said via email. “Studies have shown that historic buildings increase property values and desirability, especially by millennials. Generally, the region should make more of an effort to preserve and adaptively reuse buildings. This would help make Southeast Michigan more competitive with booming cities such as Boston and Philadelphia.”

The Ilitches have completed hundreds of millions of dollars in development in the district.

The Wayne State University Mike Ilitch School of Business was largely bankrolled by a $40 million donation from Mike and Marian Ilitch to the Detroit university. Of that, $35 million went for construction of the 120,000-square-foot building at Woodward Avenue and Temple Street that opened last year. The remaining $5 million from the donation is for an endowment for the school itself.

The $150 million midrise Little Caesars Global Resources Center is expected to open this year after two years of construction that was delayed by an issue involving the 234,000-square-foot building’s unique glass facade that has triangular panels designed to look like pizza slices. The snag put the project at least nine months behind schedule. A source familiar with the project said Little Caesars employees are expected to start moving in starting in April.

And the proposed $65 million Detroit Medical Center Sports Medicine Institute was announced in June and work is expected to begin early this year on the 127,000-square-foot building sandwiched between the Ilitch school and the arena on Woodward. It will treat athletes and employees of the Red Wings and Tigers, as well as the general sporting public. It’s slated to open next year.

DMC is taking 50,000 square feet in the building, and Grand Rapids-based law firm Warner Norcross + Judd LLP is taking another 30,000 square feet.

Warner Norcross is just the second major office tenant not affiliated with the Ilitches to move into the district. The other is Google, which opened a 29,000-square-foot office next to the arena last year and has plans to expand it by an unknown amount. “As a result of these efforts, more than 20,000 construction and construction-related jobs and more than 3,000 permanent jobs have been created,” ODM said in its statement. “More than 200 new development projects have been announced. And more than $2.8 billion has been invested in the area. All of this investment directly led to the Detroit Downtown Development Authority’s highly successful bond refinancing, helping to give stability to the city’s development planning.”

“Future developments in The District Detroit will only add to the area’s growth and revitalization, serving a significant role in Detroit’s amazing comeback. As our development plans continue to evolve, we are confident in our city, our community and in our collective future.”



tron_ is offline  
Old 03-05-2019, 06:34 AM
  #2  
Imgur Lives Matter
 
90hatch94dsm's Avatar
 
Join Date: Feb 2005
Location: on a bed of #8 stone
Posts: 330
Default Re: On Taxpayer-Funded Arenas

its going to trickle down any minute now
90hatch94dsm is offline  
Old 03-05-2019, 06:35 AM
  #3  
C-A-P-S CAPS CAPS CAPS
 
The GreenD16's Avatar
 
Join Date: Jun 2002
Location: Stuck in traffic on the capital beltway.
Posts: 1,443
Default Re: On Taxpayer-Funded Arenas

Literally the worst.
The GreenD16 is online now  
Old 03-05-2019, 06:37 AM
  #4  
Bloody Beaver
 
.Beaver's Avatar
 
Join Date: Jun 2002
Location: Ulft, NL
Posts: 16,599
Default Re: On Taxpayer-Funded Arenas

I love paying extra sales tax for a stadium that I will NEVER go to and have never been to.
.Beaver is offline  
Old 03-05-2019, 06:38 AM
  #5  
Imgur Lives Matter
 
90hatch94dsm's Avatar
 
Join Date: Feb 2005
Location: on a bed of #8 stone
Posts: 330
Default Re: On Taxpayer-Funded Arenas

Originally Posted by .Beaver View Post
I love paying extra sales tax for a stadium that I will NEVER go to and have never been to.
assuming you can afford to go in the first place
90hatch94dsm is offline  
Old 03-05-2019, 06:38 AM
  #6  
Imgur Lives Matter
 
90hatch94dsm's Avatar
 
Join Date: Feb 2005
Location: on a bed of #8 stone
Posts: 330
Default Re: On Taxpayer-Funded Arenas

inb4 someone tries to compare it to a school or hospital
90hatch94dsm is offline  
Old 03-05-2019, 06:42 AM
  #7  
Cole Trickle
 
Join Date: Nov 2018
Posts: 164
Default Re: On Taxpayer-Funded Arenas

I've read books about this subject because I'm bigly interested in it.

I am ready to pop off ITT if anyone defends these bullshit programs.

There is ZERO evidence that stadiums actually benefit cities, there's actually more evidence that they hurt cities.

If cities stopped paying out, the teams would pay for their own stuff, it is that simple.
moopmoop is offline  
Old 03-05-2019, 06:59 AM
  #8  
Imgur Lives Matter
 
90hatch94dsm's Avatar
 
Join Date: Feb 2005
Location: on a bed of #8 stone
Posts: 330
Default Re: On Taxpayer-Funded Arenas

evidence?

pshaw
90hatch94dsm is offline  
Old 03-05-2019, 07:01 AM
  #9  
816d16 owes me money!
iTrader: (1)
 
usdm420's Avatar
 
Join Date: Nov 2003
Location: Sofa King
Posts: 4,533
Default Re: On Taxpayer-Funded Arenas

VEGAS BABY!
usdm420 is offline  
Old 03-05-2019, 07:04 AM
  #10  
Prairie Dog Breeder
 
93Accord117's Avatar
 
Join Date: Oct 2005
Location: Orcas Isl, WA
Posts: 469
Default Re: On Taxpayer-Funded Arenas

**** no, taxpayers shouldn't pay for ****! Unless it is built by the government it should not receive any such funds. Not to mention, look at how wealthy the NFL is as an entity, they can build new stadiums with their own dime if they think it will extend their future.
93Accord117 is offline  
Old 03-05-2019, 07:07 AM
  #11  
Cole Trickle
 
Join Date: Nov 2018
Posts: 164
Default Re: On Taxpayer-Funded Arenas

Originally Posted by 93Accord117 View Post
**** no, taxpayers shouldn't pay for ****! Unless it is built by the government it should not receive any such funds. Not to mention, look at how wealthy the NFL is as an entity, they can build new stadiums with their own dime if they think it will extend their future.
The city governments do build it.

They then hand out free rent to the teams, who then sell naming rights to a stadium they haven't paid for in anyway, take all the profits from the events within them and complain in the next 8-12 years that their new arena is outdated and needs to be remodeled.

Also on the taxpayer dime. We know exactly how it works.

Miller Park (the stadium beav alluded to) was initially promised to Milwaukee as a stadium Bud Selig would pay for.

It wound up costing tax payers around one half of a billion dollars with zero economic benefit to the area around it.
moopmoop is offline  
Old 03-05-2019, 07:12 AM
  #12  
Prairie Dog Breeder
 
93Accord117's Avatar
 
Join Date: Oct 2005
Location: Orcas Isl, WA
Posts: 469
Default Re: On Taxpayer-Funded Arenas

Originally Posted by moopmoop View Post
The city governments do build it.

They then hand out free rent to the teams, who then sell naming rights to a stadium they haven't paid for in anyway, take all the profits from the events within them and complain in the next 8-12 years that their new arena is outdated and needs to be remodeled.

Also on the taxpayer dime. We know exactly how it works.

Miller Park (the stadium beav alluded to) was initially promised to Milwaukee as a stadium Bud Selig would pay for.

It wound up costing tax payers around one quarter of a billion dollars with zero economic benefit to the area around it.
I should have articulated my point better - unless the entity was built for by the government and serves the public/greater good then it should not receive ANY funds. But yes, I agree with all your points. Stadiums are garbage and also the definition of our wasteful society, where restoration never occurs and new ones are built to last a finite time, like 20ish years.
93Accord117 is offline  
Old 03-05-2019, 07:12 AM
  #13  
816d16 owes me money!
iTrader: (1)
 
usdm420's Avatar
 
Join Date: Nov 2003
Location: Sofa King
Posts: 4,533
Default Re: On Taxpayer-Funded Arenas

Originally Posted by moopmoop View Post

They then hand out free rent to the teams,
Raiders are paying Oakland $8M in rent in 2019.....so I don't think this is always the case.
usdm420 is offline  
Old 03-05-2019, 07:14 AM
  #14  
Honda-Tech Member
Thread Starter
 
tron_'s Avatar
 
Join Date: Jan 2012
Posts: 642
Default Re: On Taxpayer-Funded Arenas

Bigly deferring to moop on this topic. I know we feel the same way about this but he approaches this topic with a level of knowledge and rigor that I cannot match.

Can confirm the "District Detroit" is just a sea of parking lots. They even close down public streets (illegally) to funnel people into their parking lots that you're paying up to $50 to park in.
tron_ is offline  
Old 03-05-2019, 07:15 AM
  #15  
Official Snowflake of GDD
 
Join Date: Feb 2007
Location: Cincinnati OH
Posts: 146
Default Re: On Taxpayer-Funded Arenas

Originally Posted by 93Accord117 View Post
I should have articulated my point better - unless the entity was built for by the government and serves the public/greater good then it should not receive ANY funds. But yes, I agree with all your points. Stadiums are garbage and also the definition of our wasteful society, where restoration never occurs and new ones are built to last a finite time, like 20ish years.
Who is to say what serves the public/greater good?
UC Nick is offline  
Old 03-05-2019, 07:15 AM
  #16  
eight equals equals equals D
iTrader: (2)
 
Tim2179's Avatar
 
Join Date: Jul 2003
Posts: 12,886
Default Re: On Taxpayer-Funded Arenas

I don't feel strongly one way or the other. It's got to be taken on a case by case basis and voted on by the taxpayers.

Counterpoint: Should banks not lend to homeowners for mortgages? Should people pay cash for the homes they live in?

The article below points out that the Orioles pay interest on the loan they got and have paid back more than double the original loan amount, and it continues to do so.

Orioles payments to stadium authority exceed original cost of Camden Yards

JEFF BARKER APRIL 17, 2017Twenty-five years after Oriole Park at Camden Yards opened, the Orioles have paid the state $255 million in rent and admission taxes — more than the stadium's sticker price — and state officials say Maryland got a good deal even as it continues to spend $15 million a year to pay off the bonds.

Documents obtained from the Maryland Stadium Authority show Oriole Park provides the state money — and costs it money — in relatively equal amounts each year. That doesn't include the less measurable impact the stadium has on consumer spending, state tax revenues and the city's image.

"Maryland has not done nearly as poorly as some but has done worse than others," said Dennis Coates, a professor of economics at the University of Maryland, Baltimore County, who has long questioned the benefits of government support for sports venues.

Since Camden Yards opened in 1992, Coates said, many other baseball and football team owners have demanded costly "bells and whistles," and some stadiums already have had shorter life spans than Oriole Park.

The club's lease is due to expire at the end of 2021, though the Orioles have the option to extend it for five years. While everyone expects the Orioles would continue playing at Camden Yards, given the club's deep Baltimore roots and commitment to the city, everything else could be on the table, including lease terms and updates in and around the stadium.Camden Yards through the yearsUnder the terms of the lease, the Orioles pay the stadium authority varying percentages of ticket sales, stadium advertising revenues, parking revenues, concessions sales and suite and club-level revenues. The lease makes the authority responsible for maintenance and repairs while the team provides ushers, ticket-takers and other game-day staff.

Documents show the authority has received an average of $6.4 million in annual rent from the team, plus $4.1 million a year as its share of state admissions taxes. The total, through the fiscal year ending June 30, 2016, is $255 million.

That compares favorably with the stadium's original $225 million price tag, including $100 million for land acquisition and $125 million for the stadium.Opening Day at Camden Yards through the yearsThe state also rents out the the brick B&O Warehouse, the stadium's right field backdrop, collecting about $4 million a year, the authority said.

But, as Coates and others point out, the state's tab is considerably higher when financing costs are included.

The stadium authority said it pays about $15 million a year in debt service — principal plus interest — on the 30-year bonds issued to pay for Camden Yards. The bonds are to be fully paid off by the end of 2019 at a total cost of about $450 million, about twice the stadium's initial cost.

The debt service, however, is paid with Maryland Lottery proceeds appropriated each year by the General Assembly. The authority uses the team's rent money for ballpark operations.

Still, state officials — and at least one regional economist — declare Camden Yards a bargain. Cheap by today's standards, the red-brick stadium was an instant hit with fans and the forerunner for a generation of retro, baseball-only parks in downtown locations around the league.

"It's unquestionable this has been a good thing for the city and state," said Michael Frenz, the authority's executive director. "A lot of the value is because the park has become so iconic. Every time a game on is on TV there are all these beautiful shots of Baltimore. There is value in that. Think about how much Camden Yards helps Baltimore in terms of convention business."

Oriole Park is "our Fortune 500 company," said Terry Hasseltine, a stadium authority vice president who seeks to attract sporting events to Maryland. "When you go out nationally or internationally, you're talking tens of millions, if not hundreds of millions of dollars, in media value because of the brand equity."

Oriole Park was approved as part of a stadium package. After the Colts left Baltimore for Indianapolis in 1984, state lawmakers approved a pair of stadiums in 1987 with the goal of keeping the Orioles in the city and trying to attract a new NFL club.

After being burned by the Colts, the state's principal objective was securing a commitment by the Orioles to remain in the city, said Herb Belgrad, the former stadium authority chairman when the ballpark was built.

Because the stadium was intended as an urban development anchor, the state believed it would receive a solid return on its investment. It didn't require the Orioles to reach specific economic milestones.

"We didn't talk in those terms," Belgrad said. "After our experience with the Colts, we were all very paranoid. The team achieved very favorable terms for them to remain in a new park. What we achieved was an economic benefit to the Baltimore metropolitan area that was significant."

The promise the team made was "to a long-term lease and to make Baltimore their home for the duration, and that obviously has been fulfilled," said Alan Rifkin, who is now counsel to the Orioles but earlier served as chief counsel to then-Gov. William Donald Schaefer. Rifkin said the club has "overdelivered" with its impact on spending and civic pride.

Spending associated with games at Oriole Park averaged $331.3 million in the 2014 and 2015 seasons, according to a recent study for the stadium authority by Crossroads Consulting, a Florida firm. The ballpark supported an average of 2,440 jobs each year, it said. And the games generated about $22.5 million in state tax revenues over the two years.

The impact of fan spending and other stadium economic benefits is often the subject of debate in the academic community.

"Regarding the economic returns to the community, the consensus among economists is that these are too small to be able to measure, if they exist at all," said Roger Noll, a Stanford University economist.

But economist Anirban Basu called called Camden Yards "an enormous economic winner for the city and the state."

"It is of course possible that a city or state can end up spending too much, but Camden Yards was a bargain the day it was built," said Basu, CEO of the Baltimore-based Sage Policy Group. "One cannot imagine what it would mean for Baltimore without Oriole Park at Camden Yards and the Orioles and it should be noted Baltimore could be in a situation without it — of having no professional franchises."

M&T Bank Stadium, home of the Ravens, opened in 1998 at a cost of about $220 million, not including interest on the bonds. The team doesn't pay rent but — unlike the Orioles — reimburses the stadium authority for the cost of operations and maintenance. Those payments, plus admissions taxes, have totaled $221.8 million through last June, according to an authority document.

The Orioles and stadium authority have each spent millions of dollars over the years on upgrades, including a rooftop deck in 2012 paid for by a stadium improvements fund controlled by the authority and the team.

Before this season, the team paid for a new field, and the authority funded new LED lighting.

The Orioles and the state could potentially tap several different revenue sources for future renovations.

The club could use its own funds. The state holds a capital expenditure account that might be used. And since there is some retired debt on Camden Yards, new bonds could be issued to finance improvements.

The Ravens said in January they are investing $120 million in M&T Bank Stadium as part of a three-year project that will add elevators and escalators, enlarge the end zone video boards and improve the sound system and kitchen facilities. The stadium authority pledged to spend an additional $24 million for improvements.

"Many economists will still make the claims these types of investments do not make sense," Basu said of Oriole Park. "This is a quality-of-life amenity. It's an amenity that helps maintain social cohesion."
counterpoint counterpoint:

Was Camden Yards worth it?

LOUIS MISERENDINO MARCH 26, 2012Opening Day is almost here — time to renew a Baltimore tradition and celebrate the 20th anniversary of Oriole Park at Camden Yards. With offseason renovations complete, the best ballpark in baseball looks more beautiful than ever.

The city's economic development office is excited, too. Tens of thousands of fans decked out in orange and black will spend money downtown, and a television audience will see aerial views of Camden Yards, with its attractive waterfront surroundings.

One lingering question, however, is whether the taxpayer-funded ballpark — and its neighboring football stadium — has done what its proponents promised.

"It's going to help us fulfill our dreams not only on the athletic field but in the field of economic development," pledged then-Mayor Kurt L. Schmoke in 1992. "When you think about the number of jobs it will create and the number of people it will draw, it's great," added then-Gov. William Donald Schaefer. Herbert Belgrad, then chairman of the Maryland Stadium Authority, called the ballpark "the jewel" in Baltimore's "crown of redevelopment."

Just as Oriole Park started the trend toward retro-style ballparks, Baltimore became the model for using sports stadiums to spearhead downtown-focused urban renewal. The imitators are many: St. Louis, Pittsburgh, Cincinnati, Cleveland and Detroit have built downtown baseball and football stadiums as centerpieces of their redevelopment programs.

Clearly, this approach has made their downtowns more fun, but it comes at a steep cost: the hundreds of millions spent on stadiums were not available for new schools, better roads, improved parks or other infrastructure in neighborhoods.

None of the cities that banked on downtown "stadium stimuli" have reversed their population losses. Between 2000 and 2010, Baltimore lost 30,193 residents (4.6 percent of its population), St. Louis, 28,895 (8.3 percent), Pittsburgh, 28,859 (8.6 percent), Cincinnati, 34,340 (10.4 percent), Cleveland, 81,588 (17.1 percent), and Detroit, 237,493 (24.9 percent). Meanwhile, some cities that have refused to subsidize stadiums have fared much better.

Consider Boston. (Orioles fans understandably might not appreciate this comparison, but bear with me.) There, the baseball team plays in a 100-year-old ballpark that is privately owned by a property tax-paying entity. The football team plays in a suburb roughly 20 miles from the city's center.

Yet Boston is thriving. In fact, Boston city proper is much healthier and more vibrant than Baltimore City precisely because, three decades ago, Boston took a more organic approach to urban renewal.

Before 1980, Boston was in worse shape than Baltimore. From 1947 to 1972, manufacturing jobs declined by 43 percent in Boston versus 25 percent in Baltimore. From 1950 to 1980, Boston's population fell 30 percent compared to Baltimore's 17 percent. In the 1970s, Boston dealt with mob families and desegregation busing riots. By 1975, Boston's crime rate was higher than Baltimore's, and by 1979, Boston's median household income was lower than Baltimore's.

But in 1980, Massachusetts voters passed Proposition 21/2 , forcing Boston to cut its effective property tax rate by an estimated 75 percent within two years. The property tax cap instantly made Boston more hospitable to private investment and more attractive to employers and residents. Boston was set on a path to greater prosperity, increased public safety and enhanced quality of life.

Baltimore has focused instead on "big footprint" projects made possible by public subsidies and tax breaks for politically connected developers. Hearing our civic leaders enthusiastically promote the "game-changing" effects of such projects has become as much a Baltimore tradition as Opening Day. There's no doubt that we have a great waterfront where there is plenty to see and do, but a truly citywide picture of Baltimore still looks nothing like the downtown showcase we see during Oriole games.

While Boston has 10 percent more residents than it had in 1980, Baltimore has 21 percent fewer. Boston's inflation-adjusted median household income rose 51 percent between 1979 and 2009, but Baltimore's grew only 2 percent. We continue to struggle with high poverty rates and tens of thousands of properties that are vacant or in disrepair. The benefits of our redevelopment strategy have certainly not trickled down to communities throughout the city, where property tax rates are more than double those in the rest of Maryland (and Boston).

The lesson is clear: You don't need taxpayer-subsidized sports facilities to jump-start an urban economy. Indeed, having them in no way guarantees an urban revival. It's time for a new season in Baltimore: one that welcomes private investment to stimulate a genuine, lasting renaissance for the whole city.
Tim2179 is online now  
Old 03-05-2019, 07:22 AM
  #17  
Prairie Dog Breeder
 
93Accord117's Avatar
 
Join Date: Oct 2005
Location: Orcas Isl, WA
Posts: 469
Default Re: On Taxpayer-Funded Arenas

Originally Posted by UC Nick View Post
Who is to say what serves the public/greater good?
"greater good," in the broadest sense of the term means that if taxpayers are going to pay for any stadium to be built, the tickets should then be free/sold to the public at a cost which is profit neutral.
93Accord117 is offline  
Old 03-05-2019, 07:25 AM
  #18  
Cole Trickle
 
Join Date: Nov 2018
Posts: 164
Default Re: On Taxpayer-Funded Arenas

Originally Posted by 93Accord117 View Post
I should have articulated my point better - unless the entity was built for by the government and serves the public/greater good then it should not receive ANY funds. But yes, I agree with all your points. Stadiums are garbage and also the definition of our wasteful society, where restoration never occurs and new ones are built to last a finite time, like 20ish years.
Exactly. The further issue is, these stadiums aren't designed to help the average Joe, the main reasons teams clamber for new stadiums are for more luxury boxes and increasing the value of the franchise were they to sell it, not to make it a nicer place for you & I to watch the game.

Originally Posted by usdm420 View Post
Raiders are paying Oakland $8M in rent in 2019.....so I don't think this is always the case.
That $8M does not go very far, that is still likely less than the interest Oakland is paying on the renovations they made to get the Raiders back from LA more than twenty years ago.

Other teams are literally in their arenas for free (both the Orioles & Ravens were at one point for example).

I can come up with more but I don't think you're disagreeing, just pointing out my generalization

Originally Posted by tron_ View Post
Bigly deferring to moop on this topic. I know we feel the same way about this but he approaches this topic with a level of knowledge and rigor that I cannot match.

Can confirm the "District Detroit" is just a sea of parking lots. They even close down public streets (illegally) to funnel people into their parking lots that you're paying up to $50 to park in.
Exactly. And they actually hurt small businesses in the area too, when a Bucks game goes on, people aren't at the bar on the corner or the restaurant a block away, they're eating at the game and going home. People who would go to the area are staying home or going to different areas to avoid game traffic. Again, this has been seen in studies.

And what of the nights where stadiums lay fallow? Especially with football specific stadiums, they're almost always empty, at least in the case of a basketball arena you can generally host concerts, hockey games, etc.
moopmoop is offline  
Old 03-05-2019, 07:25 AM
  #19  
Official Snowflake of GDD
 
Join Date: Feb 2007
Location: Cincinnati OH
Posts: 146
Default Re: On Taxpayer-Funded Arenas

Originally Posted by 93Accord117 View Post
"greater good," in the broadest sense of the term means that if taxpayers are going to pay for any stadium to be built, the tickets should then be free/sold to the public at a cost which is profit neutral.
So you are qualified to define the greater good for everyone else? Others might argue the broadest sense it would allow locals to watch professional athletes compete.

I think the best way would be to hold a vote for the taxpayers to determine if it's for the greater good.
UC Nick is offline  
Old 03-05-2019, 07:26 AM
  #20  
Imgur Lives Matter
 
90hatch94dsm's Avatar
 
Join Date: Feb 2005
Location: on a bed of #8 stone
Posts: 330
Default Re: On Taxpayer-Funded Arenas

it doesn't allow them?
90hatch94dsm is offline  
Old 03-05-2019, 07:27 AM
  #21  
I ask Twitter, not xtrac1
iTrader: (1)
 
rico91stang's Avatar
 
Join Date: Feb 2004
Location: THE Bay Area
Posts: 3,218
Default Re: On Taxpayer-Funded Arenas

Im ok with tax deferrment but not raising taxes or oroviding funds to pay for them.
rico91stang is offline  
Old 03-05-2019, 07:27 AM
  #22  
Prairie Dog Breeder
 
93Accord117's Avatar
 
Join Date: Oct 2005
Location: Orcas Isl, WA
Posts: 469
Default Re: On Taxpayer-Funded Arenas

Originally Posted by UC Nick View Post
So you are qualified to define the greater good for everyone else? Others might argue the broadest sense it would allow locals to view professional athelets compete.

I think the best way would be to hold a vote for the taxpayers to determine if it's for the greater good.
You know what, fine. How about you get taxed to hell and pay for a new road in your neighborhood but then have it be a $45 toll you must pay to use it after already paying of for it. I'm not going to get into the bullshit semantics of this.
93Accord117 is offline  
Old 03-05-2019, 07:31 AM
  #23  
eight equals equals equals D
iTrader: (2)
 
Tim2179's Avatar
 
Join Date: Jul 2003
Posts: 12,886
Default Re: On Taxpayer-Funded Arenas

Originally Posted by moopmoop View Post
Other teams are literally in their arenas for free (both the Orioles & Ravens were at one point for example).
Any more lies? Orioles pay $15M/yr and the state collects an additional $4M in rent from the office space at the Warehouse.

Regarding the Ravens:
M&T Bank Stadium, home of the Ravens, opened in 1998 at a cost of about $220 million, not including interest on the bonds. The team doesn't pay rent but — unlike the Orioles — reimburses the stadium authority for the cost of operations and maintenance. Those payments, plus admissions taxes, have totaled $221.8 million through last June, according to an authority document.
Tim2179 is online now  
Old 03-05-2019, 07:33 AM
  #24  
Drunk Wagon Pilot
 
Pinja's Avatar
 
Join Date: Feb 2006
Location: Pasadena......MD
Posts: 1,175
Default Re: On Taxpayer-Funded Arenas

Wrigleyville certainly turned into a commerce area right around the time the Cubs stopped sucking and it's a huge revenue booster

Also Camden Yards WAS a baseball mecca until the Nats showed up and casual fans that lived near DC and Virginia decided to support them instead. Couple that with Baltimore having a bad rap and apathetic fans that are more interested in the Ravens than the O's and it's surprising that anyone even shows up to games anymore.
Pinja is offline  
Old 03-05-2019, 07:35 AM
  #25  
eight equals equals equals D
iTrader: (2)
 
Tim2179's Avatar
 
Join Date: Jul 2003
Posts: 12,886
Default Re: On Taxpayer-Funded Arenas

Originally Posted by Pinja View Post
it's surprising that anyone even shows up to games anymore.
I think I've been twice in the last 5 years. I can't name many Orioles off the top of my head. Chris Davis? Adam Jones and Manny Machado don't even play for them anymore
Tim2179 is online now  

Thread Tools
Search this Thread

Contact Us - About Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

© 2019 MH Sub I, LLC dba Internet Brands

We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.