SBD/August 4, 2011/FacilitiesPrint All
An L.A. City Council committee "voted unanimously Wednesday to endorse the financial framework of an agreement" between the city and AEG to build Farmers Field and a new wing of the L.A. Convention Center, according to Arash Markazi of ESPN L.A. Last night's vote means "yet another hurdle to the NFL's potential return to Los Angeles has been cleared." The full City Council "will vote on the proposal Tuesday morning." City Council member Jan Perry, Chair of the committee studying the proposed stadium and events center in downtown, said, "This is a giant leap forward." Markazi reported an actual deal between AEG and the city is "still about a year from becoming a reality, with the completion of an environmental impact report not expected until the spring." The proposed agreement "requires AEG to extend a series of financial guarantees over the course of the project as a safeguard against shortfalls." It also calls for the developer to "break $80 million of the $275 million into a special bond financed with tax on already-established AEG-owned properties Staples Center and LA Live instead of a stadium five years away from potentially opening." L.A. Chief Legislative Analyst Gerry Miller said, "To be very clear, there is no public money in the stadium, none" (ESPNLA.com, 8/3). In L.A., David Zahniser noted AEG's Farmers Field project "cleared a major hurdle" last night. City negotiators told committee member Bill Rosendahl, the project's "biggest skeptic," that AEG "has promised to reimburse the city for any convention business lost as a result of stadium construction." Rosendahl: "I’m delighted to see all these answers to my questions." As part of the vote, the committee "recommended that the city retain Nixon Peabody, a law firm hired to analyze the project’s bond financing" (LATIMES.com, 8/3).
THE COST OF DOING BUSINESS: Dallas-based consulting firm Conventions, Sports & Leisure indicated that AEG's plan to land an NFL team for Farmers Field "could cost the company between $2 billion and $3 billion." CSL Dir of Sports Services Bill Rhoda, whose firm was hired by the city of L.A. to examine the economic impact of the project, wrote, "We agree that it is likely that AEG will purchase a percentage of the team and possibly the entire team." In doing so, Rhoda wrote the developer "would be required to pay a major relocation fee, purchase the team and pay for the stadium. Those total costs could easily exceed $2.0 billion and could reach $3.0 billion.” CSL estimates that the stadium and expanded convention center "would result in $133.3 million in indirect tax revenue." The firm contends that the Farmers Field project "would recreate 6,320 permanent jobs, most of them in the service industry, well below estimates by AEG and several labor unions." Meanwhile, Majestic Realty officials confirmed that they "have met with NFL officials since the league reached a new labor agreement with its players" about their planned stadium in nearby City of Industry (ORANGE COUNTY REGISTER, 8/4).
WORTH THE EFFORT: NBC's Al Michaels said L.A. “will have two teams within a decade if a stadium gets built," but no teams will land in the city "if a stadium does not get built." He said, "It’s all about a stadium, that’s what it’s about these days. Cities have leveraged stadiums against other cities -- that’s how the Ravens ended up in Baltimore. … That’s how St. Louis got its team back after the Cardinals went to Arizona. ... We’re playing this game right now where Los Angeles will be used as leverage.” Michaels did note that he is "confident right now that something can finally get done here." Michaels: "My feeling would be if they build a stadium in Los Angeles, an existing team would come immediately. Down the line, they’ll expand because that means too much in revenue to the existing owners. … They’ll play the Super Bowl here every three years, because the National Football League loves glitz, loves glamour, loves Hollywood” ("The Jim Rome Show," 8/2). Pro Basketball HOFer Magic Johnson, who has expressed his interest in bringing an NFL franchise to L.A., anticipated the L.A. City Council would approve the $300M in bonds for a new stadium, saying the deal is "going to get done because it’s a win-win for the city, it’s also a win-win for the people who live in Los Angeles – the taxpayers – and then it’s also a win-win for the NFL” (“Outside The Lines,” ESPN, 8/3).
BABY STEPS: Former 49ers President Carmen Policy said that team officials "were smart to show the public that they are taking concrete steps toward building the stadium," and that by doing so they "can sell luxury boxes and sponsorship deals and drum up excitement." In a front-page piece for the S.F. CHRONICLE, Demian Bulwa notes the model unveiled yesterday is "about 2 1/2 feet long," and team officials said that its "portability would allow them to take it on the road to woo prospective ticket buyers and sponsors." Marathe said that the team thus far "has raised nearly $150 million in sales of luxury suites for the planned stadium and has hired a concessionaire" (S.F. CHRONICLE, 8/4).
The “financially troubled” parent company of Nashville Superspeedway, Dover Motorsports, yesterday announced that it will not seek to host NASCAR-sanctioned races at the track in ’12, “effectively ending its operation as a racing facility,” according to Tom Kreager of the Nashville TENNESSEEAN. The track opened in ’01 and “has been host to NASCAR Nationwide Series and Camping World Truck Series events since its inception.” It also “has held IndyCar and Indy Light races through 2008.” The announcement “came 11 days after the Superspeedway held its second of two NASCAR doubleheader race weekends,” at which time “speculation of a grim future for the track began when once again it failed to sell enough tickets to fill the 25,000 seats.” Track VP & GM Cliff Hawks yesterday said that “not having a Sprint Cup race in a NASCAR-crazed market doomed the track’s ability to have success.” Kreager notes NASCAR racing “of some ilk has been a part of the Middle Tennessee sports landscape since 1958.” The track “has some rental agreements in place it plans to keep through October.” Hawks said that “after that, the track will be winterized, which is normal.” Hawks: “Then the question becomes if someone will buy the race track.” Dover Motorsports’ closure of the track is the “third such financial move by the company within the past three years.” It “closed and subsequently sold Memphis Motorsports Park” in ’09, and last year “closed Gateway International Raceway in Madison Ill., just east of St. Louis.” Kreager notes shortly after the announcement, the track “reduced its website to one page, carrying the announcement under the heading, ‘Thanks for all the Memories!’” (Nashville TENNESSEAN, 8/4). NASCAR officials “did not say where those Nationwide and Truck Series races could be relocated next year” (SCENEDAILY.com, 8/3).
BLAMING THE ECONOMY: Dover Motorsports President & CEO Denis McGlynn said the economy "basically just caught up to us" regarding Nashville Superspeedway. He said, "When we made the decision back in the late ‘90s to go forward with (the) project, NASCAR and the economy (were) in a very different place than it is today. At the end of the ‘90s in the Nationwide Series, (Dale) Earnhardt Jr. and Matt Kenseth and the Burton brothers were just tearing up the series. They were filling the racetracks wherever they went.” McGlynn added people "expected NASCAR to continue expanding, and it was logical to expect that some increase in status for the Nationwide Series would be part of that because the Cup series could only accommodate so many events.” However, he cited several factors for the downturn in fortunes for the track, including the death of Dale Earnhardt Sr. at the '01 Daytona 500, the “big dotcom bubble break" and the ’02 recession. He also noted the "many, many years where there was a lot of change in NASCAR” was a “big turning point.” McGlynn: "With our customers being working people, the unfortunate reality is they’re not working right now and they’re not buying tickets" ("NASCAR Now," ESPN2, 8/3).
TAXPAYERS NOT ON THE HOOK: In Nashville, Duane Marsteller cites local officials as saying that Dover Motorsports’ decision to “let the facility go dark won’t leave taxpayers on the hook for a remaining $21 million in outstanding bond debt issued 12 years ago when the speedway was first developed.” A Winslow County sports authority is “using sales and property tax revenues generated by the track to pay for the bonds.” Dover "also was required to maintain a credit line -- currently from PNC Bank -- to cover bond payments in case tax revenues fell short." County Finance Dir Aaron Maynard said, "There's no financial obligation on (government's) part." A legal expert said that even if Dover Motorsports were to "file for bankruptcy -- and that hasn't been discussed -- the chances are 'extremely low' that the bonds wouldn't be paid off" (Nashville TENNESSEEAN, 8/4).
RETURN TO THE ROCK? ESPN.com's David Newton noted the closure of Nashville Superspeedway could open the door for other tracks to host a Nationwide and Truck event, and Rockingham Speedway in North Carolina was the "overwhelming choice to host one or both of NASCAR's lower series" among respondents on Twitter. Rockingham "hasn't hosted a Sprint Cup or Nationwide race since 2004." It "remains the track's goal to host a Nationwide or Truck event, but the addition of SAFER barriers at a cost of about $1 million will have to come first" (ESPN.com, 8/3).
The Marlins will open a new ballpark next season, and their departure from Sun Life Stadium “leaves an uncertain future for their home of the past 18 years, which has more to do with the stadium's age than the loss of baseball,” according to Craig Davis of the South Florida SUN-SENTINEL. Whether the future “includes regular stops by the Super Bowl and BCS Championship games may hinge on renovation plans currently in limbo.” Dolphins CEO Mike Dee last week said that there is “no plan for seeking public funding since a bid to raise the tourist tax cap in Miami-Dade County for that purpose failed this spring in the Florida Legislature.” Still, stadium officials “are prepared to aggressively pursue new events.” That has “already begun with WrestleMania XXVIII, scheduled for April 1, 2012, expected to fill the 75,000-plus seats.” Dee said, "Despite the Marlins' struggles here to draw, from a business sense it was good for the owners of the stadium to have the Marlins here. The flip side of that is it took up an inordinate amount of shelf space as far as dates. There are a multitude of different events that we've had the ability to go after in prior years that we were unable to do so because of the commitment to baseball." The absence of baseball “will provide opportunity to bring in more concerts as well as events such as the University of Miami spring game.” But Craig wrote the “big games have defined the stadium, and the big question is when will they be back?” NFL Commissioner Roger Goodell “never ruled out the Super Bowl returning.” South Florida has hosted 10 of them, but “sun and South Beach are not enough to ensure frequent returns to an aging stadium” (South Florida SUN-SENTINEL, 8/3).
THIS IS NO MARLINS GAME: In Miami, Michelle Kaufman reports last night's Chivas de Guadalajara-FC Barcelona match at Sun Life Stadium drew 70,080 fans, the "biggest crowd for a soccer game in state history." The previous high was a '94 FIFA World Cup match in Orlando. During the Herbalife World Football Challenge match, the stadium "could have been mistaken for Barca's Camp Nou Stadium" due to the "sea of Barca's maroon-and-blue striped jerseys, Latin music and largely Spanish-speaking crowd" (MIAMI HERALD, 8/4).
HSBC Bank USA's naming rights to the Sabres' arena "would seem to make less economic sense now than it did before the bank sold its retail branches in upstate New York," but sports marketing experts said that that "doesn't necessarily mean the bank wants out of its naming rights deal," according to by Phil Fairbanks of the BUFFALO NEWS. HSBC's naming rights contract runs through '27, and some suggested that the benefits the bank "enjoys, most notably national media attention, continue regardless" of its presence in the area. Team Services Principal E.J. Narcise said that most naming-rights deals "have an 'out' clause but that HSBC's commitment to the Sabres is about more than the bottom line." The bank is "showing no signs of wanting to give up its naming rights at the downtown arena and went out of its way to suggest otherwise." Smith College sports economist Andrew Zimbalist said that it is "possible HSBC, given its continued corporate and commercial presence here, might consider the naming rights valuable enough to retain, especially if the price is right." He also "thinks it's possible the bank might use this opportunity to renegotiate its contract with the Sabres." When asked if the bank "might seek changes in its deal with the team," HSBC VP/Public Affairs Neil Brazil "declined to comment, except to suggest that the two sides talk often about their relationship." Sports marketing experts suggested that a "likely scenario would be the addition of new corporate sponsors for the arena." Narcise "thinks HSBC and the Sabres may look at this as a opportunity to share the naming rights' benefits" with other local companies. He mentioned First Niagara Bank, "which is buying 195 HSBC branches, as one possible new partner." First Niagara President & CEO John Koelmel "made it clear this week the bank is interested in establishing a relationship with the Sabres" (BUFFALO NEWS, 8/3).
Vikings Owner Zygi Wilf yesterday said that "efforts continue to get a special session called in September in order to seek legislative approval for the proposed venue in Arden Hills." Wilf: "We're very excited about moving that process forward for our fans and for everybody in the state who utilized the Metrodome in such a good fashion for the last 30 years. This will be a great venue for the next generation." Wilf stressed that he "does not believe the stadium is being pushed aside by legislators" (Minneapolis STAR TRIBUNE, 8/4).
BRING OUT THE SUNSHINE BAND: In K.C., Tod Palmer reports Livestrong Sporting Park "will serve as the launching pad for the U.S. Women's National Team's post-World Cup tour" with a Sept. 17 game against Canada. Landing the U.S. team "is a coup for Sporting KC and Kansas City in general." It will be the team's fifth appearance in K.C., but first since '04, and Sporting KC VP/Communications Rob Thomson said, "It's a very exciting day for us. It's been a while since we've had the women here" (K.C. STAR, 8/4).
BEARER OF BAD NEWS: In Memphis, Kyle Veazey reports Public Financial Management Managing Dir Lisa Daniel yesterday told the Memphis & Shelby County Sports Authority that a "yearlong NBA lockout could send the fund used to pay off FedExForum bonds into the red by 2022, forcing the city and county to make up the difference." The shortfall "could reach $10.6 million by 2029, or about $600,000 annually for each government." The bonds, authorized in '02 by the authority, are "paid with six different revenue streams." Veazey notes "sales tax rebates from NBA-related sales, such as tickets and concessions to Grizzlies games, and seat rental fees would be most affected by a lockout" (Memphis COMMERCIAL APPEAL, 8/4).
IN THE NEUTRAL ZONE: Town of Hempstead Supervisor Kate Murray said that a "new effort to build at the Nassau Coliseum site could result in a faster, smoother, more successful development, in part because the town already has approved a mixed-use zone for the area." On Long Island, Randi Marshall notes Hempstead's new zone "allows for 5.4 million square feet of construction, compared with 8.8 million square feet" in the $3.8B Lighthouse Project, which Islanders Owner Charles Wang had proposed for the site. But while "some local developers said they had ideas for the 77 acres of land, they also noted the town's limit on total density might make any plan with an arena less feasible" (NEWSDAY, 8/4).