SBJ/October 4 - 10, 2004/SBJ In Depth
Big plans in the Big Apple
Published October 4, 2004
After watching from the sidelines as teams throughout the nation built new venues, is New York finally ready to get into the game? More than $5 billion in sports facility construction has been proposed for the New York metro area. The tough part will be winning the needed support. In the first of a two-part series on the New York sports scene, SportsBusiness Journal examines the metro’s sports venues, plans to replace or renovate them, and the obstacles that could keep them on the bench.
The hired gun Woody Johnson brought in to land a Manhattan stadium for the New York Jets was in his element, lunching at a midtown restaurant, a political adviser at his side.
Jay Cross gets on a roll in this environment. His speech quickens as he describes a New York City that was energized in the 1960s; that built JFK Airport and Lincoln Center and a baseball stadium in the sprawling park that hosted the World’s Fair. The Jets and Mets toddled in their new playpen. The Nets and Islanders would arrive soon.
“We had everything,” Cross says, his arms extended fully, stretching to get a wrap around it all.
Sitting across from him, it is easy to forget that when his “we” — the sporting class of New York City — had “everything,” Cross was a boy growing up in Toronto. No matter. He is an advocate always and a zealot sometimes, and when it comes to the subject of a football stadium in Manhattan, he is paid to be both.
Johnson brought in Cross in the summer of 2000, a few months after buying the Jets, assigning him the task of pitching a stadium project in a city that had not built a new facility for a major sports team since Shea Stadium opened in 1964.
New York stands as the only market in the country that has more than one franchise in all four major professional sports leagues. All nine teams — the Yankees and Mets, Giants and Jets, Knicks and Nets, Rangers, Islanders and Devils — play in buildings that cry out for either renovation or a wrecking ball.
“Hell’s bells, this is the sports capital of the world,” Cross says, “and we’re playing in the worst sports facilities in the country.”
Amid the hyberbole of a city so irksomely fond of its biggest and bests, Cross has hit upon a worst that is undeniable. The building boom that replaced outdated venues across the country in the last decade skipped America’s busiest sports city. Now, nine franchises cry out for relief.
The estimated cost to replace or rebuild playing facilities for the lot of them: $5 billion.
“I really don’t think people appreciate how much our facilities are outmoded,” said Dan Doctoroff, New York City’s deputy mayor for economic development and the leading force behind the city’s push to host the 2012 Olympics. “And it’s every single one in the region.”
New York’s stagnation is magnified by advances in other major cities. Teams in the nation’s next 10 largest markets — ranging in size from Los Angeles to Boston — have christened 20 new stadiums for NFL and MLB franchises since Shea Stadium opened 40 years ago.
Those same markets have opened 19 new arenas since Nassau Coliseum welcomed the New York Islanders and Nets in 1972. The Coliseum, by the way, stands outside the city limits. The last arena built within the city was venerable Madison Square Garden (1968), which was renovated in 1990 but has fallen behind.
Frank Vuono, a prominent sports marketing agent who has cut deals on behalf of corporations, players and teams, works from an office that’s nearly in field-goal range of Giants Stadium. Built in 1976, the facility that houses the Giants and Jets offers 119 suites and 142 club seats. In comparison, FedEx Field, home to the Washington Redskins since 1997, has 280 suites and 15,000 club seats.
“The facilities here in New York are woefully lacking by every measure,” Vuono said. “Revenue. Luxury suites and themed attractions and interactive entertainment for the fans. You name it, we’re behind.
“The things I travel around the country advising other teams on are tremendously lacking here, where I work and live.”
Passing the hat
The Jets are the furthest along in a contentious and complex process of public review that faces any team that aims to break ground inside the city line.
In November 2002, they rolled out plans to contribute $800 million — the largest private investment ever for a U.S. sports facility — toward a $1.4 billion, retractable-roof stadium on Manhattan’s west side that also would serve as an Olympic Stadium if the city lands the 2012 Summer Games.
Even with the outspoken and unflinching support of Mayor Michael Bloomberg and Gov. George Pataki, the project has collided with a powder keg of opposition. Cablevision Systems Corp., which owns Madison Square Garden, has lobbied hard against the project with city leaders and state legislators. In a three-week period spanning May and June, Cablevision’s strategists ran $2.2 million worth of ads designed to torpedo the Jets stadium.
The Jets have fired back, casting Cablevision as a monopolist that cares nothing about what’s good for the city.
While the Jets mount what Cross calls “a public campaign to win the hearts and minds” of the city, his counterparts are making pitches of their own.
Developer Bruce Ratner, who was approved as new owner of the New Jersey Nets in January, plans a $2.5 billion commercial and residential project in Brooklyn that would include a $485 million arena for the relocated team as its centerpiece. While Ratner says he will pay for the building, he wants about $150 million in infrastructure work done. Ratner also wants the city and state to use tax revenue the building generates to help pay for it.
Yankees executives are marshaling political support for a $700 million ballpark that they say they’ll pay for so long as the city issues tax-free bonds for it. The team wants the city and state to pay for about $400 million in infrastructure, including parking garages and a rail station.
Cablevision, owner of the Knicks and Rangers and Madison Square Garden, is listening to architects’ presentations for a $300 million renovation that would add seats and a club level and improve sightlines. Cablevision says it will do so without tapping taxpayer funds, but it received a controversial tax break when it last renovated and likely will want to keep that benefit.
Islanders owner Charles Wang last week unveiled plans for a $200 million renovation of Nassau Coliseum that would include a health club and a 60-story hotel and condo complex, along with long-range plans to develop 70 acres around the building as part of an effort to develop a downtown that ties together sprawling Long Island.
The Giants and the New Jersey state agency that operates their stadium last year agreed to share the tab on $300 million in renovations in the hope of landing a Super Bowl. But now the team has consultants weighing renovation against starting fresh in a $600 million building.
The Mets unveiled a model of a $500 million recreation of Ebbets Field, replete with a retractable roof and a rollaway field, way back in 1999 and were included in the $1.6 billion plan to build ballparks for both New York baseball teams that former Mayor Rudolph Giuliani announced in December 2001. Nearly three years later, they have gone underground on the issue, saying only that they expect to get whatever city and state funds the Yankees get.
The New Jersey Devils this year revealed plans to move to a new, $310 million arena that would be the core of a downtown redevelopment plan for Newark.
|Sports facility plans in the New York metropolitan area|
The only aspect of New York’s stadium story that is more striking than the breadth of need is the span of time that most of these teams have been working the system, to no avail. Flip through the history and you will come away a skeptic.
Yet in some corners, there is a belief that the Jets, Yankees and Nets have cracked the economic and political calculus of stadium financing in New York, creating a model that will work for others. In each case, it begins with this declaration from the team: We will pay for our stadium. By agreeing to do that, and positioning the facilities as essential pieces of larger projects that carry broad public appeal, teams may find that they get what they need at a price they can afford.
“This time, you have a set of motivated owners of teams who are prepared to make enormous private investments in facilities; and they’re doing that because it makes sense for them,” said Doctoroff, who was an investment banker before he began his quest to land the Olympics. “They also have an administration that is willing to work with them, but only on very specific terms.
“We’ve laid out the groundwork for everybody. The city and state will be their partners. We won’t invest in the building. We’ll invest in infrastructure to help get the projects done, so long as we can justify that it’s profitable for the city and state.”
Doctoroff identified projects proposed by the Jets and Nets and the one that the Yankees are previewing for city leaders as examples of sports facilities that are part of larger plans that he says are good for the city.
The Jets stadium would cover rail yards and act as a connector in Doctoroff’s plan to remake New York’s west side. The Nets arena, which also would be built on a platform over rail yards, is only a slice of Ratner’s $2.5 billion plan to expand commercial and residential development in Brooklyn. A new Yankee Stadium could be linked to a master plan designed to redevelop the South Bronx.
Wang’s plan for a new Nassau Coliseum is tied to a larger private development that uses the arena and a 60-story hotel and condo tower as part of a hub for business and mass transit.
“If all teams in New York followed our lead and said, ‘We’ll pay for our facility, all we’re asking the public to do is help us with infrastructure,’ I’m willing to wager that for maybe $1.5 billion in public money, you could have two new baseball parks, an arena or maybe two new arenas, and a football stadium,” Cross said. “That’s a pretty darned good investment for $1.5 billion in public money, to get all that built in New York.”
Opponents would argue that $1.5 billion is enough to fund the city’s Fire Department for about 18 months.
Politics and economics
So how did it get this bad?
It was partly politics. Procedures implemented in response to backroom deals made between city power brokers and developers in the 1950s and ’60s make it difficult to get any large land-use project done within the city borders. An adept activist with the right numbers on speed dial can stall a developer into submission, particularly when the project requires a zoning change.
But, mostly, it has been economics. The stadium that the Jets proposed would be the most expensive ever for an NFL team. The arena that Ratner wants to build in Brooklyn would be the most expensive ever in the NBA. And, even without a roof, a Yankee Stadium that harkens back to the original Ruthian house would be the nation’s most expensive baseball park.
Anything with a doorknob costs more in New York.
High costs, coupled with a series of fiscal crises, left the city’s elected officials in no position to write checks to subsidize sports owners. It lost the Giants, Jets and Nets to New Jersey.
“It was very difficult for us to say build, renovate or create when education was collapsing and we were firing police officers,” said Bruce Bender, who served as chief of staff to several prominent city Democrats before becoming the chief political operative for Ratner’s real estate development company, Forest City Ratner. “When I entered government, we still had some coal-burning schools. Liberal New York City, environmentally conscious. Coal? Are you kidding?
“We weren’t going to pay for anybody’s ballpark.”
The teams that remained weren’t driven by the economic pressures that imperiled franchises in other cities. The Yankees, Mets, Knicks and Rangers made up for their lack of suites and club seats through lucrative deals for their media rights. They renovated here and there.
Mostly, they waited for the economy and the politics to align. They might still be waiting, were it not for the nutty idea that a sports facility might fit cozily within a larger, more embraceable project — and pay off as a private investment.
Working the system
Morning arrives in downtown Brooklyn in much the way that it arrives in other commercial hubs, with people streaming from mass transit stations and zigzagging down crowded streets. With about 70,000 workers, it is the city’s third-largest business district, behind Manhattan’s midtown and downtown. With 2.5 million residents, Brooklyn would stand as the nation’s fourth-largest city if taken by itself.
In this setting, Bruce Bender weaves a compelling story.
Bender grew up in Brooklyn. He remembers coming here, to the downtown corridor along Atlantic Avenue, where his father worked when he was a boy. In the 1950s and ’60s, it was mostly light industrial. The New York Daily News had its offices here. Bender remembers the smell of fresh bread coming from a commercial bakery down the street.
As light industry collapsed, so did downtown Brooklyn. More than 150 major manufacturers left the borough between 1961 and 1976. Corporate New York ventured across from Manhattan to occupy a few blocks of office space beginning in the early 1980s, but the rest of Brooklyn’s commercial center was left to wither.
“Would you have believed even five or 10 years ago that you would come to the corner of Atlantic Avenue and Flatbush Avenue and find that the NBA would want to come here?” Bender asks today. “It would have been beyond comprehension. But here you see the power of a borough.”
Like most cities, New York has experienced an urban resurgence. Priced out of Manhattan, many — and particularly the young and creative — have chosen to land as pioneers in a rapidly re-emerging Brooklyn that their parents wouldn’t recognize.
Ratner was the first big-project developer to look beyond the residential brownstones that are Brooklyn’s calling card, building a 7 million-square-foot complex that has attracted the back offices of several major banks.
His plan for the Atlantic Yards is even more ambitious. The arena would be the centerpiece of a development that promises 4,500 residential units and 17 office towers on six blocks. Like the Jets stadium, the Nets arena would be built on a platform over rail yards.
“It’s a big hole in the ground … that serves today to divide neighborhoods that are trying hard to revitalize,” said Jim Stuckey, executive vice president and director of commercial and residential development for Forest City Ratner. “What this arena and surrounding development will do is tie those neighborhoods together in a significant way. From an urban planning point of view, it’s good for the city.”
Because the project will require significant rezoning — and because they knew a sports arena was bound to attract opposition — Ratner and Bender began working the political side of the equation quietly and cautiously 18 months ago, a year before they received NBA approval to buy the team.
They started by taking the temperatures of the mayor and governor, who both embraced the basic concept. Then they met in private with elected officials, community organizations, advocacy groups, unions and religious leaders.
At each stop, they presented the basics of their proposal, emphasizing what might be in it for each constituency, whether it be jobs, affordable housing or a point of civic pride. Each time, they stressed an underlying theme: bringing something big back not only to New York City, but to Brooklyn, a borough long overlooked.
“Usually you keep the electeds and the community out of it and then you plop it on out there and an explosion hits,” Bender said. “Because we understand Brooklyn, we knew we couldn’t do that here. We had to reach out to the leaders from the start.”
Though supported by a broad coalition, Ratner’s project has run into snags. Opponents say his office towers are too big for the neighborhood, that tax revenue won’t be enough to cover the bill for the arena, and that his proposal that the city condemn about 150 housing units is an improper use of government power.
Ratner expected opposition, but has been surprised by the “vicious, personal nature” of what he has seen as “attacks on his character,” Bender said. After being out in front for several announcements early on, Ratner declined interview requests for this story.
Others in the company say they knew all along that they’d be in for a fight.
“In a city like New York, you’re not starting with a clean palette where nothing else is around,” said Stuckey, Ratner’s development boss. “It’s very common to have a group of people not in favor. You’re going to have objections and you’re going to face opposition. With an arena or stadium, they’re going to attract a lot of attention.”
The group that has led the public opposition to the west side stadium — the New York Association for Better Choices — counts a host of Manhattan neighborhood associations and a handful of elected officials among its supporters.
It also has the backing of Madison Square Garden, which along with underwriting $2.2 million in opposition ads spent about $375,000 on lobbyists between January and June, up from $80,000 for all of 2003.
“I’ve never encountered a project where you have a $4 billion corporation financing the entire opposition, and creating a pseudo coalition and using that as a guise to protect a monopolistic interest,” said Matt Higgins, the former Giuliani press secretary whom Cross hired as a vice president of strategic planning. “That’s what’s different here.”
Cross lashed out at Cablevision, painting it as a company that is willing to torpedo a project that would benefit the city in order to protect its lock on Manhattan’s big events.
“It’s never happened in pro sports that I’m aware of that a team will go after another team that’s in its own market like this,” Cross said. “And it’s not some noble fight for the public good. It’s about greed. These people are takers, not givers. They’re monopolists. That’s their whole mind-set.”
Cross said he approached MSG executives shortly after he took the stadium development job. He knew that Doctoroff’s Olympic plan proposed a stadium on the west side of midtown and a new Madison Square Garden on the east side. He wanted to make sure the two sports titans could co-exist. Cross said he was assured they would; that while MSG might not work in concert with him, it would not work against him.
He says he began to suspect otherwise the next time they met. Cross recounts a conversation he had with Joe Cohen, former executive vice president of MSG who was assigned to explore possibilities for a new Garden. Cross says the meeting began with Cohen surprising him by saying, “You know, [MSG Chairman] Jimmy Dolan really likes the water. We want to be on the waterfront site [the west side].”
Cross says he told Cohen that would be fine with the Jets. They would give Dolan his view of the Hudson River and look into developing their football stadium on rail yards to the east. Cross said MSG soon balked at that as well.
When Cross pointed out during a later discussion that MSG obviously couldn’t lay claim to both sides of Manhattan, he was floored by the response.
“They said, ‘Actually, we can,’” Cross said. “There’s really no room for you guys.”
Cross said he followed up with a meeting in which he pitched Dolan on an admittedly ambitious plan for the Jets and MSG to combine on a facility that could accommodate all three teams. He said Dolan eventually rejected the plan, but, again, emphasized that MSG would not stand in the Jets’ way.
“And then,” Cross said, “they came after us.”
MSG executives wouldn’t comment on anything related to the west side stadium, referring questions to the New York Association for Better Choices. Cohen, now chairman and CEO of HTN Communications, said he remembers telling Cross about Dolan’s affinity for the water and may have flip-flopped in later conversations. But he added that the two sides still were working toward a plan they could both live with when he left MSG in 2002.
Two weeks ago, the Jets launched their own set of TV ads promoting the stadium project and firing back at MSG. In one spot, the most recognizable of Jets fans, “Fireman Ed” Anzalone, says, “Those attack ads are from Cablevision. They don’t care about firefighters, just their monopoly on Madison Square Garden and their profits.”
It has gotten uglier than Cross expected. He knew he’d face a fight from what he calls the “west side liberal elite.” But he didn’t expect Cablevision to lobby this hard against it. And he didn’t anticipate the bloodbath that has ensued in Albany, where state assembly members who overwhelmingly support funding for a new convention center have refused to approve it unless the Jets stadium is jettisoned.
Many believed that the Jets streamlined the approval process when they chose to build on state-controlled land. But even at the rail yard site, with the support of the mayor and governor in hand, Cross already has been pushing this project for longer than it took the Heat to get from concept to ribbon-cutting in Miami.
“People say, ‘Why don’t you go to Flushing? It’d be so much easier,’” Cross says, parroting the suggestion of those who believe Manhattan presents an insurmountable challenge. “Really? Would you like to tell that to [Mets owner] Fred Wilpon? Tell him how much easier it is in Flushing. Or tell George Steinbrenner how much easier it is in the Bronx.
“It’s not easy anywhere. With all the brain damage that’s required to get this done, you might as well go to the best site, because in the end it’s the same amount of work and costs the same amount of money.”
Can they really be built?
In a city that has gone 40 years since it last dug a hole for a major stadium or arena, surrounded by suburbs that have gone 20 to 30 years since breaking ground in the name of sports, it is difficult to envision a shift in tides that would be sufficient to satisfy both Steinbrenner and Wilpon, never mind Ratner, Wang, Woody Johnson and the rest.
“Skepticism is what New York is about,” Bender said. “But I’ve always said that we in government can’t kill pioneers. You have to embrace them.”
Doctoroff, the deputy mayor, points to the recent completion of the $1.7 billion Time Warner Center on Columbus Circle as evidence that a public-private model can work in New York.
“There was a culture that existed for decades that people simply believed that you couldn’t get things done,” said Doctoroff. “I think that culture is disappearing. We’re solving long-standing issues where properties have been laying dormant since the ’70s. People recognize the need to invest in the future of the city.”
Perhaps they do. But will that appetite for investment extend to sports?
Doctoroff concedes that his vision of a remade far west side, with an NFL stadium and an expanded convention center rising from the rail yards, stretch the bounds of the imagination.
“They say make no small plans.”
Next week: The battle for the New York sports fan