Category Archives: Convention.Centers/Arenas

City Council advances plans to privatize Tyson, Orpheum management

Source: Ian Richardson, Sioux City Journal, October 16, 2017

Sioux City is entering contract negotiations with a Philadelphia-based venue management firm to oversee day-to-day operations at the Tyson Events Center and Orpheum Theatre. … Monday’s decision followed nearly an hour of discussion that included more than a dozen comments from the public — many of them local labor leaders and city employees concerned about their jobs and benefits — in a nearly standing-room-only City Council chamber. “We’ve heard this song and dance before throughout the state of Iowa,” Chris De Harty, president of American Federation of State, County and Municipal Employees Local 212, said of contracting out public services. …


Majority voice support for private management as City Council defers vote
Source: Ian Richardson, Sioux City Journal, October 10, 2017
A majority of City Council members on Monday voiced their favor toward a proposal by a private management firm to run two city entertainment venues, but ultimately deferred a final vote until next week.  The delay came at the request of Councilman Dan Moore, who said he wanted to take that time to gather public input and to reflect on the disadvantages and advantages of switching. … The city is weighing whether to enter negotiations with the Philadelphia-based Spectra for management of the Tyson Events Center and Orpheum Theatre, a move recommended by City Manager Bob Padmore and by the Orpheum Theatre Board of Directors. Sioux City has been exploring the move this year and has been deciding whether to contract with Spectra or conduct a series of organizational tweaks within its current city management structure, a move favored by another city panel, the Events Facilities Advisory Board.… Chris De Harty, president of American Federation of State, County and Municipal Employees Local 212 — which represents more than 350 workers, including the city’s operations, field services, technical and clerical staff — said city staff have done well up to this point and he doubts a contracted company would improve the situation. …

Why the federal government should stop spending billions on private sports stadiums

Source: Ted Gayer, Austin J. Drukker, and Alexander K. Gold, Brookings Institute, September 12, 2016

Because the interest earned on the municipal bonds is exempt from federal taxes, a large amount of tax revenue that would have been collected—had the bonds been issued as taxable—went toward the construction of the stadium. In other words, the Yankees received a federal subsidy to build their stadium. How much? About $431 million. That’s a lot of money, but it gets worse. The loss in federal tax revenues was even higher than the subsidy to the stadium. High-income taxpayers holding the bonds receive a windfall tax break, resulting in an even greater loss of revenue to the federal government. In the case of Yankee Stadium, the additional loss was $61 million. That is, the federal government subsidized the construction of Yankee Stadium to the tune of $431 million federal taxpayer dollars, and high-income bond holders received an additional $61 million. … In “Tax-exempt municipal bonds and the financing of professional sports stadiums,” Brookings Senior Fellow Ted Gayer, Austin J. Drukker, and Alexander K. Gold quantify the federal subsidies given to finance professional sports stadiums built or majorly renovated since 2000, and the total loss in federal tax revenue. All together, the federal government has subsidized newly constructed or majorly renovated professional sports stadiums to the tune of $3.2 billion federal taxpayer dollars since 2000. But because high-income bond holders receive a windfall gain for holding municipal bonds, the resulting loss in total revenue to the federal government is even larger at $3.7 billion. …

Read full report.

Convention Center picks new food vendor

Source: Rick Rouan, Columbus Dispatch, August 2, 2016

The Greater Columbus Convention Center has selected a new food vendor. The Franklin County Convention Facilities Authority chose Chicago-based Levy Restaurants from among four companies that submitted proposals to replace Centerplate, which lost its contract amid a federal investigation. … Brown said Levy’s reputation for handling convention center business around country, including those in Atlanta, Boston and Pittsburgh, made it an attractive choice. Levy will take over for Centerplate by November, Brown said. The company will handle all food and drink service in the convention center except for the food court. That business totals about $10 million a year, which nets about $3 million a year after expenses to help fund the convention center, he said. The contract with Levy is for five years with three, three-year renewal options. The authority will pay the company $200,000 a year, and Levy can earn another $100,000 a year in incentives. The authority also is paying $5,000 a month to the Columbus Hospitality Management firm to make sure that the transition between Centerplate and Levy is smooth. …

Amid Building Boom, Debate over Publicly Funded Stadiums Goes On

Source: Elaine S. Povich, Pew Charitable Trust, July 11, 2016

Missouri and St. Louis tried mightily to keep the NFL Rams from decamping for Los Angeles, offering $400 million in state and city money for a new stadium. To justify the public expense, officials argued that the team, which moved from Los Angeles to St. Louis two decades ago, was an economic engine for the region. They offered to put up the money even though the Rams’ billionaire owner, Stan Kroenke, could afford to build a new stadium on his own. … Two other NFL teams, the San Diego Chargers and the Oakland Raiders, also are eyeing a move to the nation’s second largest city. But Nevada is hoping to grab the Raiders for itself, by dangling a $1.4 billion stadium that would be paid for, at least in part, by the taxpayers. Meanwhile in Atlanta, construction is underway on a new $950 million stadium for the NFL Falcons, to be financed partly through bonds secured by extending a tax on hotel and motel rooms. Amid all the jockeying, a decadeslong debate rages on: Does it make economic sense for cities and states to use public money to build sports facilities? …

… But many economists maintain that states and cities that help pay for new stadiums and arenas rarely get their money’s worth. Teams tout new jobs created by the arenas but construction jobs are temporary, and ushers and concession workers work far less than 40 hours a week.  Furthermore, when local and state governments agree to pony up money for stadiums, taxpayers are on the hook for years — sometimes even after the team leaves town. St. Louis, for example, is still paying $6 million a year on debt from building the Edward Jones Dome, the old home of the Rams that opened in 1995, despite the team’s move to California. The debt is financed by a hotel tax and taxes on “game day” revenues like concessions and parking. …


New stadiums cost more than just money
Source: Yousef Baig, The Weekly Calistogan, July 29, 2015

…The first place to start is with the financing. A few years ago, a Harvard urban planning professor named Judith Grant Long put out a book called “Public/Private Partnerships for Major League Sports Facilities” that shed some light onto what these deals really cost taxpayers and the subsequent spillover effect into other areas. … The average public/private partnership has the cities forking over 78 percent of the costs, and the teams themselves just 22 percent. Additionally, she added, taxpayers spent about $10 billion more than originally estimated on the construction of all 121 stadiums that were in use during 2010. Ownership groups (made up of billionaires) tell city officials that they can’t afford the hundreds of millions of dollars required to erect these modern coliseums. They talk about the boon it will bring to the surrounding area, the increase in tourism, and the creation of jobs, while in the same breath, threatening to leave for another city if they don’t oblige. …

Hamilton County, which took on stadiums for both the Cincinnati Bengals and Cincinnati Reds in the mid-1990s, has been crippled with debt ever since. In 2013 alone, annual stadium expenses totaled $43 million. Since these two stadiums were built, a public hospital was sold, mass transit investments were put off, and the tiny amount of private development along the Ohio River, which was a big selling point to get an increase in sales tax approved, has still required additional public subsidies. …
To afford the $720 million required to build Indianapolis’ Lucas Oil Stadium, the city raised hotel, restaurant and rental car tax rates. Five months after it opened in 2008, a first-year deficit of $25 million was projected to jump to $45 million a year later. In June 2013, the city of Detroit, amid a financial crisis and filing for bankruptcy, stayed the course with its $444 million hockey arena for the Red Wings. A $450 million bond with a 30-year term fit the average arrangement mentioned in Long’s book, leaving taxpayers responsible for $283 million of it. …

John Oliver: How Sports Teams Are Ripping Us Off
Source: Marlow Stern, Daily Beast, July 12, 2015

After a week off, John Oliver and his award-worthy HBO program Last Week Tonight are back, and this time, they’re targeting one of America’s favorite pastimes: pro sports….. “The vast majority of stadiums are made using public money,” said Oliver, citing a report from 2012 stating there’s been “$12 billion spent on the 51 new facilities opened between 2000 and 2010.” “Which begs the question: Why?” he asked…… But the theory that building a new stadium boosts a city’s economy is, according to an economic study cited by Oliver, a total myth. “A major review of almost 20 years of studies shows economists could find no substantial evidence that stadiums had increased jobs, incomes, or tax revenues,” he said….Recently, Hamilton County, Ohio, spent more than $50 million on stadium debt service and other costs in 2014 for the Cincinnati Bengals and Reds, even though the county has had to sell a public hospital, cut 1,700 jobs, and delay payments for schools because of budget gaps.

Source: Last Week Tonight with John Oliver, July 12, 2015

Cities spend massive amounts of public money on privately-owned stadiums. Cities issue tax-exempt municipal bonds that — wait, don’t fall asleep!

Public-Private Partnerships for Major League Sports Facilities
Source: Judith Grant Long, Routledge, ISBN-13: 978-0415806930, 2012
(purchase required)

This volume takes readers inside the high-stakes game of public-private partnerships for major league sports facilities, explaining why some cities made better deals than others, assessing the best practices and common pitfalls in deal structuring and facility leases, as well as highlighting important differences across markets, leagues, facility types, public actors, subsidy delivery mechanisms, and urban development aspirations. It concludes with speculations about the next round of facility replacement amidst rapid changes in broadcast technology, shrinking domestic audiences, and the globalization of sport.

Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?
Source: Dennis Coates and Brad R. Humphreys, Econ Journal Watch, Vol 5 no. 3, September 2008

From the abstract:
This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.

City of LA will rack up bigger bill than anticipated for Convention Center: report

Source: Cathaleen Chen, The Real Deal, July 6, 2016

If the City of Los Angeles decides to tackle the overhaul of the L.A. Convention Center by itself, it will be $250 million more expensive than the initial $470 million quote, a new report found. However, there are options. The report, from City Administrative Officer Miguel Santana, offers an alternative to paying $720 million for renovations on the outdated center at 1201 South Figueroa Street: a $1 billion private partnership that would result in greater savings down the road. Under this option, a private developer would design and finance the property and develop it into a mixed-use complex that includes housing, retail and a hotel, L.A. Downtown News reported. … A public-private partnership isn’t unprecedented for L.A. The city has long had a relationship with AEG. The firm currently runs the convention center alongside the city authorities. But this connection may be strained, as the entertainment firm announced last month it was pulling out of the development of a 755-room hotel on Olympic Boulevard next to the Convention Center because of competition form the city’s own on-site hotel.


L.A. budget chief suggests privatizing Convention Center
Source: Kate Linthicum and David Zahniser, Los Angeles Times, August 6, 2012

After years of pushing for the privatization of more city services, Los Angeles’ top budget official took his crusade to pare down city government a step further Monday with a recommendation that lawmakers turn over management of the Convention Center to a private firm. … Lowell Goodman, a spokesman for Service Employees International Union Local 721, said his group opposes the proposal because it would replace city staff with cheaper workers.

Maryland Stadium Authority asked to fund private conference hotel in Frederick

Source: Peter Samuel, Maryland Reporter, April 20, 2016

Maryland Stadium Authority officials begin talks soon with a Frederick team over a complicated deal for a public-private partnership to finance a $70 million downtown conference center hotel on Frederick’s Carroll Creek Park. The authority is reluctant to lend money to a private hotel operator but the city of Frederick doesn’t want to accept responsibility for losses that would put its taxpayers “on the hook.” The MSA is being asked to agree to a scheme by which state bond monies are formally lent to the city for a city-owned conference center, but then are immediately passed on to the hotel developer, who in turn will build a 200-room hotel and the conference center while undertaking to carry its expected operating losses. … Stadium Authority officials have insisted they will lend only to the City of Frederick for a city- owned conference center and that the city agree to accept liability for operating losses. Frederick City officials are in a political bind. They have repeatedly told local citizens the private developer will take responsibility for losses, so they want an agreement that passes their liability to the MSA on to hotel operator Plamondon. Whether such a deal can be crafted that is politically and legally viable  remains to be seen.

Township of Langley Arenas brought back in-house

Source: Canadian Union of Public Employees, April 13, 2016

UPE 403 is proud to announce that after nearly 20 years two arenas in the Township of Langley will once again be operated in-house. The George Preston Recreation Centre and the Aldergrove Community Arena will both be staffed by CUPE 403 members starting July 1, 2016. … Whyte says that community members with a ‘Go Active’ will now be able to use the pass at both the George Preston Recreation Centre and the Aldergrove Community Arena and that the Township is planning to increase programming at the facilities. Residents will now also be able to pay for municipal services such as taxes, dog licenses, and burning permits at George Preston Recreation Centre. Currently the two arenas are operated by private for profit contractor Canadian Recreation Excellence (Rec Ex). Their contract with the Township expires on June 30 and will not be renewed.

I Was a Super Bowl Concession Worker

Source: Gabriel Thompson, Slate, February 9, 2016

The smart stadium was supposed to be an economic boon. Back in 2010, when residents of Santa Clara, a small city of 120,000 just northwest of San Jose, voted to support its construction, boosters promised it would create “thousands of desperately needed new jobs,” providing a lifeline to the very people “bearing the brunt of the recession.” Pro-stadium signs reading “Yes on Jobs!” blanketed the city, part of a campaign paid for by the 49ers, who plowed more than $4 million into the effort. … The stadium has indeed provided a few thousand jobs—about 4,500 people work each event, serving hot dogs, directing traffic, mopping up spilled beer, and securing the grounds. … Many of the stadium workers I spoke with told me they earn $11 or $12 an hour. That would be about $1,900 a month if it were full-time work, but it’s not. … That’s what the NFL usually does: Twenty-nine of the 31 NFL stadiums have received public funds. The stadium for the Indianapolis Colts was made possible with a $620 million subsidy; the Minnesota Vikings are set to receive $678 million from taxpayers to help build their new one. St. Louis, which recently lost the Rams to Los Angeles, built the team a stadium in 1995 with $280 million in taxpayer money—and will be paying off the debt on those bonds, team or not, through at least 2021.

Judith Grant Long, an associate professor of sport management at the University of Michigan, studied all 31 NFL stadiums in use during the 2010 season, and calculated that taxpayers shelled out an average of $374 million each. The 49ers got a good deal with Levi’s Stadium, too. Santa Clara used $114 million in public funds, and, with the help of Goldman Sachs, created a public authority that borrowed $679 million to fund the remainder of the construction, all of which would be paid off with revenue generated by the stadium over the next 25 years. Or so the authority—whose board comprises Santa Clara’s mayor and city council—claimed. The original plan called for the 49ers and the NFL to chip in another $493 million, but during lengthy negotiations between the stadium authority and the team, that figure was later cut nearly in half. In the end, Goldman Sachs earned $75 million in interest and fees and the 49ers’ net worth jumped 69 percent in one year, to $2.7 billion.

Rauner pushes privatization as more efficient for IL Government; History raises some questions

Source: Brett Chase, Reboot Illinois, December 14, 2015

Rauner said the downtown Chicago office tower isn’t the only property being eyed for sale as he’s reviewing all Illinois-owned assets, including those in central and downstate Illinois. His comments follow a union’s earlier disclosure that Rauner is asking state workers for more latitude to seek private operators for government services. As Illinois falls short of cash, faces declining revenue and wrestles with more than $100 million in unfunded pension obligations, Rauner is signaling that one way to ease those financial burdens is by spinning off government assets and services to private operators for millions of dollars and likely more. It’s not a new idea: Past governors from Jim Edgar to Pat Quinn embraced aspects of outsourcing.


Selling off Illinois
Brett Chase, Illinois Times, December 10, 2015

Rauner said the downtown Chicago office tower isn’t the only property being eyed for sale as he’s reviewing all Illinois-owned assets, including those in central and southern Illinois. His comments follow a union’s earlier disclosure that Rauner is asking state workers for more latitude to seek private operators for government services. As Illinois falls short of cash, faces declining revenue and wrestles with more than $100 million in unfunded pension obligations, Rauner is signaling that one way to ease those financial burdens is by spinning off government assets and services to private operators for millions of dollars and likely more. It’s not a new idea. Past governors, from Jim Edgar to Pat Quinn, embraced aspects of outsourcing. But the state’s past ham-handed execution of private deals – from a veterans home to the lottery to health care for prisoners – illustrates why privatization is no panacea or cure-all.

Thompson Center the latest symbol of state stalemate
Source: Rich Miller, Crain’s Chicago Business, October 16, 2015

Gov. Bruce Rauner said last week that he had spoken with both Senate President John Cullerton and House Speaker Michael Madigan about his proposed sale of the state’s Thompson Center building in Chicago and that both men were “forward-leaning and positive” about the plan. So I checked in with the legislative leaders, and that’s not exactly what I heard. … Check out the joint statement released last week by the House and Senate Republican leaders regarding the proposed sale. “We filed House Bill 4313 and Senate Bill 2187 at the request of Gov. Rauner. The James R. Thompson Center is in complete disarray due to years of neglect by previous administrations, and better utilizing this asset would benefit Illinois taxpayers tremendously. It has become a white elephant for the state of Illinois. This legislation will enable us to review all of our options to maximize the overall value of the property and secure the greatest savings for taxpayers.” Notice anything missing? How about a pledge to work cooperatively with others in the General Assembly to achieve the governor’s goal?

House GOP leader proposes plan to speed Thompson Center sale
Source: Sophia Tareen, Quad-City Times, October 15, 2015

Plans to speed up the sale of the state-government owned James R. Thompson Center, and potentially avoid a lengthy public comment period, have been submitted at Gov. Bruce Rauner’s request, House Republican Leader Jim Durkin said Thursday. Earlier this week the GOP governor announced intentions to sell the 16-story downtown Chicago building he called a “wasteful” use of government resources requiring roughly $100 million in maintenance. Rauner said his plan was to move roughly 2,200 state employees to offices nearby or in Springfield and put the building up for public auction within a year. Legislation proposed Wednesday by Durkin also detailed options to sell or lease through a sealed competitive bidding process or launch a public-private partnership. The proposal also alters how appraisals are used and allows Rauner to skip requirements that the building first be available for sale to other public entities like the city. … No specifics have been announced on where employees will go, including those working for statewide elected officers in the building. There’s also the unanswered question of how a sale will impact commuters. The Thompson Center is connected to a busy Chicago Transit Authority hub and underground pedestrian tunnel.