Naperville to add 6,600 seat indoor concert venue

While a new development in the northwest corner of Naperville seems to be primarily about ice hockey, the facility could also accommodate sizable concerts:

Extra landscaping to block sound will be negotiated into a plan for an ice rink and entertainment venue soon to be developed in Naperville.

CityGate Centre North will be a 209,589-square-foot facility with two NHL-regulation-sized ice rinks and seating for up to 4,600 for hockey games or 6,600 for concerts…

Ken Witkowski, senior vice president of Calamos Real Estate LLC and a former law enforcement official, said CityGate Centre North plans to be largely dedicated to hockey and ice skating uses with several local clubs and a semipro team. But owners are keeping their concert options open and Witkowski said they also could plan up to two concerts, expos or other entertainment events a month.

He said the concrete outer walls of the $60.2 million arena will absorb sound created inside, and security on site will “maintain proper decorum.”

Does a facility like this give Naperville a new edge in the competitive suburban entertainment scene? This would help fill a gap in the west suburban entertainment scene: a decent-sized concert venue. The northwest suburbs have the Sears Center and Allstate Arena. Gymnasiums on college campuses throughout the metropolitan region can host concerts. This sized facility would fit between larger (think United Center, Allstate Arena) and smaller venues (think theaters). It would also be in a wealthy community where plenty of nearby residents could pony up money for tickets.

At the same time, it is a little funny that a suburban concert venue will be constructed next to a retirement community, warehouses, and a nice hotel. There are a jumble of uses just off Route 59 north of I-88 and they are not necessarily all compatible.

It will also be interesting to see how much the concert potential affects the design of the facility. Could this accommodate high-tech shows? Could the hottest new acts be headed to Naperville, Illinois?

 

Cities ready to offer tax monies for new soccer stadiums

Cities continue to see sports stadiums as good uses for tax dollars. This time, it involves soccer stadiums:

Officials from Cincinnati, Detroit, Nashville, and Sacramento appeared in New York on Wednesday to place their bids with Major League Soccer for an expansion team. Slots for two teams are now up for grabs in the league’s plans to expand, so cities are lining up to lob promises of tax incentives for stadium construction at the MLS. Picture the mayors of each of these cities lined up for a free kick on goal.

Cincinnati, for example, has secured $200 million in private funds to build a stadium for FC Cincinnati, and the city has pledged up to $75 million in public money to pay for the infrastructure associated with a stadium. Nashville promises $25 million in tax dollars toward build-out costs for a $275 million Nashville Soccer Club stadium, which would be paid for through a public-private financing deal. Representatives for Sacramento Republic FC argued for a plan that would cost the city $46 million to realize a privately financed $226 million stadium.

Meanwhile, the Detroit Express would play on Ford Field, the home of the National Football League’s Detroit Lions, meaning that the proposed soccer team’s owners—who also own the Lions, the Detroit Pistons, and the Cleveland Cavaliers—would merely have to pony up the $150 million franchise fee plus some smaller costs in adjusting the existing stadium.

Perhaps in their favor, the cities and taxpayers would not be investing so much as is required for a top-four sport stadium.

At the same time, this approach is likely a bad idea. The research is pretty clear: the winners of taxpayer funded stadiums are the team owners who tend to already be wealthy people. Cities desperately want to boost their status and look trendy and acquiring a new sports team, particularly one in a sport that is thriving and looks like it is on the rise (just see the number of new teams in MLS in recent years). But, research shows that if do not build these stadiums and acquire teams, residents and visitors will just spend their money elsewhere.

Another interesting piece of the MLS expansion is that it is involving some medium-size big cities. Think Sacramento: they have a NBA franchise and nothing else. Orlando had a NBA franchise, nothing else. Cincinnati has the NFL and MLB. Austin has no major team. MLS expansion offers some new places a chance to get in the sports game and signal that they are major players.

Could high school football stadiums drive economic development?

Among other reasons, the construction of impressive new high school football stadiums in Texas is justified by the idea that they will promote economic development:

School officials have responded to critics by pointing out that the stadium would also be used for soccer games, band competitions, and some state football games; there’s also the hope that retail and restaurant development will spring up nearby. A high school football stadium serves the community in ways other than just bringing in visitors, business, new residents and more tax dollars. One of them is clearly Texas pride in the game-day spectacle.

The evidence is pretty clear with sports stadiums that the public money spent on them tends to go back to the owners and teams, not the community. Could high school stadiums – paid for with tax money yet serving the community – be different?

One point of skepticism is to ask how many significant events these stadiums would hold each year. The biggest crowd events are football games. But, a high school team plays roughly five to eight home games each year. While these stadiums are bigger than the average high school stadium, are there enough fans to support local businesses? It seems like the stadiums need to hold a lot more events to truly bring in people. (Perhaps some of them could attract concerts or festivals?)

A second question is how to directly link the football stadium to economic development. As the article notes, a number of these communities are expected to grow. At least some of this growth would have happened without the flashy new stadium. Are the communities going to survey new residents and businesses to see if the stadium factored into their decision? Or, having built the stadiums, will they attribute positive changes to the stadium?

Finally, it sounds like these communities are locked into competition for stadiums (and other amenities as well as general growth). Is it necessarily the case that building a great stadium would give one suburb a significant leg up on another suburb? If this is a zero-sum game or an arms race, someone will lose. A different view might be that Sunbelt suburban growth will continue in a number of these communities and may not be strongly related to the construction of high school stadiums (or other public amenities).

In economic terms, 1 baseball team = 1 midsized department store

Following up on the academic consensus that sports do not economically benefit communities, one economist notes the economic impact of sports teams:

“If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent,” Leeds says. “A baseball team has about the same impact on a community as a midsize department store.”

The reason?

Economists say the biggest reason sports teams don’t have much impact is that they don’t tend to spur new spending.  Most people have a limited entertainment budget, so the dollars they are spending when they go to a game is money they would have spent elsewhere, maybe even at a restaurant or small businesses where more money would have stayed in the community. Plus, Matheson says, rather than draw people to a neighborhood, games can actually repel them.

Don’t underestimate the money generated by large retail stores. When I worked a short stint at a local Target at the end of high school, I remember seeing the board in our office that listed daily sales. The figure was typically around $100,000. That generates a lot of tax revenue through sales taxes and property taxes.

This is more evidence that the more important feature of sports teams in major cities is their social and cultural value. Teams provide something for a city to rally around and contribute to the city’s collective identify. In major cities with millions of people, it is difficult to find features or events that can bring large numbers of people together. Sports teams also provide opportunities for leisure, whether through enjoying the stadium experience or experiencing the game from afar. Now, if only we could find politicians that would admit the taxpayer money going to stadiums or teams was due to the interest in having a common sports identity and leisure experience rather than some grand economic impact…

Obama administration proposal to limit tax-free government bonds for stadiums

Federal policy might change how sports teams and municipalities negotiate stadium deals:

That’s what the Obama administration proposed in its budget last month: to end the issuance of tax-free government bonds for professional sports facilities, a practice that has, according to research by Bloomberg, siphoned $17 billion of public money into arenas for NFL, MLB, NBA, and NHL franchises over the last 30 years and cost Americans $4 billion in forgone federal taxes on top of that. It’s too late for residents of Cobb County, but Congress might yet save the rest of us some dough…

So how did we wind up in this situation? Local authorities have long used tax-exempt bonds to raise money for certain private uses—whether factories, train stations, or home mortgage loans—in addition to schools, sewers, and other infrastructure projects. In most cases, the ensuing economic growth was at least intended to pay back the municipal investment. Sports stadiums were no different: Governments could raise money in exchange for a share of future revenue…

Much of the rest of the article summarizes the research that shows cities and taxpayers tend not to come out ahead in these deals. So, this new policy might solve the problem?

Still, it wouldn’t stop cities from paying for stadiums. The last time Congress made public financing more onerous, in 1986, the result was a disaster: Cities jumped to meet the new, harsher terms, opening a three-decade stadium construction spree.

In other words, the policy might close the loophole for this particular financial instrument but there are other ways to make such deals. As I’ve said repeatedly, few politicians are willing to let the big team get away. Of course, the historical record suggests that everything does not necessarily fall apart when teams move. Many of the cities since the 1950s that saw teams move away later saw new teams take their place. Sports teams only have limited numbers of places they can move to make the kind of money they want; this is the reason Los Angeles looms so large right now in the NFL’s urban landscape because the next options are not very good.

The bigger question may be whether cities and suburbs can stop themselves from making bad deals, even with federal policies that take away some of their options.

High-powered lawyer to help sell the Milwaukee Bucks wants public money even as he lives in a McMansion

Here is an example of how looking at the personal McMansion of a wealthy individual can be pulled into commentary regarding that person’s public actions:

Marotta will certainly not be on the sidelines as a new arena is sought and fought over. He will be faced with the task of assembling a suitable building parcel as well as financing its purchase and the construction of a new facility. The $200 million promised by the seller and the new owners will not be enough to foot the bill.

Mayor Barrett and others have called for a regional tax to help pay for the stadium. If Marotta has to help this pass, he will get a taste of the struggle ahead by reading the Resolution Opposing a Tax to Fund a New Sports Arena in Downtown Milwaukee that was passed by the Executive Committee of the Ozaukee County Board of Supervisors in September 2013. Ozaukee County contributes to the 0.1 per cent Miller Park tax, and wants no part of another…

The first task is probably to find them in this cavernous dwelling, built in 2010. It has 17 rooms, of which 7 are bedrooms. There are 6 full baths and 3 half-baths in the home, along with “5 add’l fixtures”

Oh, we’ll find them later — off to the 5,605 square foot basement, of which 4,926 square feet is a finished rec room. That is a lot of recreating. Above is a first floor with 4,623 square feet of living space, surmounted by a more modestly sized 3,821 square foot second floor. Maybe it’s time to search around the 982 square foot attached garage with lake views and see if the kids are there, transfixed by the waves below…

By contrast, the visitor is encouraged to look at the orange structure to the south of the Marotta home. It could easily be overlooked, but upon closer inspection you can see a modern full-sized home dwarfed by the giant shadow cast by its neighboring McMansion.

This argument appears similar to the critique of McMansions offered by Thomas Frank several weeks ago: how can someone who has done well in life even think of asking for public money for a sports stadium? On top of this, studies suggest public tax dollars used for stadiums tend to benefit owners, not taxpayers. The McMansion discussed here (and it could be a mansion at over 10,000 square feet with the basement) is held up as an emblem of excess: it is very large, it is a teardown, it is an expensive house (in a nice location), and it is architecturally compromised. But, this analysis goes beyond speaking in generalities and links the negative qualities of the home to a particular person.

Lorde observes NBA game as an objective observer

Music star Lorde attended a recent Chicago Bulls game and sent these tweets while at the game:

i am at a bulls game this is so intense how does everyone in this room not have a stress ulcer

— Lorde (@lordemusic) March 18, 2014

i am such an outsider to the world of sport but i feel very proud of all playing

— Lorde (@lordemusic) March 18, 2014

the cheerleaders are doing synchronized movements to small pieces of drum-based instrumental music

— Lorde (@lordemusic) March 18, 2014

in the break they rolled out a red carpet on the court and a man did some tricks with his dog

— Lorde (@lordemusic) March 18, 2014

This presents an intriguing opportunity to compare how the average American sports fan would view things opposed to an outsider. For sports fans, it is easy to think of all they see as “natural:” the players just do what they do, the fans respond in certain ways, and the stadium experience is fairly similar across the United States. However, it is easy to forget that all of this “natural” behavior or knowledge is all learned. The whole American sports/entertainment package has a fairly set course from sports talk radio to how it is presented on television to how it is experienced live.

In her first experience at a NBA game, Lorde was simply describing what she saw. None of it is wrong and she is making “common sense” observations that might make little sense to non-fans. Why would there be a man with a dog doing tricks during the break? Why are stadium experiences in the US so intense (loud, constant videos)? Why do cheerleaders do what they do? The average sports fan may not even have good answers to these questions; those things happen because that is the way it has always happened. Of course, that is not true: sports experiences can differ widely based on contexts and history.

In this way, an outsider can bring needed perspective to a social norm many of us just take for granted. Is Lorde’s view of the NBA game more objective than those who have lots of basketball knowledge and experience?