Tuesday, June 13, 2006

Soccer Fans I need your help

From yesterday:

Ok, As I post this the US is trailing the Czech Republic 1-0. Help me understand why the public needs to pay for REAL's soccer stadium. Who does this benefit? Why should public money go to a project that will ultimately benefit Dave Checketts?I honestly want to know. I am opposed to any public financing for stadiums, and I am a huge sports fan!

I looked up an old Deseret News article by Brad Rock on July 12, 2001 that talks about public financing for stadiums:

In the April 2001 issue of The Regional Economist, writer Adam M. Zaretsky addresses the issue of building arenas and stadiums for pro teams. The general conclusion is that public financing of such facilities is risky business."When studying this issue, almost all economists and development specialists . . . conclude that the rate of return a city or metropolitan area receives for its investment is generally below that of alternative projects," he writes. "
He also notes that in metro areas where a stadium was built or refurbished in the previous 10 years, only three showed significant real personal income growth.
In Utah, both the E Center and Franklin Covey Field were built with taxpayer assistance. However, minor league player salaries, staff and operating expenses are lower, and thus the teams usually have an easier time meeting rent. Since World War II, the article states, approximately 140 sports facilities have been built or refurbished; only 14 did not use taxpayer dollars.
One of those is the Delta Center, which Jazz owner Larry H. Miller built with a personal loan. Miller isn't a typical owner. He has said he doesn't believe taxpayers should finance an owner's personal business ventures. For those who complain that Miller is making big dollars off the Delta Center, consider this: Unlike most owners, he took all the risk.

So please let me know why the public should finance this stadium, regardless of location. I think if their name is REAL SALT LAKE, they should play in SALT LAKE. Or they could follow the Los Angeles Angels of Anaheim and be called the REAL SALT LAKE of Sandy.


Scot said...

Excuse my head as it explodes re the Larry Miller thing. When will people pay attention to what actually happened with the Delta Center. The article is correct, Larry paid for the bricks and mortar on the DC...but NOT the land (RDA funds) or the infrastructure to the property (RDA funds).

If you put the amount that SLC paid for Larry's DC in early 1990 up against the amount that RSL would like for LAND and INFRASTRUCTURE but not for the bricks and mortar on the soccer stadium, you will see that we are dealing with apples to apples...yet, somehow Larry is lauded for building it on his own and people think that RSL is trying to rip off the taxpayers. First get the facts straight...then give your opinion.

Utah Conservative said...

Hi Scot,

I did research and this is what I found. Please correct me if I am wrong, but please cite it before you accuse me of not having my facts correct. I would love to include that.

Stenar said...

I don't think RSL should get any public money to build a stadium in Sandy, mostly because of the dirty, underhanded way politicians from Sandy went about getting their location chosen by RSL.

With that said, here's info about Delta Center using RDA funds:
The Delta Center in downtown Salt Lake City was built in 1989-90 with a $20 million RDA subsidy. In the late 1980s, Larry Miller, the owner of the Utah Jazz NBA basketball team determined that he needed a larger arena to accommodate public demand for seats and to provide the cash flow to attract top NBA players. Larry Miller proposed paying the bulk of the $80 million arena cost privately, requesting a $20 million contribution from the RDA. A coalition of government officials worked together to make a new arena possible. Salt Lake City School District, Salt Lake County and Salt Lake City agreed that the RDA could use the portion of the tax increment that was slated to go to each entity from the downtown project area for the new arena.
Salt Lake City School District asked for a partial in lieu payment in each year the tax increment was used for the new arena. Salt Lake County agreed to release the Jazz from its contract to play in the Salt Palace and to adopt non-compete agreements for the existing Acord Arena. The Utah Legislature agreed to change the RDA law to permit the use of funds scheduled to go to the taxing entities to be used for the new arena. The RDA subsidies paid for the land, the relocation of parking that was on the land used by Triad Center, the plaza surrounding the building, streetscape improvements on 400 West Street, and a small portion of the building construction cost. The Delta Center has a 50-year land lease. At the expiration of the lease, the land and building will belong to the RDA.
Source: www.lwvutah.org/Studies/RDA%20Study.pdf

If it cost $80M to build and $20M was public funds, then 25% was public funding. RSL wants 31% public funds ($45M of $145M).

Utah Conservative said...

Thanks for the clarification Stenar.

Surprising that I couldn't find anything on Lexis-Nexis...

Eric Salsbery said...

If you want to see how LHM paid for the Delta Center... Look on the Delta Center's own web site for starters. http://www.deltacenter.com/history.cfm

"after several months of conceptual design meetings and negotiations with potential lenders. Sumitomo Trust and the Redevelopment Agency of Salt Lake City saw the vision of Larry H. Miller and agreed to fund this new multi-purpose home for the Utah Jazz."

The local papers are chock full of selective writing, mis-information, diversionary writing, smoke, mirrors and everything just short of bald face lying on the subject of the Real Stadium.

The "News Agency Corporation" which owns DesNews and the SL Trib used public money to build their shiny new printing facility in West Valley City. Why did they not decry the evils of Public/Private partnerships when they had there hand out?

LHM used (in 1990) comparitively the same money for the Delta Center.

Franklin Covey Field (LHM's Bees are the main tenant) and E center were built entirely using public funding.

LHM's Jordon Commons and his Raceway in Tooele are both recieving HUGE tax breaks.

Essentially LHM is living on the public dime... yet people in Utah, including yourself, herald him as the model for public and private Fiscal responsibility... WAKE UP...

You know that Guy! but what you don't know about that guy is he is trying to prevent others from cutting in on his very lucrative public funding action...

With the help of the local media, LHM is using your trust to make millions off people like you... so if you want a villian... "You know the Guy!"

Anonymous said...

Well if you are opposed to "any public financing for stadiums" then I'm not sure what the point is to your question.

I'm also not sure what the relevance of the Czech Republic game has to your question (seems implied).

Certainly 100% public funded stadiums seem like giveaways to benefit team owners. It's a tough sell to argue justification behind it. Stadiums aren't quite museums. There's got to be some public benefit in having a stadium and team. Whether that in itself justifies public funding/financing is something I don't think can be "proved" either way.

Getting to the Real issue, they are requesting money for land and infrastructure. Land I see as a debatable issue. Teams don't want to be subject to property taxes. Once built a stadium ought to last 20-30 years and teams don't want to be subject to uncertainty over land issues. I can see something of a point there. Also if a team has options in where to play (Salt Lake vs St Louis vs etc), asking for some land to build on isn't necessarily ripping off the public IMO. The team is willing to develop an area and invest in the community while providing something many in the community will appreciate. I tend to favor giving teams of value some land if they want to build a state of the art stadium.

I don't get the objection to infrastructure costs. Are you going to build a home without assurance that the city will run electricity, water, etc to it as well as provide reasonable road access? Why shouldn't a sports team get the same?

Maybe the economics don't justify RSL building the stadium without 1/3 public support. But so what? You'll find that sports teams are something of a limited asset for mid-size markets in this country. Soccer and Salt Lake are a good fit. I think Checketts has a good plan to benefit both himself and Salt Lake.

Utah Conservative said...

The reason I mentioned the Czech Republic game was that soccer was on my mind.

Duece- good points. Thanks for contributing.

Anonymous said...

If state and local governments plan on subsidizing businesses, they should be businesses that are either export-oriented such as IT, manufacturing, biotech, etc. or are businesses that improve business productivity and competitiveness such as telecommunications, etc.

Subsidizing businesses -- and subsidies include infrastructure that businesses normally pay on their own dime -- that primarily serve a local customer base (most retail, entertainment, and some recreation fit into this category)makes no sense. It's not like local consumers are going to spend more money because they have another retail or entertainment option.

Finally, long term economic growth is NOT about getting locals to spend more money. The prime driver of economic growth is investment in production, not spending on final consumption. In the long run, we'll actually spend more by investing in productivity improvements because these investments lead to higher wages which allows us to spend more money.

Anonymous said...

This is the way I see it. Many people are asking, "How does a soccer stadium help the community? If I'm not a soccer fan nor if I have kids that play soccer, why should I care?"

It is simple, soccer is the world's biggest and most popular sport and the world will take note of Salt Lake City and Utah when big games are played here. Case in point, Real Madrid. You can bet that the thousands upon thousands of fans that follow Real Madrid know they will be here August 12th playing a game. Many of them may say to themselves, "Oh yeh, that's where they had the Olympics a few years back. Cool place." Over time the worldwide exposure will reap rewards. (You better believe the Olympics have already benefitted the State and many Utahns could care less about skiing.) And it will be this way year after year with RSL bringing in one big game on average to showcase our team or city. There are already plans in the works to sometime bring in the Mexican national team for an exhibition game. Watch out when that happens because you ain't seen nothing yet.

But our own stadium is needed for this. Rice Eccles Stadium is terrible for soccer. And Dave Checketts isn't asking for an outragous ammount of money. Just enough for the infrastructure and then he and his investors will cover the rest.

This deal is such a no brainer that the State and County will be making out like bandits, not Dave Checketts.

Anonymous said...

the problem isn't partial public funding. We ALL know it's done all the time.

The problem is the Loyalists have their lips firmly planted on some very wealthy asses.

RULoyal?- is that the phrase on your collar?

Bring out the gimp!

How many of there are you now? Ten?

Eric Salsbery said...

Anonymous... if that is your real name!

I suppose you have put me in my place. I may lose some sleep tonight... yawn!!!

But seriously! What does your post have to do with the subject?

Stenar said...

Studies have shown that stadiums in cities do not provide economic growth.

As anonymous said, it just shuffles around the money that is already in the local economy. It doesn't bring in new money.

Another anonymous questioned: "I don't get the objection to infrastructure costs. Are you going to build a home without assurance that the city will run electricity, water, etc to it as well as provide reasonable road access? Why shouldn't a sports team get the same?"

Developers, not the city, usually build the roads, run the electricity, water, etc. and they don't do it for free. They buy raw land, develop it and sell it for a profit above the price they paid for it and the cost of improvements they made to it. In the cases where the city provides that infrastructure, again, they don't provide it for free. We pay for it in property taxes.


Anonymous said...

So what if there isn't a big direct economic profit to the govt for such an investment. Having the team as an entertainment option has some value and along with similar options in other areas (Jazz, museums, parks, etc) contributes to quality of life. I for one would never have considered moving to Salt Lake before RSL was founded. Last year I came very close to going to Salt Lake for a new job. I'm not saying thousands will flock to the city. But I think many will admit it's a factor in quality of life for many residents. I tend to think of the team as more a resident than a developer/business. Sure MLS wants Salt Lake as market. But it doesn't HAVE to be there. Partnering for a stadium is mutually beneficial to the area and US soccer IMO.

jerry said...

for those of you that are against public funding of stadiums such as REAL Salt Lake there is a petition circulating for putting it on ballot for the Utah voters.
getrealutah.org and getrealutah@gmail.com