;For the second time in five years, Amway billionaire Rich DeVos has his hand out. As in 2000-2001, the Orlando Magic owner is demanding that we build his team a new arena. If we don't, he'll bolt for friendlier terrain; perhaps Kansas City, Mo., which is building a new arena without a team to play in it. Without a basketball team, say civic boosters including the Orlando Sentinel editorial board, Orlando Mayor Buddy Dyer and pest-control company owner Harvey Massey, we'll no longer be a world-class city.
;;Taxpayers didn't buy it the first time. When DeVos offered up only $10.5 million toward a new arena in 2001, the region revolted. This time, the Magic have yet to say how much they'll offer for the estimated $385 million building — educated guesses range from $60 million to $100 million — which city officials have packaged with a renovated Citrus Bowl and performing arts center as part of a larger downtown revitalization. In their presentations to the Orange County Commission, backers of the arena — er, "events center" — and the Citrus Bowl emphasized that these projects are about more than sports events. Great cities have great community venues, they said, so this is something we need to do.
;;Neil deMause thinks that's ridiculous. He's the co-author of the 1998 book Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit (which is scheduled for an expanded re-release in 2008) and a New York-based sportswriter for The Village Voice and Newsday. We asked him for his take on the situation.;;
;You've written extensively about how professional sports teams convince local governments to build them new stadiums. Describe how this process works.;
;There's, at this point, a standard playbook for team owners who want public money for a stadium. The first thing you do is say, "Well, the old space is obsolete …" Team owners tend to be very vague about what "obsolete" means. Does obsolete mean it's falling down? Does that mean that it doesn't have enough luxurious boxes and enough food courts as the place down the road? Does it just mean you're not making as much money as you'd like to? Those can all fall under the rubric of economic obsolescence. It doesn't play very well to say, "We're not making enough money.";
;It's part of a package. If the response is, "You can't survive there or else what?," the implicit threat is, "Or else we'll move.";
;Typically what team owners will say — and I've seen this in 30 cities across the country now — is, "The last thing we want is for the team to leave the town. We want to make a go of it here, and we really wouldn't want to have to move.";;
;You'd think there would be populist opposition to subsidizing multimillionaire athletes, yet these stadiums and arenas go through more often than not. Why is that?;
;There absolutely is a populist opposition to it everywhere. … If you take a poll when a team starts a stadium campaign saying, "Should we spend public money on a new stadium or arena?," you're almost always going to get significant opposition, two-thirds opposed or something like that. … People are taxpayers and people never like to see their tax money spent on things that don't benefit them.;
;So you'll always see opposition and teams will try either one of two tracks. … They will try to get something passed without a popular vote, so you just have to win over a few key legislators. That's what the Minnesota Twins just did. After 11 years of trying to get a stadium through, they finally managed to do it by focusing on the [Hennepin] County Commission, which only had seven people. So they got four of them, they convinced four people to raise the county sales tax, and they went to the state saying, "OK, this is county money. All we want you to do is say [the county] can do this without going to referendum." And [the legislators] said OK. They managed to get around what is normally a state referendum on sales tax hikes.;
;So that's one way of doing it. The other is, if you have to have a public vote, just pour money into the campaign, because generally the opposition is poorly funded. I have looked at some case studies, and it seems like the tipping point is if you outspend the opposition by about 100 to one, then you'll usually win the referendum campaign.;;
;For years the Magic have complained that the TD Waterhouse Centre, which opened in 1989, is outdated. In 2001, DeVos offered up $10.5 million toward a new arena. This time, the team hasn't said how much it will offer. Any insight into what the Magic will do?;
;I don't pretend to have any clue as to what's inside Rich DeVos' head … [but] there's an increasing trend for team owners to put in more up front [for construction costs] in exchange for getting a larger share of revenues down the line. They want to make sure that they don't pay rent. They want to make sure that if there's naming rights, and concession-pouring fees, and ad-board sales, that that goes to them and not to the public. I think this is very much in response to the opposition that we don't want to be paying for somebody else's arena. So the idea is, "OK, we'll pay for it" or "We'll pay for a larger chunk of it, but we want to sign a lease deal that gets us money back down the road." And that's something that I think has to be watched extremely closely.;
;That's what happened, incidentally, with the Miami Heat's arena in the 1990s. The Heat were originally going in saying, "OK, we're having a referendum. We're asking the public to put up the money for the arena, but we'll take care of the operations and maintenance costs." Two weeks before the election they thought they were going to lose so they said, "OK, we're switching it around. We'll pay all the money to build it, but the county will pay us an operations subsidy to pay our annual operations cost." At the end of the day, the public-private split was exactly the same. But it sounded a lot better.;;
;The city argues that these projects benefit the region more than just the teams, because they will lure big events beyond basketball games.;
;Well, there are a couple of problems with that. One is that you can only get so many NBA All-Star games and NCAA [basketball] finals and things like that. There are a lot of arenas out there competing for them and there aren't that many to go around. The second problem is … especially for a place like Orlando, you have the problem that people aren't going to build new hotels just to service the NCAA finals. If you already have the hotels pretty much maxing out their capacity, then all you're doing is pretty much displacing people who otherwise would come.;;
;We've been told that if we don't ante up we'll no longer be a top-tier city.
;;Because nothing else is going on in Orlando that anybody outside of Orlando would know about.;;
;There's now talk of moving the arena from downtown to the county's tourist district. It's a bit of hardball, a way for the Magic to extort more money from the city to keep them downtown, and keep this project part of a broader revitalization scheme.;
;Most cities like to have them downtown because then they can sell it as sort of this redevelopment package, which there's definitely an argument for. If you're going to have money spent regionally, it's better for the city to have it in the city, because then they get a share of the tax proceeds. But the revitalization aspects of arenas are so overblown. There's a certain price point at which you have to say, well, sure we wouldn't get the benefit of having it in the city, but if we also don't have to foot the bill, I mean, get somebody else to pay for it. You can still drive there.;;
;Let's talk about the Citrus Bowl, which supposedly needs a $252 million renovation despite not having a football team to anchor it. The pitch is, again, if we build it, the major NCAA events and Bowl Championship Series games will come, and maybe one day an NFL team. Right now, though, the stadium is barely used, save for the occasional monster truck rally or marching band competition. What do you think of the economics of such an investment?;
;I think the worst thing that you can ever possibly do is build a stadium on spec. I think you're seeing that right now with cities like Oklahoma City and Kansas City, where they built arenas on spec without a tenant. And you know Oklahoma City, to get the [NBA's New Orleans] Hornets to do just a little cameo there for a couple of years, offered them the sweetest sweetheart lease deal anybody has ever seen, where not only don't they have to pay rent, but they actually get their profits guaranteed. If they don't make enough profit, the city pays them what they were otherwise going to make.;
;[With] arenas, at least you can argue [that] if the city or the county or whoever winds up owning it is getting a cut of the revenues, you can at least use it 200 nights a year, so at least you're going to have some sort of economic activity coming out of there, some of the concert revenue, and concessions revenue from whatever tour comes through.;
;But a football stadium, the NFL at most is going to be there 10 days a year, and how many friggin' stadium tours are there? There's just not a lot of acts that actually want to play at a stadium. So you're back down to your monster truck rallies.;
;The problem with a football stadium is that 300-odd days a year, it's an empty stadium blighting an impoverished neighborhood anyway. Jesus, with $250 million you could do an awful lot for a neighborhood. I'm sure if you asked people in that neighborhood, "Here's $250 million. What would you use it for?," they probably would not say, "Hey, could you refurbish the luxury boxes in that stadium?";
;;We know DeVos has money enough to do it himself if he wanted to.;
;Exactly, but if it were going to be a moneymaker overall, I think he would have done it himself. … You don't want them because they are moneymakers, they want them because they're ways to get public subsidies. If you go to the state and you say, "Can I have $300 million in cash?," they laugh at you. If you go to the state and say, "Can I have a $300 million arena?," they say, "Let's talk." … DeVos knows that he could build this, but he knows that if he wins just once, the payoff is going to be tremendous for him.; firstname.lastname@example.org
Subscribe now to get the latest news delivered right to your inbox.