What we really need in a new stadium...

[CuseOnly]

Sorry phone typos. Change the present vale , not then. Also, love to know what SU pays in rent for the dome and what the dome expenses are

I know the dome maintenance and upkeep is pretty high based on what has been reported but we will never see the real numbers. I would guess that the reported "rent" to the new stadium ($5 mil) is less than the dome's monthly nut. The Dome hosts an ungodly number of university events though, I thought there was a number reported but I can't remember what it was.

 

[retro44]

http://www.nydailynews.com/life-sty...center-owner-city-drop-debt-article-1.1206050

 

[Millhouse]

Quick and dirty calculation

Assumptions

NPV 100,000,000
discount rate 10%
Number of years 30

That means that the operator of the dome would need to make $10.6 million a year (not revenue but cash after expenses) to break even.

big numbers obviously sensitive to discount rate. at 5% (absurdly low btw), the breakeven yearly cash flow is 6.5 million.

I think people are making a mistake by assuming that just because the developer only puts up 20% of the cost of the thing, that must mean the cash flows are there to justify the 20%.

i think if COR is willing to assume that much cash rolling in a year, there must be some arrangements we don't know about.

I'm having trouble finding good numbers but i found a link that says that rent for Nationals Park in DC is about 5 million a year. (doesn't count expenses)

 

[TheCusian]

Quick and dirty calculation Assumptions NPV 100,000,000 discount rate 10% Number of years 30 That means that the operator of the dome would need to make $10.6 million a year (not revenue but cash after expenses) to break even. big numbers obviously sensitive to discount rate. at 5% (absurdly low btw), the breakeven yearly cash flow is 6.5 million. I think people are making a mistake by assuming that just because the developer only puts up 20% of the cost of the thing, that must mean the cash flows are there to justify the 20%. i think if COR is willing to assume that much cash rolling in a year, there must be some arrangements we don't know about. I'm having trouble finding good numbers but i found a link that says that rent for Nationals Park in DC is about 5 million a year. (doesn't count expenses)

I think we can safely assume that the 3 parties involved are involved because it makes no sense financially for any of them to do it on their own. It only works if it's beneficial for all 3 - now the 4th party is asking: what's our take? Are we on the hook or not getting the same value as the other 3?

The real question is: Can the city be pacified enough to not tip the balance the other 3 have hammered out? Will the political pressure be enough?

 

[Millhouse]

I think we can safely assume that the 3 parties involved are involved because it makes no sense financially for any of them to do it on their own. It only works if it's beneficial for all 3 - now the 4th party is asking: what's our take? Are we on the hook or not getting the same value as the other 3?

The real question is: Can the city be pacified enough to not tip the balance the other 3 have hammered out? Will the political pressure be enough?

my suspicion is that the city will be expected to be on the hook considering they're not putting anything down. they'll be expected to reduce the risk of COR's investment as some sort of backstop, I think.

 

[TheCusian]

my suspicion is that the city will be expected to be on the hook considering they're not putting anything down. they'll be expected to reduce the risk of COR's investment as some sort of backstop, I think.

Agreed. There something in there financially that the mayor is gagging on. It can't be what's public - because that would be politically risky and/or stupid.

 

[GoSU96]

my suspicion is that the city will be expected to be on the hook considering they're not putting anything down. they'll be expected to reduce the risk of COR's investment as some sort of backstop, I think.

Uh, as the developer COR would also get a subcontact to act as the prime from the project company. They make money on that to. That profit will go into their IRR calculation.

That's why contractors invest in PPP's.

And if they already have the operating company lined up as an equity investor in the project company they are already doing it right.

 

[Millhouse]

Uh, as the developer COR would also get a subcontact to act as the prime from the project company. They make money on that to. That profit will go into their IRR calculation.

That's why contractors invest in PPP's.

And if they already have the operating company lined up as an equity investor in the project company they are already doing it right.

i'll admit that i don't know what any of that means.

paraphrasing to see if i get it - pay 100 million for the right to build it and operate it. you'd have to be either a pretty darn efficient subcontractor or wildly overpaid by the state/county/project company(?) for that to amount to much.

this isn't snark - very roughly how much of the NPV do you think comes from being the prime contractor? (quarter, half,?)

 

[GoSU96]

i'll admit that i don't know what any of that means.

paraphrasing to see if i get it - pay 100 million for the right to build it and operate it. you'd have to be either a pretty darn efficient subcontractor or wildly overpaid by the state/county/project company(?) for that to amount to much.

this isn't snark - very roughly how much of the NPV do you think comes from being the prime contractor? (quarter, half,?)

From what I can tell this would be done as a public private partnership. As part of that the sponsors set up a project company, which is dedicated specifically to that particular project. The sponsors from what I can tell would be NYS, Onon. Cty, the Developer (at this point COR) and the operating company. SU would not be a sponsor and member of the project company according to the letter to Miner. Their commitment appears to be as the core tenant.

Based on what OE and others have said NYS would bring $200M in stimulas money. No bond, no future tax, but straight cash with no payback to the state. The county would bring $100M in financing that they would bond for. That could be county issued bonds or the project company could get project financing. Without digging back through it to see the amounts, ($100M total or $100M each or something inbetween) the Developer and the Operating Company would each be equity investors.

If this is the structure the project company itself would not be heavily leveraged at all if that is a primary concern. The parties could also heavily leverage the project, which increases the IRR for the equity investors and spreads the risk to debt issuers.

As for cash flows, somebody keeps bringing up Louisville. A major difference, and this is huge, is that the Yum center is a 20K arena, this would be a 44K mixed use, retractable roof stadium. Between SU, the Crunch, and the Soccer team you are going to get a ton of use. I don't see anyone but the Lville Basketball teams and Women's volleyball as locked in users. The rest of the events they have are concerts. What this new plan calls for consolidates facilities which is going to concentrate revenues. If gives the operator the option of adding big field sporting events that an arena can't. The same facilty could host ACC and NCAA Lax tourney events, same with Soccer perhaps (don't know about the field size), and also NCAA basketball tourney first and regional rounds, same for hockey. Add an MLL team and/or professional soccer team.

Do it right and the same facility could host big stadium shows and festivals and be configured for arena tours.

And again additional benefits are that this facility is added to the tax rolls in some manner, which benefits the gov't sponsors. The Dome and War Memorial don't pay a dime in property taxes. It gets the county out of the War Memorial business, that's a good thing.

In terms of functionality and use it would be like having the Staples Center and the LA Coliseum in the same building, the Izod Center and Met Life in the same building, the Linc, Wells Fargo and PPL Park in the same building. It has to be right sized for this community and the events we can draw, but done right this could be a great asset for everyone involved.

 

[OrangeXtreme]

What would be the difference in cost between a retractable roof stadium, and a fixed roof stadium with air conditioning?

It would seem to me that if they want to go after the summer convention & exhibit business, AC would be more beneficial than open air.

 

[GoSU96]

What would be the difference in cost between a retractable roof stadium, and a fixed roof stadium with air conditioning?

It would seem to me that if they want to go after the summer convention & exhibit business, AC would be more beneficial than open air.

It looks like retractable isn't a deal killer price wise. And I believe according to the letter full HVAC is in the plans.

 

[Millhouse]

putting your's in bold so I'm not responding in the middle of a quote

***
From what I can tell this would be done as a public private partnership. As part of that the sponsors set up a project company, which is dedicated specifically to that particular project. The sponsors from what I can tell would be NYS, Onon. Cty, the Developer (at this point COR) and the operating company. SU would not be a sponsor and member of the project company according to the letter to Miner. Their commitment appears to be as the core tenant.

Based on what OE and others have said NYS would bring $200M in stimulas money. No bond, no future tax, but straight cash with no payback to the state. The county would bring $100M in financing that they would bond for. That could be county issued bonds or the project company could get project financing. Without digging back through it to see the amounts, ($100M total or $100M each or something inbetween) the Developer and the Operating Company would each be equity investors.

If this is the structure the project company itself would not be heavily leveraged at all if that is a primary concern. The parties could also heavily leverage the project, which increases the IRR for the equity investors and spreads the risk to debt issuers.
***

I'm with you up to this point. I'm not saying that the developer would be highly leveraged compared to the cost of the whole thing. But they still need to come up with 100M of their own

***
As for cash flows, somebody keeps bringing up Louisville. A major difference, and this is huge, is that the Yum center is a 20K arena, this would be a 44K mixed use, retractable roof stadium. Between SU, the Crunch, and the Soccer team you are going to get a ton of use. I don't see anyone but the Lville Basketball teams and Women's volleyball as locked in users. The rest of the events they have are concerts. What this new plan calls for consolidates facilities which is going to concentrate revenues. If gives the operator the option of adding big field sporting events that an arena can't. The same facilty could host ACC and NCAA Lax tourney events, same with Soccer perhaps (don't know about the field size), and also NCAA basketball tourney first and regional rounds, same for hockey. Add an MLL team and/or professional soccer team.

Do it right and the same facility could host big stadium shows and festivals and be configured for arena tours.

And again additional benefits are that this facility is added to the tax rolls in some manner, which benefits the gov't sponsors. The Dome and War Memorial don't pay a dime in property taxes. It gets the county out of the War Memorial business, that's a good thing.

In terms of functionality and use it would be like having the Staples Center and the LA Coliseum in the same building, the Izod Center and Met Life in the same building, the Linc, Wells Fargo and PPL Park in the same building. It has to be right sized for this community and the events we can draw, but done right this could be a great asset for everyone involved.
***
I'm not in disagreement about the types of events the place could host.

I'm just skeptical about the 100M present value. I'd love to be able split out the 100m assumed value between event revenue and building revenue. Let's split down the middle (i think that's unlikely, events will probably make up a bigger share of the total value than that)

50M NPV, 30 years, 10% discount. That means you need 5.3 million a year of cash. Let's assume 20% margins. (this is also generous because the building would need to be rented constantly for so many different purposes which leads to expenses of reconfiguring) That means you have to bring in 26.5M in revenue to get to 5.3 million profit. (72 grand every day)

That is a lot of SU soccer games!

This doesn't even factor in taxes (another generous assumption)

I just don't think the area can support that many events.

That just seems like a lot. Lots of assumptions here but I think mine are all pretty generous. This is all just quick and dirty excel pmt formulas so take it with a grain of salt - if someone can pick apart mistakes, have at it

 

[orangeinohio]

What would be the difference in cost between a retractable roof stadium, and a fixed roof stadium with air conditioning?

It would seem to me that if they want to go after the summer convention & exhibit business, AC would be more beneficial than open air.

I don't understand the push for a retractable roof in Syracuse. It's sunny on average 163 days per year.
Here are some more facts about retractable roofs.

A study by the Atlanta Journal-Constitution found that 149 of the 225 NFL games that have been played in the league's four retractable roof stadiums [Houston Texas, Indianapolis Colts, Arizona Cardinals, Dallas Cowboys] have been conducted with the roof closed. That's 66 percent of all contests
The Colts have played only 13 of 43 games in Lucas Oil Stadium with the roof open.

 

[Cheriehoop]

[quote="GoSU96, post: 908183, member: 114" Between SU, the Crunch, and the Soccer team you are going to get a ton of use. I don't see anyone but the Lville Basketball teams and Women's volleyball as locked in users. The rest of the events they have are concerts. What this new plan calls for consolidates facilities which is going to concentrate revenues. If gives the operator the option of adding big field sporting events that an arena can't. The same facilty could host ACC and NCAA Lax tourney events, same with Soccer perhaps (don't know about the field size), and also NCAA basketball tourney first and regional rounds, same for hockey. Add an MLL team and/or professional soccer team.

Do it right and the same facility could host big stadium shows and festivals and be configured for arena tours.

And again additional benefits are that this facility is added to the tax rolls in some manner, which benefits the gov't sponsors. The Dome and War Memorial don't pay a dime in property taxes. It gets the county out of the War Memorial business, that's a good thing.

In terms of functionality and use it would be like having the Staples Center and the LA Coliseum in the same building, the Izod Center and Met Life in the same building, the Linc, Wells Fargo and PPL Park in the same building. It has to be right sized for this community and the events we can draw, but done right this could be a great asset for everyone involved.[/quote]

I'm confused though how many outside SU users could really utilize the building as their main arena when SU football would have the facility for 6 - 7 weekends in the fall and SU basketball would have 40 or so home games between mens' and womens games scheduled from Nov through early March. That isn't counting the lacrosse team, if like the dome, this new facility would be their home. What other major sports team like the Crunch could use it for their 35 home games from October through April? I doubt the AHL is going to co-ordinate their longer schedule with SU sports teams to accommodate the Crunch anymore than the local soccer team Silver Knights could find facility time available for their 10 home games all in the same season. In addition what about practice time for the Crunch, Silver Knights etc and their opponents?

From May through September the facility would be open for functions but other than graduations, baseball (we already have a stadium), large concerts what other uses could be scheduled especially when Onondaga County themselves and their new SRC arena with a capacity of 6,500 would be in direct competition . The state fair grounds is also another competitor for events/concerts etc. How many sports/events in Syracuse exceed that capacity particularly when SU isn't in session?

 

[OrangeXtreme]

I'm confused though how many outside SU users could really utilize the building as their main arena when SU football would have the facility for 6 - 7 weekends in the fall and SU basketball would have 40 or so home games between mens' and womens games scheduled from Nov through early March. That isn't counting the lacrosse team, if like the dome, this new facility would be their home. What other major sports team like the Crunch could use it for their 35 home games from October through April? I doubt the AHL is going to co-ordinate their longer schedule with SU sports teams to accommodate the Crunch anymore than the local soccer team Silver Knights could find facility time available for their 10 home games all in the same season. In addition what about practice time for the Crunch, Silver Knights etc and their opponents?

From May through September the facility would be open for functions but other than graduations, baseball (we already have a stadium), large concerts what other uses could be scheduled especially when Onondaga County themselves and their new SRC arena with a capacity of 6,500 would be in direct competition . The state fair grounds is also another competitor for events/concerts etc. How many sports/events in Syracuse exceed that capacity particularly when SU isn't in session?

Assuming that the facility will have field turf, and knowing that field turf can't be rolled up after each game, where would the ice rink go?

It takes days to set up one of those temporary rinks that you see in all the outdoor NHL games. Makes it almost impossible to share the facility with SU Men's and Women's Hoops and LAX.

 

[GoSU96]

[quote="GoSU96, post: 908183, member: 114" Between SU, the Crunch, and the Soccer team you are going to get a ton of use. I don't see anyone but the Lville Basketball teams and Women's volleyball as locked in users. The rest of the events they have are concerts. What this new plan calls for consolidates facilities which is going to concentrate revenues. If gives the operator the option of adding big field sporting events that an arena can't. The same facilty could host ACC and NCAA Lax tourney events, same with Soccer perhaps (don't know about the field size), and also NCAA basketball tourney first and regional rounds, same for hockey. Add an MLL team and/or professional soccer team.

Do it right and the same facility could host big stadium shows and festivals and be configured for arena tours.

And again additional benefits are that this facility is added to the tax rolls in some manner, which benefits the gov't sponsors. The Dome and War Memorial don't pay a dime in property taxes. It gets the county out of the War Memorial business, that's a good thing.

In terms of functionality and use it would be like having the Staples Center and the LA Coliseum in the same building, the Izod Center and Met Life in the same building, the Linc, Wells Fargo and PPL Park in the same building. It has to be right sized for this community and the events we can draw, but done right this could be a great asset for everyone involved.

I'm confused though how many outside SU users could really utilize the building as their main arena when SU football would have the facility for 6 - 7 weekends in the fall and SU basketball would have 40 or so home games between mens' and womens games scheduled from Nov through early March. That isn't counting the lacrosse team, if like the dome, this new facility would be their home. What other major sports team like the Crunch could use it for their 35 home games from October through April? I doubt the AHL is going to co-ordinate their longer schedule with SU sports teams to accommodate the Crunch anymore than the local soccer team Silver Knights could find facility time available for their 10 home games all in the same season. In addition what about practice time for the Crunch, Silver Knights etc and their opponents?

From May through September the facility would be open for functions but other than graduations, baseball (we already have a stadium), large concerts what other uses could be scheduled especially when Onondaga County themselves and their new SRC arena with a capacity of 6,500 would be in direct competition . The state fair grounds is also another competitor for events/concerts etc. How many sports/events in Syracuse exceed that capacity particularly when SU isn't in session?[/quote]

I get all that, that's why you hire an operating company that can get that done. Look at the staples center. Two NBA teams and the Kings. They have Hockey games that start at 1pm and a Basketball game at 7:30.

Would it be complicated, sure, but far from impossible. The war memorial isn't going away, they can use that as a practice facility. If the Cty wants to decommision it there are plenty of indoor facilities for an indoor soccer team to use during the day. The hockey team would either have to use an existing facility or a practice facility might need to be built, but that's a pretty minor issue.

 

[GoSU96]

Assuming that the facility will have field turf, and knowing that field turf can't be rolled up after each game, where would the ice rink go?

It takes days to set up one of those temporary rinks that you see in all the outdoor NHL games. Makes it almost impossible to share the facility with SU Men's and Women's Hoops and LAX.

According to everything I've seen the plan is to have the Crunch as a tenant.

 

[OttoMets]

From what I can tell this would be done as a public private partnership. As part of that the sponsors set up a project company, which is dedicated specifically to that particular project. The sponsors from what I can tell would be NYS, Onon. Cty, the Developer (at this point COR) and the operating company. SU would not be a sponsor and member of the project company according to the letter to Miner. Their commitment appears to be as the core tenant.

Based on what OE and others have said NYS would bring $200M in stimulas money. No bond, no future tax, but straight cash with no payback to the state. The county would bring $100M in financing that they would bond for. That could be county issued bonds or the project company could get project financing. Without digging back through it to see the amounts, ($100M total or $100M each or something inbetween) the Developer and the Operating Company would each be equity investors.

If this is the structure the project company itself would not be heavily leveraged at all if that is a primary concern. The parties could also heavily leverage the project, which increases the IRR for the equity investors and spreads the risk to debt issuers.

As for cash flows, somebody keeps bringing up Louisville. A major difference, and this is huge, is that the Yum center is a 20K arena, this would be a 44K mixed use, retractable roof stadium. Between SU, the Crunch, and the Soccer team you are going to get a ton of use. I don't see anyone but the Lville Basketball teams and Women's volleyball as locked in users. The rest of the events they have are concerts. What this new plan calls for consolidates facilities which is going to concentrate revenues. If gives the operator the option of adding big field sporting events that an arena can't. The same facilty could host ACC and NCAA Lax tourney events, same with Soccer perhaps (don't know about the field size), and also NCAA basketball tourney first and regional rounds, same for hockey. Add an MLL team and/or professional soccer team.

Do it right and the same facility could host big stadium shows and festivals and be configured for arena tours.

And again additional benefits are that this facility is added to the tax rolls in some manner, which benefits the gov't sponsors. The Dome and War Memorial don't pay a dime in property taxes. It gets the county out of the War Memorial business, that's a good thing.

In terms of functionality and use it would be like having the Staples Center and the LA Coliseum in the same building, the Izod Center and Met Life in the same building, the Linc, Wells Fargo and PPL Park in the same building. It has to be right sized for this community and the events we can draw, but done right this could be a great asset for everyone involved.

Not a major point here, but you've repeated this a lot. No matter who builds what, the Dome and War Memorial parcels will always be exempt from property taxes.

No non-profit is going to build anything on the Dome site, and the County's not going to unload the War Memorial -- historically protected and part of the OnCenter complex -- on a tax-paying entity.

For what it's worth, this proposed stadium would, if built, certainly be tax-exempt for a very long time (read: the life of the building). Chatter from the County about fully-taxable was just that: talk.

There are plenty of valid arguments in favor of a new stadium (and, of course, valid arguments against), but property tax revenue isn't one of them.

 

[supp]

Millhouse, go and read Raij's letter. SU will pay $5.4 million/year as a tenant of the new building. Add in parking/concessions, special events, and whatever piddling crap the Crunch will pay and I would say that the arena operator is getting a steal of a deal.

The elephant in the room is where the other $100 million will come from for the construction...$200 from NYS, $100 from operator, and $100 Onondaga Cty bonds (yes, bonds, go and see Mahoney's comments) is only $400 million. Naming rights might bring in $15 million over a 10-12 year period (generally not a lump sum).

 

[Millhouse]

Millhouse, go and read Raij's letter. SU will pay $5.4 million/year as a tenant of the new building. Add in parking/concessions, special events, and whatever piddling crap the Crunch will pay and I would say that the arena operator is getting a steal of a deal.

The elephant in the room is where the other $100 million will come from for the construction...$200 from NYS, $100 from operator, and $100 Onondaga Cty bonds (yes, bonds, go and see Mahoney's comments) is only $400 million. Naming rights might bring in $15 million over a 10-12 year period (generally not a lump sum).

i don't know. operating the building has costs. 30 years, 50 million up front, 10% discount rate, 20% margins means you need 25 Mil a year. parking, special events, crunch doesn't make up that difference.

put it this way. 5.4 million a year with no expenses (unrealistic for the sake of argument), 30 years, 10% discount rate only gets you to 94 M

 

[supp]

i don't know. operating the building has costs. 30 years, 50 million up front, 10% discount rate, 20% margins means you need 25 Mil a year. parking, special events, crunch doesn't make up that difference.

put it this way. 5.4 million a year with no expenses (unrealistic for the sake of argument), 30 years, 10% discount rate only gets you to 94 M

I would imagine that 5.4 million is not locked in for the entire length of the lease but what SU will pay in year 1. A question that remains unanswered: who will get the ticket revenues? Does SU as the tenant get all the revenues for SU sports events? Does the operator get a cut? If so, do they have a say in ticket costs? What about PSLs and luxury suites? I think on balance you're right that there's lots of unreported revenue here. The questions is where does it come from? Does it come from those who use the arena (via ticket revenues) or from everyone in the area (via tax breaks and subsidies)?