The NFL Is On the Clock
Posted by: Scott W. Graves | 11/16/2007 6:39 PM
By Jerry Slusiewicz
Much like pro football's draft where teams have fifteen minutes to make up their minds on who to pick or whether to make a trade, the NFL or a current or future team owner has about six months to decide if they would like to bring a team to Orange County. Anaheim has been waiting for an NFL team to relocate to Orange County since the Rams bolted in the night to St. Louis prior to the 1995 season. There have been numerous meetings with NFL executives, expressions of interest from NFL owners, and deadlines passed with no positive action taken by the NFL or a team owner. Now the city has put the NFL 'on the clock'. It has taken matters into its own hands by selecting property developer Archstone-Smith and Hines to build a mixed use project including high rise office towers, condos, hotels and boutiques on the site adjacent to Angels Stadium.
The decision to sell the land came almost one year after the city's deadline passed for the National Football League to select this property for a stadium. Anaheim was one of two sites that the NFL was considering for its return to the greater Los Angeles-Orange County area. The other site is the LA Coliseum, which has many drawbacks. The NFL needs the L.A. / O.C. market more than L.A. / O.C. needs the NFL. Strong markets attract teams, and Orange County is a very strong market. As the nation's fifth most populous county, with the second highest median household income for an urban area, Orange County's three million residents provide an excellent base for supporting professional football. There are few areas with the amount of disposable income for purchasing club seats or season tickets as Orange County. Anaheim is right in the middle of the nation's second largest media market, with roughly half of all 20 million Southern Californians living south or east of the 605 Freeway. Anaheim's location for a football stadium could not be better.
Anaheim Mayor Curt Pringle said, "We have become victims of our own success. The development activity within the Platinum Triangle has been stronger than anywhere else in Orange County, if not in all of Southern California. And with that, property values have increased and development interests have risen for this property around Angels Stadium." The city has owned the land since the 1960s, and has an approved Environmental Impact Report to allow for an NFL stadium. The value of this 51-acre parcel, part of the Platinum Triangle, is worth over $200 million dollars. That is what Archstone-Smith and Hines is offering if they are permitted to build 4 million square feet of office and retail, 3,125 residential units and multiple new hotels. This value is approximately four times the $53 million price the NFL suggested. Mayor Pringle says, "There have been other developments outside the NFL. There is pressure to come up with a fair value for the land." However, Pringle clearly states that it is not too late for the NFL. "The NFL is informed. It's not a done deal yet."
A final purchase proposal from Archstone will be presented to the Anaheim City Council in approximately six to eight months. The developer has been asked to explore opportunities with the NFL to be a part of their plan, but the city has stated that is not required as a condition of the sale to Archstone. Therefore, the NFL is now on the clock. Are they going to follow through and negotiate to build a stadium on this site in Anaheim or are they going to punt?
Building a new stadium is a costly venture and most modern day facilities have been built with large taxpayer contributions. Because of the NFL's strong desire to be back in the LA - OC area, they are willing to forego the rule that forces stadiums to be built using taxpayer dollars. Anaheim officials, and similarly those in Los Angeles, have told the NFL they can not rely on any significant taxpayer funding. Conservative, tax-averse OC residents should be pleased. However, the tab to build a stadium with the latest in suites and luxury boxes will come in close to $1 billion. Leigh Steinberg, the famed sports agent and NFL insider, was called an alarmist when the Rams left 13 years ago. He was on the money when he said, "The Rams wouldn't be replaced quickly and the cost will be much larger when an NFL team comes back." When the Rams left, the franchise was valued at approximately $200 million. Today a franchise costs about $1 billion. Therefore, the combined cost to purchase a team and build a stadium is about $2 billion. OC has potential NFL owners lined up. For OC, recognition has always been an issue. Steinberg says, "If OC was located anywhere else, not near Los Angeles, it would be considered one of the leading business, cultural, and entertainment centers in the country. LA's shadow looms large. Bringing a team to Anaheim would create a massive identity benefit, and generate hundreds of millions of dollars in revenue from merchandising, sponsorships, promotions, and naming rights." Steinberg goes on to say, "The league would love to put the new stadium on its prime rotation for the Super Bowl. Meaning the biggest corporate event of the year would be held in Southern California once every five years. It's well worth the effort to put a team here because the long term economic benefit would be a bonanza for any owner and OC."
Mayor Pringle agrees that it is a matter of considering the short-term cash infusion to the city from commercial and residential development against the long-term economic benefit of a professional football team. "Imagine the indirect benefits of this potential, all of which must be quantified. Anaheim is different from other NFL cities because of our destination amenities. The challenge is arguing dollars for dollars. Millions are spent each year to help identify Anaheim as a convention city. We have about 20,000 hotel rooms that benefit when people visit. Our bed tax is the single largest revenue to the city. If we put an NFL team on that site and build a West Coast Football Hall of Fame, and create a year round NFL Experience venue, how many visitors would stay an extra night in Anaheim?" Other NFL cities do not have the vast resources like Disneyland, the Angels, Ducks, or a premier convention center. Pringle's logic is more visitors equal a higher occupancy rate, which translates into higher room rates, and the possibility of building more capacity. "There is a lower direct tax-base by having an NFL franchise, but a much higher indirect tax-base and longer term economic benefit." The Anaheim City Council is not in full agreement on the indirect benefits to the city.
What about the NFL, what is their take on this deadline? Brian McCarthy, spokesman for the NFL says they are exploring ways to make it happen. He says, "The NFL has one shot to get this right. There are many considerations. It is a lengthy process and we are well aware of the Anaheim timelines." The NFL is still considering the LA Coliseum, but there are some issues of disagreement. According to Steinberg, "A stalemate has occurred. The NFL and LA have washed their hands of each other." The other tenant of the coliseum is the USC Football team. USC does not want the NFL to come in and reduce their sold out 92,000 seat stadium down to 65,000 seats so a few luxury boxes can be put in. Nevertheless, the LA name has always been a bigger attraction nationally with its proximity to the perceived glamour of Hollywood and the entertainment industry. McCarthy further stated, "Both locations make sense, we need to ensure it works for everyone. We have a deep interest in being back in the LA - OC area. We are very fond of the leadership in Anaheim and recognize the thriving business community that OC has to offer. The NFL will exercise patience and not rush."
As the clock ticks by, and we wait to see if the NFL makes a play or passes, there are a couple of things to consider. The city owns the land and the EIR is done; construction can commence immediately. Anaheim would be home to one of the finest, fan-friendly sports venues in the country, without the additional cost and constraints imposed by concerns for historical preservation or neighborhood compatibility. Anaheim has become a major sports town. The Angels attract over 3 million fans per year, second only to the New York Yankees in the American League. The city was named the number one sports city in the nation in 2003 by Sporting News magazine. Anaheim hosted the 2002 World Series and the 2003 & 2007 Stanley Cup. By a multiple of two, the NFL is the most popular sport in America. Yet, for almost a generation, children in this area have grown up without a local team to root for.
Former coaching great Bo Schembechler once said, "Football is the American game that typifies the old American spirit. It's physical. It's hard work. Football is not going to die. It is our American heritage." Whether or not football comes to OC remains to be determined. The NFL is on the clock, Anaheim is waiting in the green room, Football Commissioner Roger Goodell steps up to the microphone and announces, "For our first pick the NFL selects..."
Jerry Slusiewicz is the principal of Pacific Financial Planners LLC in Newport Beach, California. He is also host of Money Talks which airs on Saturdays AM 740 & 830. Mr. Slusiewicz can be contacted at 800-449-9501 or on his website: www.yourmoneytalks.com.
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BONUS FEATURE: What Do the Neighbors Think?
By Megan Marlena & Jerry Slusiewicz
From Tile Row to The Block and Downtown Disney, there is a plethora of business in the Platinum Triangle area. The question is what type of development does the local community prefer for the site adjacent to the Angels' ballpark, an NFL stadium or the currently planned residential and retail development? Both plans present advantages and disadvantages for neighboring business.
The Catch of Anaheim is a local seafood restaurant. President Don Myers was around when the Rams were in Anaheim. He says the games were a big boost for the profile of the city, and "being across the street from an NFL stadium means a big increase in business. When the Rams were in Anaheim, we saw increased revenues from pre- and post-game parties, and from parking." Myers added that because of the visibility many fans returned again at a later date. "When the Rams left, we lost a half a million dollars in revenue. Besides, there are too many retail centers with The Brea Mall and The Block only miles away...I prefer an NFL stadium."
Blocks away at fine dining establishment Mr. Stox Restaurant, owner Ronald Marshall had a different point of view. "An NFL stadium would not be a big money maker for us. Game day traffic would present a challenge to our clientele and could deter them from visiting." The current plan to build a retail and residential development is much more desirable to Marshall. That concept could generate a constant flow of steady patrons. Marshall recalls when the Rams were in Anaheim. "We lost business when the Rams played. I would pass on football for the Platinum Triangle."
Austin Taylor Corporate Clothing Store offers their clients "the experience of dressing well". The store, located across from Angel Stadium, does not rely on foot traffic; rather they focus on client relationship building. President Ron Viggiano says being located next to an NFL stadium would contribute to the "experience" they offer their clients. "We are a destination store. A stadium would enhance relationships with our clients. During football season we would offer a place to park and hang out before and after the game." The men's clothing store is equipped with a bar, leather couches, big screen TVs and a pool table. All the ingredients needed for pre- and post-game NFL fun. Business would expand from the NFL players desiring custom suits. Viggiano has no doubt that a stadium would increase sales. "Even though there would only be 8-10 games a year, it would be 8-10 really great gatherings for my clients." If Ron Viggiano could say one thing to Anaheim Mayor Pringle, he would express that the legacy of bringing a football team to Orange County would surpass any retail and residential development.
With an opposing view is Bruno Serato, owner of the White House Restaurant. Serato has praise for Mayor Pringle and how he has handled the development of the Platinum Triangle. "In my opinion, Mayor Pringle is the best leader Anaheim has had in the past 20 years. I agree with the mayor's choices. However, for my restaurant, I would prefer a retail and residential complex in the Platinum Triangle."
One of the biggest neighbors for this new project is the Angels. The parcel for this project is located directly on a large portion of what is now the Angels' parking lot. Angels' owner Arte Moreno's lease with the city forbids residences on the plot north of the stadium. Archstone-Smith is hoping to convince Moreno to change the lease. The city has asked the developer to remove 1,100 homes from their original plan. Moreno has threatened legal action if the project continues without his permission.
What do the neighbors think? It's statistically inconclusive. Some may say having a stadium would be a touchdown for business; while others feel a football team would result in a penalty for their establishment.
Much like pro football's draft where teams have fifteen minutes to make up their minds on who to pick or whether to make a trade, the NFL or a current or future team owner has about six months to decide if they would like to bring a team to Orange County. Anaheim has been waiting for an NFL team to relocate to Orange County since the Rams bolted in the night to St. Louis prior to the 1995 season. There have been numerous meetings with NFL executives, expressions of interest from NFL owners, and deadlines passed with no positive action taken by the NFL or a team owner. Now the city has put the NFL 'on the clock'. It has taken matters into its own hands by selecting property developer Archstone-Smith and Hines to build a mixed use project including high rise office towers, condos, hotels and boutiques on the site adjacent to Angels Stadium.
The decision to sell the land came almost one year after the city's deadline passed for the National Football League to select this property for a stadium. Anaheim was one of two sites that the NFL was considering for its return to the greater Los Angeles-Orange County area. The other site is the LA Coliseum, which has many drawbacks. The NFL needs the L.A. / O.C. market more than L.A. / O.C. needs the NFL. Strong markets attract teams, and Orange County is a very strong market. As the nation's fifth most populous county, with the second highest median household income for an urban area, Orange County's three million residents provide an excellent base for supporting professional football. There are few areas with the amount of disposable income for purchasing club seats or season tickets as Orange County. Anaheim is right in the middle of the nation's second largest media market, with roughly half of all 20 million Southern Californians living south or east of the 605 Freeway. Anaheim's location for a football stadium could not be better.
Anaheim Mayor Curt Pringle said, "We have become victims of our own success. The development activity within the Platinum Triangle has been stronger than anywhere else in Orange County, if not in all of Southern California. And with that, property values have increased and development interests have risen for this property around Angels Stadium." The city has owned the land since the 1960s, and has an approved Environmental Impact Report to allow for an NFL stadium. The value of this 51-acre parcel, part of the Platinum Triangle, is worth over $200 million dollars. That is what Archstone-Smith and Hines is offering if they are permitted to build 4 million square feet of office and retail, 3,125 residential units and multiple new hotels. This value is approximately four times the $53 million price the NFL suggested. Mayor Pringle says, "There have been other developments outside the NFL. There is pressure to come up with a fair value for the land." However, Pringle clearly states that it is not too late for the NFL. "The NFL is informed. It's not a done deal yet."A final purchase proposal from Archstone will be presented to the Anaheim City Council in approximately six to eight months. The developer has been asked to explore opportunities with the NFL to be a part of their plan, but the city has stated that is not required as a condition of the sale to Archstone. Therefore, the NFL is now on the clock. Are they going to follow through and negotiate to build a stadium on this site in Anaheim or are they going to punt?
Building a new stadium is a costly venture and most modern day facilities have been built with large taxpayer contributions. Because of the NFL's strong desire to be back in the LA - OC area, they are willing to forego the rule that forces stadiums to be built using taxpayer dollars. Anaheim officials, and similarly those in Los Angeles, have told the NFL they can not rely on any significant taxpayer funding. Conservative, tax-averse OC residents should be pleased. However, the tab to build a stadium with the latest in suites and luxury boxes will come in close to $1 billion. Leigh Steinberg, the famed sports agent and NFL insider, was called an alarmist when the Rams left 13 years ago. He was on the money when he said, "The Rams wouldn't be replaced quickly and the cost will be much larger when an NFL team comes back." When the Rams left, the franchise was valued at approximately $200 million. Today a franchise costs about $1 billion. Therefore, the combined cost to purchase a team and build a stadium is about $2 billion. OC has potential NFL owners lined up. For OC, recognition has always been an issue. Steinberg says, "If OC was located anywhere else, not near Los Angeles, it would be considered one of the leading business, cultural, and entertainment centers in the country. LA's shadow looms large. Bringing a team to Anaheim would create a massive identity benefit, and generate hundreds of millions of dollars in revenue from merchandising, sponsorships, promotions, and naming rights." Steinberg goes on to say, "The league would love to put the new stadium on its prime rotation for the Super Bowl. Meaning the biggest corporate event of the year would be held in Southern California once every five years. It's well worth the effort to put a team here because the long term economic benefit would be a bonanza for any owner and OC."
Mayor Pringle agrees that it is a matter of considering the short-term cash infusion to the city from commercial and residential development against the long-term economic benefit of a professional football team. "Imagine the indirect benefits of this potential, all of which must be quantified. Anaheim is different from other NFL cities because of our destination amenities. The challenge is arguing dollars for dollars. Millions are spent each year to help identify Anaheim as a convention city. We have about 20,000 hotel rooms that benefit when people visit. Our bed tax is the single largest revenue to the city. If we put an NFL team on that site and build a West Coast Football Hall of Fame, and create a year round NFL Experience venue, how many visitors would stay an extra night in Anaheim?" Other NFL cities do not have the vast resources like Disneyland, the Angels, Ducks, or a premier convention center. Pringle's logic is more visitors equal a higher occupancy rate, which translates into higher room rates, and the possibility of building more capacity. "There is a lower direct tax-base by having an NFL franchise, but a much higher indirect tax-base and longer term economic benefit." The Anaheim City Council is not in full agreement on the indirect benefits to the city.
What about the NFL, what is their take on this deadline? Brian McCarthy, spokesman for the NFL says they are exploring ways to make it happen. He says, "The NFL has one shot to get this right. There are many considerations. It is a lengthy process and we are well aware of the Anaheim timelines." The NFL is still considering the LA Coliseum, but there are some issues of disagreement. According to Steinberg, "A stalemate has occurred. The NFL and LA have washed their hands of each other." The other tenant of the coliseum is the USC Football team. USC does not want the NFL to come in and reduce their sold out 92,000 seat stadium down to 65,000 seats so a few luxury boxes can be put in. Nevertheless, the LA name has always been a bigger attraction nationally with its proximity to the perceived glamour of Hollywood and the entertainment industry. McCarthy further stated, "Both locations make sense, we need to ensure it works for everyone. We have a deep interest in being back in the LA - OC area. We are very fond of the leadership in Anaheim and recognize the thriving business community that OC has to offer. The NFL will exercise patience and not rush."
As the clock ticks by, and we wait to see if the NFL makes a play or passes, there are a couple of things to consider. The city owns the land and the EIR is done; construction can commence immediately. Anaheim would be home to one of the finest, fan-friendly sports venues in the country, without the additional cost and constraints imposed by concerns for historical preservation or neighborhood compatibility. Anaheim has become a major sports town. The Angels attract over 3 million fans per year, second only to the New York Yankees in the American League. The city was named the number one sports city in the nation in 2003 by Sporting News magazine. Anaheim hosted the 2002 World Series and the 2003 & 2007 Stanley Cup. By a multiple of two, the NFL is the most popular sport in America. Yet, for almost a generation, children in this area have grown up without a local team to root for.
Former coaching great Bo Schembechler once said, "Football is the American game that typifies the old American spirit. It's physical. It's hard work. Football is not going to die. It is our American heritage." Whether or not football comes to OC remains to be determined. The NFL is on the clock, Anaheim is waiting in the green room, Football Commissioner Roger Goodell steps up to the microphone and announces, "For our first pick the NFL selects..."
Jerry Slusiewicz is the principal of Pacific Financial Planners LLC in Newport Beach, California. He is also host of Money Talks which airs on Saturdays AM 740 & 830. Mr. Slusiewicz can be contacted at 800-449-9501 or on his website: www.yourmoneytalks.com.
---------------------------------------------------------------------
BONUS FEATURE: What Do the Neighbors Think?
By Megan Marlena & Jerry Slusiewicz
From Tile Row to The Block and Downtown Disney, there is a plethora of business in the Platinum Triangle area. The question is what type of development does the local community prefer for the site adjacent to the Angels' ballpark, an NFL stadium or the currently planned residential and retail development? Both plans present advantages and disadvantages for neighboring business.
The Catch of Anaheim is a local seafood restaurant. President Don Myers was around when the Rams were in Anaheim. He says the games were a big boost for the profile of the city, and "being across the street from an NFL stadium means a big increase in business. When the Rams were in Anaheim, we saw increased revenues from pre- and post-game parties, and from parking." Myers added that because of the visibility many fans returned again at a later date. "When the Rams left, we lost a half a million dollars in revenue. Besides, there are too many retail centers with The Brea Mall and The Block only miles away...I prefer an NFL stadium."
Blocks away at fine dining establishment Mr. Stox Restaurant, owner Ronald Marshall had a different point of view. "An NFL stadium would not be a big money maker for us. Game day traffic would present a challenge to our clientele and could deter them from visiting." The current plan to build a retail and residential development is much more desirable to Marshall. That concept could generate a constant flow of steady patrons. Marshall recalls when the Rams were in Anaheim. "We lost business when the Rams played. I would pass on football for the Platinum Triangle."
Austin Taylor Corporate Clothing Store offers their clients "the experience of dressing well". The store, located across from Angel Stadium, does not rely on foot traffic; rather they focus on client relationship building. President Ron Viggiano says being located next to an NFL stadium would contribute to the "experience" they offer their clients. "We are a destination store. A stadium would enhance relationships with our clients. During football season we would offer a place to park and hang out before and after the game." The men's clothing store is equipped with a bar, leather couches, big screen TVs and a pool table. All the ingredients needed for pre- and post-game NFL fun. Business would expand from the NFL players desiring custom suits. Viggiano has no doubt that a stadium would increase sales. "Even though there would only be 8-10 games a year, it would be 8-10 really great gatherings for my clients." If Ron Viggiano could say one thing to Anaheim Mayor Pringle, he would express that the legacy of bringing a football team to Orange County would surpass any retail and residential development.
With an opposing view is Bruno Serato, owner of the White House Restaurant. Serato has praise for Mayor Pringle and how he has handled the development of the Platinum Triangle. "In my opinion, Mayor Pringle is the best leader Anaheim has had in the past 20 years. I agree with the mayor's choices. However, for my restaurant, I would prefer a retail and residential complex in the Platinum Triangle."
One of the biggest neighbors for this new project is the Angels. The parcel for this project is located directly on a large portion of what is now the Angels' parking lot. Angels' owner Arte Moreno's lease with the city forbids residences on the plot north of the stadium. Archstone-Smith is hoping to convince Moreno to change the lease. The city has asked the developer to remove 1,100 homes from their original plan. Moreno has threatened legal action if the project continues without his permission.
What do the neighbors think? It's statistically inconclusive. Some may say having a stadium would be a touchdown for business; while others feel a football team would result in a penalty for their establishment.
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