Football relocation fever and the Redskins bandwagon

San Diego Chargers fans showing their support for keeping the team in San Diego.  Photo: Jake Roth, USA Today.

1. Southern California.   Yesterday, National Football League decided on how to proceed with the interest of three teams, the Oakland Raiders, Saint Louis Rams, and the San Diego Chargers, in relocating to Los Angeles.

The League ended up acceding to the desires of the St. Louis Rams ("Goodbye, St. Louis Rams, next stop, LA," St. Louis Post-Dispatch) and the San Diego Chargers ("After all that, Chargers to stay – for now," San Diego Union Tribune), leaving the Oakland Raiders in place ("Oakland Tribune editorial: Time for Raiders owner Mark Davis to get realistic," Oakland Tribune), but chose the Inglewood site being developed by the Rams owner, not the Carson site project developed by the other teams, which was the site preferred by the League committee charged with making recommendations on the issue.

-- "Full coverage: The NFL in Los Angeles," Los Angeles Times
-- "Chargers stadium: Complete coverage," San Diego Union-Tribune

Each team has ties to Los Angeles.  Both the Rams and the Chargers were founded in Los Angeles. The Rams were formerly the LA Rams, although they've been gone for 20+ years, and spent the last part of the tenure in Anaheim--Orange County ("'The Rams are ours': Fans, former players want to welcome NFL team back to Southern California," Orange County Register).  The Chargers had originally been located in Greater LA before moving to San Diego.  And the Raiders spent time in Los Angeles between stints in Oakland.

In this Aug. 14, 2015, file photo, Oakland Raiders fans hold up signs for the team to stay in Oakland before an NFL preseason football game between the Raiders and the St. Louis Rams in Oakland, California. (AP Photo/Tony Avelar)

The urge to move was spurred by the owner of the Rams, who having difficulties in strongarming local government for a new stadium, went all out and created a joint venture to redevelop the Hollywood Park race track in Inglewood, including a football stadium in the plans.

That spurred the other teams to get in on the action, and the Raiders and Chargers proposed an alternative, a two-team stadium in Carson.

In part, San Diego is motivated by their assertion that 25% of their fan base is from north of San Diego County, and they would lose out if they didn't relocate.  However, there has been some interesting opinion writing on this issue, which avers that unlike the Rams, the Chargers don't have a natural fan base in LA, and a great deal of resources would have to be expended to build a fan base for the team were it to relocate.

While Southern California is the nation's second largest television market, the fact that it has been empty of a professional football team for the last two decades has been adroitly used by the National Football League and individual teams to strong arm their respective localities for lots of public monies to build new stadiums, out of fear that their team could relocate to Los Angeles.

It's worked for quite some time.

But Oakland isn't particularly replete with spare dough and according to the Oakland Tribune, not only is the current stadium a good site but the team owner hasn't been realistic in his demands, and in San Diego "political problems" within the local government made it difficult for the city to respond fast enough on the deadlines artificially imposed by the football team and league.  In the interim, the State of Missouri came up with a plan that in an objective world, ought to satisfy the NFL.

The funny thing is while the issue is "fan loyalty and community pride" for states and localities when it comes to team sports and providing financial support for stadiums and arenas, for the owners, for the most part, it's merely business.

Intra-league politics are involved too.  Each of the owners has pluses and minuses with others, which influences whether or not their proposals would be approved--three-quarters of the teams have to vote in favor of a relocation request for it to go forward.  Plus the League has decided there is only room for two teams.

One team will lose out, at least in terms of Los Angeles.  Not to mention the two cities losing teams.

The League benefits on both sides of the equation because if proposals for new teams come forward for the cities losing teams, large payments will have to be made to the league to buy a franchise.  For example, when the Cleveland Browns team was re-created in 1998, Al Lerner paid $530 million to the League for the franchise rights.  Plus, the relocating teams will each have to pay a relocation fee of $550 million to move.  The moves could generate $2 billion in extraordinary revenue to the League, albeit paid out over many years.

The recent proposal by AEG.  A few years ago, an independent proposal was pushed by the entertainment conglomerate AEG for a stadium in LA, which would have been sponsored by Farmers Insurance.  But the league pooh poohed the proposal, because AEG wanted to add a team, get ownership, and not have to pay extranormal fees, whereas the league was looking to make money from a new team--not give a team away for a discounted price.

A rendering of the plans to develop the site at the former Hollywood Park in Inglewood as a sports, retail and entertainment venue that will include an NFL stadium.  Some proponents liken the project to "an NFL Disneyland."

Hollywood Park/the Inglewood proposal.  The development project at Hollywood Park is both big and well underway ("Construction is underway at Hollywood Park site," Los Angeles Times).

On about one-half-square mile, besides the stadium, the project includes a performance venue of up to 6,000 seats, 890,000 square feet of retail, 780,000 square feet of office space, 2,500 new residential units, a 300-room hotel, and 25 acres of public space amenities.

Previous to the decision by the League, the Rams owner was willing to include another team as a tenant, but not as a co-owner (by comparison, the Meadowlands stadium is equally shared by the Jets and Giants) which would put the other team at a serious financial disadvantage.  But the League made the approval of relocation to Inglewood conditional on Kroenke acceding to a co-ownership agreement ("NFL consensus builds for a Rams-Chargers stadium project in Inglewood," Los Angeles Times.

From a logic standpoint, were I making the decision, I'd not have let the Rams move in the first place, and instead of letting the St. Louis Cardinals move to Phoenix, why didn't the League just create an opportunity for an expansion team in Phoenix.  But we can't change history.

In this case, it would have been "just as easy" to add two expansion teams to Los Angeles and kept the teams in place.  But that wouldn't enable teams to extract extranormal sums from localities and states for new stadiums.  For example, the new stadium for the Minnesota Vikings will cost just over $1 billion, with half the cost being paid for by the city and state.  Now, St. Louis and San Diego will be the cities used as a way to get communities to pony up public financing for stadiums as a way to preclude relocation.

2.  The !@#$%^&*()_ Washington Redskins and Washington, DC.  I am not much interested in professional and college sports, except from a business,organizational, and political standpoint, but especially from the standpoint of public financing and spending.

Visitors park at FedEx Field, home of the NFL Washington Redskins. (U.S. Air Force photo by Staff Sgt. Christopher A. Marasky)

I did follow the Washington Redskins more closely this fall out of an interest in organizational behavior and culture change because the team has foundered for more than one decade under its owner Daniel Snyder, but it seems to have turned a corner this year, despite a sense at the beginning of the season that it would not turn out well--instead the quarterback found his groove and team ended up winning their division, but lost in the first round of the playoffs.

The team's newfound success amps the "Redskins Bandwagon," and increases the desires to accommodate the team's interest in moving to a more lucrative location.  In the 1990s, the team moved from DC to Suburban Prince George's County, Maryland.

More recently, Virginia has been angling for the team ("Let it go: Washington Redskins and Virginia"), but the city keeps expressing interest ("(DC area) Stadium talk a/k/a "football stadiums are a bad 'investment' for (big) cities").

Now the team has hired an architect to design a new stadium ("Source: Redskins advance plans to relocate, hire Google’s architect for new stadium," Washington Post) and the successful season has so worked up the Washington Post, which in an editorial yesterday, called for the team to relocate back to the city ("Washington’s NFL team should build its next stadium in the District") so long as the team changes its name.

Unfortunately, there's not much talk of the opportunity cost in allocating a large parcel of land to a professional football stadium, which tends to go unused at least 340 days/year, and is surrounded by large swathes of parking.

DC is a small place (61 square miles) and one-third of the city's land is undevelopable as it is in federal hands, is comprised of parks, etc.

Postcard showing RFK Stadium surrounded by parking lots, with the DC Armory to the left.

The opportunity cost of keeping the RFK site as a stadium, mostly surrounded by parking, is considerable, especially as the H Street corridor is booming--with more than $1 billion of development at hand, and more than $1 billion forthcoming in the Union Station area, with more opportunities to be reaped.

Streetcar service in the corridor is spurring development east, and could along Benning Road as well, making it is possible to redevelop the northern RFK parking lots in a manner which would add housing and retail and other amenities to the city.

DC Streetcar on Benning Road.  Flickr photo by BeyondDC.

The need for more housing is especially pronounced, given the rampant rise in pricing for owned and rental housing throughout the city.

Even though local residents would be happy to keep the land as park ("A park "is always preferred" by residents over development: proposals for a park on the grounds of RFK Stadium" versus "Wanted: A comprehensive plan for the "Anacostia River East" corridor" and "DC has a big "Garden Festival" opportunity in the Anacostia River corridor") repatterning the site as a newly active part of an extended city is the preferred course of action.

Note that to redevelop the site, the city would have to get the National Park Service to agree to extinguish an easement on the property requiring "recreational use," of which a professional football stadium and parking lots qualifies. That would involve a significant payment.

Football stadiums and city locations--over the last 20 years, it's about 50/50 for in-city vs. suburban settings.  While it is possible for baseball stadiums and hockey/basketball arenas to be well-fit into urban settings, it's more difficult for football stadiums, especially because of the parking/tailgating requirement.  So many of the more recent football stadium projects have been built in "suburban" locations, such as the new stadium for the San Francisco 49ers, which is in Santa Clara, not SF, along with stadiums for the New York Jets and Giants, and the Dallas Cowboys.

In-city stadium locations tend to be preferred in weak real estate market cities.  However, the Minnesota Vikings are getting a new stadium in the City of Minneapolis, and many other cities still retain their football teams within the center city, and in new stadiums including Baltimore, Pittsburgh, Philadelphia, Detroit, and others.

However, compared to Washington, I'd argue that those cities have more fallow land development opportunity--they are weak real estate markets with lower demands for alternative uses for property--and it would make much more sense for the city to let the team go elsewhere.

Conclusion.  DC is a strong real estate market.  With latent demand especially for housing, and for walkability, redeveloping the RFK site as a way to

(1) spur redevelopment of the Hill East section of Capitol Hill

(2) better connect Hill East to H Street/Benning Road by redeveloping the RFK northern parking lots

(3) extend revitalization eastward not only from H Street but to Ward 7 and the Minnesota Avenue corridor

passing on the "opportunity" to recapture the area's professional football team ought to be the course of action chosen by the city's leaders.  Let Virginia or Maryland deal with the opportunity costs in hosting such a facility, allowing DC to better utilize the development opportunities present within the site to achieve better goals and objectives.

Note the recent announcements by New York State Governor Andrew Cuomo, in advance of his "State of the State" speech tonight, all calling for significant investments in infrastructure projects:

-- a new Penn Station
-- a revitalized and expanded Convention Center
-- a third track on the Long Island Railroad on a main line in Nassau and Suffolk Counties

along with previous proposals for

-- investment in LaGuardia Airport
-- the Hudson Rail Tunnel expansion and replacement project.

These proposals will build the economy of New York State, especially Greater New York, in ways that go far beyond what could be realized in association with a football stadium.

P.S.  It's not like the area around RFK Stadium did well economically when when it was the home of the Redskins football team either.  Maybe a better located site could have a different effect, but it would come at other costs.