Montreal in MLS sooner than we think?

[brownbear]

Well, well, well...

I had a very interesting dinner conversation this evening with someone in the MLS who told me two very interesting things:

1) Montreal may get into the league sooner than we thought as a direct result of serious financial problems of the backers' of the Philadelphia bid.

2) The stadium issue could be a deal-<s>clincher (in the negative sense)</s> breaker for the Vancouver bid.

Let's take these one step at a time:

First, the main backers (financially, at least) of the Philly bid are Christopher and Robert Buccini, co-founders of the Buccini/Pollin Group; Jay Sugarman, chief executive of iStar Financial. iStar Financial has seen it's share price drop 25-1.6/25=93.6% since the beginning of 2008. Wow! So it looks like Mr. Sugarman is much less wealthy today than he was not even 10 months ago. It's not a surprise given iStar's business. Check this out:

quote:Majority Investor Jay Sugarman is the Founder, Chairman and Chief Executive Officer of iStar Financial, a publicly traded investment firm providing custom-tailored capital to high-end private and corporate owners of real estate in the United States. [:0]iStar also invests in other targeted areas through its European, AutoStar (auto dealership) and TimberStar (timber) platforms, and in the leveraged finance markets [:0] through its affiliate, Oak Hill Advisors. iStar’s current investment portfolio exceeds $20 billion.

Now, $20 Billion is a lot of money (although this was written up as of Feb. 28, 2000, when iStar's shares were still worth north of $20/share. Given the nature of the corporate real estate market and the leverage that many of these firms used to make a killing as real estate prices were rising, the vertiginous drop in iStar's share price is probably an indication of the financial strength (or lack thereof) of the company as a whole and also ann indication of the old adage that "leverage works just as well when asset prices are falling as when they are rising." What's the easiest way to lose $100 million in real estate? Use $2.5 million of your own money and get someone else to lend you 40X that amount to invest in a sure-thing (which we know real estate is, right?) So, given a falling real estate market (both commercial-which is just starting to really decline right now--and residential), a highly leveraged portfolio can see its wealth evaporate lickety-split.

As for the Buccini brothers, guess which industry they made their fortune in? One guess:

quote:Rob Buccini is a founding partner of The Buccini/Pollin Group, Inc., a privately held, full-service real estate acquisition, development and management company with offices in Wilmington, DE, Washington DC, suburban Philadelphia, Baltimore, MD and New York City. Buccini/Pollin has developed and acquired office, hotel, multi-family, townhouse, industrial, retail, and parking properties in the Mid-Atlantic and Northeastern regions of the United States and is the largest privately held office landlord in the Philadelphia region.

On the face of it, then, the news that the Philly investors are having money troubles is not surprising. Moreover, the stadium they were going to (are? will?) build in suburban Philly was meant to be--much like the St. Louis bid--a part of a much larger real estate development. Will the development go ahead? Given the nature of the US (and global) real estate market, the answer is likely no. Are Sugarman and the Buccinis big enough soccer fans to gift the people of Philly a soccer stadium if the rest of the development is a no-go? About that, I plead ignorance.

Finally, I'm not certain about the firmness of the commitment of the state of Pennsylvania for its portion of the cost ($47 million), nor of Delaware County ($30 million). Economic times have gotten much tougher in Pennsylvania (see Barack Obama's double-digit lead in polls there) since the beginning of the year. The private investors were to have put $80 million into the cost of the stadium, but once again what is their level of commitment of the rest of the project becomes uneconomical?

Now, the story (rumour) is that the Saputo/Gilett group will be asked to fill Philly's slot in the (increasingly likely) event that the Philly money is found wanting.

By the way, does anybody know how old the Google satellite images are? I just checked and there's no evidence whatsoever of any construction having begun on a stadium in Chester--on the shore of the Delaware River near the Harrah's Casino.

2) As for the Vancouver bid, there's no more specific information but that the stadium portion of the Vancouver bid allegedly centered around BC Place as the Whitecaps' home and did not (could not) guarantee a SSS in the near future. This, according to my MLS source, could be a very big albatross for the Vancouver bid. Well, we'll know in a matter of months.

Oh, and a bonus rumour. Atlanta's money--and the fact that the owner is an NFL owner--seems to have generated a lot of interest from the MLS. I don't understand the NFL owner part--synergies?--but that's the rumour.

BB

[BringBackTheBlizzard]

Bit embarrassing posting a link to MLS rumours but here was their take on the impact of the financial crisis on Philadelphia:-

http://www.mls-rumors.net/2008/10/report-global-economic-crisis-and-how.html

Philadelphia - Philadelphia may be a study of right place, right time. Philadelphia was awarded a club after their quite substantial ownership group made a strong case to the city, region and state government to enter into a partnership to develop part of the City of Chester around a Soccer Specific Stadium, Had negotiations dragged out then things might have been much different. The reason is due to the nature of the economic downturn. Philadelphia fans who were salivating at the thought of a big time Designated Player brought to the stadium on the Delaware River courtesy of the deep pockets of investor, iStar Financial may want to dial it down a bit. According to this report in the Wall Street Journal, iStar Financial's debt rating has been cut down to "junk status".

[Luis_Rancagua]

Brownbear, does this means that Vancouver will win the bid eventually despite some complications on their waterfront stadium???

[Keano]

quote:Originally posted by brownbear

Well, well, well...

I had a very interesting dinner conversation this evening with someone in the MLS who told me two very interesting things:

1) Montreal may get into the league sooner than we thought as a direct result of serious financial problems of the backers' of the Philadelphia bid.

2) The stadium issue could be a deal-clincher (in the negative sense) for the Vancouver bid.

Let's take these one step at a time:

First, the main backers (financially, at least) of the Philly bid are Christopher and Robert Buccini, co-founders of the Buccini/Pollin Group; Jay Sugarman, chief executive of iStar Financial. iStar Financial has seen it's share price drop 25-1.6/25=93.6% since the beginning of 2008. Wow! So it looks like Mr. Sugarman is much less wealthy today than he was not even 10 months ago. It's not a surprise given iStar's business. Check this out:

Now, $20 Billion is a lot of money (although this was written up as of Feb. 28, 2000, when iStar's shares were still worth north of $20/share. Given the nature of the corporate real estate market and the leverage that many of these firms used to make a killing as real estate prices were rising, the vertiginous drop in iStar's share price is probably an indication of the financial strength (or lack thereof) of the company as a whole and also ann indication of the old adage that "leverage works just as well when asset prices are falling as when they are rising." What's the easiest way to lose $100 million in real estate? Use $2.5 million of your own money and get someone else to lend you 40X that amount to invest in a sure-thing (which we know real estate is, right?) So, given a falling real estate market (both commercial-which is just starting to really decline right now--and residential), a highly leveraged portfolio can see its wealth evaporate lickety-split.

As for the Buccini brothers, guess which industry they made their fortune in? One guess:

On the face of it, then, the news that the Philly investors are having money troubles is not surprising. Moreover, the stadium they were going to (are? will?) build in suburban Philly was meant to be--much like the St. Louis bid--a part of a much larger real estate development. Will the development go ahead? Given the nature of the US (and global) real estate market, the answer is likely no. Are Sugarman and the Buccinis big enough soccer fans to gift the people of Philly a soccer stadium if the rest of the development is a no-go? About that, I plead ignorance.

Finally, I'm not certain about the firmness of the commitment of the state of Pennsylvania for its portion of the cost ($47 million), nor of Delaware County ($30 million). Economic times have gotten much tougher in Pennsylvania (see Barack Obama's double-digit lead in polls there) since the beginning of the year. The private investors were to have put $80 million into the cost of the stadium, but once again what is their level of commitment of the rest of the project becomes uneconomical?

Now, the story (rumour) is that the Saputo/Gilett group will be asked to fill Philly's slot in the (increasingly likely) event that the Philly money is found wanting.

By the way, does anybody know how old the Google satellite images are? I just checked and there's no evidence whatsoever of any construction having begun on a stadium in Chester--on the shore of the Delaware River near the Harrah's Casino.

2) As for the Vancouver bid, there's no more specific information but that the stadium portion of the Vancouver bid allegedly centered around BC Place as the Whitecaps' home and did not (could not) guarantee a SSS in the near future. This, according to my MLS source, could be a very big albatross for the Vancouver bid. Well, we'll know in a matter of months.

Oh, and a bonus rumour. Atlanta's money--and the fact that the owner is an NFL owner--seems to have generated a lot of interest from the MLS. I don't understand the NFL owner part--synergies?--but that's the rumour.

BB

It still shows Saputo barely started so not very up to date.

[CanadianSoccerFan]

That's interesting because Philly's stadium renderings have been downgraded from a gorgeous mini-Emirates to a cheap BMO replica and the groundbreaking has been delayed several times.

[Kibby]

deal-breaker is the term you're looking for

[brownbear]

quote:Originally posted by Kibby

deal-breaker is the term you're looking for

Thanks. Fixed it above.

By the way, does anybody else remember Bobby Lenarduzzi being quoted on the day of the bid deadline as emphasizing how good a revamped BC Place will look for soccer? They may really think that MLS will acquiesce to BC Place as a longer than short-term solution.

What doesn't make sense to me is Seattle's stadium situation. Will Qwest Field be the Sounders' permanent home or are they also planning on building a SSS?

[brownbear]

quote:Originally posted by Luis_Rancagua

Brownbear, does this means that Vancouver will win the bid eventually despite some complications on their waterfront stadium???

Luis, I really don't know, but my dinner companion was extremely skeptical of Vancouver's chances considering the stadium situation. I pressed him for more information, but he really seemed to think that without some demonstration of the Whitecaps' ability to get a SSS built in the very near future, that Vancouver's bid is simply not competitive. I found it hard to believe and played devil's advocate (stressing the advantages Vancouver had over rival bids) but he insisted that the stadium issue is huge in the eyes of the MLS.

[MegasAlexandros1555362277]

quote:Originally posted by brownbear

What doesn't make sense to me is Seattle's stadium situation. Will Qwest Field be the Sounders' permanent home or are they also planning on building a SSS?

The Sounders ownership also owns Qwest field... HUGE difference. It means they don't pay rent and control 100% of the revenue generated by the stadium. Besides SSS being better for soccer as they are purpose built, those financial considerations are possibly the more important reasons why MLS wants it's teams to have their own SSS.

[CanadianSoccerFan]

Can Kerfoot just consider a different location? Maybe near downtown but in a nimby free area? Waterfront's nice but this just looks like a dead end.

[Johnnie Monster]

quote:Originally posted by CanadianSoccerFan

Can Kerfoot just consider a different location? Maybe near downtown but in a nimby free area? Waterfront's nice but this just looks like a dead end.

Well, can't blame the guy for trying. The city steered him to False Creek, then screwed him. Then he spent close to $30 million on the Waterfront site, plus a few million more on The Landing heritage building as an access point, and they've screwed him again.

Pretty much the only land still available downtown that can accomodate something as big as a stadium is the Main Street railyards behind the old train station, or Stanley Park, the latter of which is a logistical nightmare and political suicide for any council member approving it.

The only other reasonable option is to rebuild at the old Empire stadium site, but it's a fair distance out of the downtown core, and I can't see the Hastings Park NIMBYs ever letting that move forward.

These Empire NIMBYs aren't the same useless druggies and welfare cases who rallied against the Waterfront site... these guys are lawyer-toting fuss-pots who will mount endless court challenges like they did when slots were proposed for Hastings Race Track.

To solve the stadium issue, it's gotta happen like this:

1. The city has to swap False Creek land for Kerfoot's watefront; or

2. Kerfoot has to build a floater in Burrard Inlet; or

3. The city or province needs to grow some cajones and allow Kerfoot to build on his own land without any further pissing about with the Port; or

4. BC Place needs to look spectacular after the renos, and Kerfoot needs a significant cut of the concessions and parking from Pavco as per orders from the provincial gov't.

[Guest Jeffery S.]

quote:Originally posted by Johnnie Monster

Well, can't blame the guy for trying. The city steered him to False Creek, then screwed him. Then he spent close to $30 million on the Waterfront site, plus a few million more on The Landing heritage building as an access point, and they've screwed him again.

Pretty much the only land still available downtown that can accomodate something as big as a stadium is the Main Street railyards behind the old train station, or Stanley Park, the latter of which is a logistical nightmare and political suicide fro any council member approving it.

The only other reasonable option is to rebuild at the old Empire stadium site, but it's a fair distance out of the downtown core, and I can't see the Hastings Park NIMBYs ever letting that move forward.

These Empire NIMBYs aren't the same useless druggies and welfare cases who rallied against the Waterfront site... these guys are lawyer-toting fuss-pots who will mount endless court challenges like they did when slots were proposed for Hastings Race Track.

To solve the stadium issue, it's gotta happen like this:

1. The city has to swap False Creek land for Kerfoot's watefront; or

2. Kerfoot has to build a floater in Burrard Inlet; or

3. The city or province needs to grow some cajones and allow Kerfoot on his own land without any further pissing about with the Port; or

4. BC Place needs to look spectacular after the renos, and Kerfoot needs a significant cut of the concessions and parking from Pavco as per orders from the provincial gov't.

I have posted here that my contacts amongst architects in Vancouver suggested widespread opposition to the site on the waterfront. One key problem is in fact the site: a place that has to rely almost entirely on public transportation is complicated, access should be mixed (walking from nearby residents, public transport, and a personal auto option, which this does not have).

But the problem is that a lot of people, and not just the DERA-types, are opposed to the site. I don't have city hall contacts mind you, nor in the port, but one things seems clear: the waterfront, as ambitious and fascinating a project as it may be, has been handled badly. By Kerfoot. You do not buy land first then try to wedge in the proposal, which is highly unorthodox. You make the deal first or advance it at least a bit, then go for the land. Or work in cooperation with those you have to make the final deal with. It is a major public facility after all, however much the money is meant to be private.

The impression that Kerfoot is trying to make his real estate move work for a stadium is fairly negative, and suggests a strategic failure on his part. Even if he felt he had to garner support from City Hall, he should have seen that the Port Authority is not under their control. So even there he has blown it, I personally think he was badly advised, not only in picking the site but also making public a rendering without striving for a quality architectural proposal after getting approval and its terms.

[brownbear]

quote:Originally posted by Jeffrey S.

I have posted here that my contacts amongst architects in Vancouver suggested widespread opposition to the site on the waterfront. One key problem is in fact the site: a place that has to rely almost entirely on public transportation is complicated, access should be mixed (walking from nearby residents, public transport, and a personal auto option, which this does not have).

But the problem is that a lot of people, and not just the DERA-types, are opposed to the site. I don't have city hall contacts mind you, nor in the port, but one things seems clear: the waterfront, as ambitious and fascinating a project as it may be, has been handled badly. By Kerfoot. You do not buy land first then try to wedge in the proposal, which is highly unorthodox. You make the deal first or advance it at least a bit, then go for the land. Or work in cooperation with those you have to make the final deal with. It is a major public facility after all, however much the money is meant to be private.

The impression that Kerfoot is trying to make his real estate move work for a stadium is fairly negative, and suggests a strategic failure on his part. Even if he felt he had to garner support from City Hall, he should have seen that the Port Authority is not under their control. So even there he has blown it, I personally think he was badly advised, not only in picking the site but also making public a rendering without striving for a quality architectural proposal after getting approval and its terms.

I agree with everything in your post except for what I've highlighted in red above. There must be more than 10,000 parking spots within a 15-20 minute walk of the proposed stadium site.

[ted]

quote:Originally posted by Jeffrey S.

You do not buy land first then try to wedge in the proposal, which is highly unorthodox. You make the deal first or advance it at least a bit, then go for the land.

Clearly you have no idea what you are talking about. You have to secure the land first because a) you cannot get development permission to build on land you don't own and if you somehow could and then went to buy the land the price would be significantly higher.

In general I object to the Campbell Government's ability to override local authority but this is clearly a case where it should be used to advance the public interest in the face of nonsensical opposition.

[Guest Jeffery S.]

The Waterfront stadium does not have on site parking. It is a bit far, when most stadiums have parking right up to the door, even underneath.

I agree that some could park in the downtown business area, often empty on weekends. And walk. But it is not a close walk really, if you say 15-20 minutes you are talking about, what, 2-3 kilometres?

If that is what is involved the advantage of the car is lost.

Much better to go for a site like "Main Street railyards behind the old train station" as mentioned. Multiple access, possible parking, no downtown juggernauts, no Port Authority. And yes, no side revenue for Mr. Kerfoot. So maybe he should decide what he really wants, a stadium or something to sit on a revenue making investment he happens to have on the same spot, referring to the shunting yard.

[Guest Jeffery S.]

quote:Originally posted by ted

Clearly you have no idea what you are talking about. You have to secure the land first because a) you cannot get development permission to build on land you don't own and if you somehow could and then went to buy the land the price would be significantly higher.

In general I object to the Campbell Government's ability to override local authority but this is clearly a case where it should be used to advance the public interest in the face of nonsensical opposition.

No Ted, you are mistaken. People do not buy land in secret, behind everyone's back; all the developers know it is going down, who is involved. Do not make it look like you first have to get a bit of plastic surgery, heal, shave and then put on the cologne and then go look for the chick. It is not first this, then that. You have to be in dialogue with a city and with public officials, you have to know what the general opinion might be. You should know that the maximum voice of the Port Authority feels that their task has nothing to do with assisting leisure zone development in their jurisdiction. And you know that by talking first, not buying first. And Kerfoot obviously did not know that. Or maybe he didn't care.

Kerfoot bought because he could get immediate revenue from the site, as the rail shunting is basically leasing rights from him (of the equivalent, I do not know the exact economic deal). He obviously erred in not talking about everything else. Or as I say, he did not care, went for the revenue, then tried to shoe horn the deal without having done his homework or spoken with the authorities, basing his case on two arguments: I will fund it; we are already underway.

Basically, as I see it, he is trying to force a deal on the basis of a consumated set of circumstances, getting a chunk of public opinion behind him, doing a rendering to sell the idea (rather than to really think about a decent piece of architecture on a prime scenic location deserving better), and showing considerable disrespect to the Port Authority --implicating the federal government no less--and other municipal authorities whose job in defending the public interest is NOT to just bow to a private deal already made by a guy tossing the money around (as you seem to think is the right way to go about things) without consulting them in good faith first.

So there it is, my conclusion. You initiate a major project with a bit of bad faith and disrespect for due process, and you get the response you get. Which is why the stadium is dead in the mudflats that used to lie below those railyards before incorporation.

[Johnnie Monster]

One thing I'll raise here is that while there may have been "strategic failures" with respect to building a stadium</u> on the Waterfront site, it was an outstanding move for Kerfoot financially.

For starters, he's snatched up the last undeveloped piece of Waterfront land in Vancouver... and I'm sure the value of the site has grown substantially since the purchase.

Further, as the new landlord to the rail companies using the storage yard, he has guaranteed revenues for as long as he owns the land. It's not unsually for those types of major industrial leases to have terms of 50 to 100 years.

Something will eventually be built above those tracks, either by Kerfoot or by whomever he chooses to sell the site off to. Whenever it happens, it will be a windfall for Kerfoot, and that means serious stability for the Whitecaps' financial footing.

[piltdownman]

quote:Originally posted by brownbear

By the way, does anybody know how old the Google satellite images are? I just checked and there's no evidence whatsoever of any construction having begun on a stadium in Chester--on the shore of the Delaware River near the Harrah's Casino.

In google earth go to where the location you want. I recommend zooming in so they eye is less than 50km. Then in the Layers go to More>DigitalGlobe Coverage and you can see tons of imagery. You have to pay for the high res stuff, but you should be able to see what you need with teh free previews. Warning I have Google Earth Pro, so I have no idea if its in the free or plus version.

[Johnnie Monster]

Jeffrey:

Further to your reference re: "considerable disrespect to the Port Authority"... what are you referencing here?

Last I checked, the Port entered talks with the Whitecaps quite willingly. The Port has a vested interest in acquiring Kerfoot's land, and have made no bones about that fact. Nobody has forced the Port into these discussions... the Port is at the table because there's something in it for the feds, and indirectly, the taxpayers.

But while we are on the topic of disrespect, how about when that clown from the Port ran his mouth off in the media about the negotiations in spite of an informal non-disclosure agreement with the Whitecaps? Wasn't that disrespectful?

Or how about when Port officials make statements in the media like "We're not in the stadium building business, we're in the port business" only to go on and sign 2010 Olympic sponsorship deals involving access to Port land that have zero benefit to the public or the taxpayers?

Or how about when city hall told Kerfoot "grab some land in False Creek and we'll zone it for you," then re-zoned it for social housing to shore up the welfare vote in advance of the municipal elections? COPE screwed Kerfoot to save their own political asses...

If anyone has been disrespected here, it's the guy who's trying to give Vancouver an $80 million landmark free of charge.

[ray]

Brownbear, did you source mention when is the deadline for Philly's owners to satisfy MLS (come up with the money)?

[piltdownman]

quote:Originally posted by ted

In general I object to the Campbell Government's ability to override local authority but this is clearly a case where it should be used to advance the public interest in the face of nonsensical opposition.

Unfortunately Campbell's wish to renovate BC Place pretty much kills any chance of that happening.

Now that Real Easte is slowing, this might be the right time to try to get a chunk of the old Indy land from Concord. While costly, it would get things done. Concord and the city has had this area marked for Creekside Park extension for a decade and its still just a slab of concrete.

Its still close to transit(inclusing the new streetcar):

I have done a mock up, by dropping <s>BMO</s> Lamport Stadium (to scale) into the said area.

[brownbear]

quote:Originally posted by ray

Brownbear, did you source mention when is the deadline for Philly's owners to satisfy MLS (come up with the money)?

No, s/he didn't mention a deadline, but I would assume the MLS would want to completely assess and make a decision about Philly's financial state before finalizing the eventual expansion bid winners. So, anywhere from late this year to March, or so, of next year.

[brownbear]

quote:Originally posted by Jeffrey S.

The Waterfront stadium does not have on site parking. It is a bit far, when most stadiums have parking right up to the door, even underneath.

I agree that some could park in the downtown business area, often empty on weekends. And walk. But it is not a close walk really, if you say 15-20 minutes you are talking about, what, 2-3 kilometres?

If that is what is involved the advantage of the car is lost.

Much better to go for a site like "Main Street railyards behind the old train station" as mentioned. Multiple access, possible parking, no downtown juggernauts, no Port Authority. And yes, no side revenue for Mr. Kerfoot. So maybe he should decide what he really wants, a stadium or something to sit on a revenue making investment he happens to have on the same spot, referring to the shunting yard.

I was wrong, Jeffrey. From the Whitecaps website: http://www.whitecapsfc.com/stadium/waterfront/faq/:

quote:6. What would be the most convenient way to reach the proposed Whitecaps Waterfront Stadium?

The proposed Whitecaps Waterfront Stadium would be attached to the main transit hub of Vancouver. The stadium would be built with direct access to SeaBus, SkyTrain, West Coast Express and the new RAV line. It would also be located near the Harbour Lynx, floatplanes and Helijet terminals. In addition, there are over 15,000 parking stalls within a five minute walk of the proposed stadium and 30,000 within a 15 minute walk.

I think they're being overly optimistic, although I am looking out my office window and down upon the top floor of a six-story parkade, nwhich is on Water St. and has 100 parking spaces on the top floor. So that's 600 right there and it's right across the street from the Landing.

[RS]

quote:Originally posted by piltdownman

I have done a mock up, by dropping BMO (to scale) into the said area.

That's not BMO Field, that's Lamport Stadium.

BMO's footprint is much bigger.

[Luis_Rancagua]

Guys, MLS Rumors have now published the story of this Montreal Impact so-called gossip/rumbling that is going around of Saputo/Gillett replacing the Philadelphia bid. Again, this is a story coming directly from the tabloid news of MLS Rumors. I found it somewhat interesting, but I'm also skeptical of its context.

http://www.mls-rumors.net/2008/10/expansion-mlss-montreal-contingency.html