Friday roundup: Houston readies stadium upgrade cash, Oakland Coliseum buyers seek new payment plan

Thanks for your patience while I’ve been traveling this week (and watching Mets playoff games at 3 am), though honestly it’s been a pretty slow news week as well. Not completely dead, though, so let’s get to the weekly roundup:

  • The Houston city council is refinancing its bonds for the Astros and Texans stadiums and Rockets arena, which will let it spend an additional $150 million on renovations. The Houston Chronicle says the money is expected to be allocated as part of lease negotiations — the Texans’ is up in 2031, the Rockets’ is up in 2033, and the Astros’ not until 2050 — but also that the bond money is expected to “be split between the three venues evenly,” so maybe the city plans to set aside $50 million for each team, then see what it can get in lease extensions for that? The Houston Business Journal also reports that the Astros and Rockets leases require “renovations to maintain the first-class status of the venues” — the Astros can terminate their lease in 2035 if the additional spending isn’t made, though there’s no estimate provided of how much maintaining “first-class status” is expected to cost. Friends don’t let friends sign state-of-the-art clauses, let’s just leave it at that.
  • The city of Oakland has rearranged the payment schedule for the African American Sports and Entertainment Group to supply $105 million for the city’s half of the Oakland Coliseum, and the Oakland police union wants answers, calling the change in timetable “strange and weird.” Apparently the new payment schedule also still needs to be approved by the city council before it’s final, so I’m going to go ahead and say that the whole thing is strange, though “weird” will have to wait until we have further information.
  • Destruction from Hurricane Helene is expected to cut into hotel tax revenues earmarked for paying off the Tampa Bay Rays‘ new $1.3 billion stadium, though it’s too soon to predict by how much. Sports economist Geoffrey Propheter notes that if bond buyers balk at purchasing bonds because the tax revenues don’t seem sufficient, Pinellas County could have to allocate more public money to reassure them and keep interest rates from soaring, this should be fun.
  • If the prospective owners who want to get an expansion franchise in Portland, Oregon are successful, and if they then are able to build a stadium where they want, it could have the side benefit of shoring up the approach ramps to a neighboring bridge so they don’t collapse in an earthquake. Neither the earthquake nor the expansion team appears imminent, but this is still news, apparently, so consider yourself informed.

If there’s anything else up, it can get discussed in the comments, or else wait till Monday when I’m back on a normal schedule. See you then!

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Does MLB’s postseason bubble format make any damn sense? An investigation

After much speculation, it’s official: MLB will be going to a “bubble” format for most of its postseason, isolating players and staff at a handful of locations to try to avoid any Covid outbreaks like the ones that disrupted many teams’ regular seasons. After the first round of best-of-three series takes place at teams’ regular home parks, the National League Division Series will be held at Arlington and Houston and American League Division Series will be in San Diego and Los Angeles, followed by League Championship Series in Arlington and San Diego, then a World Series in Arlington.

Going to a bubble makes sense: It’s worked well for the NBA and NHL, and does seem to be the best way to prevent outbreaks. And baseball has even thought through some of the problems of starting a bubble on the fly — players will have to start self-quarantining at their homes and hotels as early as next Tuesday, with their families joining them then in quarantine if they want to enter the bubble with them, though given that players are already not supposed to be out on the town, this pretty much comes down to “try extra-hard not to get sick right before the playoffs, guys.”

Playing in Southern California and Texas is more puzzling, though. Sure, they’re both warm-weather sites, though pretty much all of North America is relatively warm in October now thanks to climate change, except when it’s not. But they’re also both relatively high-virus states: Texas has begun to see a major second spike after its huge outbreak that began in June, and California isn’t far behind.

(That’s one-week new-case averages, but if you check 91-DIVOC you can see similar trends underway for positivity rates, so this isn’t just a matter of more people getting tested — there really is way more virus afoot in Texas and California than in states like New York and Massachusetts. And while a bubble in high-virus Florida worked okay for the NBA, it also didn’t have players traveling between cities.)

On top of that, warm weather hasn’t exactly been good for California lately, given that Los Angeles County just saw a record high temperature of 121 degrees and, oh yeah, the whole damn state is on fire. Maybe the wildfires will have died down by October, but wildfire season in Southern California usually lasts till the start of November, and thanks again to climate change is basically all year round now, so baseball could be risking a repeat of this week’s games in Seattle that had to be canceled after the Oakland A’s and Seattle Mariners played a doubleheader in a cloud of choking smoke.

The first thing that comes to mind is MLB’s longstanding tradition of rewarding team owners who’ve built or renovated stadiums with getting to host special events like the All-Star Game. The Texas Rangers‘ stadium, of course, only just opened this year, after winning close to half a billion dollars in city subsidies so they could have air-conditioning, while Dodger Stadium just got a $100 million renovation (at team expense), and in fact was in line to host the All-Star Game this summer before that got canceled. And once you’ve picked those two, the Houston Astros and San Diego Padres stadiums are relatively close to reduce travel, and also relatively new, though, man, Houston’s is 20 years old already? I guess Enron was a long time ago.

Texas has another advantage, though. MLB commissioner Rob Manfred had this to say yesterday at a sports business panel:

“I’m hopeful that [for] the World Series and the LCS we will have limited fan capacity,” Manfred said during a question-and-answer session through Hofstra’s Frank G. Zarb School of Business. Manfred’s comments were first reported by the Athletic. “I think it’s important for us to start back down [that] road. Obviously, it’ll be limited numbers, socially distanced, [with] protection provided for the fans in terms of temperature checks and the likes…

“But I do think it’s important as we look forward to 2021 to get back to the idea that live sports are safe. They’re generally outdoors, at least our games, and it’s something we can get back to.”

Whether live outdoor sports are safe for fans to attend in the middle of a pandemic outbreak is, of course, a huge open question, one that the NFL is currently attempting to answer via a giant human test subject experiment. Also, the Houston and Texas stadiums aren’t entirely outdoors — they both have retractable roofs, and in fact the roof is the entire reason for the Texas stadium existing — and while they probably still have better air circulation than a totally indoor arena, if the principle here is “it’s safe to let in fans so long as its outdoors,” shouldn’t Manfred have picked entirely outdoor stadiums? Hell, New York City has two of ’em, plus oodles of now-vacant hotel rooms.

Ah, but New York City also has bans on fans attending live sporting events, and Texas notably does not. And even at 25% capacity, selling tickets for the World Series — the only tickets that would be available for any MLB games this year — would be massively hot commodities, something that Manfred said later in his talk was at the forefront of baseball’s thoughts:

“The owners have made a massive economic investment in getting the game back on the field [in 2020] for the good of the game,” he said. “We need to be back in a situation where we can have fans in ballparks in order to sustain our business. It’s really that simple.”

So, yeah, it really is that simple: If we can sell tickets, that’s the priority, we’ll figure out the risks later.

Prioritizing money over safety also explains perhaps the biggest hole in the MLB bubble structure: The first-round games, which will be held in eight different cities, with no bubbles, right before the embubbled postseason begins. This Round of 16 was announced abruptly at the beginning of the season, and doesn’t make any more baseball sense than public health sense — three-game series in baseball have essentially random outcomes, especially now that home-field advantage maybe means nothing without fans (though maybe it still does?), so you’re subjecting regular-season division winners to virtually the same odds of making it to the next round as sub-.500 teams lucky enough to play in weak divisions. But it does mean a whole lot more TV money, enough that MLB was willing to cough up $393 million in postseason bonus money to the players’ union to make it happen.

And as Marc Normandin points out in today’s edition of his newsletter (this one un-paywalled, but please send him some money if you like it!), even before seeing whether this results in a bunch of third-place teams on hot streaks battling it out in the playoffs, Manfred is already eager to make this the new normal:

“Manfred also said the expanded, 16-team postseason is likely to remain beyond 2020, adding that “an overwhelming majority” of owners had already endorsed the concept before the pandemic.

“I think there’s a lot to commend it,” he said, “and it is one of those changes I hope will become a permanent part of our landscape.”

Normandin also points out that letting a thousand playoff teams bloom has an important side benefit for team owners who are sick of shelling out big bucks to buy the best team possible:

If the league was already full of teams aiming to win 83 games because it’s cheaper than trying to win 90 and they might get lucky and win 90, anyway, what is going to happen when the threshold for making the postseason drops? A bunch of teams looking to win 75 games and occasionally being rewarded for it because a prospect hits their stride sooner than expected, or an inexpensive, low-end free agent has a surprise epiphany and subsequent breakout? We’re going to end up in a scenario where owners know they’ll be getting increased shared revenue from an expanded postseason, and more revenue than that if their teams manage to make it there themselves. And little incentive to spend any of that increased revenue, because why try when not trying might get you to the postseason, anyway?

In other words, if you loved the marginal revenue gap that has allowed owners to pocket even more money without having to collude about it, it’s about to get that much bigger.

MLB’s bubble postseason, in short, is one part profiteering and one part just enough concern for the public to seem reasonable without getting in the way of the profiteering. Which is how baseball — and pretty much all pro sports in the U.S. — has always been run, so it should come as no surprise. But it’ll be something to keep in mind while watching the Toronto Blue Jays and San Francisco Giants battle it out for the World Series in Texas in front of 12,500 very well-heeled and well-air-conditioned fans.

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No, the World Health Organization did not say it’s safe to open stadiums to people without Covid symptoms

The debate over Texas’s plans to reopen outdoor stadiums at 50% capacity, and MLB’s apparent plans to go along with that, took an unexpected turn yesterday when a gajillion news outlets reported that World Health Organization coronavirus chief Maria Van Kerkhove had declared spread of the coronavirus that causes Covid by asymptomatic carriers to be “very rare”:

“From the data we have, it still seems to be rare that an asymptomatic person actually transmits onward to a secondary individual,” Van Kerkhove said on Monday.

“We have a number of reports from countries who are doing very detailed contact tracing. They’re following asymptomatic cases, they’re following contacts and they’re not finding secondary transmission onward. It is very rare — and much of that is not published in the literature,” she said. “We are constantly looking at this data and we’re trying to get more information from countries to truly answer this question. It still appears to be rare that an asymptomatic individual actually transmits onward.”

As a gajillion commenters both here and on Facebook immediately pointed out, if true, this would be huge news for reopening sports stadiums (and restaurants and schools and offices and everything else): Just test people for symptoms at the door, and don’t let in anyone with a fever or cough or what have you, and everyone else is good to go! If people without symptoms can’t spread Covid, we can reopen everything, all that universal social distancing was a waste!

Unfortunately, a closer read of Van Kerkhove’s comments reveals that when she says “asymptomatic,” she doesn’t actually mean “all people currently without symptoms,” even though that’s how you’d normally expect English to work. Epidemiologists divide people not currently showing symptoms into “asymptomatic” and “presymptomatic,” with the former being those who never develop symptoms, and the latter being those who will go on to develop symptoms later. And Van Kerkhove was only referring to the former, not the latter, as Harvard Global Health Institute director Ashish Jha quickly took to Twitter to clarify:

And if anyone was unclear, Van Kerkhove took to Twitter later in the day to clarify herself that she just meant it’s rare for Covid to be spread by people who never develop symptoms, not those who haven’t gotten them yet (though “clarify” is maybe an overstatement given her contorted science jargon):

https://twitter.com/mvankerkhove/status/1270081492908216320

So where does this leave us? If you catch the coronavirus but never develop symptoms, you’re probably pretty safe to be around even if you go about without a mask and speak with lots of P’s, K’s, and T’s — presumably because your body fought off the infection so well that you don’t have much virus in you. If you’re just still working your way up to getting sick, though — a period that typically lasts 2-14 days — then you are potentially contagious, and a hazard to others if you don’t mask up and socially distance and stay out of enclosed spaces with poor ventilation.

As Jha notes above, this is very helpful for contact tracing, since it means the government can focus all its resources on people with symptoms: Even if they were spreading virus around before they got sick, you can still find all those people after the fact. It is not helpful for screening sports fan attendance, say, because there’s no way for stadium security to tell people who will never get sick from people who haven’t gotten sick yet unless they start employing fortune tellers.

The usual caveats apply, of course, in terms of this being a developing situation and there being new scientific findings every day, etc. But as of now, there’s no reason to believe that there’s a safe way to allow mass gatherings while preventing the spread of the virus simply by temperature checks and the like. Believe me, if that changes, I will be the first to celebrate it — well, maybe after Ashish Jha.

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MLB will reportedly allow fans at games once mayors (not health officials) say it’s okay

Last Thursday I reported on Texas Gov. Greg Abbott’s announcement that outdoor sports stadiums could be open to fans at 50% capacity this summer despite Covid cases continuing to be on the rise in his state. (And they really are — for anyone who thinks it’s just a matter of more testing being done, go here and select Texas and “Daily Test Positivity” and see graph tick alarmingly upwards in recent days.) I also reported that sports leagues were showing no interest in taking Abbott up on his offer, but that was before MLB reportedly decided that what’s good enough for any random elected official is good enough for them:

According to two major league sources Thursday, MLB is inclined to allow local and municipal governance to take precedence when it comes to allowing fan attendance at games.

Okay, based on unnamed sources, so the usual grains of salt apply. At the very least, though, this does appear to be a trial balloon to see if taking advantage of local reopenings to let in fans — and all their delicious spending money that MLB would otherwise have to do without — is something MLB can get away with without massive uproar. (Though it’ll be kind of hard to tell right now with so much uproar focused elsewhere.) And it’s potentially of huge concern, because you know that if the Texas Rangers and Houston Astros are allowed to start selling tickets, MLB team owners in other locales will begin angling to do so as well, and it will be hard for local elected officials to resist cries of “All the other kids are doing it, you’re putting us at a disadvantage!”, or at least easy for elected officials to use that an excuse to lift restrictions they wish those old fuddy-duddy health officials hadn’t made them put in place to begin with.

But speaking of health officials, maybe “local and municipal governance” doesn’t mean just asking the local mayor, but rather consulting with local officials in charge of pandemic response to see what’s safe to do when? That would make sense — even if health officials aren’t always immune to rose-colored thinking either — but it’s a bad sign that MLB apparently didn’t consult local health officials on its reopening safety plan even after it said it would:

When the Daily News asked the NYC Department of Health — which serves a constituency that has Yankee Stadium, Citi Field, and one out of every six of the United States’ confirmed COVID-19 deaths — about its collaboration with MLB, an emailed response said it all:

“Has there been any formal proposal presented?”…

On June 2, MLB told the News that “each of our Clubs already has contacted their local or county officials where appropriate or will do so shortly after a second draft of the protocols is completed,” further clarifying that their safety protocols were delivered to individuals designated by the governor in every state with a baseball team.

Yet, of the 28 city and county health departments that the News contacted prior to June 2, only five confirmed any interaction with MLB or the local team in their jurisdiction regarding health and safety measures, and only four reported they received MLB’s health and safety protocol from the league or club.

(H/t to Marc Normandin’s invaluable newsletter for this nugget.)

Now, it’s still entirely possible that there won’t be an MLB season because owners and players can’t agree on money or safety protocols, or that a second wave of infections will overtake the U.S., or large enough parts of it, before a season can get underway. (I keep seeing reporting that MLB wants its postseason over by November to avoid any second wave of lockdowns, but there’s no actual reason to think it won’t hit sooner, especially since in many states it seems like the first wave never actually ended.) But if baseball does return, and it’s left up to local politics to determine what the rules are, that’s going to create huge economic incentives for team owners and elected officials alike to turn a blind eye to the risks involved — like taking off your mask to make a phone call, the benefits all go to you while the risks are spread around, so it’s tempting to say hell with it, and what’s that you say about the tragedy of the commons?

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D.C. and Houston both predict World Series windfall from visitors from opposing city, what could possibly be wrong with this logic?

With the World Series underway, Washington, D.C.’s tourist bureau has estimated that the city will see a $6.5 million windfall from hosting games, partly from added Nationals fan spending and partly from spending by visiting Houston Astros fans:

“We are going to be welcoming business that we would not have without the World Series here,” McClain said. “You can really feel the excitement throughout the city, whether you are watching with folks at local restaurants and bars or just walking down the street seeing all the Washington Nationals gear that people are wearing.”…

“New York is closer, and so people can make that decision to come to D.C. closer to the times of the games. … If it’s Houston, it’s really just a distance thing, in terms of people having to take flights here, and so that just becomes a little bit more limiting in terms of the visitation estimate,” McClain said.

Houston, meanwhile, is excited for the $9 million windfall that the Greater Houston Partnership estimates the city will receive thanks to visiting Nationals fans:

“It’s wonderful hosting the World Series because it gives us an opportunity to show businesses and people outside of Houston what a great place this is,” Jankowski said. “It gives an image of a winning team, a winning season and enthusiastic sports fans. Houston needs images like that — not the images we saw with [Tropical Depression Imelda].”

Okay, so here’s the thing about baseball games — in fact, about all sporting events: Only one of the two teams can be the home team. Depending on how long the World Series goes, Houston will host from two to four home games, and Washington from two to three; and each time fans from one city travel to the other, they leave their home city. So while there may be an influx of big-spending Washington fans in Houston for tonight’s Game 2, there will be that many fewer people spending money in Washington tonight (and, perhaps more the point, that many more Washingtonians returning to town tomorrow with drained bank accounts); and vice versa for Friday’s Game 3 in Washington. “Let’s boost our local economies by first us sending you a bunch of our fans and then you send us a bunch of your fans!” sounds more like a design for a perpetual motion machine than a legitimate economic argument.

There is some positive impact from a World Series game, obviously: A few locals probably do increase their spending somewhat instead of just reducing their other entertainment spending by the same amount, and there are visiting media crews and whatnot who rent hotel rooms and eat dinner the same as baseball fans do. But the numbers are fairly marginal: A 2005 study by economists Victor Matheson and Robert Baade determined that “any increase in economic growth as a result of the post-season is not statistically significantly different than zero,” though they also guesstimated the economic impact at $6.8 million per home game, which is actually quite a bit more than the D.C. and Houston studies are promising.

I just got off the phone with Matheson, who says that the issue is the $6.8 million figure wasn’t statistically significant, so “the answer could be zero,” or could be more. He added that any actual positive impact could come in the form of fans traveling into the city from the suburbs to see games — “you want to be in a Houston sports bar rather than a Galveston sports bar to watch the game” — or from, say, expatriate Astros or Nats fans driving down from Philadelphia to D.C. for games and bringing their spending with them. So the ultimate economic activity numbers being put forward by the D.C. and Houston groups may not be too far off, even if their explanation of them is kind of nutty.

In any event, though, that’s all “economic activity,” which Matheson once memorably defined to me as: “Imagine an airplane landing at an airport and everyone gets out and gives each other a million bucks, then gets back on the plane. That’s $200 million in economic activity, but it’s not any benefit to the local economy.” So really the lesson here for journalists and sports page readers alike is twofold: Take the claims of tourism booster agencies with an enormous grain of salt, and always ask what the tax revenue impact will be, not just the economic activity impact. Or just use your basic brain skills and understand that you can’t make two glasses of water more full by pouring them back and forth into each other, and you can save time on reading news coverage at all.

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Houston has needed new dams for decades, built stadiums instead

I may have noted to The Nation’s Dave Zirin last week that building tons of sports venues and giving the surplus ones to megachurch operators who balked at opening them up to disaster victims was an inefficient way for Houston to get hurricane shelters, but I didn’t suggest that Houston’s flood damage could be directly linked to its stadium spending spree or anything. Washington Post sports columnist Kevin Blackistone, though, has no such qualms:

Two Januarys ago, the City of Houston, after a delay of at least seven years, finally started a critical long-term project. It was patchwork on two dams constructed during the post-World War II era to protect the city from catastrophic flood and deemed by the U.S. Army Corps of Engineers to have fallen into as dangerous state of disrepair as possible. The cost: $72 million in federal funds.

Two decades ago, Houston found itself without a professional football team for the first time in seemingly forever. There was no holdup. There was no skimping.

Okay, so it’s not like Houston had a simple choice between fixing dams and building stadiums, and decided, “Stadiums it is, on the double!” But as Blackistone points out, there’s been no shortage of editorials and the like pointing out that aging dams needed to be shored up — or else “floodwaters could submerge downtown, west and south Houston and the Texas Medical Center,” in the words of one Houston Chronicle editorial last year — but the city’s response has been to wait for federal money to pay for the work. Meanwhile, Houston area taxpayers have spent around $1.4 billion on new buildings for the Astros, Texans, and Rockets in recent years (per the numbers in Judith Grant Long’s book with the really long name). As the kids today say, that’s not a good look.

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Palm Beach County gives Astros, Nats $135m for spring-training complex, says now go find a place to build it

The city of West Palm Beach may have voted to take the land that the Houston Astros and Washington Nationals wanted for a spring-training site and hand it over to developers who are actually willing to pay for it, but that’s not stopping the Palm Beach County Commission, which voted yesterday to give the two teams $135 million in hotel tax money to build a new stadium complex … somewhere.

The new $135 million proposal to build another stadium calls for the county to pay for about half of the costs, with the Astros, Nationals and the state paying for the rest.

The latest version of the deal trims $5 million from construction costs in a prior proposal. But the deal would also leave the county responsible for about $17 million more in public money than once envisioned.

The hotel tax is already being used to pay off the county convention center, support local arts programs, and other ways of promoting tourism, but hey, maybe hotel tax receipts will rise by $135 million if these stadiums are built, right? And if not, they can always raise the hotel tax. Because surely that won’t do anything to cause tourists to choose to stay in a different county.

In any event, the Astros and Nationals owners now just have to drive around Florida looking for a place to spend their $135 million, which they’re promising to do within the next couple of weeks. It’s a tough life, running a pro sports franchise.

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West Palm votes to pursue alternate plan for Astros, Nats spring site, and what’s up with that graphic?

The West Palm Beach city commission voted Tuesday to pursue the other offer for land that the Houston Astros and Washington Nationals want for a spring training site, since that proposal wouldn’t require piles of public subsidies, and … you know what, while this is all very interesting, I’m more concerned with what’s going on with the image illustrating the South Florida Sun-Sentinel article on this:

Seriously, what exactly happened here? Did graphics staffer Cindy Jones-Hulfachor supply two alternate images, one with a bluish stadium site and the other in straight greyscale, and then the web production staff mistakenly used both? If so, why are both images cut off at the outside edges? It’s been a day and a half since this went up — isn’t anyone paying attention at the Sun-Sentinel to what’s actually on their site?

Anyway, Nats and Astros still want stadium subsidies, West Palm Beach is still saying no, blah blah blah. That graphic sure is strange, though.

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Palm Beach gets better offer for stadium site, newspaper makes sad face

One of the complaints that I and other subsidy critics like to levy at stadium plans is that localities seldom examine the but-for: What else could be done with the land, money, and political time and energy that might be more productive than a sports facility? Fortunately for Palm Beach County, Florida, a developer has just done this for its plan to build new spring training facilities for the Washington Nationals and Houston Astros, offering to pay the city of West Palm Beach $14 million for its land and not demand tens of millions of dollars in subsidies like the stadium project would.

This, according to the South Florida Sun-Sentinel, is a terrible roadblock:

New obstacles surface for county baseball stadium proposal

(Okay, the Sun-Sentinel is also reporting on county officials raising concerns about the cost of the spring training plan, which could reasonably be seen as an obstacle. Still, it’s a bit odd that the headline writer didn’t go with something a bit less “Oh, noes!” in the headline, like, say, “County officials wonder if there might be a better deal than baseball.”)

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Astros, Nats: We’ll pay rent on Palm Beach spring training site if we get it right back in hotel tax kickbacks

Palm Beach County is still trying to build a new $140 million spring-training complex to lure the Houston Astros and Washington Nationals, with the slight holdup that the county doesn’t actually have $140 million. So the teams have proposed a solution: They’ll pay $2.1 million a year rent (combined), if the county agrees to give them $3 million a year in hotel taxes, rising by 3.5% a year for 30 years wait what? How does that help?

The Palm Beach Post, which apparently first reported this, is behind a paywall, and the subsequent reports in the Houston Chronicle and Washington Post aren’t helping much. (The Chronicle says that $2.1 million a year would pay off $56 million in bonds, which it wouldn’t, and the Post links to a month-old Palm Beach Post article about something else, which is also behind the paywall anyway.) The two teams are making a formal presentation to the Palm Beach County Tourist Development Council on Thursday; hopefully we’ll get some actual information then.

 

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