Vincent Safuto’s Weblog

Notes and observations

Another economic development scam falls apart

When times are tough and you have millions in grant money sitting around for economic development, it’s easy to fall for the lure of the economic development con man.

He rolls into town and promises everything to everybody.

Want jobs? You’ll have them.

Need a tenant? I’ll sign a long-term lease.

Got cash to give to me? I’ll take a check.

I don’t seem to have enough cash to get started? Fear not, I have investors in Minnesota, oh, I mean, investors in Singapore, or maybe it’s Albania?, whose identity I can’t disclose who’ll lend me $20 million.

You insist that I meet your requirements before you disburse the money? Oh, if you want to be “that way” about it, I’ll still do the deal.

I think the word is getting out about the Bradenton Area Economic Development Corporation, and it’s that they’re the biggest bunch of suckers since that lollipop truck overturned on I-75.

Sharon Hillstrom, CEO of the EDC, gushed like mad over the wonders that Major League Football would bring to the area. As I mentioned before, and before, and before, this bankrupt pseudo-football league is run by people who are adept at making economic development jumps to different parts of the country, making wild and vague promises, and then walking away, leaving vendors and lenders in a pinch and seeking legal relief.

It was hardly a surprise when the league, after holding tryouts, canceled its inaugural season and then announced that it was all part of the big strategy, and then this past week it was revealed that the league has been living “on the arm” at Lakewood Ranch, and the landlord decided to make a move and file eviction papers.

(You can follow the story at the newspaper where I work, the Bradenton Herald.)

The Bradenton EDC managed to avoid being taken in the Sanborn Studios scam, but remember that they fell for the Gulf Coast Swords hockey team deal, the rowing competition and now Major League Football.

What’s next? Cat racing?

June 25, 2016 Posted by | Living in the modern age, The business of sports | , , , , | Leave a comment

Major League Football’s field of dreams is just crazy

I have always heard that when you go to the movies, you should suspend disbelief. Sometimes you just need to get away from it all, and I have found that movies like “Interstellar” were great escapes. Maybe the physics wasn’t exactly right, but hey, it was a story. I haven’t seen “Jurassic World” yet, but plan on doing so. I don’t expect exactitude, just a rollicking good time.

But when local governments are spending taxpayer dollars on local businesses, you have to have both feet planted firmly on the ground, and evaluate whether the things that are being promised in exchange for that dough are real or just jawbone.

I see darkened crotches in the pants of a lot of our local economic development officials over this “thing” called “Major League Football.”

I’ve commented on it before, and noted that Manatee County’s commissioners have pledged $147,000 to the organization to – as the Sarasota Herald-Tribune noted on June 16 – “…relocate to Southwest Florida and create 49 jobs at its corporate headquarters within the next five years.”

Commenters at the bottom of the story – unusually – had nothing to say about Benghazi or Obamacare, but one astute observer noted as I did that this was “From the city that brought you one wall of a hockey arena and a suspect movie production studio. Strike 3.”

Not wanting to be left out, the H-T said, “Bradenton and Sarasota sports commissions have since committed a combined $35,000 in tourist tax dollars to offset Major League Football’s rent in its inaugural season — the company will chip in $10,000 for the use of Premier Sports Campus next spring from Feb. 15 to March 20.”

The reason for this is that, and I know this sounds hard to believe, next year at Premier Sports Campus in Lakewood Ranch, there will be a spring training camp for 1,000 players and coaches.

Running on empty
If Major League Football was a running back prospect, he’d be cut after the 50-yard dash. As of Jan. 31, again according to the H-T, the company “has $5,000 in cash, a working deficit of $1 million and thousands in unpaid income taxes to the state of Delaware.”

Wow. I’m really worried that I might have been wrong about this outfit.

Seriously, folks, based on past stories, does anyone really believe that there is a horde of investors out there waiting to lose money on this?

League executive vice president Frank Murtha claims that this is all part of some grand plan. “We’re not just winging it,” he told the Herald-Tribune.

Well, sheeze, with $5,000 in cash, you can buy a lot of Playstations and copies of “Madden 15,” and there’s your league.

The history of Major League Football makes you wonder, as the H-T drops names that have some associations with the NFL, as if that makes them credible:

“Last December, MLF emerged as a publicly traded company with a plan to launch a spring football league in cities without National Football League or Major League Baseball teams. The company has since announced “tentative” teams in Orlando; Little Rock, Arkansas; Norfolk, Virginia; Birmingham, Alabama; Oklahoma City and Eugene, Oregon. The company has several former NFL players behind it, including Ivory Sully, formerly of the Los Angeles Rams, and Wesley Chandler, the former Gator who played for the New Orleans Saints, the San Diego Chargers and the San Francisco 49ers. CEO Jerry Vainisi is the former vice president of the Chicago Bears and led football operations for the World League of American Football, later known as NFL Europe. That league disbanded in 2007.”

The deluded Bradenton EDC

The head of the Bradenton Economic Development Corporation, Sharon Hillstrom, is still as deluded as ever, insisting that any corporate headquarters is good. So I guess if the company is busted and incapable of doing anything, that’s as good as there not being a company there.

“Any time you can land a corporate headquarters, that’s great,” Hillstrom, the Bradenton EDC president, said. “Typically that’s going to be positions that have a higher wage. And a company gives us that much more credibility as a viable location for sports performance events.”

Unless, of course, the company never pays promised wages. I doubt that $5,000 will last long.

But not to worry.

“At a press conference held earlier this month, a finance officer with MLF told the Herald-Tribune that it would take roughly $100 million to cover the costs of a league that aims to fill a gap in professional football by playing in the spring and summer seasons. Reached Monday, Murtha discredited that number, but declined to provide a more realistic figure. Before MLF announced that it would move to Lakewood Ranch, the company filed paperwork that states that it has raised $470,000 out of a planned $3 million.”

Oh, OK.

“When it came to picking a headquarters, MLF reportedly looked at setting up shop in Daytona, on Florida’s east coast, and in San Antonio, Texas, and Casa Grande, Arizona. The Premier Sports Campus, as well as the incentive package from Manatee County, helped officials decide on Lakewood Ranch, Murtha said.”

So in other words, the other places weren’t big enough suckers for their pitch. They found just what they were looking for here. Lovely.

And, of course, just as the Florida Marine Raiders insisted they would do well in Lakeland, Murtha claims Major League Football will do well here.

“Murtha said that open tryouts for Major League Football will be held this summer, when the company expects to announce the remaining cities in the league. What fuels his confidence is the idea that Major League Football can help the NFL by becoming a development league, providing options for talented players who are cut from the NFL or looking to make it there. He said Monday that he expected recruiting players to be ‘easy,’ since there is a ‘surplus of good players and the lack of (alternative) places to play.’ [Especially since the X-League seems to be falling apart.] He maintains that his company will not be like other sports leagues — such as the United Football League, which was unable to attract enough fans to stay in business after four fall seasons.
As for continuing to secure funds for coaches and players’ salaries, team expenses and other costs — that may rely on the public’s interest in the new league.
‘We have the ability to raise funds in the public market at the appropriate time,’ Murtha said. ‘The bulk of our expenses don’t begin until next spring.’”
I refuse to suspend disbelief when it comes to this.

June 18, 2015 Posted by | Life lessons, The business of sports | , , , , | Leave a comment

Airport and sports games enthrall municipalities

It was hardly a surprise when the news came that Major League Football, the bankrupt entity that has not produced one single down of professional football in several years of operation, has found a new home in Lakewood Ranch.

The rumors that it would settle here made several economic development officials in Manatee County nearly wet in the pants, as sports is a big deal to them and is a good way to spread excess government money in the name of creating jobs that somehow never get created.

The league is promised more than $200,000 if it creates a certain number of jobs that pay a certain salary. Given the track record of its personnel, we can bet that money might never get paid because most of what I read in the excellent articles in the Bradenton Herald and Sarasota Herald-Tribune was basically corporate jawbone. There was a lot of talk about talks about deals with various entities, but all – according to the mouthpiece for the league – are in varying stages.

Quite often, organizations that are financially bereft will try to buffalo the media with this kind of chatter in an effort to conjure up “discussions.” These discussions rarely go anywhere and usually there is a point where the entity closes up shop and leaves town, often leaving rent and salaries unpaid.

The brass talk of “moving in a new direction,” which means finding new municipal suckers to promise them money to relocate their headquarters. And the cycle begins anew.

I will note that the EDC in Manatee County isn’t totally oblivious. As I mentioned in my last post, Sarasota County’s Economic Development Corporation got lit up in the Sanborn Studios disaster because it handed over money upfront. If you at least force a company to do what it promises to do before it gets the government money, well, you’ve accomplished something.

Manatee learned what Palm Beach County learned years ago about funding companies that move to your area: make them wait to see if they’re viable before you start handing out the cash.

Come fly with me
A few months ago, Lakeland was all agog at the possibility of airline service at the airport.

Like many Florida cities, Lakeland has a municipal airport with plenty of private airplanes and businesses, some of them aviation-related, and a terminal but no commercial airline service, though it can handle some pretty big airplanes.

The trouble is that airline service to these mid-size cities is just not a profitable proposition. In addition to the higher cost, there is the lack of direct flights to anyplace like Washington, D.C., New York City, Chicago or Los Angeles – which you can get at a major airport – and the airline might have the name of a major like Delta or American but the flight might be operated by a hidden subsidiary.

Lakeland was like a lot of cities that fell for Falcon Air’s pitch. As usual, when the initial announcement was made there was a lot of talk about “talks” that still had to take place, and the city of course had to pony up some cash, but even though Falcon Air had a reputation that stank to the high heavens it looked like a done deal.

The trouble is that while these airlines might fly some leased jets of the MD-83 class instead of twin turboprops, they also are using underpaid flight crews and the maintenance might not be up to snuff. Bear in mind, too, that Florida is especially susceptible in the afternoons of summer to some pretty frightening weather, and that can affect arrival times.

Customers often complain when these airlines come to town, and many folks simply factor in the fact that they’ll have to drive to Tampa International or Miami International to get the flights they want.

Falcon Air came with a lot of baggage. One of its planes was repossessed at the Lakeland airport, and there were stories about unpaid wages, sexual harassment and corporate executives with criminal records.

It was hardly a shock to me on a recent night when the news came in that its deal with Lakeland was off. I’ve seen cities like Gainesville and Ocala go to unbelievable lengths to get and keep airline service, so I know it’s not easy.

Often, such service is accompanied by threats that if enough people don’t fly on the route, the service will end. Sometimes, people have found themselves stranded as an airline goes out of business in the middle of their trip. Believe me, it’s happened to Gainesville.

Deals with marginal entities might make a county or city economic development group look like it’s doing big things, but the hit to their reputation is massive when things fail. I wish our elected officials and the EDC officials could see that.

June 10, 2015 Posted by | Living in the modern age, The business of sports | , , , , , | Leave a comment