Monthly Archives: September 2007

What to do with the Dome?

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ReliantStadium%20and%20the%20Astrodome%20091007.jpgThere has been an interesting disparity in media reports about the Astrodome over the past couple of weeks. First, this one from Channel 13 investigative reporter, Wayne Dolcefino:

The county judge warns the aging Houston Astrodome may soon become too dangerous for people to even go inside.
What do you do about an important piece of Houston history? Do you tear it down? The Eighth Wonder of the World has now become a legacy of how not to pay for a sports stadium. Long after the Oilers left and seven seasons after the Astros stopped playing here it sits.
When we went to the dome this week, it was warm inside and didn’t smell too pretty. It’s home to a few offices but the floor of the Dome floor is now just concrete.
“The dome is old and it’s falling apart,” said Harris County Judge Ed Emmett. “It’s time as they say to fish or cut bait.”
“Now we’ve got a situation where we have what was the Eighth Wonder of the World sitting there effectively unoccupied,” said Harris Co Tax Assessor-Collector Paul Bettencourt.
And you are still paying. They are numbers many public officials probably had a hard time figuring out themselves. You still owe $38 million on the Astrodome. It’s property tax money and every year it’s costing millions just to keep it operating. In the last five years it cost $18 million. The tax assessor calls it a money hole.
“We’ve got to decide what to do with the domed stadium,” said Emmett. “It’s time to put up or shut up frankly.”
Hurricanes have nearly doubled insurance on the dome. The bill has been $894,000 just this year. And you think your utility bills are high? Look at this. The bill was $1.1 million. Operating expenses this year alone were $2.75 million.
The biggest money maker at the Dome is The Hideout. That’s the bar the Rodeo operates on the floor of the Dome. We get no money for that. The rest of the year the Dome was used just 13 days, making just $100,000.
“Frankly we can’t let people use it much longer, it will become a dangerous place,” Emmett said.
“The question we have to decide is if we can’t find something for the Dome to become, then they have to think seriously about tearing it down,” said Bettencourt.

Then, this one on the interminable Astrodome hotel redevelopment project:

Entrepreneurs looking to turn the iconic Astrodome into an upscale convention hotel have scrapped a “best of historic Texas” theme for a more modern, streamlined look.
A faux Texas courthouse and other features that played on the state’s past are out. Plans now call for including a section of the Dome’s seats, part of the diamond and an overall contemporary design that plays up the building’s cutting-edge nature when it opened in 1965.
“We’re going to have rides. There could be air rides that take you off the ground and make you say, ‘Wow,’ ” said Scott Hanson, president of Astrodome Redevelopment Co., the firm hoping to transform the Dome. “We’re going to have a few of those. They would be easy-going rides that would show off the venue.”
Astrodome Redevelopment still has hurdles to clear before it begins work. Willie Loston, director of the Harris County Sports and Convention Corp., which oversees Reliant Park, will update the Commissioners Court on the company’s progress in executive session Tuesday.
The court’s approval is needed before work could begin. And Astrodome Redevelopment needs to work out revenue sharing and parking deals with the Houston Texans and the Houston Livestock Show and Rodeo, the major tenants of Reliant Park.
But Hanson and Astrodome Redevelopment’s chief executive, John Clanton, said the company is making progress and hopes to begin work on the interior as early as next April.
Hanson previously said the company had obtained financing for the $450 million project. But he and Clanton publicly announced the lender, Deutsche Bank, for the first time Thursday.

The article goes on to claim that the “entreprenuers” of the project have a new Atlanta-based partner who will supposedly add equity to the deal and make it more viable.
Frankly, this silly notion that entreprenuers can arrange private financing for the conversion of the Astrodome into a hotel has been going on for three years. Now, the Chronicle would have us believe Deutsche Bank has approved a $450 million financing commitment on a highly-speculative covention hotel project in during the tightest credit market in years? I’m willing to bet that any such commitment has more outs than the Stros lineup this season.
All of this imagery about the proposed Astrodome hotel would be all fun and games except that it is costing the County real money to maintain the Dome, probably around $10 million just since the dome hotel project was first floated. Given that we are three years into this and the entreprenuers are not even at the stage of cutting deals with the Texans and the Rodeo over use of the Reliant Park property during times of mixed use, just how long is the County going to dawdle over the Dome before moving on to more realistic uses of the property?

Fighting Irish bashing

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Notre%20Dame%20mascot.gifIt has not been a good year so far for Notre Dame.
After getting hammered 41-14 by LSU in the Sugar Bowl, Fighting Irish head coach Charlie Weis got poured out in the trial of his medical malpractice lawsuit against the surgeons who performed a gastric bypass operation on him. Then, the Irish were pummelled in their first two games of the season, 33-3 at home by Georgia Tech and 31-10 yesterday by Penn State. A wounded but talented Michigan team looms next week.
Thus, it’s probably no surprise to anyone that more than a few of Notre Dame’s opponents are enjoying the current troubles of the Fighting Irish. One of those passed along the flow chart below:
Notre%20Dame%20chartB.gif

Stros 2007 Season Review, Part Seven

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Pence%20and%20Lee.jpegGosh, it’s amazing how fast 20 games go by for the Stros (62-79) when the club’s General Manager and manager are fired in the interim (previous periodic reviews are here). The reactions to the firing were varied (see here and here), and they prompted some dire warnings about the direction of the club. However, as the club started to wind down the 2007 season over the past 20 games, I saw enough to like that I’m cautiously optimistic about the direction of the club.
The past 20 games was really no different from the way the club has played all season. The Stros went 8-12 in this seventh 20-game segment of the season, including ugly 14-2 and 11-3 losses to the Brewers and the Mets over the past two games. The hitting continues to be slightly below-National League average (-9 RCAA), although Lance Berkman (31 RCAA;/.388 OBA/.506 SLG/.894), Hunter Pence (25/.368/.558./926), Carlos Lee (15/.354/.522/.876) and Luke Scott (14/.358/.510/.869) are providing a nice nucleus of solid hitters to build around. The Stros overall hitting places them ninth among the 16 National League clubs.
Nevertheless, the Stros overall pitching has remained atrocious. To put this in perspective, Stros pitchers saved 78 more runs last season than an average National League staff would have saved in the same number of innings (RSAA), which was the best performance by a pitching staff in the National League last season. This season, the Stros pitchers have already given up 83 more runs than an average National League staff would have given up in the same number of innings, which is dead last in the National League.
Thus, with 21 more games to go in the season, the Stros pitching staff is an incredible 161 runs worse than the club’s pitching staff from last season. Frankly, with that size of decline in the club’s pitching performance, it’s amazing that the club’s won-loss record is only 7 or so games worse than the club’s record was last season at this point in the season. If the Stros win half of their remaining 21 games, the club will end up finishing (72-90) a full 10 games worse than last season’s club (82-80).
Despite that somewhat bleak landscape, the reason for my optimism is that Stros’ management has embraced many of my earlier recommendations regarding preserving the club’s assets during the remainder of this lost season. The Stros are not overpitching their best pitching assets (Oswalt, Qualls, Lidge, the rehabbing Backe and Sampson) or there most promising younger pitchers (Patton, Guitierrez, Paulino, etc). They went ahead and had Jennings get his elbow surgery over with so that he might be a viable option for the 2008 season. They are giving younger players such as catcher J.R. Towles some playing time to measure when they might be able to contribute at the MLB level. Although Drayton McLane is interviewing several of the typical hacks who always seem to get their foot in the door on MLB general manager interviews, he is also interviewing some of the younger GM prospects who understand the importance of statistical analysis in evaluating players and who know that re-energizing the Stros’ floundering farm system is the key to turning around the club’s fortunes in the long run.

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Houston Texans, Year Six

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Matt%20Schaub%20090707.jpgRejoice! The seemingly unending National League Football pre-season is over!
It’s Year Six for the Houston Texans and the fourth annual preview of the Texans since this blog began back in 2004 (previous previews are here). Thankfully, this past off-season for the Texans was not as eventful as the off-season after Year Four:

After unexpectedly finishing the 2006 season with a couple of wins, the Texans are riding a wave of optimism into the 2007 season. Unfortunately, most of those optimists forget that the team looked deader than a doornail in the game before those final two wins;
After changing the management model of the football team during the off-season after the 2005 season, Texans owner Bob McNair and second-year coach Gary Kubiak changed the marquee player of the franchise, which was followed by the typical potshots that occur after such changes;
Does the Michael Vick affair provide some hope for the Texans’ draft strategy?; and
Texans owner Bob McNair — one of the truly good guys among NFL owners — was rated much more highly than his team.

So, is the optimism for the 2007 Texans justified? Well, in addressing that question, it’s helpful to review briefly the Texans’ tumultuous first five seasons. As noted in the pre-season review before last season, the Texans were the toast of the town for their first three seasons of existence in which the team and the local media trumpeted the party line that the organization was building a playoff contender “the right way” — i.e., through prudent drafting and development of young players while eschewing the temptation of short-term rewards provided by over-priced veterans who were on the downside of their careers. The progressively better won-loss records in the first three seasons (4-12, 5-11, and 7-9) — plus the drafting of young stars such as WR Andre Johnson, RB Dominack Davis and CB Dunta Robinson — seemed to indicate that the Texans’ plan was working.
Reliant%20Stadium%20at%20night%20090707.jpgUnfortunately, those progessively better won-loss records during the first three seasons camouflaged some big problems, such as the fact that the Texans entered each of their first four seasons with the same two core problems — the Texans’ offensive line could not protect the quarterback and the Texans’ defensive front could not apply adequate pressure on the opposing team’s QB. Although former Texans GM Charlie Casserly tried (remember the Texans’ flirtation with LT’s Tony Boselli and then Orlando Pace?), the Texans were never able to address those problem areas effectively. Ultimately, both Casserly and original Texans head coach Dom Capers were fired after the disastrous Year Four for their failure to solve those two core problems.

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Loren Steffy’s Enron Myopia

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Houston Chronicle business columnist Loren Steffy is a particularly vitriolic critic of former Enron executives Jeff Skilling and the late Ken Lay.

Steffy convinced himself early on that Skilling and Lay had lied to investors about Enron, so he made a good part of his living for the past several years appealing to resentment and scapegoating rather than fair-minded analysis in covering Enron’s demise.

Even the fact that the criminal cases against both Skilling and Lay turned out to be rather weak made no difference to Steffy. He rarely, if ever, gave Skilling or Lay any credit for the enormous wealth that was created from their legacy of beneficial risk-taking.

Stoking anger toward wealthy business executives is much easier than nuanced analysis of often complex markets and business transactions. Probably sells more newspapers, too.

So, against that backdrop, imagine my surprise when I came across this recent Steffy column in which he defends embattled securities fraud plaintiff’s lawyer, Bill Lerach.

Lerach is in the cross-hairs of a federal criminal indictment for lying to federal judges and his firm’s class clients about payments that his firm allegedly made to class representatives in certain of the cases that Lerach’s firm and his former firm (Milberg Weiss) handled. Despite these allegations, Steffy sees the good in Lerach’s work:

Lerach and his lawyers have held countless executives accountable over the years. They’ve recovered billions for fraud victims, both individuals and, more recently, pension funds and institutions.

All of this, of course, has made Lerach wealthy, which fuels the criticism against him. [. . .]

Past mistakes may have caught up with him, and if they have, he must pay the price.
But for . . . thousands of other shareholders, those mistakes may tarnish Lerach’s reputation, but his legacy remains unblemished.

As noted several times over the past year (most recently here), I also have doubts about the anticipated criminal case against Lerach, although not for the same reasons as Steffy.

My radar system for abuse of prosecutorial power is always activated whenever the government’s case is based on witnesses whose testimony has been bought and paid for.

But here’s what gets me. Steffy balances Lerach’s alleged lying to judges and his investor class-clients against the economic benefit of the recoveries his firm made on behalf of those investor-clients (many of those recoveries actually reduced the value of the companies that Lerach’s clients owned, but that’s another issue).

However, Steffy excoriates Skilling and Lay for their alleged lying to investors despite the fact that the two former Enron executives created enormous wealth that dwarfs any economic benefit that Lerach’s firm ever generated.

Thus, to Steffy, Lerach is Robin Hood who deserves some slack, while Skilling and Lay are greedy shysters who got what was coming to them. But in reality, what happened to Skilling, Lay and Lerach is far more complicated than that.

Too bad that Steffy prefers his simple morality plays to analytical clarity that might actually lead his readers to understand that encouraging the type of risk-taking that Lay and Skilling promoted at Enron facilitates productive markets, employment growth and wealth creation.

Considering Giuliani

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giulianiSweats.jpgDaniel Drezner has an interesting recent observation about Rudy Giuliani’s presidential bid:

Take this for what you will:
Over the past month, I’ve had at least two dozen conversations with various people about Rudy Giuliani’s presidential campaign. A lot of these people are Democrats, but there were a healthy number of Republicans and independents as well. These are all smart observers of politics who generally do not make knee-jerk assessments. The one common denominator was that, at some point, all of these people had lived in the New York City area while Rudy was mayor.
What is astonishing is that, despite the fact that this collection of individuals would likely disagree about pretty much everything, there was an airtight conensus about one and only one point:

A Giuliani presidency would be an unmitigated disaster for the United States.
That is all.

UPDATE: Commenters have reasonably asked the “why?” question. For some answers from New Yorkers, click here and here.

Here is my contribution on why Giuliani should not be elected president.

This should make Stros fans feel a bit better

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carlos%20zambrano.jpgIt’s been a bad season for the Stros, so fans of the local ballclub have to look for solace anywhere they can get it.
A couple of weeks ago, the Cubs inked ace starting pitcher Carlos Zambrano to a 5 year $91.5 million deal ($18.3/year) to keep him off the free agent market this coming off-season. The deal makes Zambrano the highest-paid pitcher in Major League Baseball.
As if on cue, over his last six starts, Zambrano’s record is 0-5 with an 8.29 ERA. On Monday night, he was the starter for the Cubs in an 11-3 loss to the Dodgers, prompting desperate Cubs fans to boo Zambrano as he left the field for the day. For the season, he has saved only seven more runs than an average National League pitcher would have saved in pitching the same number of innings (RSAA, defined here). Zambrano’s ERA is a rather pedestrian — at least for a $91 million pitcher — 4.35.
Zambrano is only 26 years old and has already thrown almost 1200 big league innings. The Cubs have a legacy of overworking young pitchers (think Kerry Wood and Mark Prior), so Zambrano’s downturn this season is a definite warning sign that something may not be right physically with him. Even if he is not battling an injury, Zambrano is a high injury risk given his workload over the past five seasons. If he is sidelined for any significant period during the term of his contract, then the Cubs investment in him will make the Stros’ recent bad deals seem tepid in comparison.
See, feel better? ;^)

The Wyatt Oil-for-Food Trial

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Oscar%20Wyatt%20090507.gif83-year old legendary Houston oilman Oscar Wyatt will be fighting to live the remainder of his life as a free man beginning today in a U.S. District Courtroom in New York City. Wyatt is being tried on criminal charges that he bribed Iraqi officials in a scheme to acquire Iraqi oil in violation of the United Nations’ oil-for-food program (previous posts here, here, here and here). The Houston Chronicle ran major stories here and here on the trial over this past weekend, and the NY Times story on the beginning of the trial is here.
The Wyatt trial has the potential to be particularly noteworthy because of a part of the defense strategy — to paint the prosecution as political payback by two of Wyatt’s old oil field rivals, U.S. President George W. Bush and his father, George H.W. Bush, the former president.
Wyatt is charged with conspiracy, wire fraud and trading with a country that supports terrorism. The indictment essentially alleges that he arranged for about $4 million in secret payments to Iraqi officials funneled through shell foreign companies and Swiss intermediaries to the Iraqi government from 2000 through 2002. In response, Wyatt contends that the U.S. government has targeted him for prosecution because he has been an outspoken critic of the two Bush administrations, particularly over the two wars in Iraq. Wyatt is the most prominent U.S. businessman indicted in the affair, althought eight other individuals have been convicted or pleaded guilty to similar charges to those against Wyatt. Likewise, charges are pending against five others.
A 2005 report from a commission led by former U.S. Federal Reserve Chairman Paul Volcker alleged widespread corruption in the $64 billion oil-for-food program, which was created to allow Iraq sell oil and use the proceeds to buy humanitarian goods to offset sanctions imposed after the Desert Storm War in 1991. Mr. Hussein’s 1990 invasion of Kuwait. The Volcker commission’s report accused 2,200 companies from 40 countries of conspiring with Saddam Hussein’s regime to divert $1.8 billion from the supposedly humanitarian campaign.
Jury selection is scheduled to begin today and the trial is expected to last four to six weeks. Wyatt and his defense attorney — noted New York criminal defense attorney Gerald Shargel, who previously represented the late reputed mobster, John Gotti — have not yet decided whether Wyatt will take the stand in his own defense. This one looks to be worth the price of admission, so stay tuned.

Ida Mae reports on the Horns

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Ida%20Mae%20Crimpton.jpgThose Texas Longhorns are playing football again (albeit not very impressively), so it’s time for Ida Mae Crimpton to provide the inside scoop on the Horns first game, straight from her front porch in beautiful Elgin, Texas. According to Ida Mae, the first game was bad, but the after-the-game Longhorn locker room was much worse:

And based on what Mack’s wife, Sally, told me, it wasn’t any picnic in the locker room after the game, either. Sally said that Mack really read the guys the riot act. He yelled at them and told them that after the way they played, they didn’t need to expect any post-game orange Gatorade, either (and he was true to his word, tooÖhe made them stand in line at the water cooler). And then when Offensive Coordinator Greg Davis got back from gassing up Mack’s car and bringing it around (he also lets the air conditioner run for a while so it’s nice and cool when Mack gets in to drive home), he told the offense how disappointed he was. He said that Mack had every right to be pissed off and that they would be doing double drills this coming week in preparation for TCU. Well, that made the guys groan, let me tell you. It was a pretty glum locker roomÖyou’d have thought we’d lost or something.

But that’s not all. Read the entire piece.

A worthy campaign

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herskowitz235-2.jpgJames Anderson over at AstrosDaily discovers a glaring oversight — the dean of Houston sportswriters, Mickey Herskowitz, has not been elected to the sportswriting section of the Baseball Hall of Fame in Cooperstown. Not only is Herskowitz the finest sportswriter of the past generation in Houston, he was also intimately involved in encouraging the investors who ultimately brought Major League Baseball to Houston in the early 1960’s. As Anderson notes, Herskowitz is richly deserving of this honor and all longtime Houstonians who have had the opportunity to enjoy his work over the years should be squarely behind the campaign to award him this honor.