How I Figure Nelson Peltz Sabotaged A Clark Street Parking Garage

It’s hard to be mad at anyone at 2:15 on a Tuesday afternoon, with Idlewild cruising its way through my stereo for the first time. I’m not sure yet whether this will end up surpassing Tool’s 10,000 Days as my favorite album of the year, but it might. Outkast is most definitely on to something, despite what all the critics and reviewers seem to be saying about the disconnection between Andre and Antwan being a major problem.



Anyway, I am mad. I’m mad at the Tribune Company about this parking garage thing. It makes them look like a big, evil company. Which apparently they are.

The e-mail about it came across my desk from KJM:

http://www.suntimes.com/output/cubs/cst-nws-wrig22.html

The Cubs added 1,790 seats for 82 games at average cost of $40. The math on that comes out to be $5,871,200 per SEASON and they are saying they are not sure where to find the money? That does not even include the extra money spent by 1,790 extra bleacher seated fans. I assume they will also lease the storefronts and charge for parking creating more revenue. Classic bait and switch, its hard to get rid of the extra seats now that they are built.

Yep, it is bait and switch alright. Or, if it wasn’t their intent to pull the plug once they got what they wanted and it’s true that circumstances have changed, at least the Cubs look awful bad for neglecting to see through on their end of the bargain.

Here’s the Cubs VP for community relations, Mike Lufrano:

“Like many construction projects, though, the costs have gone up and we need to make sure we understand the economics and build the right project,” Lufrano said.

Lufrano denied that the construction delay has anything to do with financial problems that have beset Tribune Co., corporate owner of the Cubs. “It's about the cost of the project and having it make economic sense,” he said.

Here’s the central question that Cubs fans and Wrigleyville residents in particular should ask: What, exactly, has changed since the project was presented as part of the expansion deal?

Have costs gone up? Or, more pointedly, have costs gone up more in the past year or two than what any reasonable project planner might have anticipated? That sounds like an awful flimsy excuse. Besides which, when in the history of construction projects has one like this ever come in under budget? Elasticity is simply part of the equation.

So, if money is the problem, is it that revenue is down? Well, that doesn’t stand up either, does it. As KJM points out, the expansion is certain to net an extra $6M-plus for the Cubs. Looking at the bigger picture, the Cubs are still selling out nearly every game, and the brand is still solid despite the spiraled season. TV revenue and other advertising streams are constant. If anything is down it’s probably merchandise revenue, but I doubt even that is hurting. At least -- and this is crucial -- hurting beyond what conservative estimates would have projected, which are always the estimates to use when planning an expansion.

What this leaves are two choices: either the project is delayed for some unknown reason aside from money, or it is the financial problems of TribCo.

Now, maybe it is the old bait-and-switch. Maybe they never intended to build this thing, and they just used the project’s glitz to appease the residents. I’m not buying that, however, if for no other reason than this is an expansion that should help the Cubs in several aspects. Renting spots to restaurants guaranteed to be packed to the gills a large portion of the year, besides pulling in parking dollars and being another reason for fans to come by the park if the team is mediocre -- this thing can’t lose money in the long run. Besides which, by all accounts the club needs those improved workout facilities. It will help the team. It’s something of a no-brainer.

Are there any other reasons why they wouldn’t want to see this project through? Break out your conspiracy theories if you want -- and Jimmy Hoffa's body isn't buried there, after all -- because that’s all there is to it. Unless it's more straightforward.

I don’t know how many of you keep track of the ups-and-downs of the TribCo at large. I don’t generally, but occasionally I follow along a little bit just out of curiosity, and for the fact that what happens with the TribCo will probably have larger reverberations in the economy and culture at large. It’s still not entirely certain what will happen with newspapers and other media outlets as businesses, given this brave new on-demand world.

Well, last week TribCo’s stock spiked when it became known that Nelson Peltz has bought 1.2% of the company. And while it’s still a lot lower than it was a year ago ($39), at $31 it’s still up around 15% from its low water mark ($27) a few months ago. Somewhere around half of that recent improvement came in the last few days, since the news about Peltz.

Speculation has begun regarding what pressures Peltz will put on FitzSimmons and the rest of the company, and staff writers for the (TribCo owned) LA Times report, “Wall Street speculated that the 64-year-old billionaire would increase the pressure already being applied by a shareholder group that has called on Tribune management to sell assets, spin off its broadcast division or sell the company.” It’s starting to look like things will be happening sooner rather than later.

I don’t think it’s a coincidence, this recent chatter and the announcement of the delay of the project. If you’re a company in such a state of flux, does it make any sense to put up a $30M expansion that will probably cost more like $40M or more when it’s all said and done? Nope. None at all. Every dollar counts right now, and while it's not a huge amount of money on the grand scale, the TribCo has to keep everything it can close to the vest. I'd speculate that this is probably just the most visible of several such decisions to keep costs down in all their divisions. The expansion makes no sense... except of course that the company said they would build it, and real people were counting on it.

Once again, it’s the business hemisphere pushing back the meridian, shrinking the baseball hemisphere until it looks like a Dark Ages map, back when the world was flat and North America did not exist.

A quick read about Peltz’s past business moves demonstrates that he’s always had a plan to fix a broken company before he invests. There’s no doubt TribCo is broken. Now we wait and see what Peltz’s plan is, and whether his influence will be strong enough to execute it.

Somehow, I have a feeling that he’s not a Cubs fan, and I hate that something I care about is simply an asset.