Cities are being forced to gut budgets for non-essential items like schools, police, road repair and so on in order to fund impoverished sports franchises, and the sweetheart stadium deals the sports teams negotiated. Or something.
Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.
From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.
In Indianapolis, the Capital Improvement Board spent 2009 trying to find $32 million to run the Lucas Oil Stadium and convention center. In Milwaukee, a drop in sales tax receipts may delay by several years the date for paying off the bonds issued to build Miller Park, the home of the Brewers.
Columbus, Ohio, is considering using public money to keep the Blue Jackets in town. Glendale, Ariz., has fought to hold the Phoenix Coyotes to their long-term lease. In New Jersey, a ticket surcharge may be added to help resolve a tenant-landlord dispute between the Devils and Newark.
Mark Rosentraub, the author of the book “Major League Losers,” said that many of the stadium deals included “revenue bombs,” with financial traps like balloon payments on debt in later years and sweeteners like the Hamilton County property tax rebate to win public support.
In many cases, the architects of the deals are long gone by the time the bill comes due.
The plan went awry almost from the start. The [Cincinnati Bengal’s ] football stadium exceeded its budget by $50 million, forcing the county to issue more bonds. Forecasts for growth in the sales tax turned out to be too rosy. The teams received sweetheart leases. In 2000, voters threw out the county commissioners who cut the deal.
That year the sales tax grew 1.8 percent, the first of many years below the 3 percent forecast. Both stadiums were originally expected to cost $500 million combined. Yet Paul Brown Stadium alone cost $455 million and the Great American Ballpark, the Reds’ home a few hundred yards down the Ohio River, cost $337 million by the time it opened in 2003.
The generous deal for the Bengals has been a sore spot. The team had to pay rent only through 2009 on its 26-year lease, and has to cover the cost of running the stadium only for game days. Starting in 2017, the county will reimburse the team for these costs, too. The county will pay $8.5 million this year to keep the stadium going.
The Bengals keep revenue from naming rights, advertising, tickets, suites and most parking. If the county wants to recoup money by taxing tickets, concessions or parking, it needs the team’s approval.
[Click to continue reading As Revenue Plunges, Stadium Boom Adds to Municipal Woes – NYTimes.com]
Was it really worth it? Are public spectacles so important to our society that paying wealthy team owners to host their games is more important than funding all else? If owners of sport teams are so broke they need welfare to pay for their team’s stadium, perhaps they should sell the team to someone who can pay the team expenses without taxpayer dollars. The sporting stadium boondoggle is one of the worst kinds of corporate welfare in the nation.