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Reminder: the public paying for ballparks almost always turns into a hot mess

Dec 18, 2013, 10:03 AM EDT

Great American Ballpark Getty

We’ve mentioned the huge problems that public dollars paying for professional sports stadiums multiple times. In case you’re still agnostic on this point, however, there’s a great story at Bloomberg to help you out. It catalogs the awful results of multiple cities’ public ballpark problems. Cincinnati’s is particularly awesome:

The tax relief hasn’t materialized as pledged, said Todd Portune, a commissioner in Cincinnati’s Hamilton County. Instead, the county government is grappling with annual stadium expenses totaling at least $43 million this year, including debt service, county documents show. Residents have seen a public hospital sold, mass-transit investments postponed and little private development near the stadiums that didn’t involve additional public subsidies, Portune said.

Not that this will stop the next city to claim untold financial and economic benefits as a result of tax dollars funding an arena, stadium or ballpark. And not that it will stop the media from passing along such claims, mostly uncritically.

  1. The Dangerous Mabry - Dec 18, 2013 at 10:15 AM

    That article was tough to read. It seemed like a series of statements, none of which was directly tied together, and the section breaks seemed arbitrary as well. This, however, seemed like a stretch of a statement from a city official:

    The county has kept its pledge to rebate property taxes every year except 2011, 2013 and 2014, said Sigman.

    So 3 out of the last 4 years, it hasn’t happened. That seems like a good indicator that things aren’t going as planned anymore, but I don’t know. This is all almost certainly more complicated than it seems. It doesn’t look like it’s all sunshine and roses, though, by any means.

    • jm91rs - Dec 18, 2013 at 10:41 AM

      Does the article mention that every time a certain percentage of stadiums get new technology, the Reds and Bengals are allowed to make the county pay for it in their stadiums? The latest was a $10M HD scoreboard.

      Does the article mention that the main proponent of the new stadiums was a county commissioner who quickly left his job after convincing Cincinnatians that the tax projections would have the stadiums paid off in no time? His new job…working with the Cincinnati Bengals, where he has been to this day. Talk about corrupt.

      • yahmule - Dec 18, 2013 at 10:45 AM

        Conflict of interest used to be a thing. Now its simply the way business is done.

      • junglerat524 - Dec 18, 2013 at 10:51 AM

        To be fair though, the Reds have always shared the cost for their upgrades while the Bengals won’t.

      • HFS Richard - Dec 18, 2013 at 11:22 AM

        Junglerat is right. Although I think for the scoreboards the Reds paid for the whole thing.

    • skids003 - Dec 18, 2013 at 1:26 PM

      Anything on Bloombergs is not only hard to read, it’s usually garbage.

  2. Old Gator - Dec 18, 2013 at 10:31 AM

    It’s not. And in a few more years, when Macondo is trapped by the usurious bond interest its corrupt and imbecile city and county commissioners and controllers committed it to at the behest of MLB and the Scrooge McLoria crime family to build Macondo Banana Massacre Field, and it too has to abandon critical public works projects and public services, the situation here will make Cincinnati’s look like sunshine and botanical gardens.

  3. yahmule - Dec 18, 2013 at 10:44 AM

    I can’t wait for this insane bubble to burst. These welfare kings hold sacred public trusts hostage and do nothing but rake in cash. The value of all sports franchises skyrocketed in this country beginning in 1995 when Cleveland Browns owner Art Modell shot the hostage and moved to Baltimore and they haven’t stopped growing since.

  4. misterj167 - Dec 18, 2013 at 10:47 AM

    I hope the Rugged Individualists of Cobb County, whose prosperity derives almost entirely from other people’s taxes, get screwed by the future Lester Maddox Stadium, because no group of people so convinced of their own natural superiority deserve it more.

  5. scoutsaysweitersisabust - Dec 18, 2013 at 10:50 AM

    As long as we continue to value athletes and sports over teachers, police, fire departments, health facilities, and social programs, this is a bubble that will never end. It’s a sad fact that people would rather pay out the wazoo for sports then live in a crime free, safe, neighborhood. Anything to be able to make yourself feel like you are part of the team.

    • 18thstreet - Dec 18, 2013 at 12:04 PM

      The thing is, I think voters really do oppose these stadium deals. Whenever there’s a poll, whenever there’s a referendum, the sports side loses. Miami/Dade impeached their mayor over this!

      And, I know, it’s easy to be cynical over politics but I’m a pretty good expert on this stuff (elections, politics, stadium funding, polling and any combination of those) and I can’t think of another issue where politicians of all political stripes so routinely ignore their constituents. It baffles me.

      Voters hate paying for stadiums.

      • skids003 - Dec 18, 2013 at 1:29 PM

        18thstreet, I think they ignore us more than they listen to us. And as a group, we keep right on electing them.

    • raysfan1 - Dec 18, 2013 at 12:08 PM

      True Tampa story, but not unique–
      Back before Raymond James Stadium was built, Tampa voted on a referendum for a 1 cent sales tax increase to fund new schools, road improvements, more police and more fire fighters. It failed miserably. The next election, the same referendum was again put forward, only this time including funding for the football stadium. It passed.

      • 18thstreet - Dec 18, 2013 at 12:19 PM

        Didn’t know that.

      • raysfan1 - Dec 18, 2013 at 1:22 PM

        I should probably elaborate a little as doing so will make another point.

        In the first election, there were virtually no commercials. I think it likely a lot/ most of the voters saw the referendum for the first time on Election Day. As a result, they likely saw a tax proposal, quit reading and voted no. (Some brilliant people, though, did get interviewed and stated things like “I don’t have any kids in school, so why should I have to pay for more schools?”)

        The next election, there lots of pro-referendum commercials touting the schools, etc, funded by pro-stadium interests. There were but a few critics, mostly painted as anti-progress at the time. The point here being that most voters’ knowledge of issues is TV commercials, and to a lesser extent TV news commentary. Most do not do any research. As a result, the side with deeper pockets generally holds sway. Thus, even though the average person will immediately agree in principle that public funding of sports venues is a bad idea, they can be convinced into voting for them by the pro-boondoggle crowd through slick advertising.

        However, I think the Cobb County model is how these things will typically go in most places now (state that public funds aren’t being used so referendums aren’t needed, then commit public funds).

    • scoutsaysweitersisabust - Dec 18, 2013 at 12:16 PM

      Bood points by both 18th and rays. I think the general public are beginning to wisen up to this horrific scam. But the age old adage is that no matter how intelligent people are in general, collectively we are all morons. It seem the new trend is to lie about funding that will come in if you just let us build a tiny little out of the way MEGA CASINO! Same lie in a different skin.

      Problem is, we are allowing our politicians to make these deals without our permission and get away with it. I’m in favor of more reform to the entire political process to include prison sentences for “politicians” like this.

      • scoutsaysweitersisabust - Dec 18, 2013 at 12:17 PM

        * Both GOOD points by….

        Stupid comment system

  6. sdelmonte - Dec 18, 2013 at 10:57 AM

    I am on your side, Craig, but one of the bloggers at PBT did a post about efforts by the owner of the Milwaukee Bucks that suggests that there are actually some economists who have a different opinion the the Zimbalist camp:

    http://probasketballtalk.nbcsports.com/2013/12/16/bucks-owner-herb-kohl-seeking-new-investors-to-keep-the-team-in-milwaukee/

    I would love to see the numbers from the other side, but it is worth noting that there IS another side.

    • karlkolchak - Dec 18, 2013 at 11:04 AM

      Another side whose opinion is no doubt subbsidized by the billionaire owers.

    • churchoftheperpetuallyoutraged - Dec 18, 2013 at 12:55 PM

      Milwaukee Bucks that suggests that there are actually some economists who have a different opinion the the Zimbalist camp:

      It took forever to find the economist paper to argue against it (have to click that link, which goes to another link about the Sac Kings, and then a third link to the paper), but I’ll let you guess how that theory is holding up when I tell you what the economist studied:

      Assessing the Economic Impact of Sports Facilities on Residential Property Values: A spatial Hedonic Approach

      This paper estimates the intangible benefits of a two sports facilities in Columbus, OH on residential property values.

      Assessing the intangibles, nice.

  7. cohnjusack - Dec 18, 2013 at 11:00 AM

    But think of all the $8 an hour, part-time, seasonal hot-dog vending jobs these stadiums create! All for the low-low price of hundreds of millions of dollars!

    • 18thstreet - Dec 18, 2013 at 12:08 PM

      In DC, Mayor Williams really wanted a stadium downtown (at the location of the old convention center). That never happened, which is why the stadium is along the water in a less convenient location.

      But at the site of the old convention center is an impressive array of mixed use office buildings, high-end apartments and retail. Moreover, they just reopened a road that had been blocked by the convention center’s giant footprint! It might improve traffic headed in and out of the city on New York Avenue (though I’m not holding my breath on that).

      It’s been a much better use of the land in every conceivable way.

      • scoutsaysweitersisabust - Dec 18, 2013 at 12:21 PM

        The area where the current stadium is located is improving, but for the longest time it was one of the er.. seedier sections of town. I know a lot of people who refused to go to games because the nearest parking was several blocks away, and it simply wasn’t safe to walk that distance, especially at night after the game got out. In the end the entire project has cost even more money than expected because they have to perform major renovations in the entire area around the stadium as-well. I believe they were hoping for a similar effect to how Camden Yards turned around the Baltimore Inner Harbor so many years ago, and it still may do so, but it’s an expensive and time-consuming process.

      • critter69 - Dec 18, 2013 at 6:54 PM

        Several reasons the old convention center site is now better:

        – The new convention center is located just North of the old convention center location;
        – The Verizon Center is nearby, and that’s what drove a lot of the initial development;
        – Metro is nearby;
        – DC is making a lot of transit improvements (the H Street Trolley, for example);
        – Etc.

  8. HFS Richard - Dec 18, 2013 at 11:32 AM

    There are definitely things that come into play on this. I actually wrote a paper on it when I was finishing my econ degree.

    there are definitely things that are not taken into account here like City taxes that are paid by ownership, the club, and the players over the life of the lease. The Reds stadium was actually quite inexpensive especially by todays standards and honestly I could see them actually paying it back over the stadiums life.
    the bengals on the other hand, probably not.

    honestly what I would vastly prefer is to see 1 of 2 things happen in the future:
    1)A modest ticket tax is adopted based on the cost to build the stadium and expected revenue generated ONLY by it to make it solvent
    2)Begin to give teams low interest loans instead of leases, make them pay it back at a very low interest rate.

    • nategearhart - Dec 18, 2013 at 11:45 AM

      Why not: “3) Let the owners pay for the stadiums themselves with the crapload of money they rake in every year”?

      • Old Gator - Dec 18, 2013 at 12:01 PM

        The answer is for communities to pass referendums that obligate their mayors, councils, commissions, what have you to put commitments to build major facilities for private entertainment and sports interests to a public vote. Several interests sued to stop the stadium but lost because, quite properly, the judge ruled that the city fathers had been vested with the power to make such decisions by the city charter and that, in effect, we had de facto “approved” the stadium when we elected the sons and daughters of bitches in the first place. After the Macondo Banana Massacre Field disaster, however, the voters of Macondo rose up and booted out the mayor and a pair of city and county commissioners in a recall election – by the biggest margins in the history of our local elections.

        Big money talks loud. In our sorry post-Citizens United world, the trick is to take the power to make these decisions away from our politicians, and keep it away from them.

      • skids003 - Dec 18, 2013 at 1:36 PM

        Gator, I agree but I don’t know if it will ever happen.

      • HFS Richard - Dec 18, 2013 at 2:07 PM

        Gator,
        in Cincinnati, which is what the story is addressing here it was put to a public vote and passed.

        Nate,
        if a team has the money more power to them, but you think that all of these teams are the Yankees and Dodgers, they’re not. Not every team has a 2 billion dollar tv deal to pull capitol from, which is why I referenced a low interest loan, a loan means they will pay for it with the money they bring in every year.

        it makes it so that even smaller market teams who don’t have the money for a stadium can afford it without burdening tax payers.

      • Old Gator - Dec 18, 2013 at 2:32 PM

        If the people have spoken, they’ve spoken. I will always respect that. Cincinnati isn’t the only place where public approval was necessary and received. In any such case, when the results don’t meet expectations, the former loyal opposition can’t be deprived of their right of schadenfreude but, on the other hand, no one who supported the scheme has the moral right to complain about anything except their own gullibility. And that’s as it should be in a democratic system.

        But that doesn’t mean that other polities can’t learn from their mistakes. If no one learns from ours, dear Buddha! I don’t know what to tell them. Might as well go ahead and fill their bathtubs with lampreys while they’re about getting their feet stuck in the same bucket of scat. I will say one thing for my own, thus blighted, community, though: when the Dolfeens came around with their palms cupped for a few dozen million to “upgrade” Joeprodolsharklife Stadium, the county commission was scared witless after their predecessors got booted out on their Praetorian asses in the wake of the Scrooge McLoria scam and put the project up for a vote. Guess what? The Dolfeens got told, in the politest way possible but by a big margin, to go invest their own goddamned billions. Matter of fact, the mail-in early vote was already running so overwhelmingly against them that the county commission, in an act of probity as rare for this place as ivory billed woodpeckers, cancelled the election itself and saved the county a couple of million in supervisory expenses.

        So, skids, yes, it can happen. We just got hammered in the worst way before this balkanized conurbation figured that out.

      • churchoftheperpetuallyoutraged - Dec 18, 2013 at 3:33 PM

        Gator,
        in Cincinnati, which is what the story is addressing here it was put to a public vote and passed.,

        Any idea what the turnout is? I can’t imagine a majority of the community turned up to vote for this, although I hope they did.

        Not every team has a 2 billion dollar tv deal to pull capitol from, which is why I referenced a low interest loan, a loan means they will pay for it with the money they bring in every year.

        Most owners are very wealthy themselves though. For all the talk of the Yankees, the Steinbrenners aren’t even close to the wealthiest owners in baseball. Let the owner(s) fund the project so they can reap the rewards. If the public pays for some of the project, let the public keep a % of the profits.

      • critter69 - Dec 18, 2013 at 4:29 PM

        The Washington NFL team used it’s own money to construct a stadium. Even so, the state of Maryland (where the stadium is actually located) was forced to spend dozens of millions to:

        – Build roadways to/from the stadium;
        – Build new utilities (gas, water, sewer, electricity, etc.) to service the stadium;
        – Relocate existing utilities (gas, electric, etc., lines are not good candidates to have steel piles driven through them);
        – Etc.

        Yes, the major expense in the actual financing and construction of the stadium should not be the non-owners’ responsibility, but don’t think the non-owners get off without paying anything.

        Prior to building the stadium in Landover, the owners of the Washington NFL franchise looked a few miles North, wanting to build the stadium in Laurel – partially to inhibit an NFL team in Baltimore. The Laurel race track, though wouldn’t agree to the terms the owners of the Washington NFL franchise proposed, and then the state stepped in and made arrangements to make sure the Laurel race track remained a race track, not the location of an NFL stadium.

    • 18thstreet - Dec 18, 2013 at 12:18 PM

      Re: City taxes. The ownership of the Washington Nationals live in Bethesda, Maryland. They’re really really rich, and they’ve always lived in Bethesda, Maryland. I imagine they go out to eat in DC’s finer restaurants (and pay a hefty 10 percent meals tax when they do), but I’d guess their existence doesn’t really benefit the coffers of the District of Columbia in a meaningful way. It’s hard to see why the City Council should be helping the Lerner family.

      And separately: why should there be a special ticket tax? There’s a sales tax in most locations. It’s not like DC changes a special retail tax at Macy’s in exchange for building them a new store. It’s not like DC changes a special entertainment tax at Lucky Strike Bowling in exchange for DC paying to keep the lanes waxed.

      Sports teams are private businesses. They should pay for their own expenses and keep whatever aftertax profits they earn. I can’t believe this is a controversial statement, but here we are.

      • HFS Richard - Dec 18, 2013 at 2:22 PM

        I’m all for teams paying their expenses, hence why I suggested loans instead of these lease deals they get.

        my point on ticket taxes is that IF a municipality is going to subsidize a stadium then they should find a way to make that stadium solvent on its own.
        in the case of the Reds stadium it cost them 350 million dollars ish. take into account ONLY the money the Reds are generating. Find the remainder and make it into a ticket tax so the stadiums pay for themselves.

        here’s the thing the ticket tax doesn’t have to be high.
        assuming through taxes like sales taxes, city taxes etc (not to mention player property tax) they are able to bring in $5 million dollars a year that only leaves around a $7m short (over the life of the lease, not including interest) if you tack a $3 per ticket tax on its paid for.

    • HFS Richard - Dec 19, 2013 at 2:20 PM

      It was 96 so honestly I couldn’t tell you what the turnout was. However it was VERY hotly contested at the time and passed with something like 63% of the vote.

  9. moogro - Dec 18, 2013 at 11:46 AM

    Lots of white people love to subsidize sports teams.

    • Old Gator - Dec 18, 2013 at 11:55 AM

      Yes, it keeps the funds from going to abandoned mothers of color. You know, the 47%.

      • gibbyfan - Dec 18, 2013 at 12:44 PM

        Gator–To me the hubris that these billionaire owners portry is astounding..I really can’t think of words strong enough to describe their unbridled greed…………but they are not deterred –even after the marlin debacle wasnt the Dolphin ownership enraged that the public didn’t allow them to do the same thing……….especially after wasting all tha tmoney to putatively but the necessary politicians?
        It just brings the concept of greed to a whole new level……………but I guuess some would argue it’s american enterprise—If you can get it, take it–to hell with any consequences

      • skids003 - Dec 18, 2013 at 1:31 PM

        I didn’t know all the athletes were white?

      • Old Gator - Dec 18, 2013 at 2:35 PM

        Gibby – no argument.

    • hojo20 - Dec 18, 2013 at 12:21 PM

      I love white people.

  10. meatcarroll - Dec 18, 2013 at 1:30 PM

    Corporate welfare is obscene and must be stopped so we can stop having our cities and public dollars held hostage.

  11. sportsfan18 - Dec 18, 2013 at 7:21 PM

    All good points and I agree that the public should not have to pay for these stadiums.

    Of course, it is good and does work out for some people or it wouldn’t happen.

    It’s just like govt employees go to work in the private sector in the same business that they used to work or provide oversight for while in the govt.

    There are many examples of the “revolving door” between govt and the private sector.

    The owners and leaders of the communities both have to benefit or these deals wouldn’t occur.

    Yes, they are bad for the public, but they are good for others so they continue to happen.

  12. jdillydawg - Dec 19, 2013 at 5:14 PM

    I think you’re looking at it all wrong. Take a look at the Mariners. They have a great season, get their park built in 1999, and get it publicly funded.

    I have no idea how that worked out for the city and the taxpayers, and it certainly has sucked for the fans who have endured an incredibly long line of losing seasons.

    BUT, the owners have done magnificently. So well, in fact, that they can sign 10 year, $240 million deals without difficulty. For that, they must be commended.

    I’d say it worked out just fine. For some.

  13. canadatude - Dec 20, 2013 at 10:38 AM

    With MLB making the huge revenue that it does, it should be their responsibility to provide the venue. In Canada, taxpayers built the Big “Owe” in Montreal in 1979 (where they just retired the debt) and the Skydome in Toronto. It is now the Rogers Center, built for $650 million taxpayer dollars and sold to Rogers for $25 million. Some criminals don’t need a gun.

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