As a taxpaying resident of Washington, DC, let me be the first to say: Amen, Boston Globe! I can't believe that we're fronting the costs of a $600+ million stadium. At least with the MCI center in downtown, the argument could be made that it spurred development. In the area where the new Nationals stadium is being built, redevelopment has been going strong for the past 2-3 years. I know that I will be voting against any city council member who agreed to this financial abortion.

Atleast when my tax dollars went to PNC Park and Heinz Field I knew where my tax dollars were actually going.

Maybe that doesn't mean much to the majority of people, but i'd rather pay for a ballpark than a fancy new car for Ed Rendell.

But then again, i've never actually cared where my tax dollars went which may be an entirely different problem.

Come on; did anyone really buy that line anyway? People support stadiums because they want to see sports in person, and for a sense of civic pride. Other than a tiny number of industries that only exist to sponge off the stadium, the "massive economic benefits" line has always been condescending and unconvincing.

A new stadium may seem attractive to job-seekers and businesses in the area, but that's no different from any other major development that gives people the reassurance that the city is doing well. The difference, of course, is that the subsidy of the stadiums is so blatant - at least the other sorts rely on quiet tax concessions, zoning changes and other gifts Joe Blow will never hear or understand. Stadiums are in your face, so they come up with this nonsense.

As another resident of Washington, DC, I'd like to second Toxik's point - for an area as small as DC (which already has insanely high income tax rates) to finance a half-billion-dollar stadium is simply awful.

Plus, there are a lot of businesses in that area that are being forced to close (via emminent domain) that DC is doing almost nothing to help relocate except tell them "Now that we've paid you much less than market value for your property, we'll let you move to this (significantly higher rent/property value) area that we all know you can't afford!" They're gone, but we'll have a $500+ million dollar hole that will help residents not at all.

T.

Re: 1, I agree with you, but MCI Center was privately financed by Abe Pollin. For as much a bungler as he's been in guiding Les Boulez, he does put his money and heart where his mouth is. (I think it's misguided, but I am nonetheless touched that he changed the team's name to Wizards, in part, to stop promoting violence.)

Here's a question that I have: Why can't the city of Washington just buy the Nationals outright? Is $600 million not enough? Couldn't DC just pay market rate for the team and throw them in RFK, making some nominal upgrades along the way. If managed well, the team could even turn a profit for the city. I seem to recall that the Green Bay Pakers are publicly owned, so why wouldn't this work in MLB?

The Green Bay Packers are publicly owned, but current NFL rules say that no other team can ever be publicly owned like that - Green Bay is granted an exemption because they were like that before the rule was put in place.

Wouldn't shock me if the other leagues had similar rules.

T.

Re #6- a city owning a baseball team would be the mother of all fiascos. Every time a job was cut or a school closed, people would scream how the city is paying a baseball player ten million dollars, but we can't afford...whatever it is that they can't have.

It works in Green Bay because it's a small city, it has a long Packer tradition, the sport has a salary cap, and the team is always profitable. That wouldn't translate to baseball.

I guess civic pride has a certain price. But then then a team plays in a stadium a while and starts crying for a newer stadium with a all the trim. And how long will they be happy in that stadium before a newer, better stadium is needed. There's a line when civic pride has passed and pure greed begins.

The natural pattern of development, Rosentraub asserts, tends to be sprawl, but stadiums can function as focal points around which apartment buildings, stores, restaurants, and bars cluster. And they can help bring back hollowed-out downtown areas.

This is about the only good argument I can give for publicaly financed stadiums. In Denver, the Rockies and Coors Field undoubtedly brought back the downtown LoDo area, counteracting (at least a bit), the awful sprawl that has ruined my hometown.

That being said, I think baseball stadiums are the only types that have close to enough events to justify anything but infrastructure development by the public... and that infrastucture is the role of the city and provided to any new business in town. For all the laurels Baltimore got for Camden Yard, the inner harbor area is still totally desolate on nights when there are no games.

8 nights a year for an NFL stadium will never be good enough for redevelopment.

I'm interested in the "no publically owned teams" rule mentioned by #7... why this rule, as I'd think the NFL would be interested in whoever is the highest bidder? Is there a fear that publically owned teams would not invest enough to build the league over the long-term (although I can't see why public management would differ from private... both are likely to want to build winners and make the team as profitable as possible...)?

Thanks JRM- I guess the fact that some baseball teams (vs. NFL) are unprofitable could make a difference... but wouldn't that just mean a city-owned team that was losing money would be likely to sell it to a private owner anyway? Are they really that likely to act any different than a private owner losing their shirt on a team?

a city owning a baseball team would be the mother of all fiascos.

That's why the city wouldn't buy it. The city would set up a corporation, loan them the money to buy the team, and incorporate the business under rules similar to what they have in Green Bay.

The city would end up making a lot of money in the interest payments (it'd be a very, very good investment). Further loans (to finance new stadia, etc.) would also generate more income.

The problem, of course, is that the leagues have bylaws to prevent this sort of thing. But it would be very smart.

Of course, as JRM pointed out, it's also trickier for baseball because baseball teams aren't always profitable, and they survive mainly on increasing equity (which... doesn't work if the team can't be sold and if shares don't appreciate in value).

I live in Manchester, NH, and about five years ago the city built an arena. I can unequivocably tell you that the arena makes the city a better place to live as it provides diverse and exciting entertainment options. The restaurants and bars are packed before and after arena events. I'm not an economist, but as a citizen it's great to have the Verizon Wireless Arena around.

Of course, it didn't cost $600 M, either :D

Re: 11

I'd be very surprised if any baseball team was legitimately losing money. Oh, they all say they lose money, but they do so by accounting tricks that hide parking revenue, consession revenue, TV and radio rights revenue, in some cases *coughChicagoCubscough* ticket revenue, etc.

If any teams are losing money, its teams like the Yankees and Red Sox. Its very very easy to make a profit in Baseball right now. Its just that you end up with a team like the Pirates or Royals if you do so (or a team like the A's, if you hire someone like Billy Beane, super genius)

Paul Krugman once theorized that people only listen to economists on subjects they disagree on; nobody listens to them on topics for which a consensus exists (like rent/price controls, farm subsidies, etc.).

This was ancient news back when I was an undergrad in the 90s (admittedly, this was with Sanderson on faculty). I'm guessing that fifty years from now, we'll still be hearing about how the new stadium deal will revitalize downtown, despite another 50 years of data indicating otherwise.

#10- yep. the one thing the rockies managed to do right, since it didn't involve actually, you know, being on the field.

regarding the publically-owned Pack and their grandfather clause, who votes for them at the owners' meetings?

The Washington Nationals stadium was perhaps the most blatant, obvious example of how these ownership cartels extort (that really seems like the best word) money out of the taxpayers. In that case, the Expos were owned by Major League baseball, which was asking for several hundred million dollars to buy it from them. There were several interested parties. Meanwhile, before awarding the team officially to Washington, they wanted a publicly financed deal in place to build a stadium worth several hundred million dollars.

So, if there were free entry into the MLB market, then the solution would be obvious - a private group would build a stadium costing several hundred million dollars, and then they would start up the team. But because entering the MLB market requires "buying a team" or "paying expansion fees", the money that would go toward a stadium had to go to the other MLB owners. In effect, once you look past the "middleman" new ownership group, you have a simple fact: the taxpayers of Washington DC paid Major League baseball several million dollars to have the right to get a team.

regardless of any economic benefit I'd be perfectly willing to pay slightly higher taxes or whatever to keep an NFL franchise around. Hell, I'd pony up for any major pro franchise, and the NFL is the only one I'd actually bother going to myself.
And back when the Lambeau Field renovation went to vote, if it had failed and the Packers moved to Milwaukee or something, Green Bay would've suddenly gone from "ugly industrial city with neato football tourism" to "ugly industrial city suddenly devoid of nearly all tourism dollars"
I say this as a person that loves Green Bay and intends to one day move there by the way.

RE 16
the elected CEO of the Governing Board for the Holders of franchise rights to the Green Bay Packers

I say this as a person that loves Green Bay and intends to one day move there.

Give me your address when you get there I am about 10 years from being able to retire and move back to my beloved WI.

Re: #17- that's why I say the world would be a better place if the major sports leagues were forced to split. If Washington or any other city wanted ateam, they'd have two leagues putting in competing bids.

But I will say this, if any team wants to be baught by a city they need to copy the way the Pack did it. it is the only way I see to makle money for the city and still keep the local government out of it.

There are stadiums and then there are STADIUMS. Heinz Field cost about $280M to build, and the Steelers picked up about 45% of that. I understand about varying real estate values and construction costs, but why does a stadium have to cost $600M+, or more importantly, why does the taxpayer have to pay for every last extravagance? As a taxpayer I'm even supportive of paying for the basics that I too might even enjoy from time to time, but beyond that I think that the beneficiaries should pay. PSLs accomplish that to some extent, but they don't fully offset the cost.

I’d be very surprised if any baseball team was legitimately losing money.

Depends what you mean by "losing money". They're all gaining in value, and they're all gaining in value faster than any losses they take on. So several teams might lose a few $M a year, but this isn't a big deal to the owner, as the team appreciates in value.

But, as I pointed out, this wouldn't work if you can't gain equity for the team - like with the Packers, who couldn't be sold to raise money. Sure, the Packers have constantly been gaining value - like $600M currently if memory serves - but Green Bay can't get half a billion dollars by selling the team. The bylaws forbid that.

In that case, you really care whether or not you can make an operating profit, which is easier to do in football than it is in baseball. Especially in years other than this one, where it was virtually guaranteed that you would make an operating profit if the organization is the least bit competent.

Aw, come on, taxpayers DO benefit from a publicly financed stadium in Phoenix...

taxpayers named Bidwill, that is!

I may be wrong, but I understand that you cannot trade Packer stock; is that correct?

Also, regarding baseball teams losing money, for years Peter O'Malley of the Dodgers said he was losing money. When the books were finally opened, it turned out that to ol' Pete a year with a $20 million profit followed by a year with $17 million in profit was a "loss" of $3 million.

I may be wrong, but I understand that you cannot trade Packer stock; is that correct?

I think you can. It's just that you can't sell it for more than you paid - the stock doesn't appreciate. It doesn't pay dividends, either.

Basically there's fundamentally no way to make money with Packers stock. In fact, you're guaranteed to lose money, since it can't even appreciate at inflation.

The other nice thing about the Packers is the fact that you can actually get access to their financial records. :)

Also, regarding baseball teams losing money, for years Peter O’Malley of the Dodgers said he was losing money. When the books were finally opened, it turned out that to ol’ Pete a year with a $20 million profit followed by a year with $17 million in profit was a “loss� of $3 million.

Not to nitpick, but O'Malley claimed he'd lost $2m after only making $4m a season after he'd made $6m.

He did insist that, on those grounds, front office employees wages were frozen.

$4m was a phenomenal profit in the 50's.

from the article re: new Arizona stadium..

"Among the features are huge murals, a 60-foot team logo and a wall remembering Cardinals greats."

I'm sure that in place of "wall", the author meant to use "small alcove near the men's room".

I will tell you that I live in Houston and we have three brand new stadiums here. Before that, we had the old Astrodome and the Summit. Both were out of the way and not near any area where any real development could occur.

If you came to Houston in 1997 before the stadiums were built, you would probably comment on the fact that downtown Houston STUNK. But they built Minute Maid Field and the Toyota Center in downtown and I'll tell that downtown, even on non-game days, is hopping now. That's quite a bit of money that may not have been spent in Houston but rather in the suburbs or not at all.

I will tell you that the downtown train (that I'm absolutely against and for reasons why, read any Bill Simmons article about Houston), that has connected the Texans park with downtown and numerous people leave games, take the train to downtown and watch games at the sports bars there. So I will say that although I have no concrete numbers to prove that there has been an economic impact to the community, I will say that it sure seems like it based on the fact that I've worked in downtown for almost 8 years and it's not anything like what it was 10 years ago when downtown was a ghost town...

Re 29:

They'll need a bit more than that to list all the players who have left and become great NFL players. It'll be just like a minor league stadium.

Which taxes are used to build of finance the stadium makes a difference. In Charlotte, an extra tax levied on restaurants and hotels can only be used on projects that, at least in theory, lead to economic development. This is the money used on the new Bobcats arena and the Nascar Hall of Fame. While many people felt the money could be better spent, the reality is it would have been against city law. I would imagine other cities have similar rules.

I can't link to it because it was an email column and I can't find an archive of it (so basically you don't need to believe me at all), but Thomas Boswell (Washington Post columnist) wrote a column stating that the Washington Nationals stadium deal was like the test case that would finally prove or disprove whether tax-payer funded stadiums can bring economic benefits to the city.

His argument goes like this. A city with a population of about half a million is building a stadium for a metro area of 2.5 million. That's 2 million people not paying taxes for this stadium, who live in the Maryland and Virginia suburbs. Now, most of these suburbanites would usually spend their entertainment dollars near their homes, which means no economic benefit to Washington, DC. Yes, some surburbanites might come into the city and spend most of their entertainment dollars there, but by and large most people stay close to home. But now they need to come into the city to see the baseball team and spend their entertainment dollars in the city. Now money that would be going to Maryland or Virginia goes to D.C.

The quote in the article from Vanderbilt University economist John Siegfried is the argument that Boswell builds his point from. Most cities are part of a state, and therefore money that would be spent elsewhere in the state are spent at the stadium. As D.C. is an indepedent city, money spent at the stadium would not be spent in the city otherwise. So Boswell makes the point this would show whether stadiums have an economic benefit, but it might also only work in the special case of D.C.

Hopefully my arguement isn't too confusing. I can clarify if needed.

You forgot to mention the retractable fans dressed as empty seats, Ryan.

Re #26 & 27:

The following is from the packers.com page linked on my name. I looked at the prospectus when they put shares on sale in '97, and it recommended treating the purchase of shares as a charitable donation (unlike the old publicly traded Boston Celtics Limited Partnership, which actually turned out to be a good investment).

"Shares of stock cannot be re-sold, except back to the team for a fraction of the original price. Limited transfer of shares (ie., to heirs and relatives) is permissible.

Based on the original 'Articles of Incorporation for the (then) Green Bay Football Corporation' put into place in 1923, if the Packers franchise was sold, after the payment of all expenses, any remaining monies would go to the Sullivan-Wallen Post of the American Legion in order to build "a proper soldier's memorial." This stipulation was enacted to ensure that the club remained in Green Bay and that there could never be any financial enhancement for the shareholder. The beneficiary was changed from the Sullivan-Wallen Post to the Green Bay Packers Foundation on the basis of a shareholder vote at the November 1997 meeting."

Wow... where to start...

In regards to the DC post about all the companies being forced out by emminent domain... Click the link on my name for an interactive map with all the properties being moved out. For anyone that has actually been to this area I doubt the city will be missing the public storage units and autoshops. Much of the land is actually owned by the goverment and city. Either through metro bus, the Navy, or the federal goverment (which has the largest track of land in the area). On the actual site of the field we are talking about an ashpalt plant, a trash transfer station, an impound lot, ext... Most of the lots are actually currently vacant. There are a dance club and small art studio... but on the whole the land is not exactly at optimum usuage.

With regards to the benifits of a stadium, what you are really talking about is urban renewal. Stadiums act as a locus point for investors and city planning. You are talking about a drastic investement, not only by the city in the actual 14 acres the stadium will sit in but the surrounding hundreds of arcres where property values have soared and investors have rushed to build everthing from commercial to high dollar residential property. This is both a boon for the city (and by extension the residents) but also the area as a whole. Crime patterns follow developement and property values. This will make the area safer. I have read several of the reports claiming that stadiums don't make economic sense and they fall in the same fallacy that plagues motivation driven science, the facts in these cases are extensive and massively interconnected. Some problems include... What is the alternative city developement options? Would tax payers or the council be able to approve of the 600 million for any other project? Would any other project pull in the same kind of local investement that a stadium can? While it might seem admirable to spend that 600 million on schools, would that actually improve education more than the subsequent raising of local property values? And could you convince 51% of the voters to pay for that tax hike? All decesions should be paired against the alternative. Goverments are in the business of spending money, not making it. Stadiums aren't by themselves investment oppertunites anymore than Museums, Schools, Parks, or Firehouses are. They are public services. This really is trickle down ecomomics at it's purist. No... this doesn't dirrectly help the current owners of the property to own new high rise office space and retail, but why would you want too? These are the same owners that could raise water front properties to greater acclaim than Cement Factories and Impound Yards. Its a good thing to encourage or force turnover. The current owners are getting far more money than they would have if they had sold before the stadium deal was proposed.

And most of the studies that show stadiums are a great deal are bought and paid for by them that wanted or wants a new one. Consider the source.

Who wants to live by a stadium? Sign me up not.

I dispute that living by one would raise my property values. Here in daytwa (Pontiac), by the silverdome, the locals despised the dome. I have been there. People would park all over the doggone lawn and driveway if one wasnt out there watching them. Not just for football games... any other game, music, rodeo, convention, you pick. Why sure I could open my own parking lot but most folks arent interested in doing that on their property...

If you want to be a vendor and walk to work, gee I guess one could save money on transport to and from "the office".

Resale value after the stadium is built? Sorry, you are taking it in the financial shorts for the team!

If people want to sell, pre-construction, they can get a decent altho not high dollar offer in such a situation If they dont want to sell, well, local gummint will build the railroad tracks straight to yer door. I prefer to keep the "state", so to speak, from exercising eminent domain so easily, as happened with "Kelo".

Looks to me like the best thing to do is have the neighboring burg, city, township build it in THEIR burg, city, township...

Of course, the Globe conveniently fails to cover the equally horrendous boondoggle the giant new convention center in Boston has been. But thats because they supported that fiasco.

The NFL has a connection to Halliburton and other big corporations and they intend to take as much money as possible out of tax payers and cities around the U.S. Soon the NFL will greed itself to almost collapsing. This system was started by outside marketing firms and corporations working with greedy NFL exec and some greedy owners. Owners telling loyal cities they might move to stay "competitive" is a joke, we can't talk about greedy agents and players anymore. Whats worse is a rumor of "parity" as a way to fix games to keep fans spending money because of upsets and a longer time to decide the playoffs. But the main problem is fans not saying enough.