Magazine
Footing the Bill for a Ballpark
The once popular practice of spending public money to finance sports stadiums has recently been striking out. That’s no surprise when you consider the books economists and journalists are writing these days: “Loot, loot, loot for the home team,” is a chapter in a 2005 book called The Great American Jobs Scam by Greg LeRoy, founder of the Washington, D.C.-based nonprofit development watchdog group Good Jobs First. The 1999 book Field of Schemes offers a similar take. Its author, journalist Neil DeMause, sums up the situation as follows: “In almost eight years of reporting on stadium deals, I’ve spoken to every economist I can find about the impact of sports stadiums. And I’ve yet to find a single independent economist (by which I mean one not actually working for a sports team or league) who thinks that stadiums are any use as an economic engine.”
LeRoy explains in his book that the whole system of public financing is usually traced to the 1950s. Until then, team owners paid for their own stadiums— with few exceptions. The trend started in 1953 with the first team relocation in half a century, the Boston Braves’ move to Milwaukee. They were lured there with a new stadium built with public money. Since then, politicians everywhere have been “taken in by the assumption that the presence of a professional sports team is a leading contributor to the vitality of cities,” LeRoy writes. “That notion has so captivated politicians that they are willing to give sport team owners subsidies that are far beyond wha tother private-sector businesses can hope for.”
Earlier this year, city and county officials in Miami stepped up to the plate with a $490 million plan to finance a new stadium for professional baseball’s Florida Marlins. The Marlins, a relatively young team, have only been in the major leagues for a decade, but have won two World Series in that time. “The Fish,” as they are affectionately known, have for years wanted a stadium of their own (they currently share space with the NFL’s Miami Dolphins in Dolphin Stadium). Since 2000, a pro-stadium contingent for the Marlins has appealed to the Florida state legislature six times to help fill the whopping hole in their financing plans. This year, the city of Miami, Miami-Dade County, and the Marlins teamed up to appeal to the state for $60 million.
Though the funding bill has failed before, an aura of excitement surrounded this year’s plan, which would generate stadium money largely from Miami-area tourists and not Miami residents. Miami-Dade County would pitch in $145 million in hotel and sports facilities taxes. The city of Miami would contribute $108 million in tourist development and hotel taxes, and the Marlins would contribute $207 million—$45 million up front and $162 million in future rent payments to the county. The Marlins would also cover potential cost overruns. The new Florida governor, Charlie Crist, a Republican who took office in January, is a baseball fan whose first job after law school was as an attorney for minor league baseball. Miami Mayor Manny Diaz came out strongly in favor of the latest plan, as did Cuban-born Miami-Dade County Commissioner Pepe Diaz. Even though, according to the Baseball Almanac website, estimated attendance at Marlins games has slipped from 37,893 people per game in 1993 to 14,384 per game last year, Pepe Diaz says his constituents in District 12 are firmly behind the new ballpark. “I think [the plan] benefits us in many ways. Whether or not there are economic benefits, I don’t know, but I’m sure it helps out with jobs,” he said in an interview.
In early May, however, the Florida state Senate failed to approve the $60 million funding bill before the end of the legislative session, even though the Florida House had already approved it. In other words, Miami and the Marlins will have to wait until next year. “I have a warm spot in my heart for baseball, so I think we ought to keep trying,” Governor Crist told the Associated Press. Mayor Diaz said he was disappointed but would not give up trying to keep the team in South Florida. He said the city might look to local resources to fund the project without a state contribution.
The question is: should Miami bother? Nationwide, there is growing opposition to funding sports programs with taxpayer monies. In a 1997 Rasmussen poll on the subject, 64 percent of respondents answered “no” to the question of whether taxpayer dollars should be used to build a professional sports facility. Still, Adam M. Zaretsky, an economist at the Federal Reserve Bank of St. Louis, wrote in a 2001 policy paper on the subject, “Should cities pay for sports facilities?” that between 1987 and 1999, 55 stadiums and arenas were refurbished or built in the U.S. with more than $8.7 billion. Fifty-seven percent of that, or roughly $5 billion, was financed by taxpayers.
Clearly, the debate about whether stadiums are good for cities extends far beyond Miami. The NFL’s San Diego Chargers spent five years trying to secure funds and a location to replace the outmoded, 40-year-old Qualcomm Stadium. San Diego residents also want a new stadium: in a January 2006 poll conducted by the San Diego Union-Tribune, 68.6 percent of 27,575 residents polled said the city should donate land to build a new football stadium. An overwhelming 95.6 percent said they would support a new stadium if the Chargers paid for it, along with the requisite infrastructure improvements.
According to the proposal the Chargers made to the city in October 2005, the new football stadium, completely funded by the Chargers and their development partner, would be built on 60 of the 166 acres of current Qualcomm Stadium land in Mission Valley. The remaining acreage would be used for parks, streets, parking garages, and commercial development. But as the Chargers’ general counsel, Mark Fabiani, explains, the plan didn’t pan out because the city of San Diego, teetering on the brink of bankruptcy, decided to set aside the question of stadium funding for other priorities.
The Chargers consequently could not find a suitable development partner, according to Fabiani, “not because the project wouldn’t have worked out, but because no one wanted to get mired in the city of San Diego’s chaos.” Not surprisingly, last year the city amended the terms of its lease with the Chargers so that they could begin to look elsewhere for a home. And plenty of new cities are lining up to court them, including nearby Chula Vista, National City, and Oceanside, California. Even Las Vegas, Nevada, showed interest, though the Chargers’ contract restricts relocation talks to cities within San Diego County. “Private funding for a stadium is very difficult to pull off,” Fabiani says. “In California, people are just not eager to subsidize these stadiums.”
Stadiums have fared better in other cities. In Minneapolis, for example, after ten years of struggling with the issue, the Minnesota Twins last year reached an agreement on a new $522 million stadium that will be partially funded by a sales tax of 15 cents for every $100 in sales in Hennepin County, where the team plays ball.
But there seems to be a growing heap of evidence that stadiums don’t make such good long-term investments for cities. Robert Baade, an economics professor at Lake Forest College in Lake Forest, Illinois, studied baseball stadiums specifically. He looked at the per capita income in 30 cities that have built new sports stadiums over the past 30 years and found that in 27 of the cities, there was no observable economic impact.
“In the other three cities, income looked to have gone down as a result of the stadium,” Baade says. Stadiums do offer some clear benefits to cities. “Bars next to stadiums see an increase in customers on game days,” Baade says. But even that has a down side, however, because the bars only do well when a team is winning. “When a team is losing, who wants to go out and celebrate another loss?”
Baade found that, “In only a small fraction of the cases examined does manufacturing activity… correlate significantly with the presence of a new or renovated stadium. We conclude that measurable economic benefits to area residents are not large enough to justify stadium subsidies and that the debate must turn to immeasurable intangible benefits like fan identification and civic pride.”
Stadium boosters in Miami are vowing to try again next year, especially if it means keeping the Marlins from pulling up stakes and heading to a new city. One man watching the Marlins’ quest with special interest is Jack McKeon, the former Marlins manager who led the team to their World Series victory in 2003. Now 76 and semi-retired in Elon, North Carolina, the cigar-smoking, tough-talking McKeon (nicknamed Trader Jack) still works as a part-time consultant for the Marlins, mainly as a talent scout. “It would be a shame if they don’t have baseball in Miami,” he says. The sentiment is certainly shared by South Florida Marlin fans, whatever their numbers.
This article appeared in the Summer 2007 issue of Next American City magazine. SUBSCRIBE NOW!
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