Taxpayers on the Hook for Gwinnett, Ga. Baseball Stadium

Public subsidies for stadiums are win-lose propositions: The teams win, and the taxpayers lose.

Bitter recrimination was the order of the day when the Richmond Braves ball club lit out for Gwinnett, Ga., four years ago. The AAA team had demanded a replacement for its aging ballpark, The Diamond, and local officials hadn't come through. The city and surrounding counties were denounced as the gang that couldn't shoot straight.

Now it's beginning to look like they dodged a bullet.

County leaders in Gwinnett lured the Braves from Richmond by borrowing millions to build the team a spanking-new stadium. Residents were ecstatic over what the Gwinnett Daily Post termed the fulfillment of "Gwinnett's dream." A study plumped Gwinnett as "an ideal location" and "one of the strongest markets in the country" for a minor-league club. The paper said surveys showed "overwhelming support" for the proposal.

But the bloom, as they say, is off the rose.

Indeed, disillusionment set in almost immediately. A consultant's study had pitched a stadium costing $25 million to $30 million. The price soon climbed to $45 million. By the time construction was complete, the cost had jumped to $64 million.

That wasn't the only sticker shock. "G-Braves Ticket Prices Steep," ran a 2008 story in the Daily Post. "Even the cheapest section of the Braves' season tickets cost more than what fans are paying for the most expensive seats in the team's final season in Richmond," the paper reported. Fans, it said, were not pleased.

Perhaps because of those steep ticket prices, attendance has fallen short of projections. According to The Atlanta Journal-Constitution, the team was supposed to average more than 6,000 fans per game. Actual attendance: 4,800 in 2010 and 5,000 in 2011, when the Braves ranked "24th out of 30 AAA teams in average attendance." At a typical game, less than half the stadium seats are filled.

But then, the grand design was not merely to provide entertainment for the masses. Luring the Braves to Gwinnett was supposed to bring a fresh stream of revenue to county coffers and light a private-sector spark that would ignite a brushfire of ancillary development. Neither has happened.

"Gwinnett Braves Parking Revenue Falls Short of County Expectations," the Atlanta paper headlined in 2009. Gwinnett charges a stadium parking fee of $3 per car or truck, and $10 per bus. "The county, which had predicted $200,000 in revenue from parking proceeds this year, has received slightly more than $31,000."

Three years later, the story hasn't changed. "Gwinnett officials said the stadium would pay for itself," noted the AJC in September. Yet "they later approved a 3 percent car-rental tax to help repay" the stadium debt. What's more, "even that might not be enough: An AJC investigation last year showed the tax—along with parking, rent and other stadium revenue—won't be enough to cover the debt when principal payments begin in 2014."

But what about all the fancy development? Plans originally called for 300 hotel rooms, 600 residences, more than 300,000 square feet of retail space and twice that much office space. As of last month, the principal developer had broken ground on fewer than 250 apartments—and was so discouraged he wanted to sell part of his holdings to another developer who would build more apartments.

County officials said no. For one thing, nearby homeowners worried about the effect on their property values: "They said they were promised an upscale commercial area," writes the AJC, "not apartments and car washes." Besides, Gwinnett officials "say the original plans are worth waiting for." The chairman of the county planning commission admits the original vision "may not be viable at the moment, but I think it was a good plan originally."

In Gwinnett's defense, the stadium was being completed right around the time the economy—and the real-estate market in particular—was imploding. High unemployment and high anxiety drive down spending, especially on entertainment. Gwinnett's investment could turn to gold once the economy fully rebounds.

But history suggests otherwise. Economists, who usually disagree about nearly everything, are united on one point: Public subsidies for sports stadiums are win-lose propositions: The teams win, and the taxpayers lose.

There may be non-economic benefits to hosting professional ball clubs, such as civic pride or a sense of regional identity. But the consultants' reports never make that point. They never say: "The stadium will be a money-loser, but at least you'll feel good about yourself." Instead, they routinely sell stadiums as almost miraculous economic cornucopias.

Gwinnett is providing an object lesson in the virtue of reading those reports with a grain of salt.

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  • JLM||

    The Braves are trying to get a stadium built for their single A club here in Wilmington, NC. Fortunately the approval of the public money (including a property tax increase) is on the ballot next week and it looks like it is going to fail.

  • DJF||

    Unfortunately having the voters turn down a project often does not stop the politicians.

    Another trick they try is to get approval from the voters before they even have plans on exactly what they are going to build. That way they can turn a 10 million dollar boondoggle into a 100 million dollar one.

  • Citizen Nothing||

    This happened with the NHL arena in Columbus. Voters turned down stadium/arena taxes five or six times over 20 years. Finally the arena was built with private money. And in 10 years, the Blue Jackets were pleading poverty -- "we might have to move!" -- so the city bought the red elephant from the team.
    Disgusting. (And don't get me started on the lockout.)

  • OldMexican||

    There may be non-economic benefits to hosting professional ball clubs, such as civic pride or a sense of regional identity.

    Kind of like building Moai to adorn your island... or giving away taxpayer money to rich dictators. Makes people proud of being what they are.

  • John||

    Atlanta area has this other team known as the Braves. You might have heard of them. They play in this thing called the National League. And they put out a team that is competetive every year, plays in a very nice and accessible ball park and charges very cheap prices for a major league team. And despite all of that, they rarely sell out. Anyone who thought Atlanta was ripe for minor league baseball needs their head examined.

  • NeonCat||

    And if one really, really wanted to see minor league baseball, they could drive less than 75 miles up to Rome and see the Rome Braves.

  • wareagle||

    and ATL is exactly the reason behind the folly of the Gwinnett move. Why pay big bucks for AAA when, for a few bucks more (maybe), you can see the majors.

  • Willis||

    Speaking of the Atlanta Braves, which teams gets Michael Bourne or does he resign with Atalanta?

  • NeonCat||

    I live in metro Atlanta, am a Braves fan, and never understood the reason for the AAA team to be less than 40 miles from Turner Field. Oh, it's good if the MLB Braves need a player if someone is on the bench, but why would you go to see AAA when you can see full-fledged pros for not all that much more?

    Of course, I don't know why the local and state governments are going to build a new stadium for the Falcons (and their billionaire owner Arthur Blank) when the one they have isn't even 25 years old yet.

  • John||

    They are replacing the Georgia Dome?

  • NeonCat||

    That's the plan. Not enough expensive boxes for the well-heeled and well-connected, and the NFL commissioner has said Atlanta won't get the Super Bowl again until/unless we have a new stadium, preferably one that is either open or has a retractable roof.

  • John||

    Atlanta needs to tell those welfare queens to go fuck themselves. Where are they going to go? LA? I doubt it. And even if they did, Jags would gladly move right in after them.

  • Virginian||

    Man it was such a pain in the ass before they moved. They wanted a brand new stadium built downtown by the river. Never mind the costs, never mind that a minor league team is not any kind of anchor the way a major league team can be. They didn't get it, so they moved. Now we have the SF AA franchise, the Richmond Flying Squirrels. They play in the same old ballpark the R-Braves played in, tickets are cheap, and people do attend the games. Because they do fun stuff, not because the baseball's that good. Five dollar tickets and fireworks every Thursday.

  • John||

    In my town we have one of those college summer baseball league teams like the Cape Cod league. It is great. It costs like five dollars to get in and is a nice evening outside. You don't need a big stadium to have good baseball.

  • Red Rocks Rockin||

    My girlfriend and I took in a Rookie league game in Billings when we visited her family. The baseball wasn't particularly exciting and the stadium's in a ratty part of town, but you can tell the people attending take a lot of pride in the team and its history. Plus, parking was free, tickets were cheap, and there's a Perkin's right across the street to get pie after the game.

  • ||

    I went to a Binghamton-Bowie game a few years back and it was delightful. The stadium was full, the spiedies and salt potatoes were delicious, and the Baysox won. I would hate to see the minors become as watered down and meaningless as the majors. That minor league game was the only baseball I have enjoyed since I played Little League in elementary school.

  • R C Dean||

    I used to go see the Braves AAA squad in Richmond all the time. I vastly preferred that over an MLB game I've been to. Just more fun.

  • radar||

    And Nutsy is a much better mascot than the Diamond Duck ever was. My kids love Nutsy.

    The Squirrels are still bitching about The Diamond, though. I can see their point about the infield grass - that just looks terrible. Still, even a major renovation of The Diamond would be much cheaper than that ludicrous downtown boondoggle the R-Braves wanted.

  • The Late P Brooks||

    Not enough expensive boxes for the well-heeled and well-connected, and the NFL commissioner has said Atlanta won't get the Super Bowl again until/unless we have a new stadium, preferably one that is either open or has a retractable roof.

    Eerily similar to what they said in Indianapolis. Of course, the Powers That Be immediately fell into formation and got down to business.

  • John||

    But you got to host a Super Bowl Brooks.

  • Virginian||

    The key is to hang onto your stadium. Then it goes from being old to historic. No one is telling the Bears or the Packers they need a new stadium.

  • JLM||

    The Bears did get a new stadium about 10 years ago, and I believe it was built with a lot of public money. It is built inside part of the structure (the columns) of the old stadium. The Cubs park (Wrigley Field) does fit your argument.

  • John||

    Wrigley and Fenway. But both of those parks are in huge markets with teams that are flagship franchises that would never be allowed to move. Being "historic" didn't save the tax payers of Detroit.

  • ||

    Well, Lambeau is not in a big market, but like Hammer said, the ownership structure seems like a nice buffer to keep expectations realistic and keep the team in Green Bay.

    I don't pay too much attention to this stuff, but didn't the voters of Minnesota reject a stadium referendum, only to have the Vikings owners make deals with politicians that bypassed the rejection? All I know is that I was cheering the MN voters for saying "fuck you" to the Wilfs, then suddenly the Vikes are going to get a new stadium anyway.

  • The Hammer||

    Yeah, Soldier Field isn't quite Soldier Field anymore. Lambeau gets updated regularly, but the ownership structure of the Packers really helps keep the residents of Green Bay from getting screwed.

  • John||

    I hate what they did to Solider Field.

  • The Craig||

    Well, you know what happened the last time the Colts didn't get a new stadium...

  • Beowulf||

    The additional irony is that Gwinnett County is a bastion of conservative republicanism, proving that corporate welfare, self delusion, and spending other people's money is not limited to a single side of the aisle

  • Raven Nation||

    Seriously, if people vote to build a new stadium after all the information that's available, they deserve what they get. Although, of course, those who vote no get screwed.

    And this comment does not address the point made by DJF above.

  • C. S. P. Schofield||

    The only professional sports team that I know of that has a reasonable relationship with its locals is the Green Bay Packers. And from what I gather, it seems unlikely that any of the big sports syndicates will allows such an ownership arrangement ever again. Still, if I was mayor of a town with a sports franchise that was threatening to move if I didn't pony up with some tax dollars, my answer would be "We'll raise a bond issue to buy the team, but if you won't go for that don't let the door hot you where the good Lord split you."

  • Doug's brother||

    About 10 years ago, Albuquerque lost it's AAA team to Portland, OR. In order to get another AAA team, the city had to upgrade Albuquerque Sports Stadium or build a new one. The city held a special bond election to finance the new/upgraded stadium. The ballot was worded as such:

    1. Should the city issue bonds to build a new baseball stadium to attract a new AAA team?

    2. If the city does issue the bonds, should they spend $30 million to build a new stadium - or - should they spend $12 million to upgrade the current stadium? (I don't remember the exact dollar amount but I think this is close).

    The ballot was rigged to get a stadium built one way or another. The bond issue passed and it was decided to build a new one. The new stadium was built and we were able to steal the AAA team from Calgary, Alberta, Canada.

    The team has been quite successful attendance-wise and the rent payment amount was tied to attendance. We usually are one of the best AAA teams in attendance, mostly due to lack of competition from other sports in the area. I still don't know if it was worth the $30 million.

    Portland has since lost their AAA team to southern California.

  • MoreFreedom||

    Another example of how well government runs businesses. In this case the stadium building and leasing business. Their projections are off by 80+%, resulting in more red ink.

    But the developers, the ball club, and the politicians (who got lots of campaign cash and favors) are better off. The political benefits (for the personal benefit of certain politicians) is why government goes into business. Unfortunately, we end up getting what we don't want at a price we don't want to pay. And end up paying for it in taxes. Our prosperity declines, thanks to government "investment" which really is investing in politicians, not freedom.

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