No More Tax Dollars for Sports Stadiums

Minor league teams offer empty promises and empty stadiums.

Somebody once said sports reporters are the best writers because they have to come up with new ways to tell the same basic story over and over. If that is true, then those who cover the business of sports may be second-best.

“Officials, Flying Squirrels in Stadium Talks” has been the story here in Richmond, Virginia for several years now. The minor-league ball club is not happy with the Diamond, the current stadium, and would like to move to a nicer facility. Several possible sites have been considered, but nothing has gelled. The team says it is committed to Richmond. Yet in the back of everyone’s mind lies the possibility that the Squirrels might grow tired of waiting and pull up stakes. After all, that’s just what the Richmond Braves did when Gwinnett, Georgia, built them a new field in Lawrenceville.

If you want to see the instant replay, then watch how the Hagerstown Suns are playing officials in Maryland and Fredericksburg off each other. Last week Fredericksburg’s city council “directed city staff to negotiate the terms of a deal to bring a minor league baseball team and multi-purpose stadium to Fredericksburg,” reports the Free Lance-Star. “All signs point to the Hagerstown Suns as the team with whom city officials are speaking.”

Hagerstown leaders certainly think so. City councilman Donald Munson considers the Fredericksburg move “a serious proposal” and “real competition for Hagerstown.” According to the Herald-Mail, “In Hagerstown, a recent study detailed alternative stadium sites in the city, but little progress has been made since. Munson said Fredericksburg’s continued interest in baseball is a clear indicator that Hagerstown needs to resolve its stadium issue soon if it hopes to keep the Hagerstown Suns in town.”

This, too, is an old story: More than a decade ago, The Baltimore Sun reported: “The owner of the Hagerstown Suns minor-league baseball team said yesterday he would delay putting his team up for sale while officials work out the details of a funding plan for a new stadium.”

The specifics of the Fredericksburg deal – should there be one – have not been divulged yet. But the Free Lance-Star’s Bill Freehling reports the estimated cost of the facility at $29.5 million, not counting the price of the land. “The team would contribute part of the stadium costs up front. Bonds would be sold, and the debt service would be covered by a variety of sources, [including] lease payments . . . a profit-sharing arrangement . . . tax revenues from the stadium, and a special tax district on commercial real estate.”

That last item likely means a TIF district – short for tax-increment financing. The premise behind TIFs is that new projects increase economic activity and raise property values in their immediate surroundings, so a special taxing district simply captures revenue that would not have occurred without the project.

TIFs are a popular economic-development tool – there are thousands of them across the U.S. – but they are open to criticism on a number of grounds. Their boundaries are arbitrary. They can divert revenue from more basic government services, such as schools and police departments. They also can rely on dubious assumptions. E.g.: Is a restaurant in a TIF district really successful because there’s a ballpark nearby – or would it thrive regardless?

Speaking of assumptions: Not long ago a consulting group brought in by the Fredericksburg Economic Development Authority produced a stadium feasibility study. Brailsford & Dunlavey concluded that – surprise! –Fredericksburg would be a fantastic place for a minor-league stadium. Its report said the Fredericksburg“market has an exceptionally strong demographic profile for minor-league baseball.” At one point consultants even called Fredericksburg an “ideal location.”

Funny thing: That’s exactly what a consultant’s report said about Gwinnett, too: Gwinnett was “an ideal location” and “one of the strongest markets in the country” for a minor-league baseball club.

Just one small problem: Those rosy predictions turned out to be wildly off base. The Gwinnett study – like the one for Fredericksburg – pitched the stadium at a cost of less than $30 million. By the time construction was finished, the price tag had risen to $64 million. Ticket price soared. Attendance fell so far short of projections that the new stadium often is half-empty. Revenue from parking fees tanked. The ancillary development that was supposed to materialize – didn’t. Last year the Atlanta Journal-Constitution reported that while “Gwinnett officials [had] said the stadium would pay for itself,” it wasn’t.

An isolated case? Hardly. Study after study has concluded that sports stadiums do not improve local economies. Think tanks across the ideological spectrum – from the laissez-faire Cato Institute to the centrist Brookings Institution to the left-wing Center for American Progress – all have reached that same conclusion.

There are lots of reasons to want a local ball club. But if Fredericksburg hopes building a ballpark will turn it into Rio on the Rapidan, it might want to dial expectations down a bit.

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  • mad libertarian guy||

    How did we leave Miami out of this discussion? They just had a $500M satdium built for the Marlins with various forms of public money, and the Dolphins were just denied the opportunity to tax tourists (even those who aren't there in any way to see the Dolphins.

  • ChrisO||

    The article was written for a Richmond paper, so it's understandably local in focus.

    The Miami situation is comical, to be certain.

  • vopiwobypacA3||

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  • Red Rocks Rockin||

    Miami is pretty much a minor league baseball team, so you have a point there.

  • NealAppeal||

    Dunno, they have two World Series under their belt. A lot more than some other legacy (long established) franchises have.

  • Aresen||

    Why would any tourist visit Miami to see the Dolphins?

    Other than the ones in the ocean, I mean.

  • Rasilio||

    Cause they can't get tickets to see their home team play at home, so a long weekend in Miami watching your local team beat up on the Dolphins is a nice alternative

  • mr lizard||

    Same with the Rays. Yankees and Boston games here are basically local games for tourists who pay the same price to see their teams and get a free beach vacation.

  • NealAppeal||

    Well if it is directed at taxing Mass-holes and Yorkees then I assume they embrace senseless taxation.

  • Fluffy||

    It does not matter if stadium development helps "taxpayers", defined as everyone who pays taxes in a particular metro area.

    Stadium development helps:

    1. Economic development professionals
    2. Real estate development professionals
    3. Construction trade unions

    It also involves sports.

    So you really have an irresistible combination there, because other than stealing money, the one thing that ties together the middle-aged white bozos who comprise #1, #2, and #3 above, it's sports.

    That means that the interests of all the taxpayers don't matter. Only the interests and preferences of the local petty political class matter.

  • Doctor Whom||

    It also helps governors who want to leave a legacy.

    My name is Ozymandias, pol of pols.
    Look upon my football venue, and despair.

    Unfortunately, my old home state of Maryland gives the governor a lot of "because FYTW" leeway in forcing such things on the taxpayers. The state Court of Appeals once even ruled that the subjects didn't get to vote on it.

  • gaoxiaen||

    It probably involves a little Kelo, too.

  • Aresen||

    Great FSM, I hate the billionaire welfare queens who own sports franchises.

    Especially when they describe themselves as "small government" people.

  • mad libertarian guy||

    Great FSM, I hate the billionaire welfare queens who own sports franchises.

    Especially when they describe themselves as "small government" people.

    This.

    Stephen Ross, the owner of the Dolphins, was a huge Romney supporter and was at the famed 47% speech given by Romney. He railed consistently about small government, then throws a hissy fit when the FL legislature decided not to floor the proposal, killing the deal. He argued that it showed the dysfunctional nature of the legislature. I argue that it showed that there is some semblance of sanity in it by refusing to give over $200M in public money to a billionaire.

  • Rasilio||

    While your statement is still accurate in every other way, the fact that they are primarily talking about minor league sports franchises in this article means that the owners probably aren't anywhere close to being billionaires, A hundred million is more than enough to support a minor league baseball team.

  • Aresen||

    They are still in the 1% of the 1%.

    Not in the economic class of the average schmuck who is paying the taxes. (I'm willing to bet that a significant percentage of the franchise owners don't even live in the city that they are asking to pay for the stadium.)

  • gaoxiaen||

    Hell, I'd pay money to keep a stadium (and pro team) out of my neighborhood.

  • ChrisO||

    It wouldn't be so bad if municipal officials and consultants would stop with the BS about sports stadiums promoting economic development.

    Everyone understands that sports venues are a luxury amenity, and the argument for them (and for taxpayer subsidy) isn't based on economic analysis. Personally, I think it's a stupid use of taxpayer money, but if it's put to a vote and passes, it's really no worse than publicly funded museums or monuments.

    Team owners in the bigger sports leagues have this down to a science. They make sure to keep a few larger markets without teams, in order to have leverage in demanding that municipalities pay for new venues.

    In the NFL, Los Angeles has been very useful this way. In the NBA, the threat of the Kings moving to Seattle just caused Sacramento to pony up for a new arena when they are basically broke. It's in the interest of NBA owners to leave Seattle without a team for as long as possible.

  • ||

    It's in my interest to leave Seattle without a team so that I don't end up paying for a new stadium.

  • gaoxiaen||

    Or put up with all the bullshit from parking problems, traffic, noise, drunken assholes, etc...

  • LynchPin1477||

    no worse than publicly funded museums or monumentsAren't most public museums and monuments open for free, or at least for a minimal fee, and operated as as not-for-profits? That's a pretty big difference between a privately owned but publicly subsidized sports team.

  • ChrisO||

    That's correct. My statement had more validity back in the days of stadiums like Veterans Stadium in Philly and RFK Stadium in Washington DC, which were publicly owned and leased to teams. The cities got lease payments and all or most of the parking fees and revenue from concessions contracts. The teams got to keep the ticket revenue and that was about it.

    Today's privately owned stadiums payed for with public funds are a complete scam. No doubt about that.

  • ||

    Sports allows the politicians and supporters to make "convincing" arguments based upon emotion. No study is going to trump "but they'll leave if we dont build it."

  • ChrisO||

    It's not just sports fans that make this argument, either.

    Mid-size cities are notorious for falling into the argument that "we're not a REAL city if we don't have football/basketball/baseball/hockey."

  • ||

    Its all an emotional argument though, and that's fine, so long as they admit it. These stadiums are a cost, and I have no problem with them when they are sold as such.

    The argument in favor shouldn't be "we'll come out ahead," it should be "money well spent." Then you put it up for a vote and let people live with the consequences.

  • ||

    I have one particular Facebook friend who is absolutely obsessed with bringing back the SuperSonics. All of the shit he posts about it is emotion. All of it. And so. Fucking. Stupid.

  • ||

    I'm a huge SuperSonics fan, so I'd love to see them back in Seattle. But I live in Philly now...

  • squarooticus||

    So you can root for a different jersey? Just pick a nationally-competitive team, imagine they are called the "Seattle Supersonics", and save everyone some money.

  • ||

    Well my current plan is to root against the OKC thunder until Clay Bennett dies in a grease fire.

  • Aresen||

    No study is going to trump "but they'll leave if we dont build it."

    In many cases, the proper response is
    "Do you promise to leave for real? We may have blown a whole pile of money on the stadium that we built for you ten years ago, but at least we can save money on the extra policing during your games."

  • ChrisO||

    Politically, the problem with making that statement is that fans of the team in question are a vocal and emotional constituency, while other affected taxpayers are more diffuse and silent.

    If you are known as the "mayor who let the team get away", you will have political problems, while pushing the stupid stadium project is less likely to cost you politically.

  • Aresen||

    Definitely so.

    And the jock sniffers in the local media will not let up on that for a minute. They will lie themselves blue in the face about the "benefits to the community" of spending multi-millions.

  • fold_left||

    This story prodded me to look up what was going on with the minor stadium drama in my hometown, Augusta GA:

    http://chronicle.augusta.com/s.....eenjackets

    The team is going to move away ... all the way across the river to a neigboring town that's willing to cough up the dough. Suckers.

  • Anonymous Coward||

    The ancillary development that was supposed to materialize – didn’t. Last year the Atlanta Journal-Constitution reported that while “Gwinnett officials [had] said the stadium would pay for itself,” it wasn’t.

    You didn't actually expect them to tell the truth, now did you?

  • Curt||

    While tax-funded stadiums are almost always a loser, it's probably fair to note that Gwinnett was much more likely to be a failure than most. It's a half hour away from Turner Field and the Atlanta Braves (if traffic is light). Most fans are just going to see the big league team.

    And with the traffic leaving town on I85, the only people in the metro-Atlanta area who could even try to go to a G Braves weekday game are the people who live/work northeast of the city. For anyone else, it's a brutal drive in bumper to bumper traffic.

    The real winner from moving the minor league team to Gwinnett is the Atlanta Braves since they've got their main farm team so close. All the more reason why the team should've paid for the stadium instead of the public.

  • FlimFlam||

    Rappahannock River.

    The Rapidan joins it several miles upstream.

    Other than that, a good article.

  • creech||

    Politically, it is much easier to defeat a "build it and they will come" deal than "build it or the team will leave." In one local case, we defeated a trial balloon with several letters to the editor, testimony at a preliminary proposal hearing, and threats to drag construction out an eternity by using environmental studies ("Isn't this in the mottled box turtle habitat and didn't some Lenape Indians once have a rain dance at that location?") Also, since entertainment dollars are usually a discreet amount for many families, a dollar spent at the new minor league ball park is probably going to be subtracted from the receipts at the go-cart track, miniature golf course, movie theatre, bowling alley, pizza party place, etc. It isn't hard to find a ton of small business owners who can complain they are going to have to pay taxes to subsidize the new competitors.

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