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As Bad as DC's Nationals Are, It's What's Outside The Ballpark That's Really Fugly

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The Washington Examiner looks at the economic renaissance that baseball's Nationals were supposed to bring to their neighborhood and finds plenty of errors, wild pitches, and old-fashioned pants-splitting sadness:

Half a decade after the city's leaders plunked down hundreds of millions of tax dollars to bring baseball back to the nation's capital, many Washingtonians are still waiting for their dividends.

"What did it bring here besides the stadium?" said Victor Williams, who lives in the neighborhood near Nationals Park.

The $611 million stadium—nearly all of it paid out of public coffers—was packaged as the best way to build up the long-moribund neighborhoods around the Navy Yard and the Anacostia River.

"This ballpark really is about … the rebirth of the Anacostia waterfront," then-mayor Anthony Williams said at the 2006 groundbreaking.

But the collapse of the economy and the team's futility have conspired to keep people and businesses from the area. Half Street SW is still advertising about 75,000 square feet of space and is, as one resident described it, "a giant bowl of mud."

It didn't help that one of the neighborhood's top developers was Monument Realty, whose main financier, Lehman Brothers, shut down in the recession.

Attendance at Nationals games was projected to average nearly 30,000, meaning suburbanites would help pay for the stadium with every ticket, hot dog and beer. But the Nats reached that milestone only in 2005, the club's first year in the District—in Robert F. Kennedy stadium. This year, in the Nats' third year in their new park, fewer than 21,000 are coming to each game.

Hey but not to worry: The stadium, claims a local councilman, is a moneymaker. How? As the Examiner's David Freddoso reports, the city increased taxes on non-baseball-related businesses by a total so far of $202 million (a tax, by the way, that will likely never go away, even after its putative purpose of paying for the stadium's construction, is done). So the councilman claims the stadium has brought in $200 million. Which of course ignores all sorts of direct and indirect costs of building the thing in the first place, ranging from $600 million plus to build the thing and $32 million last year alone just on debt service (versus a total of less than $17 million in stadium rents and direct revenue). And, as Freddoso puts it, "the D.C. government has now skimmed $200 million from its economy that could have instead supported job creation and provided goods and services that people actually wanted."

Back in May 2008, Reason.tv urged cities to get out of the publicly financed stadium business altogether. Virtually every non-biased economic analysis of the effects of such edifice-complex projects comes to the same conclusion: These behemoths add nothing to the local economy and typically suck money out of it due to the sorts of big bond-passing and tax hikes that DC passed to produce a shrine to a team that's going to make the old Senators look sharp.

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  1. Attendence is going to go up. The Nationals are better this year and Steven Strasburg is going to be the biggest rookie phenom pitcher since Dwight Gooden. That being said, it was lunacy to build it in SW. There is nothing there. It is a crappy area of town and one of the few areas with a bad view. Nationals Park is a nondescript park with absolutely no atmosphere. They didn’t even get their money’s worth.

    1. That being said, it was lunacy to build it in SW. It is lunacy for government to build sport stadiums.

      Fixed that for you.

  2. What John said. The Nats are actually decent this year, playing around .500 and about to get better with the addition of Strasburg, not to mention the slew of pitchers who are about to come off the disabled list (Olsen, Marquis, Wang, Detwiler, J. Zimmerman).

    But yeah–I love having a D.C. team, but morally it was still wrong for the city to shell out public money for fans like me.

  3. And they’re likely to pick up Byrce Harper in the draft.

    They could very well become the next Rays.

    1. They could. I am torn about the Nationals. It would be nice to have a decent team in town. But the Learners are seriously evil welfare queen thieves. They are just scum. I hate to see a team they own do well.

  4. All public funding of sports stadiums is idiocy. If it were a worthwhile investment, the people who benefit would pay for it themselves. Somehow, despite the ponies and sunshine the stadia will create, they can’t bring themselves to cough up the dough. And it sickens me when multi-billionaires like Rich DeVos get $400 million handouts. (I love seeing the Orlando Magic lose).

    Also, Strasburg is overrated, and even if he isn’t, the Nats are going to continue to suck. I used to watch the Expos, the team is cursed.

    1. Strasburg is not overrated. He is the real deal. He has a fast ball similar to what Jimenez out in Colorado has. It is just sick; high 90s with about six inches of vertical and horizontal movement. And he has three other pitches as well. He is going to be great.

      1. I was thinking of Joba Chamberlain. He had some brutal stuff – high nineties, hitting 100 once in a while – but he hasn’t really performed, despite the Yankees handling him with kid gloves. (I don’t follow that closely, if he was injured, I didn’t hear about it).

      2. Wake me when Strasburg has proven himself against big league hitters when he’s in the stretch.

        So far in AAA he has thrown approximately three pitches from the stretch.

        There is a long list of names that threw 95+ and had arms “no one had ever seen before” that were belittled once they stepped up to the big time.

        Jimenez has already proven he can do it. Strasburg has yet to do so.

        1. I probably shouldn’t say he’s going to flame out – I obviously don’t know that. But as Tman mentions, skepticism is warranted. Great stuff doesn’t necessarily make a great pitcher, and there have been great pitchers without great stuff (Steve Stone, Dennis Martinez).

    2. It’s also worth noting that DeVos is a staunch religious conservative. He’s one of the top financiers of the Heritage Foundation, and its DeVos Center for Religion and Civil Society is named after him. So much for right-wing support of free markets!

  5. I can handle things, I’m smart! Not like everybody says….not dumb, but smart and I want respect!

  6. It didn’t help that one of the neighborhood’s top developers was Monument Realty, whose main financier, Lehman Brothers, shut down in the recession.

    Too bad the stadium wasn’t also being financed by Lehman.

  7. Ah, the stadium’s beautiful, the team’s a lot better this year, and I live in Virginia so it’s not my money…. I visit with a clear conscience. If DC’s citizens have a problem with it, they can elect a new city council.

    Although I was a little disturbed when they were doing the financing deal a few years ago that I actually agreed with Marion Barry, who was the only councilmember to challenge the idea of building the stadium.

  8. When legalized gambling was proposed on the Boardwalk of Atlantic City, one of the arguments in favor was that it would bring the rest of the city up. Well, now the Boardwalk looks good, and it looks awful two blocks away. These sorts of projects help the people they help. Talk of “indirect economic impact” almost never follows through. Well, at least the casinos were paid for privately, not by the state. (and yes, gambling should be legal)

    1. It isn’t the responsibility or the goal of private businesses (who should have been allowed to open up shop anywhere) to rejuvenate the community around them.

    2. It is a fallacy to think that any real estate investment will improve the surrounding area. The profits made from the new project will get used to pay off the cost of building and running it and the net profits will be invested where the owners think they will get the best return. That won’t be on painting the crack house two blocks away.

  9. I can’t in good conscience support public funding of the zoo, symphony or art museum. Why would I support public funding so a billionaire’s millionaire employees get a new place to perform in?

    There will still be professional sports without the public funding the arenas/stadiums. It would just be less profitable for the owners and players.

    1. Less profitable? Soccer and cricket are overwhelmingly private ventures, even in such statist countries as half of Europe or India. And they make a lot of money.

      But soccer and cricket are NOT based on a “competitive balance” league model, as are American major sports. So winners win, and losers lose, and they get relegated. They make more money on aggregate, and more money for the most winning teams. They certainly don’t make more money for middling and small teams.

      The competitive balance model, instead, pretty much guarantees a league-wide minimum, but also ends up capping the maximum, through its checks on free-market practices. Smalll teams do better than they’d do in European soccer or South Asian cricket leagues, but big teams don’t.

      This changes the incentive structure. A soccer team in Italy or England has all the incentives for building a stadium with its own money because they get to keep all the after-tax income, and this income can be huge in a particularly good year or dynasty. A major sport team in the USA doesn’t have that incentive, because its revenue and sporting success are limited by the balance in the league. Since they cannot maximize income freely, they opt for minimizing costs: a very obvious way is passing the bill for a stadium or arena to the taxpayer.

  10. Wait, publicly-built stadiums are a bad deal for taxpayers? That’s impossible! The Marlins, along with the city of Miami and Miami-Dade County, have assured me that the $510 million stadium they’re building in downtown Miami is great for the economy and a good deal for taxpayers! Why would they lie?

    (the Marlins owner may be the biggest slimeball among all the pro sports team owners, which says something)

    1. the biggest slimeball among all the pro sports team owners

      Slow Down. Wouldn’t granting that title require some sort of Playoff (or Bowl or Series) to be properly determined?

    2. I still think of the 2003 season as “Major League 2” come to life. Jeffrey Loria, David Samson and Larry Beinfest were sent by MLB to Miami to run the team into the ground, but they spoiled the party by winning it all.

      Mike Berardino, the old Sun-Sentinel beat writer for the Marlins (now the beat writer for the Dolphins), used to refer to Samson and Beinfest as the “toxic twins.” Trust me, your hand would be oily for days after having to shake hands with Samson.

  11. I used to buy the line that stadiums improve the economy, but I remember reading Dennis Coates’ paper a couple of years ago and waking up to the scam.

  12. Isn’t the problem that this plays out like a prisoner’s dilema? No city anymore really wants to put up taxpayer money (because of the good work done by Reason and other like-minded groups), but they know that they can’t get a team if they don’t.

    If the DC government hadn’t promised to build a taxpayer-funded stadium, then Major League Baseball wouldn’t have allowed the Expos to move, and all of us here in DC would have been stuck traveling up to B’more to watch the terrible Orioles play in order to get any baseball. And that would be the definition of dead-weight-loss.

    The problem is, the market for baseball teams is not a perfectly competitive market, and MLB uses its anti-trust exemption to milk everything they can out of cities that are looking for a team, or cities that might lose a team, hence Miami’s new ballbark going up.

    The question then is not whether DC should have paid for the new ballpark, or forced the Nationals owners to pay for it, the question is whether DC should have paid for the ballpark, or remained a second-rate city without a baseball team.

    I like going to see the Nationals every so often, and I’m not convinced that the DC Council would have used my tax money in a better way, so I guess I’m happy to be scammed in this case…

    And – Strasburg is going to be the real deal…

  13. The funny thing is, the one sports venue in DC that actually revitalized its surroundings, the Verizon Center, was privately built. Abe Pollin saw the opportunity to be had in a neglected part of downtown DC, and he put his own money on the line.

    Nationals Park was sold to the taxpayers as “another Verizon Center,” but that was patently false from the beginning, since the surrounding area was much less developed to begin with. A warehouse district sitting next to one of DC’s worst slums. It takes an awful lot of wishful thinking think that a baseball stadium could turn that around.

  14. Interesting that some of you bring up the Marlins and their owner, Jeffrey Loria. His connection to the DC franchise is greater than you might realize.

    Loria was the owner of the Expos when he cut a deal with Bud Selig to sell the team back to MLB (a move that ultimately brought about RICO charges against Loria – though he later won in mediation – partly due to the fact that he claimed the team had no value, yet sold them for a $30mil + profit to the other owners).

    That sale, along with a loan, allowed him to buy the Marlins (Marlins owner was allowed to buy the Red Sox when they were put up to bid by the Yawkey Trust (side note: the trust was required to sell to the highest bidder, who reportedly wasn’t Loria, but that’s a scam for another post)).

    Ultimately, Baseball tried to contract the Expos (and Twins), but thanks to the Twins lease, they couldn’t, legally (or even illegally it would seem, which is unusual for them). Selig gets DC to agree to a new park, MLB sells the Expos for yet another profit (gotta wonder if they wanted the contraction to fail all along), Expos fans gets screwed and Washington gets their under-drawing, under-performing, publicly-financed team and stadium.

  15. “This ballpark really is about … the rebirth of the Anacostia waterfront,” then-mayor Anthony Williams said at the 2006 groundbreaking.”

    Technically speaking, before the Anacostia waterfront can have a “rebirth”, doesn’t it have to have been something other than awful once before?

    People point to the success of Petco in San Diego, but what they forget to mention is that the area around Petco may have been awful before they built that stadium? …but it was probably the only awful part of San Diego at the time.

    It’s one thing to wipe out the only awful island in a sea of affluence, quite another to put a huge investment like that in a sea of nothing…

    And yeah, to commercial businesses/real estate people? It’s about concentric circles in a three and five mile radius and how much discretionary income you can find in that radius. …and Anacostia is a sea of nothing.

    I’d be interested to see how many of the local politicians who have condemned banks for making bad loans are also encouraging businesses to expand into a consumer market like Anacostia, a market with little in the way of consumer discretionary income.

  16. versus a total of less than $17 million in stadium rents and direct revenue).

    Are they finally paying the rent? The ownership group withheld payment the entire first year the Nat’s played in the new ballpark, claiming it ‘wasn’t finished’.

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