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.