Coronavirus

Taxpayers Still on the Hook for Stadium Debts, Even Though Coronavirus Canceled Sports

But then, those stadiums weren't likely to bring the growth the cities wanted in the first place.

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The Pawtucket Red Sox's final season was supposed to be hitting its midpoint right about now. After 51 years in Rhode Island, the "Paw Sox" are scheduled to decamp to Worcester, Massachusetts, where city officials have used their eminent domain powers—and taxpayers' money—to lure the team to one of the most expensive minor league ballparks ever built.

The coronavirus pandemic has delayed, and maybe fully canceled, the team's season-long goodbye to Pawtucket. In Worcester, meanwhile, the COVID-19 outbreak should cause city officials to worry they might have made a huge mistake.

The Massachusetts city issued more than $100 million in bonds to pay for the construction of the ballpark, two adjacent hotels, an office park, and a collection of apartments, restaurants, and bars. Almost all of that could have been funded by private developers, but the city decided to take the risk itself. Although the Red Sox are supposed to pay off $36 million of the project's cost with future revenue, Worcester taxpayers are on the hook for more than $70 million in general obligation bonds tied to the project.

Ed Augustus, Worcester's city manager, admits to Bloomberg that the city isn't "immune from the reality—from changes in travel and tourism," but he maintains that the city has enough "breathing room" to weather the downturn in demand for both commercial real estate and professional sporting venues. Worcester doesn't owe payments on the debt until 2023, so there's still time for things to work out.

Still, the risk is obvious. As Bloomberg notes, using general obligation bonds to finance a stadium project (and other questionable development) is what landed Harrisburg, Pennsylvania, in dire economic straits after the last recession.

American cities are going to lose about $360 billion in revenue over the next three years, according to a projection from the National League of Cities. The coronavirus pandemic isn't just emptying stadiums and eliminating ticket revenue. It's causing all sorts of economic spending to crater—including the common "tourist taxes" that cities often use to back debt, like those applied to hotel rooms and rental cars.

But these stadium projects were bad deals even before the pandemic-induced economic shutdown.

"The pandemic and the event cancellations it has generated have seriously disrupted the financial calculations that cities made in building stadiums at taxpayers' expense," writes David Boaz, executive vice president of the libertarian Cato Institute. "But they were never a good bargain."

The projections used to justify Worcester's investment in the stadium were iffy even under the best of circumstances. When the Worcester Business Journal surveyed 10 experts about the viability of the city's plan, nine of them expressed skepticism that the ballpark would pay for itself. The only dissenter was a Smith College economist hired by the city to make the case for the project. Study after study after study has debunked the idea that publicly funded stadiums are financially beneficial to anyone other than the team owners, who get free infrastructure for their business.

Worcester isn't the first place to learn this lesson, and it won't be the last. Sixty miles south, Hartford, Connecticut, is losing $3 million annually on publicly funded minor league ballpark that has been a years-long catastrophe for the city. Stadium debt had already wrecked the finances of Glendale, Arizona, long before the coronavirus hit, but now the city may have to yank $1 million out of a rainy day fund to avoid defaulting on those obligations. That's $1 million in taxpayer money that could have been used to deliver vital services, or returned to residents struggling to make ends meet right now.

Cities that bet on minor league baseball could be in for another surprise. Major League Baseball is reportedly aiming to reduce the number of minor league teams that are directly affiliated with major league franchises. Although the Pawtucket-but-soon-to-be-Worcester Red Sox were not included on a leaked list of teams to be cut, the COVID-19 pandemic has strained major league teams' budgets; unloading more minor league affiliates (which generally siphon funding from their big league brethren) remains a possibility. Will the people of Worcester end up paying for a stadium that doesn't have a team?

If Worcester officials are worried about missing out on a tax revenue windfall from the stadium project, the good news is that there was never going to be a windfall in the first place, quips Neil deMause, a critic of publicly funded stadiums who runs the Field of Schemes blog and wrote a book of the same name.

"The bad news," he adds, is that "that's not very good, as news goes."

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  1. They can make it up by hosting Trump rallies.

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  2. STADIUMS IMPLODING

    1. Damn. Beat me to it.

    2. nice.

  3. Can any other business venture ignore its debts because the pandemic shutdown the economy?

    I do not understand why the headlines are so bizarrely worded sometimes.

    1. Have you ever heard the term ‘clickbait’?

  4. Coronavirus didn’t cancel sports, people did, you progressive piece of shit.
    Get murdered, Boehm

  5. $Bazzilions of tax dollars for stadiums for ritualized violence, and we the taxpayers are forced to pay it… Baseball, football, etc.; they are all ritualized violence…

    Can we just spare a bare few million for ritualized sex, too, at the local naked-titty-dancing club? A little CHOICE here, please?
    Ritualized sex is FAR less likely to result in cracked ribs & broken spines & damaged brains than football (which we pay for through health insurance), BUT, NOOOO, no tax dollars for ritualized sex… Tax dollars to SHUT HER DOWN!

    How do we start a movement, Free the Naked Titties-Skin, Just Say NO to Pigskin!

    1. there’s a best of both worlds in there dude.

      1. You raising funds to reactivate the lingerie league, minus the lingerie?

        1. Yeah man ya GOT it, by Jove! I long for them ALL to be FREE of their lingerie!!!

        2. I think there would be a huge market for women’s naked sports. Why stop a football. We can do basketball, soccer, beach volley ball….

          1. At this point, I’ll watch pee-wee hockey before I’ll give MLB a second of my time. Bunch of idiots.

            50/50. 82 games. Simple, clean and respects the situation and fans.

            But nope. Haggle and act as if it’s normal circumstances.

            Fucken clowns.

  6. Korea started their baseball season more than a month ago, and Japanese baseball started a few days ago. When a nation has like 10-12 teams and the highest paid player makes like 2-5 mil a year, those teams cant try to salvage seasons playing at empty stadiums.

    America has 30 plus teams and some players make over 300 mil, so some owners will lose money for playing 80 game season while paying prorated salaries.

    America made talented minority athletes very rich and the average non white American live secure, contented lives. But the good times are over. If college athletes can’t play for 2 mil a year at pro level, they should just go to the Chinese league.

    1. MLBPA agreed to negotiate a new deal to play ball back in March in fans would not be able to attend games. Tony Clark has long backed away from the deal. He and the players are making a mockery of the situation.

      1. They balked at proposals to have the highest paid player get the biggest pay cuts.

        MLB players are paid an absurd amount of money, so some teams would essentially operate at a loss even if they paid someone like trout half his annual salary.

        It’s going to take a while for the public to go to mass gathering or even movie theaters. These businesses have to restructure their model for the post covid world.

        1. What a shame people are ‘kneeling’ to the corona virus. Looks like reason has been a casualty. I know there was going to be some retarded ramifications but I insisted on being optimistic and naive hoping it would be limited or that people would wake up and not let fear drive them.

          Oh well. I’ve got, what, another 32 years (barring getting a straw stuck in my throat) based on life expectancy figures?

    2. Edit “those Teams can try to”

  7. When if ever will the locals and village idiots learn to let the sports teams owners who want a stadium build it AND PAY FOR IT THEMSELVES!!

    Answer, not in my lifetime, also:

    ……….Something to ponder:

    The United States has become a place where entertainers and
    professional athletes are mistaken for people of importance…

    I’ve needed a Doctor..
    I’ve needed a Teacher..
    I need farmers every day..

    I have needed an auto mechanic, a plumber, a house painter
    and a lot of other everyday people.

    But I have NEVER, not even once, NEEDED a pro athlete, a media
    personality, or a Hollywood entertainer for ANYTHING!

    1. Even if they do pay for the stadium themselves, owners often get gifts from the taxpayers. Example: new soccer stadium in Austin. City property for the site, reduced lease fees, tax deferments, tax abatements, et cetera.

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  11. They’re also on the hook for their local government in places like SF, Portland, and Seattle…governments who seem to have abdicated any semblance of responsibility.

    1. SF is, strangely, pretty good in this regard.
      Yes, they did sell the land for the Giants’ stadium cheap, but the city is getting that back in spades as the surrounding area went from single-story, low rent industrial to multi-story, pricy, residential at much higher property taxes. The Giants paid for the construction.
      The Warriors bought their own land and built the stadium on their dime.
      The 9ers were told to pay their own way, so the good citizens of Palo Alto ended up being the suckers.

  12. Other than outright embezzlement, stadium financing is the worst use of taxpayers money. Giving away our money to pad the net worth of billionaires

  13. On the other hand, we have a nice big, flat, manicured field on which to set up a field hospital.

  14. Last year we were in Providence visiting a friend and considered going to Pawtucket (where my wife’s maternal family is from) to watch the Red Sox. But, you know, timing didn’t jive and so we said, ‘next time’. Here we are.

    At east we took advantage of catching a Cape Cod league game a few years back. Still have that Harwich Mariners cap.

    Anyway.

    Fuck pro sports these days. The kneeling, the philandering of hate groups like BLM, Popovich’s faux-intellectual blathering etc.

    Let it all sink for all I care. Insufferable and way over paid at this point. They all seem angry about something despite being phenomenally compensated.

    I’ve gone cold turkey.

    And I’m a guy who is pretty proficient in quite a few sports – with multiple long-term injuries to go with it – but I’m ready to just tune that shit out.

    1. You seem pretty angry for a guy talking about games with balls.

      1. AND PUCKS.

        One you should get slapped off the side of your head, ToTo.

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