Privatization of US Stadiums

But your point was, if I read you correctly, that sports stadiums and teams have all this great economic benefit. So why are Richmond and Columbus growing, and Pittsburgh not? I added the private-sector employment numbers to show the growth is not all government-related, what with Pittsburgh not having the advantage of a state capital.

Go check out a book by Cleveland State professor Mark Rosentraub called "Major League Losers," in which he thoroughly debunks the sports-as-economic-development argument. It's a bit of a pedantic read, but his point is that the money spent on sports did not create any more jobs -- or created less -- than if the money had been used for other job development efforts, or hadn't been spent at all. And he's not some sports-hating guy. He was a prof at my old school, IUPUI, and a Pacers season-ticket owner when he wrote it.

 

So you are saying all of the electrical, mechanical, HVAC, plumbing and all the other contractors used in the costruction of the stadium, or the engineers and architects who designed the building would have had other work?

All the salesmen who sold rebar, concrete and furniture would have had other work to do? All the day-to-day operations employees of the stadium would of had work elsewhere?

All the bars and restaurants would have had as many customers?

Money moving from person to person within a community is the true strength of a community. Where else does it move better than around a stadium?


I'm curious, would you have public money build a convention center in your town?

 

Oh dear, I actually agree 100% with starman on something. I oughta pack my tent and go wander in the desert for 40 years now

Conventions bring out of town visitors (new money) by the busload. Stadiums just make locals (same old local stale money) spend it somewhere different.

Stop corporate welfare now!

 

What he said.

 

No. Convention centers are an even bigger boondoggle than stadiums.

To answer your questions:

Yes, all the people involved in the construction and design of the stadium would have had other work. I remember reading that Indianapolis had to import workers for the new Colts stadium construction because there weren't enough workers available already. Those guys are living in a KOA or something and will leave town as soon as the project is done.

The salesmen may well have had other work to do. Most of the companies selling construction-related stuff to stadiums aren't little mom-and-pop shops. And, yes, the day-to-day stadium operators making crap wages could have found crap wages elsewhere (though maybe not in Pittsburgh, given that job-loss trend).

The bars and restaurants in the immediate area of the stadium might not have had as many customers. But all the bars and restaurants that people AREN'T going to in favor of spending money on events in the new stadium will LOSE money.

There are about a zillion other ways money can move better from person to person than a stadium. A stadium sucks money away. Stadiums are built with the amenities so you DON'T spend money around it. And anyone competing against it didn't get their palace built at taxpayer expense either, or have guarantees from the locals to cover any losses.

Attracting tourists to a city is overrated. Tourism is a low-wage industry. You'd be better off spending $500 million in tax money to attract manufacturing facilities. Those have long-term benefit, with jobs that pay higher than slinging hot dogs in the stadium, and the ability to attract other facilities.

A wiser use of tax money to prop up sports, in a way, is Indianapolis' attempt to lure more racing teams to the area. They lease office space and warehouse space, and attract other businesses that want to service them. And this happens for a lot less than the new Colts stadium costs.

 

From Tracy Hamilton http://www.mysanantonio.com/sports/basketball/nba/spurs/stories/MYSA083007.01A.Spurs_Venue_Tax.34406d3.html



Spurs seek "venue tax" funds for arena upgrades

Web Posted: 09/05/2007 06:42 PM CDT

Tracy Idell Hamilton
Express-News

Arguing that upgrades to the AT&T Center are necessary to remain competitive in today's NBA, the San Antonio Spurs want Bexar County taxpayers to reauthorize the "venue tax" that built the arena.

County Judge Nelson Wolff agrees that the four-time champions should get part of the renewed revenue stream — pending voter approval — along with the San Antonio River Improvement Project, amateur sports fields and a new performing arts center.

The venue tax on hotel rooms and car rentals is set to expire when the AT&T Center is paid off, sometime between 2009 and 2012.

The Spurs have a $164 million wish list of projects for the arena — built five years ago for $193.5 million — but team management is working with the Commissioners Court to whittle that amount to between $75 million and $100 million.

The team is responsible for maintenance and upkeep of the arena, according to its contracts with the county. Routine maintenance comes from the arena's annual operating budget. Some people familiar with those contracts say the Spurs should foot the bill for much of what they want the county — and, by extension, taxpayers — to fund.

Talk Back
• What do you think of the Spurs venue tax?

Team management argues that it is not responsible for upgrades, just maintenance, and that without new sources of revenue, it cannot pay the player salaries that would allow the team to keep winning.

Wolff and other commissioners appear to have found that argument persuasive, saying the county must protect its investment in the building. And their decision reignites the national debate about how far public entities should go to support private businesses — even those that win major sports championships.

Critics say the contracts already protect the county's investment and what the team wants is simply more bells and whistles.

Economists such as Robert A. Baade of Lake Forest College in Lake Forest, Ill., who has studied public arena funding for 20 years, say spending public dollars to enrich a private business rarely benefits those who pay the tab.

As teams increase revenue by upgrading their arenas, "that ratchets up what other teams must do," Baade said. "Where does it end?"

"It's been discussed all over the country a thousand times," said David Marquez, the county's economic development director, who oversaw the building of the arena and agrees the county ought to fund the upgrades. "We're not going to solve that problem here."

A quality standard

Terms of the Spurs' 25-year lease demand that, in exchange for the revenue the arena generates (minus the 20-odd days of the San Antonio Stock Show & Rodeo), the Spurs must keep the building to a "quality arena standard."

Toward that end, the contract allows the team to tack a $1 surcharge on tickets and parking. Renewal and replacement money resides in an account funded annually at $1 million by the San Antonio Spurs and $300,000 by the San Antonio Stock Show & Rodeo. The fund has a current balance of $2.1 million.

The team is "doing an outstanding job of maintaining the facility," says Derrick Howard, executive director of the Community Arenas Board, which oversees the 175-acre property that includes the Freeman Coliseum and the AT&T Center. "And our position is it behooves them to keep that building in tip-top condition."

Howard said CAB members "pressed really hard" to make sure the Spurs would be responsible for keeping the building up to a "quality arena standard" during negotiations in 2000, after the venue tax won voter approval.

The thought, he said, "was 'How do we keep up with the demands of the NBA without having to go back to the community?'"

The surcharge was their answer.

Jim Lunz, who with the late Joe Bradbury represented CAB during negotiations, believes language in the contract encompasses almost everything the team is asking for. The renewal and replacement account should cover most of it, he said, while the team ought to pay for upgrades, such as new restaurants.

"For them to come back to the taxpayer because they've won some championships is ludicrous," he said.

Spurs management says the issue of upgrades was never on the table during negotiations.

"We ran out of time," said Leo Gomez, the Spurs vice president of external affairs and corporate development. "It's something we knew we'd have to address, and now here we are."

CAB member Dan Puckett, who also was on the board at the time of the negotiations, said the contract language is open to interpretation, but he favors giving the team what it wants.

"The Spurs are the best thing to happen to San Antonio," he said. "I think it would be money well-spent."

But the differences between "renewal and replacement," which comes out of the arena's annual operating budget, and "upgrades" are often murky.

For example, in the Spurs' wish list is a $96 million lump sum for "system upgrades and improvements" that includes a line item for repainting the outside of the building.

"I do that every year," said John Sparks, the arena's general manager, adding that it likely won't be included in any final request.

Some differences seem semantic. Recent upgrades to the arena's scoreboard, which AT&T paid for when the building changed names, "could have ended up under R and R, or it could have ended up under maintenance," Sparks said.

What isn't included in either the maintenance budget or the renewal and replacement account, he said, is "the 'wow' stuff, the great thing that we need to have" that will keep the AT&T Center "on par with the top 10 arenas."

That includes the new dining options; enclosing the Sombrilla, the airy open bar area between the arena and the Coliseum; and reconfiguring the lower seating bowl for better sight lines.

Successful strategy

Commissioner Paul Elizondo, who was tasked by Wolff to negotiate with the team, said he's more interested in spending venue tax money to replace the roof than to expand the arena's restaurants.

"South food court expansion, east balcony restaurant," he read from the wish list. "I have yet to be convinced."

He does believe the county must protect its investment in both the building and the team.

"The Spurs have to have enough money to pay (top players) and win. So far that strategy has been successful. We want to keep it that way," Elizondo said.

The upgrades also would benefit the San Antonio LivestockExposition, which runs the rodeo. Already the arena has allowed for the expansion of an event that this year generated $7.6 million for education, up 75 percent since it began using the arena in 2003. Not surprisingly, rodeo officials are all for the upgrades.

That the venue tax is ostensibly paid for with other people's money is a big reason the Spurs, back in 1999, chose the county's plan to build a new arena over the city's plan, which would have stuck local taxpayers with a quarter-cent sales tax increase.

To emphasize the point, officials this time have redubbed the venue tax the "visitor tax," as a reminder that, for the most part, locals won't pay.

But Lake Forest's Baade said the idea of transferring the cost to others is really fiction.

"Every time you travel, you're paying for an arena somewhere," he said. "It's an elaborate shell game."

This is ridiculous.

 

Wow, I only thought privitization was happening in Canada's health care system. Seems the sporting world is catching on...

 

Oh. My. Fucking. God.

Now it's not enough that they get an arena built for them completely by tax money, they get all the revenues from the arena too, they want "additional streams of revenue" (i.e. more tax money) "to help pay the player salaries which would allow them to keep winning."

'How do we keep up with the demands of the NBA without having to go back to the community?'"

The surcharge was their answer.

Yeah. More tax money. From the pockets of the taxpayers to the San Antonio Spurs.

 

How has Los Angeles suffered because it has no NFL team?

Not at all.

Is it suddenly a second-class city that no longer draws conventioneers and other businesses?

Our priorities are so out of whack.

If I were a taxpayer in KC, know what I would have told the NFL in its build-us-a-stadium-for-the-Super Bowl extortion request? Go f--- yourself.

 

This should also be the case for performing art centers, etc. Entertainers, their agents and promoters are among the richest people in the country. They should be able to afford to build their own performance venues.

 

Heck, why allow ANY tax breaks for companies building anything? Look at what you can get in your pocket if you build an auto assembly plant.

Maybe a lawyer who logs on here can explain whether the federal government could even regulate this. I get the feeling because these cover state and local taxes, only those jurisdictions get a say.

 

It's kind of different for a performing arts center. Usually those are highbrow sorts of things. Ballet and opera aren't big money makers...you can say spending on that is for cultural enrichment.