Friday, August 05, 2011

From Neil deMause in The Nation: Why Do Mayors Love Sports Stadiums?

In The Nation's special issue on sports, Neil deMause's Why Do Mayors Love Sports Stadiums? (or, on NPR, Stop The Subsidy-Sucking Sports Stadiums) begins with an Atlantic Yards anecdote:
On a busy streetcorner in downtown Brooklyn, the steel girders are starting to rise....

Yet Atlantic Yards, as Ratner has dubbed his twenty-two-acre development project on the edge of the bustling neighborhood of Prospect Heights, won't look much like the image he first unveiled in 2003. The "Miss Brooklyn" office tower, which was supposed to bring jobs to the community, is gone, a victim of the virtual collapse of New York's commercial real estate market. Meanwhile, the condo towers that were supposed to provide more than 2,250 units of affordable housing are unlikely to be built anytime soon, if at all. (The latest plan involves a "modular" building, akin to stacking shipping containers thirty-four stories high.) The Nets, meanwhile, are spending two seasons playing in Newark's Prudential Center, another heavily subsidized building ($200 million fronted by taxpayers) that was supposed to revitalize its surrounding neighborhood but that still rests among the same discount stores and fast-food joints that lined Market Street before the arena opened in 2007.

It's a story that could have been told in almost any American city over the past two decades. Owners of teams in the "big four" sports leagues — the NFL, MLB, NBA and NHL — have reaped nearly $20 billion in taxpayer subsidies for new homes since 1990. And for just as long, fans, urban planners and economists have argued that building facilities for private sports teams is a massive waste of public money. As University of Chicago economist Allen Sanderson memorably put it, "If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark."
Reasons and solutions

Here's the basic explanation:
Why do new sports facilities have such a hold on local elected officials? The simplest explanation is fear: because team owners can choose new cities but cities can't choose new teams — thanks to the leagues' government-sanctioned monopolies over franchise placement — mayors feel they must offer owners anything they want.
However, as described, most teams don't leave, just use the potential as a threat.

Other justifications: sports facilities serve as monuments to the people who helped get them done. (As we've learned, elected officials like groundbreakings and ribbon-cuttings.)

Consulting firms to produce glowing "economic impact studies," leading one public official to comment, "Unfortunately, it doesn't appear that elected officials are much into evidence-based decision-making."

And, deMause also cites "[o]utright manipulation" and increasingly clever financing deals, as with the two baseball stadiums in New York.

My comment

I posted a comment:
To clarify the Atlantic Yards numbers: the project is supposed to have 6430 residential units, including 4500 rental units, of which half (2250) would be subsidized for middle-, moderate-, and low-income households. The 1930 condos would all be market rate.

The first tower, whether or not modular, is supposed to contain affordable housing.

I'd add that the same financing scheme, PILOTs (payments in lieu of taxes) used for the new baseball stadiums in New York is being used for the Atlantic Yards arena, aka Barclays Center.

Beyond the glowing "economic impact studies" produced by consultants and weak in-house legal teams, we should recognize that, with Atlantic Yards at least, the city and state have produced wildly optimistic projections, which rely on 1) the project being built in full (unlikely) and 2) the project being build in ten years (impossible, and they have 25 years).

Elected officials, the public, the press, and civic groups should demand that public agencies produce economic impact studies that show a range of results--from best- to worst-case scenarios.

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