NY Times columnist laments public spending on sports venues, provokes support and defense. The Barclays Center, though, didn't catalyze promised benefits.

Sports Stadiums Are Monuments to the Poverty of Our Ambitions, New York Times columnist Binyamin Appelbaum wrote May 28:

People who say that the United States can’t build anything anymore must not be sports fans. Barely a year goes by without the debut of a sparkling new stadium or arena, often in the very cities where it’s most difficult to build almost anything else. A $2.3 billion baseball stadium in the Bronx. A 70,000-seat football stadium in the middle of Los Angeles County. A basketball arena on the San Francisco waterfront.

The latest example, announced last month by the mayor of Washington, D.C., is a $3.8 billion plan to build a stadium for the local football team, the Washington Commanders, on 180 acres of public land just two miles from the Capitol.

His argument was framed, in part, as a focus on "abundance," the new buzzword regarding Democrats' failure to build housing and public works. It's a flawed argument; Washington, DC, does build a lot of housing and, crucially (but unmentioned), sports facilities are today often linked to other urban development.

But Appelbaum's right that "sports are popular" and that helps private businesses--teams are "sports entertainment corporations," as phrased by Bettina Damiani--gain public resources to help pursue profits..

"Stadiums are playgrounds for the wealthy, thinly disguised as public spaces," he writes, pointing to seat licenses--an additional cost--for football tickets. 

That said, arenas--smaller, enclosed venues that host more event--manage to sell lots of concert tickets, not necessarily to the wealthy but to those willing to allot their limited budgets to live entertainment, even going into debt.

Public spending

Appelbaum writes:

Academic studies have repeatedly concluded that public spending on stadiums is a bad investment. Indeed, one of the leading authorities on the subject has memorably described that conclusion as one of the rare subjects on which economists have approached unanimity.

That link, interestingly enough, goes to The Economics of Sports Facilities and Their Communities, published in 2000 by John J. Siegfried and Andrew Zimbalist. 

The latter, Atlantic Yards watchers may remember, notoriously was hired by developer Forest City Ratner to predict, unwisely, that the project would be a gold mine for the public.

Real public investment

Appelbaum writes:

Better investments would yield bigger returns. One can only imagine a world in which the mayors of American cities were equally motivated by the economic benefits of public transit. But it’s much less expensive, much easier and much more fun to build a gussied-up grandstand than to invest in faster commutes or high-quality public education. 

Barclays Center defenders initially argued that the arena was necessary to create the promised housing, including affordable housing, and jobs. It didn't, and the ownership of the arena company (and Brooklyn Nets) separated from the ownership of the larger Atlantic Yards/Pacific Park project.

Now they'd surely argue that the economic activity helps various businesses, helps brand Brooklyn, and increases tax revenue. OK, so how about paying taxes instead of using payments in lieu of taxes to pay off construction debt?

My comment

What about a sports venue closer to home, the Barclays Center in Brooklyn? 

In 2006, when running for state Assembly, Hakeem Jeffries (now Democratic leader in the House) said the Brooklyn arena might be needed to "create the jobs and housing" in the larger development project, known as Atlantic Yards. 

Instead, the jobs and housing have fallen vastly short of projections. 

Original developer Bruce Ratner sold the NBA Brooklyn Nets and the arena operating company to Russian oligarch Mikhail Prokhorov, who made a huge profit selling the package to Alibaba billionaire Joe Tsai.

Since then, Tsai's made his own large profit by selling a 15% slice to the Koch family (Julia, widow of David) at a far higher valuation.

It's all enabled by a tax-exempt site, tax-free bonds, an override of zoning, the ability to sell naming rights, direct subsidies, and NY State's use of eminent domain to acquire property. 

NY State, which oversees the larger project, still has leverage. Tsai wants the plaza outside the arena to be made permanent, rather than having a giant tower built there, as the state plan still allows. 

The potential tower builder also would rather move that bulk across the street to another site. 

In doing so, New York State could require Tsai and his fellow owners to pay for the privilege of gaining that permanent plaza (as well as the other benefits). 

Yes, I've been writing about this.

Other critical comments

Eli Deuce wrote:

The construction of major league sports stadiums reflects the ownership model of these teams. If sports teams were each owned by a very large group of investors, each with a very small stake, there would be no pressure to relocate the teams. This would reduce the pressure to repeatedly build new Taj Majal stadiums. The Green Bay Packers are a prime example of how this ownership model can thrive. 

Green Bay, though, is unique.

Dick Cox wrote:

And a final small insult is that these palaces for the wealthy to watch games, built with taxpayer charity, are finally named following an auction of ‘naming rights’ that leads to the crassest, most cynical designations: National Car Rental Center, Crypto.com Arena or whatever regional bank not yet swallowed up by a bigger one. Citibank could have used its naming rights to dub the Mets stadium Robinson Field but no, Citifield it is. Public spaces?

Yeah, why does the private business get to sell naming rights from a (nominally) publicly-owned venue? At the very least, that should be counted as a subsidy.

LIChef wrote:

The writer neglects to mention NY Gov. Hochul, who handed over $800 million in taxpayer money to the billionaire owners of the Buffalo Bills for a new stadium. Her husband was a senior executive for a Bills concessionaire. Somehow, New York is in such perfect shape that she couldn’t find another use for the money.

This makes Atlantic Yards/Barclays Center look better, only in comparison. 

Wally Grigo wrote:

Sports stadiums are fine because they bring people together to witness courage, teamwork, skill, the joy of victory and grace in the face of failure. But professional sports teams--and their stadiums--should all be owned by the cities that support them. You want fan loyalty? That's how you get it and keep it. Let the billionaires build luxury resorts

City ownership would be a challenge, on multiple fronts. 

Supportive comments

MildlyMisanthropic wrote:

I can address the baseball and soccer projects in Washington, and the baseball stadium in Baltimore. In both cities, those projects went into parts of those cities that were quite resistant to development. In DC, that stadia replaced acres of warehouses that for generations had gone empty. In the 80s, the closest thing to development the area could support was to host raves and EDM clubs in those long-empty warehouses. Today the area is loaded with high rise apartments and a bustling commercial retail district that connects to the Southwest Waterfront (which experienced its own revitalization shortly after the Nationals stadium was completed).... In Baltimore, Camden Yards went into a blighted area as well. ...Stadia are not a panacea for urban decay, but don’t cry about stadium projects if they succeed in rekindling growth where nobody has been interested in investing for generations.

In the case of the Brooklyn arena and Atlantic Yards, the growth curve had begun.

TB1 responded to the previous comment:

I agree with you that stadiums can revitalize neighborhoods - I've lived in San Diego pre- and post- Petco Park, as well as D.C. pre- and post- Nationals Park, and both surrounding neighborhoods have improved markedly since the stadiums were built. But, I would guess would be the author's rebuttal, the area around Petco Park and increasingly around Nationals Park merely gentrified and pushed out the people who were already struggling in those neighborhoods when they were neglected.

That's why it's important to ensure that the promised public benefits actually arrive.

Daniel wrote:

This comments section reads very elitist. There are continual arguments about misguided priorities, how people feel their time would be better spent, and what I would view as insulting views towards those that enjoy sports. I make no illusions that I love sports. Anytime my wife and I visit a new city, one of my top priorities is to attend a game and/or tour the ballpark, football stadium, etc. ...  I absolutely agree that the current system of bailing out billionaire owners for stadiums they profit off of is reprehensible and should be altered. However that doesn't minimize the importance of the good a sports team and stadium can provide to its city.

That, indeed, is the tension. Lots of people like sports, and elected officials like venues. That doesn't mean we should pay for them.

Joe wrote:

I understand the argument that publicly-financed stadiums are a "bad investment" from a dollars and cents perspective. But living in Baltimore and witnessing/participating in how sports teams foster a sense of shared identity that transcends class, racial, and political lines, it's not the worst thing a city could "invest" in.

If so, shouldn't the public also get some financial benefits rather than more ineffable ones?

Davey wrote:

I live 4 blocks from Oracle Park and 2 blocks from Chase Center in SF. Both bring in lots of people, spending LOTS OF money. They employ hundreds, and the neighborhood has mandated below market rate housing so at some of them can live here. Chase has a plaza with everything from a hot dog and burger joint, Burmese, BBQ, Dim Sum, to a really fancy steakhouse. We love having the stadium and arena here, and it has brought this area to life. Both were privately funded.

Yes, in San Francisco, they paid for their own arena (though they have asked for property tax discounts).

The bottom line

MS wrote:

That's one narrative. Another: stadiums serve as catalytic anchors for massive urban renewal projects in the form of live, work, play mixed use developments. Inner Harbor in Baltimore, the Deer district in Milwaukee, the Battery in Atlanta. The DC project will deliver over 6,000 housing units and thousands of jobs. Hundreds of businesses will open there. And that $1 billion spent by the city? A significant portion will go to infrastructure improvements that would be necessary for any project that utilizes the 180 acre parcel of land.

Zach responded:

@MS the issue isn't whether stadiums can boost neighborhoods. They can, and Nats Park down here is an example... The issue is whether we should be spending any money to help a business that, last year, was valued at $6.3 billion - higher than all but 15 other sports teams worldwide - build something that will increase its value even further.

Today, the presence of the Barclays Center has vastly increased the value of the Brooklyn (formerly New Jersey) Nets and the New York Liberty. Why shouldn't the public get a piece of that?