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More taxpayer money benefits professional sports owners amid ‘wave of stadium construction’

As sports stadiums built in the 1990s show their age, many professional sports teams are seeking new facilities and the public money to pay for them.

“We are in the warm-up phase of the next wave of stadium construction,” said JC Bradbury, a Kennesaw State University economics professor who has researched the issue. “That’s one of the reasons why you’re seeing a lot more stadiums coming true.”

Professional sports teams across the country are preparing to rehabilitate or build new stadiums and arenas. In Chicago, both the NFL’s Bears and MLB’s White Sox are exploring moves. Baseball’s Cleveland Guardians, Milwaukee Brewers, Oakland Athletics and Kansas City Royals are working on new or improved stadiums. So are the NBA’s Philadelphia 76ers, Oklahoma City Thunder and Los Angeles Clippers.

Elected leaders continue to pour tax revenue into stadium and arena projects to recruit or retain teams and stimulate local economies. But public debate is increasing as decades of research have shown that taxpayers are not seeing a positive return on their investments.

“This is without exception,” Bradbury said. “It’s generally clear that these are really poor public investments.”

This hasn’t stopped the deals from growing. When adjusted for inflation, stadium subsidies have increased from an average of $350 million in 2010 to about $500 million, Bradbury said.

In 2022, New York officials approved Record subsidy of $850 million Financing a new stadium for the NFL’s Buffalo Bills.

Then last April, Tennessee Titans raise more than $1.2 billion State and local funding for a new professional football stadium in Nashville.

Journalist Neil deMause said momentum has increased as governments benefit from pandemic relief and strong economies. Stadium subsidies have been written extensively about.

“Stadium deals tend to give birth to other stadium deals,” he said. “The Bills getting money from New York made it easier for the Titans to get money from Tennessee.”

Super Bowl and schools

Las Vegas hosted Nevada’s first Super Bowl at Allegiant Stadium; this event was supported by a $750 million public subsidy in 2016 to attract the Raiders from Oakland, California. Now Oakland’s baseball team, often called the A’s, is looking for its own stadium on the Las Vegas Strip.

But Nevada teachers are challenging a 2023 law that would allow up to $380 million in public funds for the A’s to move to Las Vegas.

A political action committee sponsored by the Nevada State Education Association filed suit earlier this month challenges the constitutionality of the law. The group is also pushing for a ballot initiative that would allow voters to veto some public funding.

“These are billionaires, right? They can do it themselves if they want,” said Alexander Marks, the teachers’ union’s strategy director.

“At the end of the day, there are a lot of people who want government dollars to be spent on responsible things like public education, roads and hospitals,” he said. “And every dollar we take away from that and put into the stadium is a misguided use of that dollar.”

Nevada ranked 48th in education funding per student. National Education Association’s 2022 rankings. The same report lists the state’s student-teacher ratio as the highest in the nation.

Marks said state leaders often tell educators there isn’t enough funding to address issues like class sizes. He noted that Republican Gov. Joe Lombardo vetoed the legislation last year. would continue to fund a universal free lunch program in schools.

“Where are our state’s priorities?” Marx said. “The stadium is great, but the school lunch bill needs to be vetoed? “We don’t really understand that.”

Jeremy Aguero, a Nevada consultant hired by the Raiders and A’s to work on football and baseball stadium projects, said the NFL stadium is already a mathematical winner. A. 2023 audit The Las Vegas Stadium Authority’s report showed that a special hotel tax raised more money than was needed to pay off debt at Allegiant Stadium.

And holding major sporting events increases state revenues, he said.

Aguero noted that the Nevada legislature last year passed a record budget for K-12 education for fiscal year 2025. Increasing funding per student by more than 25%.

“So from that perspective, our schools have more money because of Allegiant Stadium,” Aguero said. “Our police and firefighters have more money thanks to Allegiant Stadium. “Our state and local governments have more for everything from social services to higher education, with major events taking place in major event centers.”

Economic issue, identity issue

Although public subsidy amounts have increased in dollar terms, the share of overall stadium and arena costs has actually shrunk, said Judith Grant Long, an associate professor of sports management and urban planning at the University of Michigan who has researched the subject. problem.

Team owners and developers are increasingly promoting stadiums and arenas as larger developments that also include entertainment, condos and hotels. And elected officials are increasingly devoting public funding to expenses like infrastructure and transportation that could theoretically provide a greater social benefit than just a venue.

But this dynamic can put wealthy team owners in a powerful enough position to hold some of the most valuable real estate in their markets.

Professional sports remain a small part of the overall economy, Long said. And numerous peer-reviewed academic studies show that stadium and arena investments cost more than their economic benefits.

“The general economic thinking is that the economic impact measured by employment and taxes does not include average public investment,” Long said.

But these decisions aren’t always about pure arithmetic.

Maintaining a major sports franchise is a source of civic pride for many leaders, especially in smaller markets.

Oklahoma City Republican Mayor David Holt said the city’s economy and identity have changed since the NBA’s Seattle SuperSonics moved there in 2008 and changed the team’s name to the Thunder.

“Oklahoma City wasn’t on anyone’s radar until they acquired the Thunder,” Holt said. “Our identity as a big-league city has become an integral part of how we see ourselves and has been part of our momentum over the last few decades.”

Oklahoma City is one of only a few cities outside the nation’s top 40 media markets to have an NBA, MLB or NFL team, Holt said.

That’s why last year he strongly supported an initiative to expand a one-cent sales tax to fund a new, publicly owned, $900 million arena for the Thunder. The arena will cost taxpayers about $1 billion when interest costs are factored in, the mayor said. The team allocated $50 million to the project, which is about 5% of the public commitment.

NBA franchise worth more than $3 billion According to Forbes. The seven-member ownership group is led by Clay Bennett, a wealthy venture capitalist.

In December, More than 70 percent of voters approved the tax extension, keeping the team in Oklahoma City through 2050.

Holt said not building the new arena and possibly having the Thunder leave the city would be a heartbreak not seen in the region since the oil crisis of the 1980s.

Wisconsin state Rep. Rob Brooks, a Republican, acknowledged the difficulty of assessing the true value of a professional sports team.

Last year, as lawmakers considered legislation that would fund improvements to the Milwaukee Brewers’ American Family Field, he focused on hard issues, particularly how much the team and visiting teams contribute to state income taxes.

“I really just attribute it to tangible things… because everything else is hard to measure,” he said.

Legislation sponsored by Brooks Approximately 500 million dollars of state funding was allocated to the stadium project, which aims to keep the team alive until 2050. But Brooks said that cost would be financed specifically by the team’s income tax collections.

Democratic Gov. Tony Evers He signed the law in December.

“As long as we had a facility that was more than half its lifespan remaining, it made sense to maximize the investment we had already made,” Brooks said. “If we were making a completely new investment, that would be a completely different discussion.”

Flurry of stadium deals

Justin Wilson, the Democratic mayor of Alexandria, Virginia, is well aware of studies criticizing stadium and arena deals.

But he thinks local taxpayers are well protected in the proposed legislative agreement to move the NBA Wizards and NHL Capitals from downtown Washington, D.C., to his city

A plan backed by Virginia Republican Governor Glenn Youngkin Monumental Sports & Entertainment, which owns both teams, was called on to make an initial investment of $400 million and make ongoing lease payments to the new stadium management. The public portion of the funding will come from user fees and taxes collected as part of the new arena development, not from city or state taxpayers, Wilson said.

“That was one of the things we focused on from the beginning, we really learned from the constant recurrence of bad sports arenas and sports stadium deals across the country,” Wilson said.

But the plan faces political opposition from leaders in D.C. and some lawmakers in Richmond. While the Youngkin-backed legislation passed the state House last week, it faced a setback in the state Senate, where a key committee leader said the bill was “not ready for prime time.” Associated Press reported.

The effort also faces Organized opposition in Northern VirginiaWhere residents are concerned about subsidies and local challenges such as traffic and public transportation.

Indiana Democratic State Rep. Earl Harris Jr. wants to lure the NFL’s Chicago Bears, who have long sought to abandon his hometown Soldier Field, to northwest Indiana. Harris has introduced a bill that would create a new taxpayer-funded sports development commission tasked with attracting a professional sports team to the area.

“Maybe we can pull them over,” Harris said. “And if we can’t convince them, maybe we can draw some attention to the area and attract another team.”

bears, A team worth over 6 billion dollars, Last year, he bought and demolished hundreds of acres in the Illinois suburb of Arlington Heights. But recently the team has shifted its focus to lakefront properties in Chicago.

“The timeline should be 2024,” Bears President and CEO Kevin Warren said he told WGN-TV last week. “In a perfect world, I would like to have clarity this upcoming legislative session.”

Harris-sponsored law in Indiana could not get out of the committee But he said state and local leaders still have interest in attracting a professional team to northwest Indiana.

“I actually still get people to reach out to me,” he said. “They want to help and support this initiative. So I’m bringing this back next year.

state border Part of it State Newsroomis a national nonprofit news organization focusing on government policy.

©2024 State Newsroom. Visit stateline.org. Distributed by Tribune Content Agency, LLC.

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