Stadium Magic?

Today brought a bevy of interesting areas to explore. And my favorite topic has little to do with politics, but instead education and urban planning. NYC is contemplating luring the Jet back to the city, in the form of a $1.5 billion stadium. Government sources expect to commit $700 to the project all the while city schools struggle for funding.

My sister, the brain of the family and I have argued repeatedly about this issue Predictably, this debate rages here in DC as the city fight to find an appropriate site for the Expos to call home. Opponents have many fine examples of wasted public dollars on stadiums. Not all public financing is a debacle, certainly some of it is.

Many of these follies are in the form of football areas. And, though I know that insulting the sport is liable to incur the wrath of many Washingtonians, football stadiums should never benefit from public financing. Football stadiums sit empty too often. Maximum home games being 12, if the team makes the playoffs every year and has home-field advantage. Throw in a few rock concerts each year and you might use 20 times a year. I concede I am not an expert on stadium usage issues and maybe I’m wrong. However, if my assumptions are correct, NYC officials may reap roughly $300 million in generated tax revenues over a 30-year average life span of a new stadium.

Now there is a $400 million gap for public officials to recoup. Recapturing revenue is possible in development of nearby under/undeveloped land. The proposed NYC Jet stadium located in Manhattan will preclude this. The land though possibly under utilized will never rise high enough to generate enough revenues to meet the shortfall.

Jobs are often an excellent argument for the financing initiatives. When the current stadium or stadium site is within easy commuting distance job gains from moving the stadium are negligible. When transporting a team from a distant state job gains are much greater, but the government revenue gain by these jobs is still relatively slight. There might be an additional gain of $5 million, not much of an impact spread out over 30 years.

However, there is a much greater impact when the usage for the sites is significantly higher, such as basketball/hockey areas or baseball stadiums. Both sports, when the NHL resumes playing, would have ten times more home games and significantly more revenue generated by these events. The evidence for this argument is clear with two shining examples – Jacobs Field in Cleveland and the MCI Center in Washington, DC. Both stadiums helped revitalize cities areas in sharp decline. Jacobs Field became the cornerstone to the redevelopment of the entire downtown Cleveland area, including a new areas for football, basketball and the building of the Rock and Roll Hall of Fame. The MCI Center is even more impressive. The area south of Chinatown was desolate. You did not walk the streets alone at night. Dozens of building had lain empty for years, and with the crash of the real estate market in the late 80’s it did not appear the DC market would make a quick rebound. The area changed this. The downtown area became hip. Stores, offices and restaurants quickly sprung up.

Opponents often argue that the revenues would be better spent on education, as is the current case in the Times article. My sister and her fellow supporter also make this argument. Alas, this is sheer fantasy. Funding for public stadiums would never go to school systems. It is a sad statement but undeniably true. Proof is evident, if the government officials actually wanted to better fund their school systems it would happen regardless of any financing matters for arenas. Unfortunately public education is entirely unsexy. Officials rarely fall all other themselves to fund education better. Instead, they always find other public projects in greater need of funding. Even with limited revenues in the public coffers, stadiums do not deter from funding of education.

There are no hard and fast rules for public financing, but merely guidelines, which lawmakers should follow when deciding to commit public revenues to build. Under certain circumstances stadiums should receive public financing with restrictions and obligations for arena owners to commit resources to education.