Posted on 01/03/2013 5:38:28 AM PST by MichCapCon
The owners of the Detroit Red Wings are looking to building a new $650-million entertainment district for the team in downtown Detroit with the help of state and local taxpayers.
The plan is in its early stages and details are scarce, but the overwhelming economic consensus is that subsidized stadiums are huge losers for taxpayers.
Amidst all the other excitement in Lansing, a bill to exempt certain businesses from state and local taxes via the Downtown Development Act was signed by Gov. Rick Snyder recently. According to MIRS Capitol Capsule, this “paves the way” for a replacement for Joe Louis Arena.
Despite statements from legislators (“8,300 construction jobs”), local “economic development officers (“makes good business sense”) and business leaders involved in the deal (“$1.8 billion in economic impact”), it is important to remember that there are almost no economic studies that find that stadium deals via direct subsidies or tax incentives are a good deal for taxpayers.
As Jeff Wattrick of Deadline Detroit points out, Andrew Zimbalist, the Robert A. Woods professor of economics at Smith College, "is arguably the best known and among the most respected economists studying the value of public investment in sporting venues and their ancillary developments … Zimbalist, like virtually every other serious scholar who has reviewed the data, came to the conclusion that the economic benefit to the community is an illusion."
Zimbalist writes, “All of the independent, scholarly research on the issue of whether sports teams and facilities have a positive economic impact has come to the same conclusion: One should not anticipate that a team or a facility by itself will either increase employment or raise per capita income in a metropolitan area.”
Flashy projects have not helped the city in the past. Remember the Renaissance Center, which was supposed to “anchor Detroit’s revival”? How about the money taxpayers put up for the stadiums for the Detroit Lions and Detroit Tigers? State and local citizens are still subsidizing the local teams.
The Pontiac Silverdome, where the Detroit Lions played before moving into Ford Field in Detroit, was built in 1975 for $55.7 million ($227 million today). Besides tax benefits from the city of Pontiac, the Lions received $800,000 per year from state taxpayers. After the Lions moved, Pontiac paid $1.5 million a year in upkeep and eventually sold the stadium to a Canadian developer for $583,000 in 2009.
Michigan residents can take solace that this is far from the worst stadium deal among the many around the country: That honor belongs to New Jersey taxpayers. As I wrote last summer:
In 2010, the New York Giants and New York Jets football teams (who actually play in New Jersey) broke ground on their shared New Meadowlands Stadium. In the meantime, the old Giants Stadium, which was demolished to make room for the New Meadowlands, still carries $110 million in debt from when it was built in 1976. In sum: The bill for a now-demolished stadium is being subsidized by New Jersey residents who are, again, subsidizing a new stadium on top of the old one for two teams named for New York. New York, East Rutherford, Kansas City, Miami, Seattle, Indianapolis, Philadelphia, Houston, Memphis, Pittsburgh — all those cities and more are home to stadiums and arenas abandoned by teams that residents are still paying for. It doesn't make sense to add Detroit to the list.
I thought that less taxes going to the Govt was a 'good thing'. Isn't that what we're constantly clamoring for here?
It's one thing to ALLOCATE from current citizen's tax revenues and 'give it away' to sports franchises, it's entirely another to say that the 'taxes' we havent taken from you already 'belong to the Govt'.
Tax breaks for all or tax breaks for none.
Yes the taxpayers will pay because the revenue lost will be made up elsewhere.
Arlington, TX provided some taxpayer assistance for both thr Rangers and Cowboys stadiums. However, the team owners carried the bulk of the debt . The Rangers paid off the debt ahead of time, and the Cowboys are expected to follow suit.
The owners have to have some skin in the game as demonstrated here
Let these sports franchises pay for their own damn stadiums. Why the hell shoul the taxpayer be forced to subsidize them?and then be forced to pay exorbitant ticket and parking prices.
These guy’s get you coming and going.
Let these sports franchises pay for their own damn stadiums. Why the hell shoul the taxpayer be forced to subsidize them?and then be forced to pay exorbitant ticket and parking prices.
These guy’s get you coming and going.
NY State just threw some goodies to keep the Buffalo Bills so the cycle continues.
I’m afraid you’re right on this.
What Red Wings?
The hockey unionists busted their own season.
Indeed, why should taxpayers support economic Darwinists like the player’s union?s
I have never understood why a private business enterprise, such as an NFL team, can say to a city “we need a new stadium” and expect the taxpayers to pay for it. Why doesn’t the team pay for their own stadium? After all, the venue is being run for the owner’s profit isn’t it? The city does get taxes that are generated as the result of the stadium’s operation, but it never recoups the amount the city fathers, if they’re stupid enough to buy into this bilge, spend on the construction of a new stadium.
Usually these “requests” for a new playpen are accompanied by the threat of the team moving out of town. My response is: “OK. Don’t let the door hit you in the butt when you leave. Remember to turn out the lights and lock the doors.”
http://www.commonwealthfoundation.org/research/detail/stadiums-dont-deliver-on-promises
duh
“The United States has become a place in which professional athletes and entertainers are mistaken for people of significance.” Robert A. Heinlein
In a lot of cases the local taxpayers aren’t paying the costs, tourists are. Go to a city like Indianapolis and check your hotel room bill or your rental car bill. The smallest item on the bill is the cost of the service, the rest is taxes.
San Antonio taxpayers paid nearly 200 million for a football arena (Alamodome) and we didn’t even have an NFL franchise. Still don’t.
Yet that arena has brought us billions in return.
Good investment, wouldn’t ya say?
What billions?
From ticket revenue that would have been spent somewhere else in the city on other forms of entertainment? How could that arena possibly have brought you billions in returns?
Or, is this subtle sarcasm?
This is part of the Government’s desire to supply bread and circuses to the masses. We are New Rome in so many ways.
They do it the same way any other big business does it, the threat to move is very useful. And not just in sports, most major businesses run bidding wars between cities for new facilities and relocated facilities. And it works because nobody wants to be the mayor that lost the Toyota plant, or the football team. It’s a smart business tactic, if you know some city out there will build you a new facility why pay for one yourself.
Billions. Last year alone the Alamo Bowl brought 39 million dollars in revenue.
The Alamodome is also a reason why we still have the San Antonio Spurs. God only knows how many hundreds of millions of dollars the city brings in in revenue from the Spurs. Without the Alamodome being built, the Spurs would have left town.
Just a few examples. Billions? Maybe a slight exaggeration. But definitely a worth-while investment for the city.
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