Skip to comments.As Revenue Plunges, Stadium Boom Deepens Municipal Woes
Posted on 12/25/2009 2:24:17 AM PST by reaganaut1
CINCINNATI Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.
From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.
Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnatis public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the citys dilapidated riverfront.
But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.
The teams have not volunteered to rewrite their leases. So in the coming weeks, the county plans to cut basic services, lower its legal bills and drain a bond reserve fund with no plan for paying it back.
Anyone looking at this objectively knows its a train wreck, said Dusty Rhodes, the county auditor. I told them they were making a big mistake, but they didnt want to hear me.
Cincinnati is hardly alone. In Indianapolis, the Capital Improvement Board spent 2009 trying to find $32 million to run the Lucas Oil Stadium and convention center.
(Excerpt) Read more at nytimes.com ...
Good thing Sacramento couldn’t put it together for a new Kings stadium. Seems like Arco Arena’s holding up just fine... and the Kings rock on in that humble venue.
A few years back in my town, they put a proposal on the ballot for a large sum of money to fix the boiler at the local elementary school. My fellow residents and I voted it down. There was squawking in the local paper, and a while later it came up for a vote again, and again we voted it down. Some months went by, until one day there was a story in the local paper that the town had "found" the money to do the school repairs.
My advice to anyone who will listen--always vote NO. Make them find the money, and if what they are proposing is truly necessary, they'll find it. But you may have to say no more than once.
Similar thing with the improvements to the Sterling Heights Mi. library.
This “stadium building” stuff is just Socialism on Steroids....only it is done for owners who should have the money to it themselves
Here in Orlando....they ponied up most of the money to build the Magic a new arena. I guess the one just 20 yrs old was not good enough. Part of the new arena package was to include an arts center and a renovation of the Citrus Bowl stadium. The latter two may never get built, since the proposed tax revenue from tourism is not coming through.
Meanwhile, at UCF (Univ of Central Florida), they built a new stadium and arena on campus, without going to the taxpayers. The money is coming from booster donations and ticket sales. Imagine...the taxpayer funded school eschewing socialism.
More irony....FedEx Field (Washington Redskins) is actually one of the few privately-owned and funded stadiums...
Taxpayer funded sports venues do not bring in revenue....they do not create a lot of jobs....and are a big drain on taxpayers
Maybe Mpls will get the message.
Lived in Cincinnati from 1992 'till 2009 so I was there during the run up to the stadium vote. The Cincinnati Enquirer and downtown big business all endorsed the stadium issue. Bogus studies, conducted by the University of Cincinnati & others, were all geared to show what a tremendous stimulus to the economy the stadiums would mean. 40 thousand new jobs would be created was one claim. Flashy brochures were distributed to every mailing address in Cincinnati extolling the virtues of funding and building the stadiums ... it would be a winner, no question. The cost estimated at $450 million (as I recall) would be easily covered by projected revenue increases and the half penny (a mere half penny we were told repeatedly) sales tax increase.
Well, as it turned out, the cost of the stadiums doubled, the city fathers reached over and grabbed their ankles for Mike Brown (owner of the Bengals) and the rest is history.
I have found over the years that there are 2 things that most people believe is worth any amount of money,Sports & Hollywood. I know folks that will buy a ticket to a Football Game before they will pay rent. I’m afraid that we still live in a culture that there is no price to high to worship false idols.
I am a Dallas Cowboys fan from way back, liked them before they were winners.
Disgusts me to listen to ESPN and others just gush over the new Jerry Jones Taxpayer Rip-off Memorial Stadium. Yes, it is lovely, probably the best in the league, and I would love it IF Billionaire Jones and company had paid for it.
The day of the skyscraper downtown area where people "have to go shop" is long gone, and planners better figure it out. Phoenix, AZ, is a better approach. They put some money into the downtown area, with the Suns building and the convention center, but they encouraged the explosion of the suburbs of Tempe, Mesa, Chandler, Glendale, Paradise Valley, etc. which all have FED Phoenix and kept it alive. I think the best a downtown can do any more is to be home to a variety of specialized niche restaurants, large-scale sporting events/conventions, and night clubs---but you have to guard to keep out the nudie bars and tatoo parlors, which in Phoenix's case went in large part to some unregulated county lands in the riverbed areas.
I agree, and I’m a huge Cowboys fan, but this thing should have been privately funded.
Paul Allen, the co-founder of Microsoft, wanted a new sports stadium in Seattle. He made it clear that if the city (King County?) did not build it for him, using taxpayers dollars, he would move the team to another city.
Of course the stadium was built.
All this happened during the dot.com boom during the 1990’s. In three or four days the value of Allen’s Microsoft stock holding increased so much that just from those 3 or 4 days of grain. He could have written a check for the entire cost of the new stadium.
The article cites Phoenix and Columbus “struggling” to keep their NHL franchises. My question: where, exactly, would these teams move? Given the recent history of government tax breaks to lure teams, and the general state of the NHL, I think these teams should just go out of business....
I feel the same way about Reliant Stadium in Houston. I am an NFL fan, but I do not see any reason taxpayers should pay for stadiums. Joe Robbie privately funded what is now the Dolphin Stadium (LandShark). In Houston, they presented it to the voters in several referendum, each time slightly modifying the details until they got their 50.1% majority. Then the team owner collects parking, naming rights etc. Why is this a good deal for taxpayers?
Of course, the problem is ... the owners make demands and if the city/taxpayers refuse, they just move to someplace where they will do they bidding. Example: Houston Oilers/Nashville Titans.
They say now is the right time, because they can lock in low bond rates, whereas rates will go up at some point, and because right now they can get competitive bids on the work because of the overall economy right now. We're just about to retire 12 mil in muni debt, and they can do this without "adding" anything to our debt, just replace the old debt with new debt.
But I'm going to vote NO and I'm counting on my usually smart fellow residents to do the same. We're pretty good that way. That's how come we can send Scott Garrett to Congress even in NJ. We're a rural nw corner of the state.
The supposed economic benefits of sports stadiums never come true. The things sit empty most of the year (357 days for football) and, yet, people still buy the lie that they're economic generators.
In addition to which, it's just stupid to place gargantuan buildings like stadiums on beautiful pieces of waterfront property. People don't think these things through.
The really sad thing is, it takes no time to show the numbers are bogus. City Councils across the country are folding to a weak bluff by owners. Take out LA and every city that has lost a franchise, has gained another, ie Texans in Houston, etc.
The model is Green Bay. That franchise cannot move, residents own a majority of the stock. Divorce cases in Green Bay put season ticket rights in front of the kids, the cars and the dog! No dome, no eminent domain, a private business providing a good that sells out year after year. Not to mention, a decent football team. Whodathunkit!?
The Arena District in Columbus. And Nationwide Arena was built with private money.