Stadium Deals Drain Cities

We’ll kick off 2010 with a post from Streetsblog Network member Hub and Spokes about the perils of subsidizing stadiums in the hope of getting a big economic return:

143709320_662372de57.jpgCincinnati’s Paul Brown Stadium turned out to be a raw deal for taxpayers. (Photo: wallyg via Flickr)

This seems like a lesson that every city needs to learn for itself: Stop funding private (sport stadiums) with public money. There seems to be a notion that a stadium is for the good of all and will spur economic development in the surrounding areas. This might be true
sometimes, but for the most part stadiums drain the city coffers and produce little economic development. The Metrodome in Minneapolis is a great example. It is an island on the eastern edge of downtown. What economic development has it created? A sea of surface parking lots for game days, that is about it.

Hub and Spokes’s author, Matthew Ides, goes on to cite a December 24 New York Times article that may have escaped your notice in the holiday rush. It reports on how taxpayer-financed stadium deals around the country are blowing up in the faces of the municipal officials who pushed for them, focusing on the particularly egregious example of Cincinnati’s Paul Brown Stadium.

In New York, local businesses in the Bronx have complained they’re being hurt rather than helped by the new Yankee Stadium, which is designed to encourage fans to spend all of their game-day dollars within the ballpark walls. Meanwhile, Brooklyn’s Atlantic Yards project, which centers on a stadium for the NBA’s Nets, grinds forward, with one of the last property owners holding out on the site reportedly considering moving out. Both the Nets and the Yankees deals earned a place on our 2009 Streetsie roll of shame.

More from around the network: The National Journal’s Transportation Expert Blog wants to know what the three top transpo developments of 2009 were. Orphan Road writes about the perceived right to free parking. And Human Transit writes about how geographic chokepoints incentivize transit use in Seattle.

  • NattyB

    Is it:

    (A) Stadium Deals Drain Cities; or

    (B) The way most Stadium Deals are implemented result in Cities losing out?

    I ask, because I actually favor Private/Public Partnerships that, if done right, enhances a neighborhood for the residents and the Team as well.

    I’m thinking only of the Verizon Center in DC, but, that example is a continual success and it’s hard to think of an alternative that would’ve enhanced the city as well as the Verizon/MCI Center has.

    Granted, the new yankees stadium etc . . . suck and hurt their neighborhoods. Which is why I favor engagement, so we can help mold the development, instead of shit like the new Yankees stadium and other Islands surrounded by parking in neighborhoods.

  • Larry Littlefield

    Fans of urban life need to think through their feelings about stadiums and arenas.

    One of the purposes of cities, since the time they were first created as a form of settlement, was large scale gathering places for a variety of purposes — from religious to political to cultural (which would include sport) to economic (which would include conventions).

    Large gathering places take up large amounts of space. If you want them to locate in central locations with transit available, they will be more expensive to build (because land is more expensive there) and require eminent domain (because for the most part lots have been subdivided and projects can be stopped by holdouts extorting huge payouts).

    If you want large gathering places built cheap, they will locate where a large lot can be purchased for the entire building, generally a greenfield site on the suburban fringe, where everyone will drive.

    Giants Stadium, for example. Yankee Stadium was placed in the Bronx, and not in Midtown, in 1923 because that’s where the cheap land was. That is also why Shea Stadium was built on parkland at the intersection of highways. All around the country, in fact, the trend had been to locate stadia farther and farther away from urban centers, in the suburbs, prior to Camden Yards in Baltimore.

    So where do you want your gathering places? In auto-dependent locations on the suburban fringe, or in transit-accessible locations in city centers? Or, as an EIS would imply, should people not be permitted to gather in large groups at all, because some will drive regardless of the location?

    Not all stadium and arena projects are alike. It is precisely criticisms of subsidies that have induced cities and states to turn stadia and arenas into private projects with back-door subsidies rather than public buildings at which sports teams are tenants.

  • Cities need to get more self-respect. If you build a great city, the stadiums will come begging. If you build great stadiums, it’s not clear you get anything more as a result…

  • Zac

    As a matter of the economic forces behind stadium development, a great read is “Public Dollars, Private Stadiums.” It investigates the developments of stadiums across the country, though its several years old now.

    The idea that a stadium will ever pay the city back for the costs of construction is way too much to ask for.

    A better question, I think, is “how much net (I say net since there are many projects like the new Yankee Stadium right next to the old stadium) cultural capital does the stadium generate?”

  • Larry is 100% on target. Eighteen years ago, the Andrew Zimbalist argument was made that public spending on sports facilities was wasteful and that the multiplier of stadium/arena spending was not as large as it was touted to be.

    But as Larry points out above, demanding near-100% private financing leads to inaccessible-by-transit ballparks being built way out in the suburbs, like FedEx field in Maryland, outside of DC.

    A better deal with the Yankees could have been drawn up that would have them play in the Mets’ park for a year or two while the old Yankee Stadium was demolished and a new one built in the same footprint. But who are we kidding? Such a stadium would have been a mirror image of the current new Yankee Stadium, with shops and restaurants inside (and no bike parking outside) but on the south side of 161st St.

  • @NattyB You hit the nail on the head, what this all suggests to me is not just the way the deals are structured, but what we’ve all known and talk about here all the time: bad design kills neighborhoods and does nothing to enhance economically the surrounding area. DC’s stadium is great because it fits into the urban fabric. It’s lowrise, street accessible, and functions as a part of the community that surrounds it. Building a stadium as it’s own ecosystem — surrounded by parking or otherwise turning it’s back on the neighborhood will do nothing for the neighborhood. That’s the lesson here. But like with so many things related to the development, we never learn the right lessons.

  • Larry Littlefield

    “A better deal with the Yankees could have been drawn up that would have them play in the Mets’ park for a year or two while the old Yankee Stadium was demolished and a new one built in the same footprint.”

    I would argue that a better deal would have the Mets and Yankees sharing a stadium with a dome at a more central location, over the West Side Yards or in Long Island City. But that is water under the bridge. Absent monopoly power, there would at least be a third team in New Jersey, making the Yankees less rich and limiting the need for anyone other than Manhattan and Staten Island residents to get to baseball over a bridge.

    Over at Atlantic Yards, I have to disagree with many here — that is the right place for another large indoor gathering space in NY (that or LIC), and such a place is a legitimate public use.

    The thing is, to avoid the direct spending of public money on the arena, the project was expanded to include massive market rate housing, with the idea that the profits on that housing would subsidize the area. And the subsidized housing was used to gain political approval for the market rate housing. To me that is a less honest use of eminent domain — replacing housing with housing. And as the housing market has unraveled, the back-door subsidies are coming to exceed what could have been the front door subsidies, except perhaps that the construction industry will rip off Ratner less than the city.

    At this point, perhaps they’d be better off skipping the rest of the project, and just have Ratner buy up some existing developments out of bankruptcy and turn them into affordable housing.

  • BRTvsHeavyRail

    I think stadiums can be done well.

    Look at Qwest Field in Seattle. In the middle of downtown with lots of transit options.

    I personally havent been but a lot of people do enjoy the experience.

  • Larry, one can certainly argue that the Vanderbilt Yard (“Atlantic Yards” is a marketing term, not a place, yet, anyway) is an appropriate place for an arena, but for someone who’s been railing about the bankrupting of New York for the past several years, do you a) really think an arena in Brooklyn is appropriate given the proximity of the already-existing Madison Square Garden and the Prudential Center in urban, easily accessible locations, and b) can you really divorce the Barclays Center from a project $776 million (sure to rise when the final accounting is done) in subsidies?

    One can pay a lot of public-employee retirement money with those kinds of dollars.

    One need only look at the late-’90s tech bubble and the more recent credit and mortgage bubbles to see that the pro sports bubble is ripe for a bust.

    Frankly, I’d rather pay transit workers than Bruce Ratner and Mikhail Prokhorov.

  • Larry Littlefield

    “Do you a) really think an arena in Brooklyn is appropriate given the proximity of the already-existing Madison Square Garden and the Prudential Center in urban, easily accessible locations.”

    One could make that argument about any improvment to cultural amenity such as parks, libraries, and cultural institutions. Of course, all of these are gutted each recession and fiscal crisis.

    However, a distinction needs to be made between one-time and ongoing costs. Unfortunately, the cost of the arena isn’t much different than the typical NYCT signal project these days. And unlike the arena, to continue replacing the signals on a 60-year schedule, you need one such project per year, and if you don’t the signal system decline.

    While the need is debatable (MSG is a monopoly but does exist), the arena just doesn’t cost very much compared with any ongoing expense. A ready comparison is the public investments in the Brooklyn Museum and BAM — similar amenities with different markets.

  • Jason A

    Something left unsaid is how these subsidies are used to replace perfectly fine stadiums to create exclusive, venues that shut out average fans. The big reason why owners want these new stadiums is to expand luxury box capacity and reduce seating to jack up ticket prices – all so billionaires can watch millionaires.

    I have a problem with that.

  • Jason A

    Count me among Streetsbloggers who don’t know what to think about Atlantic Yards… The tax breaks, the subsidies, the lack of transparency, the use of eminent domain (etc…) certainly give me pause, but I wonder if there’s something of a knee-jerk rejection of the arena… b/c it’s an arena.

    I mean, if we’re going to criticize the new Cowboy’s Stadium:

    http://www.streetsblog.org/2009/10/01/can-we-learn-something-from-the-new-cowboys-stadium/

    Shouldn’t we then encourage an arena at Atlantic Yards, one of the biggest transit hubs in the country?

    Is the problem that the arena serves as something of a trojan horse for crappy urbanism (i.e. “superblocks”, out of scale skyscrapers, Atlantic Center part 2…) and more luxury condos?

    I honestly don’t know what to think…

  • Larry Littlefield

    “I honestly don’t know what to think.”

    There are legitimate arguments on both sides of that project, which is why I don’t spend too much time arguing about it. There are plenty of things going on that are flat out wrong that almost no one is talking about.

  • There’s a huge difference between an NFL stadium used 12 times a year (including concerts) and an arena shared by NBA, NHL, Arena Football and Indoor Lacrosse teams, not to mention concerts.

    Theres a culture difference too. NFL stadiums practically demand parking for tailgating, while arenas dont have such requirements.

  • I think there are two distinct issues here:

    #1 – Are tax payers getting ripped off by building stadiums for billionaire owners?

    #2 – Do the designs of stadiums actually help the local economy by being integrated into the preexisting urban fabric or are they built to be islands in a sea of parking?

    I think Newark’s Prudential Center probably fails the first question but succeeds wonderfully at the second since the traffic plan relied heavily on the stadium’s access to NJ TRANSIT from the start.

    As others have said, public/private partnerships can be excellent as long as the taxpayers don’t get hosed paying for most of the bill and that the stadium design actually creates foot traffic that benefits the local neighborhood. I could go on more but I think others have already said it.

  • clever-title

    I think Mr. Burns said it best: “Welcome to the American dream. A billionaire using public funds to construct a private playground for the rich and powerful.”
    http://www.entertonement.com/clips/wcghcjsjll–Private-playgroundThe-Simpsons-Mr-Burns-Season-20-Episode-8-The-Burns-and-the-Bees-

    I don’t understand why building a facility for an entertainment business is considered any more reasonable than using taxpayer money to build a store for Wal-Mart.

  • I think Newark’s Prudential Center probably fails the first question but succeeds wonderfully at the second since the traffic plan relied heavily on the stadium’s access to NJ TRANSIT from the start.

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