Those stadiums aren’t free

Philly, New York bullpens similar in construct
A-Rod + Scott BFF 4ever

Over the last two years, we’ve talked a lot about the new Yankee Stadium. While the Yankees originally claimed they were footing the bill for construction and that the costs to taxpayers would be minimal, a small but vocal group of writers and analysts attuned to baseball economics disputed this claim.

Today, after politicians have wrung city and team officials through the gamut of some Congressional hearings, The Times offers up an analysis of the rising costs to the public of the new stadiums. For what its worth, the total cost for Yankee Stadium has now ballooned to $1.7 billion, up for an original estimate a few years ago of $1.2 billion. May, how times have changed.

Charles V. Bagli offers up this summary:

As the two stadiums near completion, the cost to taxpayers is anything but small, a review of the projects shows. Though the teams are indeed paying about $2 billion to erect the two stadiums, the cost to the city for infrastructure — parks, garages and transportation improvements — has jumped to about $458 million, from $281 million in 2005. The state is contributing an additional $201 million.

Those totals do not include an estimated $480 million in city, state and federal tax breaks granted to both teams. In addition, neither team has to pay rent or property taxes, though both are playing on city-owned land.

The expanding public cost of the stadiums, coming in another downturn, has fueled debate about their economic benefits, and has become an issue in Congressional hearings in Washington into the use of tax-exempt bonds for stadium construction.

Now, we can debate whether or not, as Yankee and city officials claim, that stadiums spur economic development. While politicians claim they do, most economists agree that stadiums never deliver these promised benefits. What we can’t deny is that, at a time in which the city’s finances are looking rather bleak, the city has given a significant level of money to very wealthy baseball teams, and that’s just not very good government.

Philly, New York bullpens similar in construct
A-Rod + Scott BFF 4ever
  • Russell NY

    I agree. The government should shut down further construction of Citi Field and give the rest of the money to the Yankees. Then sell Citi Field and give the proceeds to the New York citizens. At least this way the Mets will be doing something positive for New Yorkers.

    • http://www.spartacus.schoolnet.co.uk/CRsmithT1.jpg tommiesmithjohncarlos a/k/a Mr. Snarky Irrelevant Non Sequitur Jones

      I’ll vote for you.

  • Chris

    If you don’t think governments should be giving incentives/tax breaks to private corporations, that’s fine, but don’t confine your arguments simply to sports teams and stadiums. Every day there are deals struck to subsidize some aspect of a private project, and most of them go unnoticed. I don’t think that the stadium deal is out of line with what New York has given to other companies to secure significant investments.

    • http://www.riveraveblues.com Ben K.

      It’s a baseball blog; of course I’m going to confine my arguments to sports teams and stadiums. Plus, those are other deals are often struck as incentives. If I’m the CEO of big company about to open a 600-person office in a major urban area and one city is going to offer me better tax breaks than the other, then I go with that urban area, and we both win.

      If I’m part of the city and a sports team — one not really in need of a new stadium and with no viable alternative relocation target — asks for tax breaks, why should I grant them and what do I stand to gain from them?

      • Ed

        “If I’m part of the city and a sports team — one not really in need of a new stadium and with no viable alternative relocation target — asks for tax breaks, why should I grant them and what do I stand to gain from them?”

        Here’s a few things…

        1) When issuing bonds, you get to impose stipulations. The most common one is that the work must be performed by businesses within your jurisdiction. By doing so, this creates more jobs within the city and ensures that (most of) the people doing the work are paying income tax to you. Income tax is a far more significant source of revenue than taxes on bond interest, even more so when you have no control over who owns the bonds but can ensure that the workers fall under your jurisdiction.

        2) In exchange for receiving rent, NYC was responsible for maintenance on the old stadium. The Yankees are responsible for maintenance of the new stadium. Considering the age of the old stadium, that’s a significant expense.

  • radnom

    “What we can’t deny is that, at a time in which the city’s finances are looking rather bleak, the city has given a significant level of money to very wealthy baseball teams, and that’s just not very good government.”

    Although I’m generally in agreement here with you, I think it is unfair to cite the current economic climate when the stadiums are just finishing up. These plans/deals were made well in advance before anyone could know what the economic situation would be like in 2-3 years.

  • Peedlum

    Isn’t that the theory of supply side economics in action, though? Take government proceeds, give the wealthy economic stimulus and have them employ the poor.

    • http://www.spartacus.schoolnet.co.uk/CRsmithT1.jpg tommiesmithjohncarlos a/k/a Mr. Snarky Irrelevant Non Sequitur Jones

      Ronald Reagan, is that you?

      • Peedlum

        Nah, I’m just another socialist because I don’t buy into this structure.

        • http://www.spartacus.schoolnet.co.uk/CRsmithT1.jpg tommiesmithjohncarlos a/k/a Mr. Snarky Irrelevant Non Sequitur Jones

          GO BACK TO RUSSIA YOU PINKO COMMIE!!!