Jan
21

The Stadium controversy as a national bellwether

By

As New York, the center of the known universe, prepares to open two baseball stadiums in a few months, urban policy gurus and baseball economists have put the city and its stadium financing deals under a microscope. Meanwhile, with the U.S. economy in a deep recession, the national construction boom has all but ground to a halt.

Enter Maury Brown and The Biz of Baseball. In a multi-part series on Brown’s site, Pete Toms has explored the issues surrounding stadium construction and financing. Part I explored how stadium construction plans are couched in terms of mixed-use development. Part II examined how the current state of the U.S. economy has left the new Busch Stadium an island in an uncompleted and unfunded ballpark village. Yesterday, Part III hit the Internet.

In it, Toms looks at the impact the recession will have on stadium financing. Toms predicts that of the three major sports teams awaiting approval for stadium financing and construction — Nets, Marlins, A’s — at least one of those teams will never get its new home and the others may have to wait a while. With the Atlantic Yards plan in shambles, the Nets fit the bill, but I don’t think the Marlins and A’s will be enjoying new digs anytime soon.

Anyway, my main point in bringing up this informative series is to look at one of Toms’ takeaways from the ongoing debate at the Yankee Stadium financing. He writes:

The unprecedented attention brought to the issue of “public dollars for private stadiums” in the political and media battle over the new Yankee Stadium might be remembered as the tipping point in this debate. Is public financing/ funding of stadiums for billionaire owners and millionaire players now too politically contentious to risk?

It’s a very interesting question and one that will have no answer until another team owned by a billionaire — Lew Wolff’s money in Oakland comes to mind — attempts to procure a high amount of public funds. It is not, however, surprising that when New York came to the forefront of the national stadium debate that has been brewing off to the sidelines for the better part of the last fifteen years, something conclusive came out of it.

Now, don’t get me wrong; despite my opposition to the latest round of bonds, positive infrastructure contributions can come out of stadium constructions projects. But there should be a limit to the amount of money teams get for their single-use facilities. If that is the final contribution the Yanks’ stadium story made to this national debate, anti-public financing advocates may just be able to claim victory yet.

Categories : Yankee Stadium
  • A.D.

    Should be interesting, the Yankees stadiums as well publicized came via public bonds, which essentially will always be issued, in the same amount each year, just a matter of what projects they go to (as I understand it).

    Other stadiums & the Marlins future stadium literally rely on tax dollars & levying of new taxes to pay for them… which is going to be a far harder sell as more and more cities face budget issues + levying tourism taxes might not be as easy if there is less tourism.

    For it to be bellweather, it really should have happened in Missouri.

    • J.R.

      My understanding, is that the issue of the latest bonds issued is that they were tax free bonds. Whereas NY could have used taxable bonds to issue the additional amount requested.

      And that the City could have used the tax free bonds in other areas that benefited the public more than building a stadium that ran over budget. Specifically that the city issued all of these tax free bonds to a multi billion dollar corporation.

      • A.D.

        That’s how I understand it too, which is what I said.

        Whats interesting is many past and future parks were paid with physcial tax dollars, and in terms of government burden:

        Tax Dollars > Tax Free Bonds > Complete private expenditure

        • J.R.

          I agree, but I the point I was trying to get at was

          Tax Dollars > Tax Free Bonds > Taxable bonds > Complete private expenditure

          Didn’t mean to nitpick, but it is millions that the city is agreeing to forgo in taxes.

          • Ed

            When the city issues tax free bonds, they get to impose more restrictions on how the money is spent. They get to say things like “Use a NY company to do the work.” When they do that, they keep more of the money spent within the NY economy, which generates far more tax dollars than they would get if the bonds were taxable and the work was done by a NJ or CT company.

            • J.R.

              I actually didn’t know that.

          • drdr

            the city lost relatively little on bond taxes – 2-3 million per year. The city lost much more on property taxes, because city owns the land, and not the Yankees, over 10 million annually, but even there I think that any smart business can easily find a way to reduce that sum to less than 50% over 40 years just with standard deductibles. And Yankees argument was that they didn’t pay property taxes in the old stadium, so city isn’t losing existing revenue, and that it was one of the deal-breakers to remain in Bronx. And city is saving several million annually in maintenance costs, because Yankees will be paying maintenance in the new stadium (at least twice what they are losing with non-taxable bonds). And because of non-taxable bonds, Yankees are saving about 30 million annually.

            Big city expense is infrastructure and the question is whether Yankees should have payed more for it (new station is necessary for the neighborhood and the city should pay all of it, but I don’t know what other infrastructural projects city payed for), but the only real issue with tax-exempt bonds is whether they could have been used for more deserving projects, i.e. opportunity cost.

  • Ed

    Damn Yankees, paying to build a stadium to play in. How dare they. They should be paying the city to let them pay for the stadium.

  • Simon B.

    How many other major North American sports teams have built their own venue from their own money?

    I’m not absolving the Yankees completely or anything. Some of these tax-breaks are suspect, but it amazes me the amount of fuss kicked up about this when almost every other team has extorted hundreds of millions directly from the taxpayers—often in other sports where the venue is not occupied as much for games or other uses.

    • Dave Benson

      To answer your question, there are two teams that have never recived any public funding or tax breaks for their staiums. That would be the Red Sox and the Cubs. Every other team is at least partly on public welfare.

  • D.B.H.O.F. p.k.a The Last Don

    I love the new Busch Stadium. Nice ballpark. I highly recommend going there if you have the means.

    Without that ballpark I really do not see a reason to visit St Louis.

    • jsbrendog

      oh come on!! NELLY!!??!?!?!?!

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

        If you wait long enough, Nelly will come visit you. No need to head to St. Louis just for that.

        • jsbrendog

          well played

      • D.B.H.O.F. p.k.a The Last Don

        Unfortunately for Nelly he is not even the most successful rapper in the STL anymore. Huey of “Pop Drop and Lock It” fame is the more recent success in town.

    • The Honorable Congressman Mondesi

      The Anheuser Busch Brewery (which is, btw, like, the Disney World of breweries), Wash. U, the Blues and Rams, the Arch, and the Bowling Hall of Fame all beg to differ, friendo.

      (I’m not a big STL fan, but that was kind of an unprovoked attack on a harmless Midwestern metropolis, wouldn’t you say?)

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

        Harmless? They gave us John Ashcroft. How harmless does that make them?

        • The Honorable Congressman Mondesi

          Buh…Buh… But…

          Let the eagle soar,
          Like she’s never soared before.
          From rocky coast to golden shore,
          Let the mighty eagle soar.
          Soar with healing in her wings,
          As the land beneath her sings:
          ‘Only God, no other kings.’
          Let the mighty eagle soar.

          Poetry. Like I said, thank you St. Louis.

        • Ed

          At least they realized that a dead man would be a better senator than Ashcroft.

      • http://www.riveraveblues.com Joseph P.

        The Rams? Did you watch a minute of football this year?

        • The Honorable Congressman Mondesi

          Certainly entertaining to non-St. Louis-ians, no?

      • radnom

        Anheuser Bush!?

        Bowling Hall of Fame?!

        Just give it up man.

        • A.D.

          Wash U… really, whats next, go visit Albany for SUNY

  • UNION YES.

    Skip St. Louis, see Bronson

    • UNION YES.

      “Hey there pally” Branson.

    • http://www.riveraveblues.com Joseph P.

  • http://www.youtube.com/watch?v=2F_2eKJ5-L4&feature=related UNION YES.

    Click my url to see the simpsons clip of Bronson, Missouri. Classic.

  • http://www.youtube.com/watch?v=2F_2eKJ5-L4&feature=related UNION YES.

    Joe, you beat me to it.

    • Simon B.

      No dice.

    • UNION YES.

      With the clicking and the searching and the posting good google GLAYVIN!!!

  • Januz

    What makes this subject so interesting is how people complain about the cost of the New Yankee Stadium. I think the Steinbrenner’s by not being cheap, areactually doing it right, by making it state of the art, and looking like the original Yankee Stadium (Although the on field dimensions are the same as the 70s renovation).
    I have never been interested in the artistic design of buildings until the past couple of years. But one thing I have learned is that facilities such as the Stadium, Wrigley, Fenway, The Beacon Theatre, and Radio City Music Hall are special, and many people do care, so renovations and rebuilds must be top of the line, and that of course, will cost more than ordinary construction alone (For example:The Beacon cost $15m for a 7 month rebuild).
    There is little doubt in my mind, that if the Stadium is as good as advertised, all the negative comments will end, because a premium price may have been paid, but the product was premium as well. ie: You get what you pay for. If on the other hand, they would have decided to do this on the cheap, this organization would have been hammered for the next thirty years for tearning down Yankee Stadium, and replacing it with a Citi Field, or worse, another Shea Stadium.

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  • Januz

    The changing attitudes towards construction of this Stadium is the “Tipping Point” and “Victory”of NOTHING except other cities and fans losing their teams, or having teams that cannot compete with others consistantly,because they can’t get funding to build new facilities (Even if they are well run like the Oakland A’s).
    Try being a fan of the New York Islanders for example: It is no fun, because you know that your team is on a deathwatch, and every season could be your last, because they play in the WORST facility in professional sports: The Nassau Coliseum, and you know deep down, you are not getting a new building. The four Stanley Cups, and names like Bossy, Trottier, Gillies, Potvin, and Billy Smith, could soon be on the ash heap of history, while they are playing in Kansas City.
    At least I know that although my hockey team is likely gone, I will have the Yankees to root for, who represent the best of everything. (Unlike OAKLAND sports fans who could be losing the ONLY two things that prevent it from being the ugly step sister of San Francisco…… The Raiders & the A’s. Think about it.

  • JCP

    not to be a d*ck, but it’s bellwether, not bellweather.

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