Grab your wallet and head for the storm cellar. Submitted for your trepidation: a proposal for a $265 million professional soccer stadium. But not to worry, they’re also going to toss in a mall!. Err…, a “retail lifestyle center”. (does that mean that I can go there and buy a new lifestyle? Should I wait for the after Christmas sale?)
This doesn’t even have the dubious claim of supporting a “major” sport like football, baseball, or basketball. (I’m taking bets with Mrs. Gretsky about the major sport status of the NHL). Here's the funding run down:
“The proposal calls for part of the money for the project to come from a tax increment financing plan. Private funds would also be used, Kuchta said. A portion of the money for the project would be released by the port authority through bonds, Kuchta said. The bonds would be paid off with taxes generated by the project, and the schools and city would have to give up some tax money.”
So, I think that we can fairly summarize this as: a) taxes will go up; b) local government indebtedness will increase; and c) schools will loose tax revenue, leading to additional local property tax increase proposals appearing on a ballot near you.
Interestingly enough, even UC Berkeley recognizes that the standard mode in publicly financed stadiums is to over promise and under deliver. "Money spent on a major stadium or arena project," Sylvan [UC Berkeley researcher Jack Sylvan of the Department of City and Regional Planning] said, "is money that cannot be spent on other forms of economic development or neighborhood revitalization."
The Federal Reserve Bank of Minneapolis concurs: “A Brookings Institution book on sports teams and stadiums noted the economic impact of a minor league baseball team is "equivalent to a large pet shop" in terms of revenue.”. Bring on Pet Supplies Plus! Toss in a PetsMart, and we’re better off! The Fed article also has a valuable discussion of substitution effects – read the whole thing.
In essence, we’re asked to subsidize a new facility (increase taxes, lessening the amount of individual discretionary income) on the assumption that what we spend at the new facility will more than offset what we have given up spending at local restaurants, sporting events, bars, concerts, etc.
A significant redistribution of wealth and spending in favor of the politically connected. Corporate Welfare, anyone?
Note: Please don’t blame me for the poor “Kucheta said”, “Kucheta said”, “Kucheta said”, “Kucheta said”, “Kucheta said” quality of the quote. Apparently the reporter, April McClellan-Copeland, not only works without a net, but without an editor. Doesn’t the MSM provide legions of stylists to prevent this sort of contretemps?
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