The new York Times of December 25, 2009, brings us the dispatch that far from being sparkplugs of local urban economies, professional sports stadiums have been largely a disaster. The article (Ken Belson, Stadium Boom Deepens Municipal Woes) brings the news that stadiums built or subsidized with public funds are having financial problems.
“From New Jersey to Ohio and 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.”
The article focuses on Cincinnati which intended to finance stadiums for the Bengals and the Reds with an increase in sales tax that would – so it was said – also “pay Cincinnati’s public schools and give homeowners an annual property tax rebate.” In the event, it turns out that “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.”
It’s a familiar story. The cost of the two Cincinnati stadiums – so it was projected when they were built – would be $500 million for both of them. As it turned out, the Bengals’ Paul Brown Stadium cost $455 million, and the Great American Ballpark (Reds) came to $337 million, for a total of $792 million – an overrun of $292 million or 58.4%.
Current projections indicate that that $14 million shortfall will grow to $94 million in 2014. What’s significant about that date? We’re glad you asked. That’s the year when the Bengals stop paying rent on their stadium.
In addition to Cincinnati, the Times reports that similar problems are afflicting Indianapolis, Milwaukee, Columbus (Ohio), Glendale (Arizona) and Newark.
You can find the article at http://www.nytimes.com/2009/12/25/sports/25stadium.html
Interestingly, the article is silent about problems of stadiums recently built in New York, that have consumed kings’ ransoms in public funds.