Jeff Schlegel
02/01/2005
Sports facilities continue to be controversial beasts, depending on the particular circumstances surrounding their funding and other issues. Sometimes investors in the wrong place at the wrong time face an onslaught of negative publicity. In many cases, public-private funding deals raise the hackles of citizens upset that public funds are used to subsidize buildings that benefit rich owners and, at the major league levels, rich athletes. They argue that the millions of dollars that municipalities and states invest in sports venues would produce better economic and social outcomes if used elsewhere in the community.
Fuel for their zeal comes from reams of data that find sports facilities are not necessarily the economic engines they purport to be. “Every academic study has found that stadiums in general don’t boost per capita income or employment,” says Andrew Zimbalist, a sports economist at Smith College in Northampton, Mass. These studies typically show that sports facilities simply reallocate resources that would be spent elsewhere in the city. Even Baltimore’s vaunted Camden Yards fails to escape scrutiny. Its $210 million price tag was financed almost entirely by funds from a state lottery and tax-exempt bonds. A study by two Johns Hopkins University economists found that the state-owned ballpark creates $3 million in annual tax revenue versus $14 million in annual operating and capital costs borne by the state and, ultimately, the taxpayers. And while the ballpark is generally viewed as a crucial driver in the renaissance of downtown Baltimore, critics contend the city’s comeback was already underway thanks to the Inner Harbor development that preceded Camden Yards.
Rick Horrow, a Miami-based sports consultant, takes the counter view that stadiums and arenas are catalysts for economic growth that also improve a city’s quality of life, much like a concert hall or a municipal park does. “Most of these projects can’t get done without public funds,” he says, “and as a result, private investors should be lauded, and not criticized, for taking the burden off of the taxpayer.”
Back to Main Article: Feature: Ground Breaking Efforts