Losing big on sports arenas
Stadiums “rarely bring about the promised prosperity, and instead leave cities and states mired in debt.”
Pat Garofalo and Travis WaldronTheAtlantic.com
Financing sports stadiums is a losing bet for taxpayers, said Pat Garo-falo and Travis Waldron. In cities across the country, team owners and politicians have extracted hundreds of millions of dollars in public funding to build and maintain privately owned stadiums by vowing to boost the local economy. But these complexes “rarely bring about the promised prosperity, and instead leave cities and states mired in debt.” Take struggling Glendale, Ariz., which recently agreed to pay $324 million over 20 years to keep the Phoenix Coyotes hockey team in town. Already on the hook for $12 million in annual debt payments for the hockey arena’s construction, Glendale receives just $2.2 million a year in stadium-related rent, sales taxes, and fees. It’s now laying off dozens of public workers to cover its $35 million budget shortfall. Cities often don’t realize that arenas sit empty for most of the year, muting any beneficial effects in the surrounding economy. Officials should follow a “simple rule” for determining the likely return on an arena investment: Take the revenue promised by the stadium promoter, move the decimal one place to the left, and divide by 10.