stadium Stadium Building by xiangpeng

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									           Stadium-Building:
The Latest Economic Development Trend

           Rebecca Rieger
             March 2001
         becky@dementia.org




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                                        Introduction
New sports stadiums are cropping up all over the country. Although ballparks and ball fields

are not new fixtures on the landscape, and the games of baseball and basketball (as well as

basketball and hockey) have an illustrious century-old history, the facilities used for the

professional versions of these sports have changed dramatically. Large-scale, modern stadiums

did not usually appear until the 1960s, and for the most part were multi-purpose. In the last

decade, however, the concrete bowls that were such prominent features on the landscape are

being replaced with one (or more) even more impressive and specialized structures. Taking

advantage of technology while often invoking the nostalgia of old-time ballparks, cities across

the country are building new athletic palaces. These new stadiums, usually benefiting a small

number of people, come at a substantial price to the larger community, often without

considering the wishes of the taxpayers. What makes these features seemingly so important to

a region‟s economy? Why will cities and other municipal entities plunge themselves into huge

amounts of debt to finance structures that are rarely used? What opportunity costs are at stake

if stadiums are not built and the professional teams – who often threaten to leave an area if

new facilities are not constructed – make good on their promise? Is a city‟s image and name

recognition more important than the quality of life of many of its residents?



These questions and more will be considered through different avenues. First, the “state of the

stadium” boom will be considered, looking at the basic facts of the issue at hand. An

examination of existing concerns, focusing on the claims of economic and intangible benefits

that usually make up pro-stadium rhetoric, will give an analytic dimension to this controversial

issue. Finally, case studies of three cities with three different takes on what it means to be a

„major-league‟ city will add local flavor and highlight issues that are different in each city with a




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major-league team. For the most part, this paper will focus on football and baseball venues,

since information regarding those professional sports is more readily available.



Where Stadiums Stand Today: How Many, How Much, From Who?

Regardless of the pros and cons of new stadiums, stadium proponents have so far been very

successful. As the following tables show, the majority of major league football and baseball

teams in North America are in relatively new arenas.



Table 1. Major League Baseball Franchises and Venues
Franchise                                                    Venue                             Date
Anaheim Angels                                               Edison Field                                 1966
Arizona Diamondbacks                                         BankOne Ballpark                             1998
Atlanta Braves                                               Turner Field                                 1996
Baltimore Orioles                                            Oriole Park at Camden Yards                  1992
Boston Red Sox                                               Fenway Park                                  1912
Chicago Cubs                                                 Wrigley Field                                1914
Chicago White Sox                                            Comiskey Park                                1991
Cincinnati Reds                                              Great American Ball Park                     2003
Cleveland Indians                                            Jacobs Field                                 1994
Colorado Rockies                                             Coors Field                                  1995
Detroit Tigers                                               Comerica Park                                2000
Florida Marlins                                              Pro Player Stadium                           1987
Houston Astros                                               Enron Field                                  2000
Kansas City Royals                                           Kauffman Stadium                             1973
Los Angeles Dodgers                                          Dodger Stadium                               1962
Milwaukee Brewers                                            Miller Park                                  2001
Minnesota Twins                                              Metrodome                                    1982
Montreal Expos                                               Olympic Stadium                              1976
New York Mets                                                Shea Stadium                                 1964
New York Yankees                                             Yankee Stadium                               1923
Oakland Athletics                                            Network Associates Coliseum                   1966
Philadelphia Phillies                                        Veterans Stadium/new stadium             1971/2004
Pittsburgh Pirates                                           PNC Park                                      2001
San Diego Padres                                             Qualcomm Stadium/new stadium             1967/2003
San Francisco Giants                                         Pacific Bell Park                            2000
Seattle Mariners                                             Safeco Field                                 1999
St. Louis Cardinals                                          Busch Stadium/new stadium                1966/n.d.
Tampa Bay Devil Rays                                         Tropicana Field                              1990
Texas Rangers                                                The Ballpark in Arlington                    1994
Toronto Bluejays                                             Skydome                                      1989


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Table 2. National Football League Franchises and Venues
Franchise                                                                                 Venue                         Date
Atlanta Falcons                                                                           Georgia Dome                         1990
Arizona Cardinals                                                                         new stadium                          2004
Baltimore Ravens                                                                          PSINet Stadium                       1998
Buffalo Bills                                                                             Ralph Wilson Stadium                 1973
Carolina Panthers                                                                         Ericsson Stadium                     1996
Chicago Bears                                                                             new Soldier Field                    2003
Cincinnati Bengals                                                                        Paul Brown Stadium                   2000
Cleveland Browns                                                                          Cleveland Browns Stadium             1999
Dallas Cowboys                                                                            Texas Stadium                        1971
Denver Broncos                                                                            Invesco Field at Mile High           2001
Detroit Lions                                                                             Ford Field                           2002
Green Bay Packers                                                                         Lambeau Field                    1957*
Houston Texans                                                                            Reliant Stadium                   2002
Indianapolis Colts                                                                        RCA Dome                             1984
Jacksonville Jaguars                                                                      Alltel Stadium                       1995
Kansas City Chiefs                                                                        Arrowhead Stadium                    1972
Miami Dolphins                                                                            Pro Player Stadium                   1987
Minnesota Vikings                                                                         Metrodome                            1982
New England Patriots                                                                      CMGI Field                           2002
New Orleans Saints                                                                        Superdome                            1975
New York Giants                                                                           Giants Stadium                       1976
New York Jets                                                                             Giants Stadium                       1976
Oakland Raiders                                                                           Network Associates Coliseum          1966
Philadelphia Eagles                                                                       Veterans Stadium/new stadium 1971/2004
Pittsburgh Steelers                                                                       new stadium                       2001
San Diego Chargers                                                                        Qualcomm Stadium                     1967
San Francisco 49ers                                                                       3Com Park                            1959
Seattle Seahawks                                                                          new stadium                          2002
St. Louis Rams                                                                            Trans World Dome                     1995
Tampa Bay Buccaneers                                                                      Raymond James Stadium                1998
Tennessee Titans                                                                          Adelphia Coliseum                    1999
Washington Redskins                                                                       Fed Ex Field                         1997

* - $295 million renovation complete in 2003
Sources: http://www.mlb.com, http://www.nfl.com, http://www.cnnsi.com

Since 1987, when the Pro Player Stadium (formerly Joe Robbie Stadium) was built in Miami and

ushered in a new wave of stadium-building, 66% of National Football League (NFL) venues1

and 67% of Major League Baseball (MLB) venues have been erected, are under construction, or

are in pre-development. Additionally, while older venues (such as Three Rivers Stadium in

1
 The NFL statistic also includes Lambeau Field in Green Bay, Wisconsin, which will undergo a substantial renovation
by 2003.


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Pittsburgh, Riverfront Stadium/Cinergy Field in Cincinnati, or the Metrodome in Minneapolis)

were designed as multi-purpose facilities, new stadiums are increasingly exclusively built or

renovated for one sport only. Of the cities listed above, twenty-one cities have both football

and baseball teams. But only four – Miami, Oakland, Philadelphia, and San Diego – share space

in the same stadium. And of those four, San Diego is in the process of building a new baseball-

only ballpark for the Padres, and Philadelphia has plans for two separate structures to replace

Veterans Stadium. Increasingly, teams are becoming more demanding and proprietary in their

quest for state-of-the-art playing facilities. But how are these facilities funded?



Surprisingly, only a handful of stadiums – including Pro Player Stadium in Miami2 ,the Skydome

in Montreal3, and stadiums in San Francisco, Washington, and Charlotte4- were completely

funded by private sources. It is becoming increasingly common “for cities, counties, and states

to use a combination of broad-based taxes (e.g., sales and property taxes) or special taxes

(e.g., taxes on alcohol and tobacco consumption, hotel rooms, and car rentals) to help build or

operate these facilities.”5 These funding mechanisms can be simple (Atlanta‟s $210 million for

the Georgia Dome was fully funded by a hotel/motel tax6), complex (Pittsburgh‟s $943 million

for two stadiums and a new convention center includes monies from twelve different sources,

including the teams, philanthropic foundations, and the state7), or anywhere in between. On




2
  “Selective Accounting.” Forbes. World Wide Website,
http://www.forbes.com/forbes/1998/1214/6213124a_print.html, accessed March 3, 2001.
3
  Pobiner, Joseph A. “Build or Else, the Big Boys Say.” Planning. May 1998. 6-7.
4
  Murphy, Cait. “Opinon: Please Don‟t Feed the Fat Cats: The Folly of Taxpayer-Funded Stadiums.” Fortune.
December 21, 1998. 41-2.
5
  Swindell, David and Mark S. Rosentraub. “Who Benefits from the Presence of Professional Sports Teams? The
Implications for Public Funding of Stadiums and Arenas.” Public Administration Review. January/February 1998. Vol.
58, No. 1. 11-20.
6
  “Georgia Dome Facts and Figures.” World Wide Website, http://www.atlantafalcons.com/facility/facts_figures.cfm,
accessed March 4, 2001.
7
  The Stadium and Exhibition Authority. “Funding Sources and Uses.” World Wide Website, http://www.pgh-
sea.com/The_Plan/Funding/funding.html, accessed March 4, 2001.


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average, approximately 70% of the costs of stadium construction in the 1990s were borne by

the public in some form.8



What’s All the Fuss About?

Why is it so important for teams to need new stadiums? Most of their existing facilities are not

structurally compromised or unusable. But they are missing the items that make them much

more profitable – revenue-producing items like luxury boxes that are not regulated by the

league; all monies gathered from these items go directly into the owners‟ pockets. This draw

exists especially in the NFL, where “all television, logo-oriented merchandise, and ticket

revenues are split among the league‟s…clubs,” but “teams are entitled to keep all the proceeds

from luxury suites, stadium-based sponsorships, naming rights, and food and parking

concessions.”9 Therefore, where a team plays is not important, as long as the stadium has

large amounts of suites, concession stands, and a corporation‟s name on the outside. Since the

market size is not as important, teams don‟t often have problems leaving a market in search of

a more lucrative stadium. Take, for example, the former Los Angeles Rams: “Venue-related

revenues have jumped by 25% since the team moved to the Trans World Dome in St. Louis and

began earning more from luxury box leases and a variety of corporate sponsorship deals.”10

Presumably, their former venue was not as lucrative as the 1995 Trans World Dome turned out

to be. The amount of revenues luxury boxes are capable of creating are impressive, as are the

proceeds from the naming rights of a stadium. San Francisco‟s Pacific Bell Park (a privately-

funded anomaly) is on the waterfront adjacent to downtown with a number of „classic‟

eccentricities: “Batters will literally be able to hit home runs into San Francisco Bay, and


8
  Whalen, Charles J. “Time for the Stadium Boom to Go Bust?” Business Week. November 20, 2000. 150-153.
9
  Robinson, Edward. “It‟s Where You Play That Counts: The real money in pro sports flows from gleaming new
stadiums and arenas that attract corporate partners and free-spending fans.” Fortune. July 21, 1997. 55.
10
   Ibid., 54.


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passerby outside the park will be able to watch the game, free, through the right-field fence.”11

However, the Giants are not just being nostalgic in developing these quirks. “These design

features add a uniqueness that enhances the $255 million stadium‟s brand value….An enhanced

brand can lure sponsors at a premium. SBC‟s Pacific Bell division will pay $50 million to put its

name on the Giants‟ new stadium for 24 years.”12



Where does this leave a city? Vulnerable. A team‟s indifference to the market as long as the

venues are state-of-the-art makes them more willing to leave if the offer from another place is

superior. Owners of franchises have become experts at manipulation, using “the real or implied

threat of moving to another city to persuade state and local decision-makers and politicians to

provide them with lavish new stadiums and arenas at little or no cost.”13 Ohio affords two

examples of this process, with the Cleveland Browns and Cincinnati Bengals. While Cincinnati

kept its (notoriously poor) football team by negotiating a lucrative lease with the owner, Mike

Brown, that included a $457 million stadium, Cleveland lost its beloved football team to a city

that offered “a $200 million stadium – free. And [Art Modell, the franchise owner] also gets to

keep all the revenues from it. The good people of Maryland will never see a return for their

money, but Mr. Modell‟s coffers are as fat as his offensive line.”14 In both cases, Cincinnati and

Baltimore (the cities gaining or keeping the team) contributed huge sums of money to have the

privilege of an NFL team in their midst. This appropriation of public funds can be dangerous, as

one city building a new stadium for their professional team makes other teams jealous – and

greedy. For if one team gets a new stadium with increased revenues, their ability to build a

better team unfairly increases. This leads to the claim that “the owners of a professional team

11
   Ibid., 55.
12
   Ibid.
13
   Coates, Dennis and Brad R. Humphreys. “The Stadium Gambit and Local Economic Development.” Regulation. Vol.
23, No. 2. 15-20.
14
   Murphy, 41.


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in once city must be given open-ended access to the public treasury in order to compete with

other teams, because the other teams have been given open-ended access to their city‟s or

state‟s treasury. There is no limit to the amount of money that can be demanded using this

logic, with each team owner ratcheting up his or her demands in round-robin fashion without

end.”15 In this case, the teams are the only entities that profit from arrangements such as this,

with considerable financial consequences faced by the city.



Bewitching Arguments: How Teams Convince Cities to Spend Money

Overwhelmingly, professional teams veil their „stadium-or-else‟ threats with claims of economic

benefit to a city. Proponents (including mayors and governors convinced a team needs to stay)

“argue that teams and the facilities they use (1) generate economic growth through high levels

of new spending in a region, (2) create a large number of jobs, (3) revitalize declining central

business districts, and (4) change land-use patterns.”16 Often, these are accompanied by

convincing statistical arguments, calculating the broad array of benefits a city is likely to enjoy if

only they build a new stadium. Advocates also stress the future of the city – while “pitching a

$540 million subsidy package in 1996 for the Cincinnati Bengals and Cincinnati Reds, Hamilton

County, Ohio, Commissioner Bob Bedinghaus would say „the issue is about staking out a vision

for what we want this community to look like 25 years from now.‟”17 Although these tactics are

often artfully crafted, skillfully presented, and believed by enough people in a city or a region to

proceed with funding, academics concur that stadiums do not deliver the benefits they promise.

In strictly economic terms, “these arguments contain bad economic reasoning that leads to

overstatement of the benefits of stadiums. Economic growth takes place when a community‟s


15
   Bast, Joseph L. “Sports Stadium Madness: Why It Started, How to Stop It.” The Heartland Institute. World Wide
Website, http://www.heartland.org/studies/sports/madness-ps.htm, accessed March 3, 2001.
16
   Swindell and Rosentraub, 12.
17
   Bast, 8.


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resources…become more productive….Building a stadium is good for the local economy only if a

stadium is the most productive way to make capital investments and use its workers.”18

Stadium jobs, both during and after construction, are not ones that are the most productive.

Construction crews are often from national firms and not locally based, since contractors often

value skill in delivering a quality product over resident status. Most stadium jobs during games

and other events are low-wage service jobs. And stadium economics actually compute to an

overwhelming employee subsidy: “Allen Sanderson, who studies the economics of stadiums,

figures that on average it takes $100,000 of government money to create a single stadium-

connected job.”19 He posits that a more productive way to create a handful of jobs with

$100,000 would be to drop it over Manhattan in $20 bills. Stadiums are also purported to

create new jobs as part of their economic benefits package. However, sports teams actually

make up a miniscule portion of a city‟s income. In Chicago, for example, “the five pro teams

generate less than 1% of the personal income of the city. Thus, the [1998] NBA lockout may

be a tragedy for Bulls fans, but it has had roughly zero effect on the Chicago economy. Those

who would have gone to a game are taking their dates to dinner or the movies or blues clubs

instead: There is a transfer rather than a net loss of activity.”20 This transfer of activity, instead

of a gain in overall activity, makes sense logically – the presence of a stadium does not increase

the disposable income of the community in which it is located. Instead, households still “face

budget constraints – they must meet their unlimited wants within a limited amount of income.

The arrival of a professional sports team in a city provides households with a new




18
     Noll, Roger G. and Andrew Zimbalist. “Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost?” The Brookings
Review. Summer 1997. Vol. 15, No. 3. 35-39.
19
     Murphy, 41.
20
     Ibid.


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entertainment option.”21 A stadium would most likely decrease the business other

entertainment venues experience, potentially putting those establishments in jeopardy.



Civic pride – an intangible good feeling that results in associating oneself with a professional

sports team – is another major element of the benefits package of stadiums. These feelings

exist as “civic pride, fan loyalty, or community spirit, they are nonrivalrous and nonexcludable,

and they exist as a direct result of a team‟s presence. People talk about the team, share their

hopes for its success, and exult in its victories, drawing a city together into a community with a

shared sense of purpose. This cultural significance of sports probably exceeds its economic

significance as a business.”22 While this phenomenon does exist in conjunction with major

league sports – manifestations that come to mind include the Terrible Towels slung by

Pittsburgh Steelers‟ fans, the rabid frenzy in the Cleveland Browns‟ dawg pound, and the

ubiquitous Green Bay Packer Cheeseheads – professional sports by no means have a monopoly

on civic pride. Public art projects, beautiful parks systems, or vital downtowns and

neighborhoods are examples of things that instill similar (but decidedly more tame) feelings of

pride in cities and regions. To suggest otherwise – that “only cities with professional sports

teams are truly world class”23 – is an illogical assumption. Assuming that civic pride will be

strong enough to be willing to cover the costs of a stadium or arena is also foolish. Several

cities, including Milwaukee, San Francisco, San Jose, Seattle, and Pittsburgh,24 have listed

referenda on their ballots to raise taxes for stadiums only to see them fail. And studies have

shown that citizens are unwilling to shoulder stadium costs: “Earlier this year, a research team

headed by Bruce K. Johnson…used community surveys to place a dollar value on the civic pride

21
   Coates and Humphreys, 19.
22
   Johnson, Bruce K. and John C. Whitehead. “Value of Public Goods from Sports Stadiums: The CVM Approach.”
Contemporary Economic Policy. January 2000. Vol. 18, No. 1. 48-58.
23
   Coates and Humphreys, 18.
24
    Noll and Zimbalist, 38.


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and employment generated by the Pittsburgh Penguins, the city‟s financially troubled hockey

team. The economics team asked Pittsburgh residents how much they would pay to keep the

franchise in town. Their finding: Keeping the Penguins was worth about $66 million to the

residents of Pittsburgh, far less than the $200 million or more a new arena would cost.”25 This

finding, where even a beloved hometown team with a fiercely loyal fan base would be out in

the cold if the citizens were to have the final say, echoes sentiments across the United States –

civic pride can only cost so much.



What They Don’t Tell You: The High Cost of Doing Business

Financing stadiums is an increasingly complex process, involving a variety of funding sources

that have varying degrees of controversy attached. For the most part, those teams that have

successfully sought public funding to help fund their stadiums have received monies through

federal assistance, state and local funds, and taxpayer subsidy. Federal resources commonly

fund “stadium construction using private purpose local bonds because their interest payments

are exempt from federal income taxation and they therefore carry a lower interest rate. The

net effect is that the federal government subsidizes construction of the stadiums and arenas

built by state and local governments for professional sports franchises.”26 Although Congress

recognized the irrationality of subsidizing private interests and attempted to curb sports

subsidies through the 1986 Tax Reform Act (which “denies federal subsidies for sports facilities

if more than 10 percent of the debt service is covered by revenues from the stadium”27), their

action did not have the desired effect. Instead, local subsidies tended to increase to keep rents

below 10% of debt service.28 State and local financing, although not restricted by acts of


25
     Whalen, Charles J. “Time for the Stadium Boom to Go Bust?” Business Week. November 20, 2000. 150-153.
26
     Coates and Humphrey, 15.
27
     Noll and Zimbalist, 37.
28
     Ibid.


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Congress, raises other issues. The money that states or cities expend to build stadiums means

that much less can be spent on other uses. “Stadium subsidies divert funding from more

important public services, such as crime prevention, road building, and schools. The cost of a

proposed stadium/convention facility for the NFL Chicago Bears, for example, is nearly half the

entire budget of the Chicago Public School…Oakland [CA] can‟t afford to heat its schools and is

contemplating cutting back the number of police and firefighters due to a deal its city council

made to bring back the NFL Raiders.”29 Another controversial local funding source is that of

taxpayer revenue. Several cities – including Cincinnati – have raised sales, hotel, rental car, sin,

or other taxes to help subsidize stadium construction. However, Cincinnati‟s approval of a sales

tax to fund construction in 1996 was one of the last successful attempts at doing so – other

municipalities have failed where Cincinnati succeeded. Why? Many feel subsidies are not

needed. For example, “voters in Minneapolis and Pittsburgh told zillionaire sports team owners

in no uncertain terms that they were sick of being on the donating end of the vast corporate

welfare machine that is professional sports.”30 Apparently, civic pride is not enough to donate

hard-earned money to people already richer than the average taxpayer will ever be.



Case Studies: Real Cities and their Stadium Issues

Although the above information, gleaned from various sources, is helpful in understanding the

issues surrounding stadiums, investigating individual cities to understand their specific struggles

is paramount in the ongoing stadium debates. Boston, Cincinnati, and Cleveland are three

cities that are all dealing with stadiums in their cities in different ways. A brief investigation of

these areas should flesh out the questions each area faces.




29
     Bast, 14.
30
     Ward, Janet. “Cities hope to hit home runs with ballpark deals.” American City and Country. June 1998. 4.


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Boston: We’re Just Fine, Thank You

The Boston Red Sox is one of the oldest baseball franchises in the country, and they play in the

oldest ballpark still used for professional sports – Fenway Park. Built in 1912, this park is a

historic landmark and a beloved cultural icon. Romanticism of the United States‟ national

pastime revolves around parks like Fenway, conjuring “up a host of images and sensations: the

hum of the crowd winding its way from Kenmore Square; the smell of sausages, peanuts and

popcorn; the lights of the Citgo sign brightening as twilight turns to evening; the perfectly

manicured grass, emerald green against the blue sky of a summer day; and, above it all, the

fabled Green Monster, the most renowned feature of baseball‟s most idiosyncratic playing

field.”31 Yet its historic nature is what also makes it a technically obsolete ballpark amidst

today‟s technological stadium wonders. As a result, the Red Sox franchise has pushed for the

building of a new park, also called Fenway, directly adjacent to the existing ballpark. Opponents

of the new baseball park plan argue that the guaranteed economic boom generated by the new

stadium would in fact not happen. Instead, “the landtakings would actually displace the

hundreds of jobs that now exist in the target footprint. And current economic research – based

on the 37 year track record of sports projects nationwide – indicates that a new stadium in

Boston would be more likely to result in net job-losses rather than gains.”32 Noting that

modernization is necessary, several renovation plans have been proposed for the existing park.

Additionally, strong grass-roots support has cropped up to keep the existing structure, stressing

that “many [tourists] come purely to experience the legendary stadium, and studies show that

history and heritage tourists stay longer and spend more money than sports and entertainment

tourists….A Boston Globe poll recently indicated that more than half the people attending the


31
   “The Fenway Factor.” World Wide Website, http://www.savefenwaypark.org/case/fenwayfactor.cfm, accessed
March 3, 2001.
32
   “Screwball Economics: Fat Cats Get Fatter By Fooling the Public.” World Wide Website,
http://www.fenwayaction.org/cass/screwball.html, accessed March 3, 2001.


                                                     13
Red Sox games come to see the historic ball park, not the team.”33 This strong support, coupled

with the sobering idea that “the Chicago White Sox replaced historic Comiskey Park with a new

stadium of the same name constructed across the street from the original (sound familiar?).

After a few good years, new stadium attendance crashed, down to 17,598 per game in 1999 –

half capacity, and less than it was in the old ballpark. Meanwhile, the Chicago Cubs at Wrigley

Field (built in 1915) were averaging 36,075 fans a game.”34 These events and others have led

the Red Sox to seriously reconsider their new ballpark plan.



Cincinnati: Owner Demands Turn Into a Regional Vision

Cincinnati‟s stadium troubles started in 1993, when franchise owner Mike Brown first threatened

to move the Bengals unless the city pledged to build him a new stadium. At that time, “Mr.

Brown had what he thought was one of the worst deals in the NFL.”35 City officials and the

Bengals “reached a legal agreement that required the city to build a new football stadium by

2000, even though there was no money to pay for it.”36 Representatives from the eight

counties that make up Greater Cincinnati formed a Regional Stadium Task Force, which

supported the city‟s pledge to the Bengals but were unwilling to help pay for stadium costs.37

Brown stepped up the pressure on the region by visiting Baltimore, which was actively

searching for an NFL franchise (Art Modell‟s Cleveland Browns would later move there and

become the Baltimore Ravens), as well as placing deadlines for every crucial decision politicians

needed to consider. A county-wide sales tax passed “by a whopping margin of 61 percent to 39

percent in a record turnout. Vote observers credited both the city of Cleveland and former


33
   “The Fenway Factor.”
34
   Screwball Economics.”
35
   “Klepal, Dan. “The deadline deals that built a stadium: Seven years in the making, Paul Brown Stadium almost
didn‟t happen.” The Cincinnati Enquirer. August 13, 2000.
36
   Klepal, Dan and Lucy May. “We‟ll all pay for rushing stadium: Cost overruns blamed on haste.” The Cincinnati
Enquirer. February 20, 2000.
37
   Ibid.


                                                        14
Browns owner Art Modell for passing the measure, which appeared to have little chance of

success when it was scheduled in September.”38 The Browns leaving Cleveland hit home for

Cincinnatians, showing that Mike Brown‟s tough talking could become reality.



Once the deal was struck and the money was available, the City of Cincinnati and Hamilton

County did not completely succumb to the strong demands of Mike Brown and Reds owner

Marge Schott. Positioning the stadiums on the riverfront became a major issue. “Mr. Brown,

the team‟s general manager, wanted it on public land next to the Roebling Suspension Bridge,

smack in the center of Cincinnati‟s riverfront. Everyone else…was determined to move the

stadium one block west to allow for a park, entertainment district and housing along the city‟s

front porch.”39 A multi-day meeting was convened to decide the future of the riverfront,

mediated by private business interests, with the end result of stadiums „bookending‟ the central

riverfront pleasing everyone, even Mike Brown: “„I understand what the city was after and let‟s

credit them,‟ Mr. Brown said. „They wanted to develop the riverfront and they should. It‟s a

one-in-a-million opportunity, and they seized it.‟”40 The resulting riverfront plan, „The Banks,‟

embodies what the city needs for a vibrant front porch. The plan for a combination of housing,

commercial, and cultural destinations on the river makes the most of the stadium struggles the

entities involved overcame.



Cleveland: An Institution Lost

Art Modell would not want to meet a Cleveland Browns fan in a dark alley – or anywhere, for

that matter. The owner of the Browns, who moved the team to Baltimore in 1995, devastated

38
   Hubbuch, Bart. “Tiger stripes would have become dawg spots: Brown admitted Bengals would have been
Cleveland bound if the stadium vote failed.” Akron Beacon-Journal. World Wide Website,
http://www.ohio.com/bj/sports/indians/xbiarch/bi/3.21bengals.html, accessed March 3, 2001.
39
   Klepal.
40
   Ibid.


                                                      15
a city in the search for more revenues. This NFL team has one of the most dedicated fan bases

anywhere, with “one of the most recognizable cheering sections in all of sports and die-hard

fans who have turned out an average of 64,000 strong every game for 50 years”41 and ranks in

the top three markets in the country when NFL football is broadcast. Yet Modell, who was in

negotiations with the city to renovate their existing venue, “had intentions to move the team for

quite a while, but didn‟t want to leak any information for fear of a loss of ticket revenues.”42

The loss of the Browns showcases what can happen to a city devoted to its sports teams. “The

effect the Browns have on Cleveland cannot be understated. This simple scenario can best

describe the grip the Browns have on the city – if the Browns win on Sunday, everyone in

Cleveland is very happy. If the Browns lose on Sunday, everyone in Cleveland is very ticked

off. One can only imagine, then, the condition the city is currently in.”43 Cleveland, however,

did not give up the Browns without a fight. The city took Modell to court to retain the use of

the name, colors, mascot, and other things related to the Browns franchise.44 The city

successfully lobbied the NFL to either move an existing team to the city (under consideration at

one time were the Cincinnati Bengals) or to create an expansion team, with the latter of the

two occurring in the late years of the 1990s. Yet the NFL insisted that a new stadium be built –

and the city complied with Cleveland Browns stadium, opened in 1999.



Conclusions: What Cities Can Do to Resist

Professional sports teams have strong reputations for bringing a community together – at a

high financial cost. The examples above show how a small number of cities have dealt with the


41
   Hubbuch, Bart. “Cleveland still faces big, Brown void.” Akron Beacon-Journal. World Wide Website,
http://www.ohio.com/bj/sports /indians/xbiarch/bi/12.31moves.html, accessed March 3, 2001.
42
   Hyland, Tim. “Art Modell‟s maneuvers show more loyalty to his wallet than faithful fans.” The Digital Collegian.
World Wide Website, http://146.186.194.36/archive/1995/11/11-13-95tdc/11-13-95d03-011.htm, accessed March 3,
2001.
43
   Ibid.
44
   Levine, Les. “Revisionist History.” The Cleveland Free Times. January 12-18, 2000.


                                                        16
ongoing pressure placed upon them by team owners and their franchises. But how can cities

successfully resist the songs of stadium sirens when so many have succumbed?



The options for maintaining control vary with level of controversy and realism, but the intent to

reduce public funding is constant. Ideas include:

          Legal action to maintain the option of control. This can include preventative legal

           measures, such as inserting “provisions in a facility lease that deter team relocation,”45

           which attempt to punish teams for breaking leases. Pittsburgh‟s Plan B, for example,

           includes a clause that keeps the teams in town for 29 1/2 years, or the team has to

           repay the public‟s investment, up to $140 million. The other legal alternative is a

           reactive one – eminent domain, where cities try to keep teams in the process of leaving

           from doing so by taking the „property‟ and keeping it „in the public interest.‟ Neither

           avenue is entirely foolproof, as leases usually also have escape clauses, and eminent

           domain proceedings on professional sports teams have not been successful when tried

           in the past.

          Stop federal subsidies. Although the 1986 Federal Tax Reform Act did little to stop

           the stadium construction boom, the idea of limiting tax-exempt bonds to fund private

           investments is a step in the right direction. Former Senator Daniel Patrick Moynihan (D-

           NY) introduced several bills to completely forbid the use of such bonds. Unfortunately,

           the pattern of limiting federal funding only leads to increased state and local funding for

           construction, not a slowdown of stadium-building, as expected. Perhaps what is needed

           is a moratorium on state or local funding, which usually comprises a higher percentage




45
     Noll and Zimbalist ,36.


                                                    17
            of funds per project. However, with states rights issues as strong as they are,

            competition for teams would likely override any agreements made with other states.

           Anti-trust regulations. A more controversial idea for limiting the power of

            professional sports teams over cities is exercising the option of breaking up the

            monopolistic league system. Noll and Zimbalist advocate a multi-league system where

            the entities could collaborate on general issues such as playing rules, interleague and

            post-season play, but would become competing business entities that could not conspire

            with each other at the expense of cities. “Under these circumstances no league would

            be likely to vacate an economically viable city, and, if one did, a competing league would

            probably jump in….Competition would force ineffective owners to sell or go belly up in

            their struggle with better managed teams.”46 This option is promising theoretically, but

            would require federal intervention and drawn-out legal proceedings to even be realized.

           Citizen action. As has already happened in other cities, “grassroots disgruntlement

            [can lead] to a political reaction against sports subsidies….Some citizens apparently

            know that teams do little for the local economy and are concerned about using

            regressive sales taxes and lottery revenues to subsidize wealthy players, owners, and

            executives.”47 Cities that follow this example have either successfully fought for

            retaining the existing facility (in Boston‟s case) or voted down tax hikes. However, those

            cities that voted against such measures so far have usually found other funding sources

            to build facilities without taxpayer subsidy.

           Fan ownership. Green Bay, Wisconsin has what some consider as an ideal relationship

            with their beloved Packers football team – they own them. The Green Bay Packers are

            owned by a non-profit organization whose shareholders are overwhelmingly the people


46
     Ibid., 38.
47
     Ibid.


                                                     18
           of Green Bay. Since 1923, when the organization bailed out a bankrupt owner, stock

           has been issued twice as „souvenir stock,‟ which cannot be sold or traded for more than

           its original price, and no one person can own more than 200 shares. “Since the owners

           cannot derive a profit from the team, according to Packers Chief Financial Officer

           Michael Reinfeldt, „all the profits we make go back into the club in the form of facility

           improvements, players or endowments. It‟s an advantage we have.‟ Indeed, the ban on

           distributing an organization‟s earnings to private investors is what enables nonprofit

           organizations to put non-market objectives, such as staying in Green Bay, Wisconsin,

           above opportunities to earn a higher rate of return on capital.”48 This ownership

           scenario, which would basically halt competition for any team that adopts it, is

           unfortunately outlawed by the NFL. However, the seeds of discontent that many people

           have with the current system could allow this type of ownership opportunity to happen

           in the future.

          Charging beneficiaries for a good or service. One of the most palatable ways to

           raise money for venues is to charge the people who benefit the most from the good or

           service – in this case, the fans that go to the games or watch it on television.

           Additionally, any limited positive economic „spillover‟ created by a stadium could also be

           levied, with a sports assessment district (similar to a BID) where entities in a given area

           are taxed to help pay for the benefits they receive. This could include user charges,

           concessionaire‟s fees, broadcast fees, or income taxes on players or other employees.49




48
     Bast, 20.
49
     Swindell & Rosentraub, 11.


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