Tuesday, August 13, 2013

Could Tampa Stadium Money Be Better Spent Elsewhere?

There's a lot of talk of how a new stadium can revitalize a region, but it doesn't always work.  Just ask Gary, Ind., which (wrongly) assumed its $50 million downtown stadium would help businesses.

But there are also lots of cities with positive downtown stadium experiences.  Tampa hopes to one day join the ranks.  But there will always be that pesky question of, "at what cost?"

An investigation from FOX 5 in Washington D.C. looked at the big crowds populating Nationals Park and its surrounding area, finding plenty of indications of unfulfilled economic promises:
In a report used by the city's Chief Financial Officer to obtain financing, the city had counted on the stadium to bring in $24 million a year last year from taxes on tickets, parking and concessions. In fiscal 2012, tax figures provided by the CFO's office showed the stadium only brought in $12.6 million in tax revenue despite finishing with the league's best record.

"Having a team, a baseball team in Washington is a great, great thing. But having a winning team is not the same as saying it's a winning financial bid for the city," said Ed Lazere, Executive Director of the DC Fiscal Policy Institute.

The group believes the numbers show the stadium isn't pulling its weight. It was critical of a taxpayer-funded stadium then and now.

The city tapped a ballpark fee and utility tax on businesses to pay the lion's share of the stadium. That tax brought in $42.6 million last year, according to the District's CFO's office.

The team owners chipped in only $5 million in rent. Critics call it corporate welfare for billionaire baseball owners that don't benefit the welfare of the city.

"There is no doubt we could clearly use those resources to pay for things that are important to the city ... our libraries and recreation centers are not open on Sundays for the most part because we don't have the money to keep them open," Lazere pointed out.
There's no telling if DC will ever break even on the Nationals deal, since exact economic effects are tough to track and so much of a stadium's value isn't financial.

But in Tampa, politicians will repeatedly face the question, "can this money be better-spent elsewhere?"

Mayor Bob Buckhorn has made it clear $100-$150 million will soon be available to a possible stadium from tax-incremental financing (TIF) revenues that can only be spent in Downtown Tampa.

But that's not "free money" - those are tax dollars.  And that money could go toward a lot of other places: upgrading buildings, renovating the Tampa Bay Times Forum, building a transit hub, or even buying/rebuilding the biggest blight on the city's waterfront, Channelside Bay Plaza.


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  2. "But that's not "free money" - those are tax dollars. And that money could go toward a lot of other places:"

    Or, here's another idea: stop taking it from people and businesses, and allow them to use that money as they see fit. Sounds crazy, I know. Then again, I'm a Republican.

  3. What's the debate in Washington?
    “In the past three years, the ballpark fee, a tax levied on the city’s 1,800 largest businesses, has brought in $85 million, double what the city had projected. Sales taxes at the stadium have lagged behind estimates because of lower attendance, but the city’s overall take has been so strong that millions in excess collections have been used to balance the D.C. budget. The gusher of tax dollars will allow the District to pay off the 30-year stadium bonds as much as 12 years early, which will let the city scrap the business tax sooner than planned, [city economic development director John] Ross said. The city also is enjoying an increased flow of property taxes — about $13 million more per year so far — as land around the ballpark has grown much more valuable. It took 10 or 12 years for the area around the Verizon Center to boom,’ Ross said. ‘The area around the baseball stadium is growing even faster.’”


    1. In the comments section on that very same article:

      "'The gusher of tax dollars,' is the result of taxing businesses that have nothing to do with baseball/the Nationals/sports. And, um, er, uh, wouldn't DC have more money if they imposed the tax, but didn't subsidize a stadium?"

      To use another case study closer to home: the Amway Center, built mostly on taxpayer dollars, was supposed to be THE venue that revitalized the depressed area immediately to the west of it. What's the result been so far? The same neighborhood blocks are still sitting empty, with some now being reclaimed by nature.

      There's no doubt that having a pro sports team is a source of pride for Orlando, in the same way that the Rays (and Bucs and Bolts) are sources of pride for Tampa Bay. But as reporters like Noah, a vast majority of economists, local/state politicians, and a huge proportion of residents will ask you, at what price?

      Given the choice between subsidizing firefighters, teachers, and public works employees, and subsidizing a massive stadium project whose endgame is pushing the value of its tenant team through the roof, I'll take the former any day of the week, twice on Sundays.

    2. The author also admits: "I’m not going to make a broader point about the extent to which public investment in sports is a good thing. It’s likely situational and, though it has been enormously beneficial here in Washington twice (though in the case of Verizon Center the city paid only for infrastructure), and it also appears to have been beneficial in nearby Baltimore, the facts and circumstances vary."

      That's been my message the whole time. It's no guarantee and every dollar needs to be scrutinized.

    3. "That's been my message", lol, maybe we been reading a different blog, but your message from jump street has been that it's NEVER beneficial to invest in a cities future using a sports team! And so now your recent post was debunked, you seem to all of a sudden changed your approach? If you want to "scrutinize" the money spend on a NEW Trop, then do it oppose to the it's doesn't matter, it'll never work theory...
      And to use a "independent baseball league" ballpark in the very depressed town of Gary, Ind. as a prop to contrast what Major League Baseball in a progressive metropolis such as Tampa in 10 years is laughable. Stay classy Noah, stay classy...

    4. And the Amway center was built less then 3 years during the "great recession". I understand the instant gratification belief, but investments like so take time, and suppose to be very rewarding because the time given like getting more $ taking the annuity from hitting the lottery...

    5. They've been trying for years to bring life back to the areas immediately to the east and west of the Amway Center, though... especially Parramore on the west side. 99.9% of the people who attend the events there, whether it's a Magic game or a concert, won't take one step in that direction when it's over. Even Church Street to the east still has a handful of "For Lease" signs plastered on its properties. Sure, we'll need some more time to see the full economic impact that the arena has had. But it's telling that there are very few people left in Orlando who still defend the arena deal today.

    6. Because it's human nature for instant gratification. And I know people like you like to make stereotype assumptions about those that live in not-as-nice areas, but newsflash! people from all walks of life go to games, not just wealthy people! If I lived next to the Amway Center, I'd walk there, get my $5 tix from a scalper, and have fun. Again Kei, I understand it's easy to think that because there wasn't brand new businesses & houses built around the arena the day after it's opening that it'll never happen like NO'ah tends to think, but sometimes things takes time...




    7. Sure, except we've waited over three years for any sort of meaningful development to take place around the Amway Center, with very little to show for it. Not exactly "instant" is it?

      Just because you Yinzers don't mind blowing millions upon millions of tax dollars on these boondoggles doesn't mean the rest of us feel the same way.

    8. No, it just means we don't cry about investing in our cities future!

  4. Noah, one piece I would love to see is a summary of potential sites in the TB area with pro's, con's, and challenges.

    1. You'll find all of that in this site's archives - from Carillon to Ybor to Downtown Tampa to the Fairgrounds. There really only are three options:
      - Downtown Tampa
      - Westshore
      - Mid-Pinellas, near the bridges

    2. lol, David must be new to conversation...

  5. We don't need to look to DC, or Orlando, or St Louis for examples of the impact a Major League Baseball team can have on a region. Downtown St. Pete is a case in point. Prior to the Rays, DTSP was economically stagnant. Central Ave was a ghost town, the relative handful of people who lived downtown were elderly and poor, there was no modern residential infrastructure downtown, and DTSP was not an attractor for locals or out of town tourists.

    In the years since DTSP was awarded the Rays franchise, the downtown core has experienced one of the most impressive resurgences of any comparable urban area in North America. Downtown is now a highly desirable residential area and one of most attractive entertainment destinations in the South. The Rays presence had a great deal to do with this resurgence. Surely, there are other factors. It is interesting to examine the downtown cores of St Pete and Tampa. Tampa's residential population is growing, and the City may soon achieve critical mass downtown. Speaking as a 30 year student of regional development, the addition of an MLB team to downtown Tampa would catapult the city's downtown in the same way it did in St Pete.

    1. Not disagreeing with you, but your argument would suggest the subtraction of the franchise from DTSP would result in a negative impact...and the city would need to be compensated substantially for the termination of its contract early?

    2. Yup, Bill Foster has been fighting the Rays to stay for years because it'll have a positive "impact" if they left, lol!
      And if the Rays are set to make many millions more in Tampa then they would make staying in St.Pete, it would far out weigh any buyout, especially by 2018...

    3. So you're saying the Rays should buy out their contract because they'll make more money if they do?