Mark Winston Griffith

New York Sports Stadiums: Fields of Dreams or Schemes?

Sometimes you have to wonder just how far American cities are willing to go in order to accommodate sports stadiums. Several studies have concluded that stadiums add little, if anything to local economies.

But throughout the country, pro sports owners seem to hold municipal leaders in a trance, boldly and routinely demanding whopping public subsidies while they line their own pockets. Just this week the Yankees ownership asked the city to sell an additional $350 million in tax-exempt bonds. The Independent Budget Office estimated that the city, state and federal governments would lose $60 million in revenue because of the lower interest rate payments that the Yankees would make on the bonds. Earlier this year, Bruce C. Ratner indicated that he was looking to raise $800 million through tax-exempt bonds.

The only problem is that the IRS has proposed rules that would make it "perhaps impossible", a New York Times article concluded, for sports teams to use this kind of financing. "If adopted, the I.R.S. rule would apply to all tax-exempt bonds issued after February 2007," the Times reported. And in case you haven't noticed, the Bronx, Queens and Brooklyn are poised to receive new sports stadiums, all subsidized on the public dime.

Translation: Shea Stadium, Yankee Stadium, but especially the proposed Nets stadium, already named the Barclay's Center, may be in deep doo-doo.

Tax-exempt financing is designed of course to grease the wheels of economic development. Which is fine, assuming the local economy is actually benefiting. The problem is that the term "economic development" is used so loosely that any set of buildings erected by a developer is proposed in the context of the public good.

A World Series or NBA championship would make for great bragging rights. But would it make for a healthier and more prosperous city for all New Yorkers?

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Posted at 8:58 AM, Jun 13, 2008 in Economic Opportunity
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