Monday, December 28, 2009

Subsidized sports stadiums: "train wrecks" happening and waiting to happen

Via former Nashville reporter Caleb Hannan, cities around the country rue the day that they mortgaged their municipal services for the sake of seducing pro sports teams. Encouraging voters to take an undue risk on an unbending, obscenely wealthy entertainment industry is no way to run a city. Nashville, take note:
From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverfront.

But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.

The teams have not volunteered to rewrite their leases. So in the coming weeks, the county plans to cut basic services, lower its legal bills and drain a bond reserve fund with no plan for paying it back.

“Anyone looking at this objectively knows it’s a train wreck,” said Dusty Rhodes, the county auditor. “I told them they were making a big mistake, but they didn’t want to hear me.”
They could have added Nashville to the list of sports-rich, service-suffering cities.

Assuming they stay that long, the Tennessee Titans will be sponging off Metro Water Services revenues for the next 2 decades. Meanwhile, our stormwater infrastructure crumbles and the Mayor authorized a regressive stormwater pay structure, which hits the middle class and working classes harder, to curb the crumbling. Mayor Dean makes lists of Tennessee power brokers partly because he cuts millions from local services, even after writing a new sweetheart deal to woo the pro hockey team to stay.

And, by the way, the same promises that Cincinnati revenuers made about tax increases paying for everything at little risk to taxpayers are the kind of things we're hearing from convention center supporters. They promise to take care of every Nashville need up to tucking our kids in and keeping vigil over them every night. If it all sounds too good to be true, it generally is. Every single potential private investor is sitting our dance with the Music City Center out. In the case of the convention center, we're a dip in tourist demand or taxes away from our own train wreck.

1 comment:

  1. "The teams have not volunteered to rewrite their leases"

    But in the coming weeks watch for a press release of some sort trumpeting the signing of another barely educated thug for millions of dollars to play a "game" for a few hours each week. Remarkably, the unwashed masses will likely know every detail of this transaction before they know about the cities fiscal condition.

    These dumbass sports fans are the sort to drive through rutted dirt roads if it means good seats.

    The sports franchises know their customer base very well.