Giant construction bills leverage treasury dough

I did a fair amount of hand wringing over the fact that the wizards in the Metro bean-counting department low-balled the cost of upgrading the utility infrastructure to First Tennessee Park in spite of widely-held knowledge that North Nashville's infrastructure is crumbling and antiquated. Haunting subsidized ballparks in general is the public payola they enjoy when teams can not even afford their own construction costs:

There is nothing wrong with new stadiums and arenas per se — well, unless you think they’re ugly, but plenty of old ones are, too. But the reason the U.S. has so many of them, and is tearing down its not-quite-as-new ones to replace them with shinier models as fast as possible, has nothing to do with the alleged riches that can be made off of them, and everything to do with the fact that in order to get those fat checks from the public treasury, you need to be able to present a giant construction bill as justification. If we could only start subsidizing something useful instead ... there would still be a massive transfer of money from the public to a bunch of rich dudes, but at least we might get something out of the bargain other than fancier cupholders.

So, the numbers for construction are already juiced when the proposals are made. Then the municipal wizards come along afterwards and say, "Uh-oh. We did not expect archaic utility lines because you know they are underground and we can't see them yet even though it was like 1969 since the last time everything was dug up here at Sulphur Dell, and we could logically deduce the odds." So, they tack on millions more. I shouldn't lose sight of the original sin to the ineptitude of the bean counters.

Dealing with new ballparks as "the sporting arm of the real estate business"

First Tennessee Park luxury

I know that some conservatives (by "some," I mean "very few") take issue with subsidizing pro sports venues period. I do not take issue with the idea of subsidizing ballparks. What I have tried to get across in my reflections on ballpark subsidies is that if a government by the people is going to give private developers and team owners millions for new sports parks, then those parks better have public access and common goods commensurate with the free revenues the sports barons enjoy.

In most cases, and specifically in the case of the new First Tennessee Park for the Nashville Sounds, they do not. The Sounds owners are playing up their services for Nashville's rich: luxury suites, "personal" servers, the "private" club level, and "exclusive access" bars. Even the best field level seats are set at a luxury price and emphasize the networking executives can do.

First Tennessee Park luxury

Private, exclusive access? Funny, but I thought such access was what any ticket, regardless of price, guaranteed you. The idea that seats purchased at the club level with luxury boxes are more private than the purchased seats farthest away from home plate strikes me as redundant, unless by "private" the Sounds owners are referring to activity they hope to shield from transparency to other ticket buyers. I am keeping in mind that the property is owned by Metro, leased by the baseball club and is technically public.

A Wisconsin professor (who had conducted research on the Sounds old parent club, the Milwaukee Brewers) explains that the sports culture is completely different than it was a half a century ago when elites rubbed elbows at professional sporting events with working class people.

First Tennessee Park luxury

The problem Sean Dinces sees it that while we continue to expect more public tax dollars to be doled out for ballparks and stadiums, we also watch team owners accept that money as entitlement as they systematically exclude most of the taxpayers from whence the money comes. The problem starts with luxury suites, which "make fans inside them feel superior and those on the outside feel inferior."

First Tennessee Park luxury

He argues that liberals need to step up their game:

rather than bringing residents together, and rather than functioning as legitimate public goods, the current generation of publicly funded stadiums systematically exclude an unprecedented percentage of American sports fans.

Of course, decisively rebuking the rhetoric of teams and leagues will not, in and of itself, solve the problem. This is especially true in a day and age when decisions about stadium subsidies have been largely removed from the democratic process, and when franchises continue to wield threats of relocation like a sword above the heads of residents and municipal officials. Nevertheless, reshaping fans’ consciousness is a necessary starting point.

Ideally, fans should see an intractable antagonism between the potential of spectator sport as a community asset and its current role as a venue for taxpayer-funded consumption by a handful of urban elites. Critics must also stress that, despite what leagues want us to believe, fandom is not necessarily contingent on having a stadium — or even a team, for that matter — close by, especially when attending actual games is unrealistic.

In the short term, transforming this consciousness raising into effective resistance against the sporting arm of the real estate business requires wresting fiscal control away from politicians competing to offer teams ever greater sums of state, county, and city money. This means making anti-stadium-subsidy campaigns part of bigger struggles for social justice in cities, like the rise of a new radical unionism in places like Chicago or recent electoral successes by socialists in urban centers, such as Seattle.

The games will go on even if the handouts do not.

I have demonstrated on this blog over and over that throughout the planning and building of a new ballpark in the North Capitol area, people have been excluded from the political process by the Mayor, the Metro Council, Metro planners and the Sounds ownership. Just take a look at my past posts on the subject. Liberals in Nashville have failed to step up their game when it comes to challenging the logic that urban elites have exclusive rights to influence and benefits in what is a process and a real estate deal that was funded overwhelming by tax dollars that we have paid.

First Tennessee Park luxury

In my opinion, unless there is some liberal groundswell to challenge business as usual in these deals that serve "the sporting arm of the real estate business," we are only going to watch more and more people excluded from public enjoyment of the local professional sports scene. The next ones in line to get the shaft are the local baseball fans, many of whom have already been grumbling about the higher prices of Sounds' season tickets. Given that their tax dollars are supporting an ownership group that drives up prices regardless of the latter's windfall wealth, their grumbling is justified.


UPDATE: In May 2015, the Sounds engaged in a league contest to promote the "Best Seat in the House" in the minors. What seat did they nominate for best seat to vote for? Seats that most of us will never be able to sit in: the "Field Level Suites," which the club calls their "most luxurious and exclusive entertainment area."

The irony is thick in this one. Proverbial beauty contests depend on popular votes. To be popular means to appeal to the masses, not the elites. Yet, only elite groups of people can afford to sit in the ballpark's "most luxurious and exclusive" seats. If you're one of the $9.00 ticket holders on the left field berm, how is voting for the Field Level Suites in any way appealing to you?

If Nashville really wants to keep its sports teams, why not eliminate the middle man, namely the team owner?

If a pro sports team is such a unique expression of a city's identity, a unifying force and an engine of economic expansion, then why aren't cities assuming control of them to keep them from bolting to other cities?

It is not like it would be unprecedented:

You're probably familiar with eminent domain as the means by which the government forcibly takes private land to make way for a highway or public building or hyperspace bypass, having only to pay whatever a court decides after the fact to be fair market value.The legal principle goes back hundreds of years, and doesn't have a great rep, especially as courts have expanded the notion of "public use" to include taking people's houses to hand over to private developers so long as it would promote "economic development"—even if there was no guarantee that the development would stick around more than a few years.

In the eyes of the courts, though, there should be no legal difference between a few acres of dirt and other private property such as, say, a pro sports franchise ....

Say you're a city council with a pro sports team demanding $200 million or so in public cash for a new building—let's call them the "Milwaukee Bucks"—under threat of leaving town if its owners' demands aren't met. Instead of reaching for your municipal checkbook, you respond by drawing up eminent domain paperwork.

In the best case scenario, the mere threat is enough to force the team owners to lower their subsidy demands. In the worst, yes, you're stuck paying close to $600 million for an NBA franchise, but keep in mind two things: first off, that's how much the current Bucks owners just paid on the open market for the franchise, so presumably somebody thinks they'll bring in enough revenue to make that worthwhile. Plus, if you don't want to be stuck with the risk of the Bucks not earning back your investment, you can always re-sell the team to new private investors—even if you need to sell for $50 million or $100 million less in order to get new owners to agree to an ironclad lease, that's still cheaper than handing over $200 million for nothing.

In my opinion, the Metro Nashville mayor's office and the metro council both failed to do their due diligence in exploring the possibility of filing eminent domain in response to Sounds' and Brewers' (the Sounds' previous parent club) insinuations that they could always go elsewhere if they did not get a new ballpark. We already saw them back off the west bank downtown when Karl Dean made it clear that a new amphitheater was going in there. I will forever hold against Hizzoner and whipped council members that they did not call the team's abandonment bluffs.

Public ownership of sports teams is not such a radical proposal. Local sports reporter, J.R. Lind, proposed public ownership for when the Nashville Sounds deal was announced in 2013:

[Karl Dean's plan] also includes $750,000 from a $50 million mixed-use development the Sounds owners — developers by trade — promise they will build.

Promise based on what? According to Mayor Karl Dean, little more than their word. There is not, and will not be, a contract pledging the Sounds to build this project. Pressed on that, Dean said if the Sounds didn't build the development, somebody would. Probably.

For the city — any city — to make a three-decade, $65 million [now $70 million and rising] commitment based on a handshake arrangement with absentee ownership is head-scratching at best and mind-numbing at worst.

But if that's the level of commitment the city is already willing to make, why not go whole hog?

Why not just buy the team?

The value of the Sounds is hard to pin down (though, presumably, it's gone up with the promise of a new stadium). But Forbes' recent estimate of the 20 most valuable minor league teams did not include the Sounds. The 20th ranked team on that list — the Oklahoma City RedHawks — came in at $21 million.

For, say, $20 million, the city gets the team ... and it gets the revenue. Not just the increased sales taxes budgeted in the financing plan — all of it. Ticket revenue, beer money, parking costs. All of it.

And if the mayor is to be believed, the city doesn't even need the Sounds for the $50 million ancillary development. It's going to happen anyway.

Right now, the city is spending at least three times the total value of the Sounds — that's being generous — to build a stadium. Doesn't it make more sense to own the entity outright?

Instead all of the pie-in-the-sky Jefferson-Street-rejuvenation wishful thoughts they have been spreading around in PR campaigns, Metro government could have been working on ways they would start spending the revenues that have already started rolling into team owner Frank Ward with season ticket sales and merchandising profits.

Despite the option that taking the Sounds by eminent domain or buying them would have been a more financially responsible act on Metro government's part than subsidizing their private enterprise, the Mayor likely never would have considered public ownership because he might have angered wealthy campaign donors who have financial stakes in the Sounds' ownership team. A deal that would have been more financially responsible to and more demonstrably lucrative for Nashville taxpayers probably never surpassed his own self-interest. Angering the special interests might risk Hizzoner's future political aspirations for higher office.

Things could have been done differently. But they were not. And Nashville missed its shot at a title.

Op-eds that rock: "every dollar doled out to a local corporation is one that can't be spent on something far more valuable"

If you have read this blog long enough, you know that I completely agree with these two local attorneys who take to the Tennessean to list the sweetheart corporate welfare deals--including First Tennessee Ballpark in the North Capitol area--that Metro under the Dean administration has brokered.

Daniel Horwitz and Mike Jameson go slow to explain the problem clearly to those who confuse willful self-ignorance with bliss:

The trope that Nashville's seemingly endless supply of tax abatements and economic development grants (two euphemisms for "corporate welfare") will ultimately "pay for themselves" is laughable.

Proof of that will come by 2016, when our next mayor — whoever that is — is forced to institute the largest property tax hike in Metro history just to cover the impending budget shortfall. When that happens, how many voters will look back upon our city's recent "investments" without regret?

Moreover, with local politicians clamoring to hand over public dollars to any business that even whispers about leaving town, why on earth wouldn't every other corporation in Nashville make the same threat? ....

Simply handing cash over to local corporations, however, can hardly be described as a "public investment." It's not. It also reeks of cronyism and incentivizes corruption. If Bridgestone ends up repaying Metro's current officeholders in campaign contributions a few years from now, will anyone really be surprised?

Rather than being real in their campaigning so far, nearly every mayoral candidate I've heard seems to act like they are in denial of gathering budgetary storm clouds. Each talks as if she or he would be a better Dean than Dean himself. In fact, they keep arguing that they will continue Karl Dean's insane corporate subsidies AND devote more money to neighborhoods and infrastructure. It is pure snake-oil, friends. Believe them at your own peril.

The chickens are eventually going to come home to roost for property owners and taxpayers. Someone is going to have to eventually pay for the bills Hizzoner is running up to keep his rave going. We may continue to join in the foolishness today if we wish, but the hangover is only going to be that much harder to deal with tomorrow.

Not good for neighborhoods: a case of false equivalence as reported in the Tennessean

I was not present at the mayoral candidates debate this week, but Tennessean reporter Joey Garrison, who was there, reported thusly:

Phil Bredesen built an NFL football stadium and a downtown arena. Bill Purcell stuck to sidewalks and community centers. Karl Dean built a new convention center and a minor league baseball stadium.

Legacies of Nashville's last three mayors were presented that way at a mayoral candidates forum Wednesday. Those vying to be the next mayor then answered a simple question: "What will you build as mayor?"

But rather than reeling off big-ticket projects, a few of the contenders on hand turned their attention more to neighborhoods.

Garrison somewhat framed the focus of the debate around future construction projects. Framing is an interpretative, not an objective move. Nonetheless, he seems to say that the moderator, news corporation president Chris Ferrell, cited the three preceding mayors as all building along the identical lines of "big-ticket projects." Giving Garrison the benefit of the doubt, I would argue that Ferrell's own framing is not just subjective, but it skews the facts into a fallacy of false equivalence.

Neither Garrison nor Ferrell (reportedly) mentioned the singular glaring difference between the three mayors as framed: Bill Purcell's projects were Metro infrastructure projects that primarily and directly benefited the people who paid for them and used them. Sidewalks and community centers benefit all Nashvillians, not just the business class. They are neither limited to those who pay admission fees nor excluded to visitors from out of town. They address common goods of the local citizenry.

Both Bredesen and Dean have been primarily subsidizers of the business class. Stadiums, arenas and convention centers primarily benefit the corporations, industries and professional groups in entertainment and tourism. They benefit those industries while Metro mitigates the risk of private investment by committing public taxes to private-use facilities.

Bredesen and Dean at least acknowledged in their more honest moments that the goods to the larger Nashville community in their "big-ticket projects" were secondary. Many would add that they provide only trickle-down scraps to the Metro taxpayers, who are on the hook for all of these venues if they fail to live up to projections. In some cases they obligate Nashvillians even if they succeed: the NFL football stadium transfuses millions of tax dollars every year from public infrastructure services (Metro Water) per the contract signed by former Mayor Bredesen (the contract runs through 2026).

Framing the different capital spending priorities of the various mayors on the flat is not just incorrect, it invites the new crop of mayoral candidates to level all such spending as the same. That is potentially hazardous for the neighborhoods that these candidates claim they will attend to. There is a qualitative difference between a community center and an arena. Both of these news men should acknowledge that difference and hold the candidates accountable for doing so.

David Fox and Megan Barry say they would be powerless to stop business as usual

During coverage of today's mayoral candidates debate local reporter Steven Hale tweeted points Mr. Fox and CM Barry made about Metro's sweetheart subsidies for corporations and developers, and I could not let the moment pass without reference to the obvious:

Are we close enough to Nashville's new ballpark to spot the manure?

Aaron Gordon at Vice Sports engages in a scathing open dialogue with a New York Times article regarding Washington, DC's plan to subsidize a new soccer stadium for its pro-team. While Gordon's entire piece is worthy of your time and attention, I wanted to comment on his observations about the lack of promised economic development that was to come with the opening six years ago of a new professional baseball park.

It seems relevant to North Nashville's close proximity to the new Nashville Sounds' home, First Tennessee Park, which is promised to bring dramatic economic development to the Jefferson Street corridor and the nearby neighborhoods. NYT comments are in bold; Gordon's replies are unbolded:

City leaders say the 20,000-seat stadium will serve as a catalyst for economic development for this area of southwest Washington, the way that Nationals Park, home of the Washington Nationals baseball team, did for its formerly stagnant neighborhood just a few blocks north and east.

Amazingly, the second half of this sentence directly contradicts the first. It takes 12 minutes to walk from Nationals Park to the very tip of Buzzard Point. If Nationals Park—which cost $700 million of taxpayer money—was such a catalyst for economic development, why do they need to build another nine-figure stadium a few blocks away?

Maybe because it didn't revitalize anything.

This has been the case in other Washington neighborhoods after the city voted to approve major new public venues...

Oh, cool! I mean, if it's worked before...

...including the Verizon Center, home to the N.B.A.'s Wizards and the N.H.L.'s Capitals since 1997;...

That was privately funded by then-owner Abe Polin, so not really a public investment! OK, what else?

...and the 2.3 million-square-foot Walter E. Washington Convention Center, completed in 2003, in revitalized Mount Vernon Square.

Wait, seriously?

I lived in the DC area for eight years, including a year and a half in Shaw, which lies just north of Mount Vernon. The above sentiment about Mount Vernon being "revitalized" is the kind of buried horseshit you can only spot if you're close enough to smell it.

Granted, the cost of the DC baseball stadium in taxpayer money was about 10 times what First Tennessee Park is going to cost Nashvillians in taxes. The flip side of that: the logic unfolds that the economic development in DC communities should proportionately be 10 times what was promised for North Nashville neighborhoods.

However, nearby DC neighborhoods got zilch.

Let's focus on the DC developer's comment that local lawmakers may have rigged expectations too high in order to give the ballpark project momentum. Some of us have been shouting that from jump with Nashville's ballpark. But to the point: they rationalized after the damage was done by minimizing the impact of the new ballpark, saying it is "just a very small piece" of development in the neighborhoods. Will First Tennessee ballpark developers and team owners thusly walk back their spin in the coming years? Will they be minimizing the claims Hizzoner kept making in late 2013 about how a new ballpark will create Jeff St. "revival"?

(If they're honest, they'll acknowledge that our neighborhoods were developing and gentrifying well before a new ballpark rose to the level of anything above a nostalgic pipe dream).

Like DC, Nashville has a convention center that is not performing to the results promised. Nashville is getting half the projected hotel nights, and no doubt tourists will compete for parking spaces downtown with minor league baseball fans for parking spaces during the summer (Metro officials said they hope Sounds fans use shrinking downtown parking opportunities). When they aren't competing downtown they will be choking on-street parking in Germantown, Hope Gardens and Salemtown.

The logic of overrated convention centers also applies to subsidized ballparks:

The whole process is basically maneuvered by the business community — banks, hotels, retailers, construction industries, others who will profit while the city loses .... Cities’ corporate movers and shakers long ago figured out how to get their new centers or expansions without the voters having a say.

The rising $70,000,000 Nashville is giving minor league team owner Frank Ward does one thing above all: it minimizes his family's risk and it maximizes inflated income from ticket and merchandising sales. It does so at our expense, even though our own elected officials allowed practically no influence over the deal. In particular it allows Mr. Ward to sell luxury boxes to rich people from Brentwood and Williamson County who would be more likely to snap up real estate investments in our urban core neighborhoods than to patronize and to put their cash in the pockets of the locally owned businesses up and down Jefferson Street.





Again, regular make-ends-meet taxpayers are the losers in this scenario, because economic benefits pad the pocketbooks of the people privately invested in the ballpark and other nearby properties. The latter need no financial assistance. Little will come back to us regardless of whether this particular ballpark bucks the trend and the science that indicate that any economic impact of sports venues is negligible and fabricated.

I am still waiting for someone to stop cheerleading and to begin explaining to me logically how the ballpark makes our lives cumulatively better in Salemtown when the costs are frankly and fearlessly considered.

Marshaled by mayoral candidate Megan Barry, the council refuses to discuss any downside to the Bridgestone dealio

In October CM Megan Barry characterized the problems that uneven growth causes in places like North Nashville as "growing pains" completely ignoring the historical prejudice and systemic flow of resources away from our neighborhoods. By minimizing the collateral shambles and planned blight caused by growth, she ignored how North Nashville has perennially been treated as a dumping ground for wealthy Nashville's refuse and as new territory for white settlement after real estate prices bottom out. Her answer to the "growing pains" is "transportation and affordable housing." Ironically, her last significant transportation vote as council member was to fund that $18 million sidewalk, exclusively serving downtown, while some Madison children walk to school in the street. Has she considered the limitations of calculating what gets called "affordable housing" in gentrifying neighborhoods?

Last night she also made clear that another option she would favor as mayor would be more of the same untamed corporate sweetheart deals that Karl Dean has become a rock star at ginning up while benignly ignoring North Nashville:

By turning this parking lot into a permanent [Bridgestone] fixture in the Nashville skyline, we are moving Nashville forward .... We are going to keep 1,100 Nashville jobs, but we are going to add 600 new jobs in Nashville with an average salary of $93,000 in which it increases our tax base for schools, for transportation and for public safety .... Let's be clear this is not a corporate giveaway.

Ms. Barry went on to soft-pedal one of the more alarming aspects of Dean's deal: Bridgestone can lay-off up to 20% of the 1,700 people it promises to deliver without losing its tax-free status with Metro. She said that "if Bridgestone fails to deliver" 1,700 jobs by the end of 2020, Metro can "claw back" a fraction of the taxes owed. But Bridgestone is still given leeway to shed 20% of this workforce and still be exempt from property taxes. The Bridgestone boosters are not being entirely honest about the risks of this deal. As one reporter put it, "Council members stayed away from discussing any possible downside to the Bridgestone deal."

The Orwellian dimensions of council supporters' comments about the Bridgestone deal are staggering. Bridgestone is not obligated to create any new permanent jobs. The company is praised for importing 600 out-of-state employees, but it can shed over half of the 600's filled positions and still keep its tax break. Supporters also tout Bridgestone's pledge to donate $150,000 to Metro schools. $150,000. That's it. They're getting a $56,300,000 hand-out from Nashville, and they're only pledging $150,000 to our schools, which I assume they can claim on their tax returns. Yet, in CM Barry's words, "this is not a corporate giveaway."

Another Orwellian moment was CM Barry's claim that the new Bridgestone building would be a permanent fixture in the Nashville skyline. Backing her up, CM Erica Gilmore said the HQ would "forever change" the skyline. The only real constant with regard to buildings in Nashville is that older ones are torn down to make room for newer ones, regardless of the history or need to preserve what is important to people here. Anyone who claims that there is permanence in Nashville's built environment is acting misleadingly and dishonestly. A new building downtown may be here for a long time, or it may give way to some future capital project subsidized by the mayor and ballyhooed by a blustery council.

Megan Barry is right about one thing. The new Bridgestone HQ is going to be a fixture, permanent or not, on the Nashville skyline that many will be able to see. Many in North Nashville who will never have the opportunity at any possible living wage jobs Bridgestone might catalyze will see it, too. And that is as close as they are going to get to the sense of entitlement downtown. The Bridgestone HQ sits on a far horizon for most of those who work their livings in this town. Average North Nashvillians will not be enjoying those $93,000 jobs even if the projected taxes on them eventually trickle down here and there like crumbs from the master's table.

And Megan Barry will continue to minimize the growth-induced plight of working people as "growing pains" that are somehow necessary when a city barters away its corporate tax base due to the Courthouse terror that companies might plead poverty and abandon it.

The dance of the rubber stamp fairy: Metro Council goes through the motions of "considering" the bid to bribe Bridgestone to stay in Nashville

The gingerbread soldiers put up more of a fight against the mice army in the Nutcracker than Metro Council is mustering against King Karl's latest public-private partnership payola to keep the Bridgestone headquarters in Nashville. Two weeks ago the local news media reported the beginning of "the debate" on Bridgestone in council chambers; the council passed the deal on first reading without a peep.

They promise us now that the plan is up for second reading that they will actually discuss the question. Metro Council may have started their cursory chinfest on the mayor's corporate welfare plan but it looks much like the confabs the preceded other major subsidy proposals (like Dean's plan to build the Sounds a new ballpark). It is a foregone conclusion. This deal is predestined to win because this council rubber stamps everything Karl Dean proposes.

Here is what happened yesterday when Dean's deal was heard by the most important committee the council has. Not much of anything:

At-large Councilman Ronnie Steine, during a series of questions with Metro officials, alluded to a policy stance of Jeremy Kane, a mayoral candidate .... In a letter to council members over the weekend, Kane called for a reduction in the size of Bridgestone's property tax abatement in order to protect revenue that could be used on public schools.

Metro Finance Director Rich Riebeling, who defended the administration's commitment to education, said that while one can always second-guess negotiations "this was one that was done thinking about the best interests of the city." He also suggested it would be difficult to amend the deal at this juncture.

"It would be very difficult to change what's been agreed upon at this point in time," Riebeling said.

At-large Councilwoman Megan Barry, another mayoral candidate for the 2015 race — and the only one among the five declared candidates who will take a vote on the Bridgestone deal — called the proposal "a really great deal." She said it would keep a major headquarters in Nashville, bring high-quality new jobs and reinvigorate downtown.

"We can take apart all the different pieces of this … There are probably pieces that we could refine and change, but that's not the deal on the table," she said.

The role of council in this process was defined by Mr. Riebeling's comment that the deal is already done between the principals (the Mayor, the Governor and Bridgestone), and the council cannot do much about it. This is the body we elect to represent us when Hizzoner will not, even though they have practically no power to do so.

Even if they did, CM Steine and CM Barry make it clear that they do not have the fortitude or the will to question the decisions that Karl Dean makes. Ronnie Steine has been unquestioningly loyal to the mayor since we forgave his unpleasant brush with the law and put him back in office.

For her part, CM Barry merely echoed the Dean administration's talking point that the Bridgestone deal is good for all of Nashville; just like she parroted his point that the opulent Gulch pedestrian bridge will inexplicably connect all of Nashville. What she will not address is the jeopardy placed on Metro services--sidewalks, school buildings. libraries, park programming, community policing, etc--by permitting one of Nashville's biggest employers to skip their property tax obligations for 20 years. $56 million is a lot of money for Nashville to risk losing and, per Karl Dean's usual script, Bridgestone is not risking a doggone thing.

But then again, neither is Megan Barry. She rarely has from her seat on the Metro Council.

I'll give mayoral candidate Jeremy Kane only partial credit for trying to set himself apart and prompt a more lively council discussion of the budget implications of Hizzoner's shortsighted trade-offs. It may seem noble to try to shield Metro school income from the brutal realities of selling off public goods to private corporations. (There is irony here given that Mr. Kane is an unwavering charter school advocate, and we see the damage privatization does to public education). However, in the breakneck shell game of Metro budgeting, shielding Metro school income can come at the expense of other services in departments that serve a clientele wider than and including children in public schools. In sum, his Bridgestone option is itself weak and impractical.

No Nashvillians should be put at risk so that Bridgestone can get wealthier than it already is. Maybe it makes no difference, given the Mayor's executive power, that Metro Council refuses to acknowledge that. But wouldn't it be quaint if for once they interrupted their dance and went through offbeat motions?


UPDATE:  According to one news source, our Deaniac overlords are enraged with the Kane mutiny. I wonder if Mr. Kane's rather limp waywardness opens up a place at Karl Dean's right hand for Megan Barry, who is forever loyal to Hizzoner:

The day after releasing the letter, Kane told the Scene he supports the Bridgestone package and wants it to pass. He veers away from anything that could resemble a criticism of the Dean administration, but the implication of his proposal seems clear enough: Could the city have gotten a better deal?

Behind the scenes, the Dean administration is livid that Kane made such a public display without approaching them for clarification.

If anything, this scores just how important loyalty is to the Dean administration. Remember how important it was in the George W. Bush presidency? It seems to have those proportions with Karl Dean. Any independent query draws their ire. All questions should be run by the Mayor's Office before they are made public. No wonder Metro Council is so whipped.

Bridgestone subsidiary hired an African warlord to "squeeze out" profits as Bridgestone lost money

Jim Cooper and Megan Barry at Karl Dean's Bridgestone announcement.

On top of all of his other government handouts to corporations, sports teams and TV shows, Mayor Karl Dean plans to give the Bridgestone company $50 million keep its headquarters in Nashville. There is no promise of new jobs, but only that 1,100 existing positions in Nashville and 600 in other states would be relocated downtown. In exchange, Bridgestone does not have to pay property taxes for 20 years (even though politicians are fond of saying that relocating business mean more property taxes to pay for Metro services).

Got it? There is no requirement that new jobs be created, although the Tennessean gushed that Bridgestone is "welcome" to create some.

Thanks to Mayor Dean (and Republican Governor Bill Haslam) the international auto parts manufacturer will be squeezing profits out of this Nashville deal (after the compliant Metro Council approves) for the next 20 years, obligation-free.

My concerns about how we're going to pay for vital infrastructure in the future while Hizzoner hands out free candy to corporations is strictly a first world problem; although it is a problem that falls disproportionately on working class people. Bridgestone also has a significant third world problem: the company does not have a clean past on the human rights front.

In the 1990s, their subsidiary Firestone had financial arrangements with rebel forces in Africa lead by Charles Taylor who would eventually be convicted for crimes and imprisoned for crimes against humanity. ProPublica has a podcast on the "secret history" of Firestone's dealings. Here is an exerpt:

During this time Bridgestone is purchasing Firestone in a big corporate merger back in the United States. It's a disaster by many accounts, and Bridgestone was losing money. So, they're trying to squeeze profits out of anywhere they can, and if you're the manager of the branch that holds Firestone, you're looking to save wherever you can. And so, Firestone is now this plantation ... making no money at all. Losing money. And so, you want to get it to become this profit-making enterprise again. And you have this connection ... with the people of Liberia that you don't want to break .... After months of negotiation they reach a deal in January of 1992 .... It's a memorandum of understanding between Firestone and Charles Taylor's government .... Firestone says, "We'll come back and we'll start paying taxes ... to Charles Taylor. In return, Charles Taylor will provide them with security. Now keep in mind that Charles Taylor is running a rebel army. This is not a state. So, essentially, Firestone is hiring a guerrilla army to protect their investments and they are paying money to a guerrilla army, which is trying to take over a country .... At the bottom line, money gets moved around, and Firestone was contributing to the war chest of Charles Taylor.

Late in the podcast, the ProPublica reporter talks about the long-term consequences of Firestone's financial arrangement with the African warlord:

One of the most shocking things about Liberia, is that there is not a single person who has ever been convicted of crimes against Liberians in a war that left 200,000 people dead [from 1989 to 1996]. Where there was thousands and thousands of child soldiers. Where there was cannibalism and people were eaten alive, burned, raped. An entire generation essentially erased, and no one has been held responsible for that .... You can't make a direct connection between what Firestone did in the 1990s and the Ebola crisis today. What is true is that the Liberian civil war ... led largely by Charles Taylor absolutely destroys the country. And afterwards, the people who helped in that destruction ... are never held accountable. So, now they're running the country. So, the very people who destroyed the country are no in charge of rebuilding it .... Liberia received tons and tons of aid after the civil war ended. Where has that gone? Why hasn't the health system improved? .... It's very easy to make a link between the civil war and Liberia's current horrible disease situation with Ebola.

ProPublica makes it clear that Charles Taylor relied on the money he received from Firestone to build an empire that waged war on its own people. That war destroyed infrastructure and created deadly social conditions, which made the Ebola cataclysm inevitable.

Since Mayor Karl Dean is proposing that Nashville taxpayers subsidize Bridgestone's new skyscraper headquarters with public dollars, the company should be held accountable for political conditions it generates with subsidized wealth at home and abroad. We should be more circumspect before gushing about how good Bridgestone is for people and jumping on their bandwagon.

The new ballpark blows its $65,000,000 Metro budget and the casualties include our future services from Public Works and Metro Water

First Tennessee Park wants you to marvel in the glory of their beige bricks
as the ballpark construction budget hits a wall.
[screenshot from their Instagram account]

Last year Mayor Karl Dean, with a big assist from my very own council member Erica Gilmore, ramrodded the plan for First Tennessee Park through the compliant Metro Council with little or no discussion and minimal chances for community feedback. When it was suggested that the developer/owner Frank Ward be held liable for any budget overages beyond the $65,000,000 budget, CM Jerry Maynard called it "a poison pill", supporters wrote in letters not to stipulate such a responsibility on poor, cash-strapped Mr. Ward. The compliant council--with the enthusiastic support of 2015 mayoral candidate Megan Barry--absolved the Nashville Sounds club from any responsibility for cost overages.

And just like that, the mayor and the Metro Council encumbered the Metro budget for any obligation beyond the $65,000,000 of expense planned for project construction.

Now the chickens are coming home to roost for us, even those who so blindly hopped on the bandwagon without a second thought or a single misgiving. You see, the council stuck us with the bill.

The Mayor's Office admitted to the Tennessean that it will have to spend $5,000,000 more on the ballpark due to water lines, electric lines, and paving along its properties. Mind you, this is Metro government. They have all of the information on water lines, electric lines, and paving. They are people who are supposed to be able to see this sort of thing coming. You cannot convince me that they did not know. Either they kept themselves willfully ignorant or they considered anything over $65,000,000 as bad PR in the days leading up to the big council vote.

Ever since my family moved to Salemtown 10 years ago, we've known that the area has 100 year old water and sewer lines underground. Every time a development goes up here that knowledge is reiterated. Some developers have balked at the price of upgrading the antiquated infrastructure here. This is not some big unknown. If we knew that fact, if others knew that fact, does Metro Nashville (and more importantly Metro Planning, which informed the ballpark plan) have any excuse for not knowing that when it came time to proposing a budget?

Gilmore: refused to slow
the plan down to talk
things through

Of course, there are many who would have supported this plan sight unseen were the proposal $70,000,000 or $75,000,000 or $80,000,000 regardless of the damage to funding the delivery of the Metro services we actually rely on every day. The idea of community planning, of involving stakeholders in big capital projects in the process, is lost on these people. And I'm not sure that they understand the connection between increased expenses to pay for this luxury and the loss of income to sustain our basic services.

It is such foolishness, because that is exactly what Hizzoner's budget busters are going to cost us; delivery of services because the money is going to come out of other Metro departments; Metro Public Works, Metro Water, and Metro IT (Metro Water is already raided annually to pay off the Tennessee Titans' football stadium). Keep this mind: it will be bad form to criticize the failure of these taxed departments to deliver services in the future if you made no effort to slow down Erica Gilmore in 2013 when she brought this project to full approval less than three months even against the protests of her constituents that we need more time and community involvement.

Others of us were waving red flags about this plan and its unanswered questions as soon as the first community meeting ended. We warned that something like this could happen to put our services at risk. And, by golly, we were right. The Mayor's Office plans to raid other services that our tax dollars pay for. And here is not a thing we can do about it now. After all, Courthouse logic would say, "We've already committed so much money to this. We need to bite the bullet and see it through. Compared to $65 million, $5 million is chump change." And you know what? We, the citizens of Nashville, are the chumps. This was an open-ended confidence game from jump.

Playing Nashville like a dollar store guitar.

It is amazing to me that Rich Riebeling, the mayor's finance director, can claim with a straight face that he already watched the budget overages of the new convention center. So, he expected them in the ballpark plan. He said nothing about expecting the same kind of overages in the community meeting he at the Farmers' Market. And if he had the same realism regarding the ballpark, why did he fail to provide some cushion in his initial cost estimates? The only thing that I can figure is that he failed because he was just as willing to risk the future delivery of Metro services on First Tennessee Park as he was on Music City Center for the sake of wealthy developers.

The Mayor's Office rationalizes the overage by setting the economic growth ceiling even higher. The sky is the limit for these guys and no expense can be spared for Frank Ward, even though many of us understand that everything has limits. Unforgiving limits. Like those causing Metro Nashville Public Schools to teach some children in frigid portable buildings. See how it is? A minor league baseball owner lives high on the Music City hog because he is already rich while some of Nashville's kids shiver while trying to learn math or science.

Beyond the ballpark dreamers, will it truly be a boon for our North Nashville neighborhoods? We know it will be for Mr. Ward. One spellbound real estate journo relates the owner's plan for thousands of feet of restaurant and bar space to the "symbiotic relationships" retail space has will new ballparks around the country. The flip side of that symbiosis is that in other cities the restaurants and bars that already existed in surrounding neighborhoods are reduced to survival mode.

For all of these rationalizations that local businesses will prosper due to Metro Nashville dropping more bling on Mr. Ward's ballpark, residential and retail, one unwavering truth remains. Frank Ward will be competing with the businesses along Jefferson Street. He will try to pull customers into his complex to spend more in order to backload his government subsidized income. We are bankrolling his competitive advantage. It is that way with all professional team owners in this age. But don't take my word for it. Sports economist Victor Matheson makes the case:

Teams aren’t in the business of making sure to generate a lot of money for the local bar across the street .... They’re in the business of selling you the $11 beer ... once you’re inside the stadium.

In the end, Karl Dean and Rich Riebeling and Jerry Maynard and Erica Gilmore and Megan Barry and every other stadium supporter are hawking a bill of goods and a gallon of snake oil to justify spending tens of millions for what is nothing more than corporate welfare to keep a very wealthy real estate kingpin from pleading poverty and moving the team out of Nashville. As if we don't hear everyday how Nashville is such a hot commodity that people choose to stay without being bought and paid for. As long as we swallow the myth that rich big shots require our tax dollars we will simply look the other way as these budget busting overages continue to roll in.

We can choose to bury our heads in the sand under the pretense of supporting the local team and North Nashville, but how long can we afford to keep doing that?

 Play ball, Megan Barry?  Pay bills!

UPDATE: As of March 18, 2015, the expenses are skyrocketing $10,000,000 over the original budget projections. Karl Dean says that he will not raise taxes or float bonds to pay for it which means that the revenues will have to come from Metro services.


UPDATE: The Tennessean reports on July 17, 2017:

More than two years after the first game at the Nashville Sounds' First Tennessee Park, a new Metro audit says the final cost of the publicly-financed project ballooned to $91 million when adding the amount spent to make improvements to the surrounding area.

The same audit also blames an expedited, 13-month construction timeline as one reason the minor league baseball stadium overshot its budget for construction and land acquisition by around $10 million ....

The audit, which was finalized in April and presented by Metro Auditor Mark Swann to the six-member Metropolitan Nashville Audit Committee last week, was conducted after the stadium was built because the total cost significantly exceeded projections.

"It was basically 13 months from approval to opening day," Swann told The Tennessean. "When we were going through the billings, you could see where we were paying overtime for expedited deliveries."

You may remember that some of living around the ballpark site advocated a more deliberate, participatory, and slow approach to the gentrification project. Can't say we didn't warn you.

That $16,000,000 bridge Erica Gilmore and Karl Dean wanted to build for Gulch Millennials makes even less sense now

Last February, council member Erica Gilmore brought a bill for Mayor Karl Dean that would have authorized $16 million from a $20 million "designation for the maintenance, repair, rehabilitation, and replacement of bridges" to build a sidewalk with terraced seating for 2,000 Gulch residents. Well, maybe not just residents, since several months later word came out that the sidewalk would be an excellent service to a few niche luxury tourists.

Guess what? Findings from a study just announced conclude that right now "there are 80 bridges in Nashville in need of structural repairs." Yet, the Mayor and my council member were willing to drop most of 2014's bridge maintenance funds on a sidewalk to serve the hotel industry. We have dozens of existing bridges that can use those funds, but they attempted to burn most of the money to build a new luxury promenade full of ambiance and attractive planters when the Gulch already has several bridges that pedestrians can use to connect to downtown.

CM Gilmore's bill is indefinitely deferred, but I assume it can be brought up any time she desires to embrace the folly of taking money away from general repair and wasting it on a very special interest. I suspect we will see future attempts to sap unsexy repair funds for sexed up infrastructure.

Study: the jobs "created" by big municipal projects were never really "created" at all

Recently I cited a bunch of evidence that debunked the urban myth that building new ballparks results in net gains for economic development in neighborhoods. The prospect of economic development is one of the rationalizations used by Karl Dean's office to defend Metro's support of First Tennessee Park in its Jefferson Street location.

Another prominent rationalization used to defend Metro's financial support of the park--that subsidies create jobs for North Nashville--is open to debate in the wake of a study that finds that subsidizing capital projects does not do anything of the sort:

a recent study by the Kauffman Foundation suggests that the money [from public subsidies and tax breaks] only shifts jobs from one state to another and doesn't necessarily create them. State and local incentives rarely target the new and young businesses that actually do create jobs.

The subsidy escalation that states have entered has become a zero-sum game in which a largely fixed set of jobs shift from one state to another as companies search for the highest bidder. And even when new jobs are created, companies would likely have needed to add them anyway, and the cost per position to taxpayers can be astronomical.

The 2011 embarrassment of the failed move of IQT Solutions that Karl Dean went through a few years ago drove the point home that the "creation" of jobs in Nashville would cost Canadian workers their jobs if the company had not eventually gone bankrupt. To a certain extent common sense should tell us that the relocation of companies often comes at great cost to the places they leave. But studies help reinforce the point.

If you build it, they will relocate.

At last year's community meeting on the ballpark proposal, Dean's Director of Finance, Rich Riebeling admitted (perhaps in a moment of candor?) that Metro is subsidizing the project because that is how other cities do it. But otherwise, the refrain from ballpark supporters is that transferring money to private companies "creates" jobs; as if those companies do not use the money for purposes other than creating jobs.

How many livable wage jobs (I'm not talking about construction jobs, which end in a few months when the building is erected) are going to be created by First Tennessee Park? The latest research indicates that we will not see enough jobs to equal the $65 million investment that we are dumping into the development.

In Tennessee, innovation and corruption seem to go hand-in-hand

Recent visits from two notable figures, AOL co-founder Steve Case and Salon writer David Sirota, rendered two different takes on how we spend our money in Tennessee. Mr. Sirota cited a study that indicates that the Volunteer State is one of the more politically corrupt due to how it spends most of its revenues: on construction and police protection instead of on education, health, and welfare. The writer also mentioned Nashville's penchant for throwing our tax revenues at private corporations, which don't appear to find our city itself enough of a lure to decline to payola to stay put:

“Cities and counties in states with troubled political cultures demonstrate the greatest willingness to offer business development incentives.” And again, comparing Tennessee’s corruption with its economic development policies seems to confirm this.

According to the watchdog group Good Jobs First, Tennessee is at the top of the list of states offering so-called “megadeal” subsidies to corporations. Likewise, the Nashville City Paper reports that in the name of economic development, the city has been dramatically increasing its subsidies to corporations, including a $65 million outlay for a minor league baseball stadium.

During last December's ballpark debate when suggestions were made that Metro lessen the moral hazard of handing Nashville Sounds owners our revenues by making them more obligated for spending the money responsibly, the Mayor's minions on the Metro Council called it a "poison pill" that would kill the deal. I would add such false provocation to Mr. Sirota's list of indicators of political corruption in Tennessee.

The city's legislative branch expressed shaky ethics in defending Mayor Karl Dean (who has turned private subsidies into an art form) with its outrageous slurs about entirely reasonable requests concerning how public money is spent.

One council member defended the ballpark funding scheme by insinuating that she might retaliate in any future projects in other districts:

Erica Gilmore

If you think about the way I have supported you in the past, your different projects so that your particular districts can thrive and survive. And I think I've been good at doing that. So, I ask that you would support my district tonight, my community, not just for me but for Nashville. We have to make sure things are equal. We have to make sure all communities work, and before I have never stood up on big projects and talked about fiduciary responsibility, taxpayers money. We just trusted it in the past and now we have a question with it.

It is the height of councilmanic privilege to hold future votes over the heads of other CMs in order to push through a ballpark plan despite questions on how public money will be spent. It must have worked, because she did it again last February regarding a different proposal in her district:

Please know that in order for us to work together you have to support me, because if you bring something for your constituents you expect me to support you and you can't support me I can't do it as well.

For his part Mayor Karl Dean acts like it a badge of honor that Metro is making no money off the lucrative ballpark naming deal with First Tennessee Bank and that the only big ticket item Sounds owners are paying for without government assistance is the guitar-shaped scoreboard. No wonder that Hizzoner wanted to push it through with as little public input as possible; Nashville ends up on the short end of the financial stick at almost every point.

Mr. Sirota is on to something in our state. His observations also provide the political backdrop for Steve Case's visit and comments about Nashville's startup businesses. Discussions about startups in Nashville seem to occur in echo chambers at the expense of evidence that the startup industry is contracting. So, Mr. Case's appearance may be an attempt to shore things up.

The Nashville Business Journal reported:

Looking forward, Case said, that entrepreneurial spirit will be needed to continue growing, competing globally and creating jobs.

“If we’re going to create jobs, we have to back our startups,” Case said.

And those startups can’t just be emerging from Silicon Valley, he added. As technology enters its “third wave” and focuses on integrating the Internet into myriad processes – health care, transportation, etc. – other regions of the country with experience in those sectors should emerge as leaders.

For Nashville, Case said, that will mean seizing the opportunity to remain the biggest innovator in the world of health care.

NBJ did not elaborate on what Mr. Case meant by "we have to back our startups". What that has meant in Nashville under Mayor Dean is kicking in corporate welfare for private businesses, even as public services suffer under his budget knife.

I worry about Mr. Case's exhortation to fund disruptive innovation in health care. Tennessee already flirts with corruption in that it spends less public revenue on access to health care than on subsidizing private business. Encouraging technological expansion in health care is not the same as investing public dollars to expand broader access. Dumping money unregulated into the health care industry simply translates to writing executives blank checks to do anything they want. Startup businesses are not beholden to anyone but themselves and the corporations to whom they may or may not eventually sell out to.

Unchecked innovation will only encourage more corruption in Tennessee regardless of how redundantly stylish it has become for techies to claim they "make the world a better place".

Mr. Sirota deftly rebuffed claims that on-the-dole innovation leads to greater economic development:

Do those subsidies result in job-creating technology and innovation hubs? While many locales ramping up their subsidies certainly hope so, the jury is still out — and that’s being generous. Indeed, there’s plenty of evidence that subsidies do not create the economic development their boosters promise, and instead they merely cannibalize already-existing economies. Meanwhile, a lot of those subsidies end up being awarded to politically connected firms, calling into question whether they are really designed with any kind of coherent economic development plan in mind.

So, the growth that happens here is not caused by the disruptions prompted by government redistribution. The growth would have happened somewhere. All the corporate subsidies do is favor some industries over others and cement political influence and cronyism.

A paycheck

One more note of irony to close this out: Mr. Case's visit was hosted by Nashville's Entrepreneur Center, which is housed in the refurbished Trolley Barns on Rolling Mill Hill. Those Trolley Barns are publicly owned (by MDHA, which bought the property for $10 from the county in 2006). The barns were built as part of the Works Progress Administration, the largest New Deal program that pulled our country out of the Great Depression, not by privatizing and outsourcing the work, but by the government directly hiring and paying people to build. Whenever governments promote job creation nowadays, they come across as a faint shadow of the bold New Deal. Likewise, Mr. Case's chatter about startups providing jobs is a negligible projection of what the government could actually do free from the networks of crony capitalism that fund so many political campaigns.

The political corruption that we see rampant in Tennessee and in Nashville with the giveaways is neither necessary nor inevitable, but until there is tectonic shift in political culture here, the corruption will continue.

Suburbanization is a failing development model in Tennessee

Charles Marohn describes how a city like Memphis got itself into a bind by relying on subsidized suburbanization as an answer to the ills of industrialization. Now with "soft defaults" (vs. hard defaults in Detroit) the chickens are coming home to roost:

Relying on the automobile to facilitate growth by horizontally expanding the city, Memphis shifted away from the traditional pattern of neighborhood development and played its part in building the American Dream of large yards, easy driving, and free parking.

Suburbanization, sold as a way to cure blight and promote prosperity, was radically new and untested. It was also irresistible. Driven by federal programs and financial incentives, Memphis – like most American cities – built highways through the middle of the city, annexed property and extended public utilities outward.

In the process, core neighborhoods were destroyed and residents relocated to neighborhoods built in the new, experimental style. Streetcars were abandoned and the economic activity at the old stops shifted to new commercial corridors. Old buildings were torn down to provide parking and millions of tax dollars were spent widening streets to accommodate the automobiles now necessary for daily life.

Eventually, the vitality of the city was inverted from its traditional historic pattern of a strong core surrounded by incrementally growing neighborhoods to one where most economic activity took place on the edge. While this shift left many people behind and devastated the historic neighborhoods of Memphis, the result was seen largely as a social problem, not an economic one. Easy growth on the periphery – where land is cheap, the development community is ready, and all the government incentives are in place – was then, and remains today, the community’s default strategy for economic improvement.

Somewhat unhindered by the levels of industrialization borne by Memphis, Nashville is no less exposed by its overreliance on exurban expansion and what Mayor Karl Dean embraces as "regionwide growth". Nashville recently depends on gimmicky baubles like the new Music City Center, a "We Are Nashville Promenade" and an east-west rapid transit connector ("The Amp") in order to spike short-term economic activity without reference to long-term viability in the city for its inhabitants.

Marohn warns of "new massive gambles" undertaken by sprawling metros to keep heads above water: convention centers and retail complexes driven by municipal debt and tax breaks for already wealthy corporations. Likewise these conditions also apply to Nashville, where it feels like we are mortgaging our future sometimes to fund huge new capital projects that enable the Dean brand more than aid Nashville proper. We are definitely sacrificing urban services, from which the Mayor perennially demands cuts, in order to bankroll the diversions.

In the end, an emphasis on regionwide growth seems like warmed-over, evangelical suburbanism. It constitutes a doubling down on failing economic policies that hurt both Memphis and Nashville in the long run. Once the smoke-and-mirrors floor show of the Dean administration ends, what will be left with?

Look who is giving Karl Dean some stiff competition in the contest to transfer huge sums of public wealth to private corporations

At a time when a state Senate finance committee has found that Tennessee revenues are down because of the sweetheart corporate giveaways, Republican Governor Bill Haslam not only wants to entitle the Sears Corporation to around $100,000 per job it creates here, but he intended to give away the Tennessee Tower, too:

In a script for Gov. Bill Haslam to read on camera -- prepared in 2011 by his Department of Economic and Community Development -- a most unusual offer was drafted to try to entice retail giant Sears to relocate its corporate headquarters to Tennessee.

The Sears effort was dubbed "Project Neptune."

"We're so committed to making your new home in Tennessee that we are prepared to offer you one of the premiere buildings in Nashville's thriving downtown," the script read.

"Our state office building, the Tennessee Tower, can be an instantaneous and immediate home for Project Neptune's corporate headquarters. This highly visible and historic building offers over 600,000 square feet of prime office space -- located conveniently across from Legislative Plaza and a stone's throw away from my office in the state Capitol."

Obscene corporate welfare is in no short supply here in Nashville, regardless of how strapped government budgets are.

When it comes to building minor league ballparks, "politicians will promise anything", says story on FBI probe into ballpark financing

Reading this report on the business of minor league ballpark construction gives me pause to wonder what kind of racket Nashville might be getting itself into with the "public-private partnership" at Sulphur Dell. Bloomberg shares the historical context within which the ballpark bubble has emerged:

From 1993 to 2003, at least 86 minor-league baseball stadiums collectively costing almost $1.5 billion opened in the U.S. and Canada with at least partial public funding, according to public documents and local news reports. It was the biggest boom in the more than 100-year history of minor-league baseball, almost 60 percent more than the number that opened in the 1930s, when President Franklin D. Roosevelt used ballpark construction to create jobs during the Great Depression.

Almost $1.3 billion of the funding for the construction was backed by taxpayers, according to the documents and reports. The average price of the stadiums almost doubled to $21.5 million in the last six years of the boom, from $12 million in the first five years.

The price rose as localities dueled for teams that follow the profits generated by new stadiums, said Andrew Zimbalist, an economics professor at Smith College in Northampton, Mass., who studies stadium financing. To get taxpayer support, politicians too often make promises that don't come to fruition, leaving localities to cover debt payments and maintenance costs that sap funds that could be spent on parks, schools, or police, he said.

"If taxpayers are supporting a stadium because they believe it'll help their city socially and culturally, then fine," Zimbalist said. "If they're doing it because they've been sold a bill of goods that it'll be a boost to the economy, then no, it's not a good expenditure of funds."

That part about FDR needs a caveat: his administration was building ballparks as public works projects to create jobs, and it was federally funded and more accountable to constituents than businesses would have been. Today's "public-private partnerships" operate with little accountability to taxpayers because while public wealth may transfer to private businesses, the latter are not directly answerable to voters. When government goes wrong we can kick the bums out. When big business chooses not to live up to bargains, those of us affected by their failure have little power to stop them. These partnerships give politicians deniability since they can point fingers at private corporations for not realizing their own promises to their constituents.

Ballparks built nowadays rise within a vicious circle of unfettered irresponsibility and unchecked greed.

Within that circle, Nashville is actually behind the curve given the historical context. In coming late to the crap shoot has Hizzoner opened us up to undue risk? The Mayor's Office went all in, hawking the ballpark myths of economic growth to what is impugned as a decaying Jefferson Street corridor. He is making more promises that cannot be sustained. He is out of office in a couple of years and will not be held responsible for any aftermath.

But according to Bloomberg the costs eclipse the promises of growth:

Of the 86 stadiums built from 1993 to 2003, at least 26 used taxpayer funding to pay for debt service and maintenance when elected officials said they wouldn't, failed to meet economic-development projections or lost the teams that said they would play there, the documents and news reports show.

The 26 collectively cost $490 million, with 90 percent of that backed by taxpayers.

Almost a third of all new minor league stadiums built over a decade failed to pay the debt service as promised, did not spur economic growth or lost the teams they were built for even as almost all of the projects were subsidized by taxpayers. There is a distinct chance, then, that one or more of these problems could visit the heavily subsidized Sulphur Dell ballpark. That would be calamitous for Jefferson Street and bad for Nashville.

But few here seem interested in talking about the risks, which would inevitably require us to also talk about ways to shelter ourselves against the risks, which provokes powerful people like Jerry Maynard to cry that we scare ball clubs and developers off. Asking realistic questions about counting the cost of our behavior is labeled as "negativity"; but only labeled as such by irresponsible people.

Minor league money pit watchdogged at Preserve Ramapo

If you are fearless and open to cautionary tales about publicly subsidized ballparks, you should read the rest of this sobering Christmas Day report on the New York minor league town that bought the promises, replicated the major league experience with a minor league park and then watched their credit rating cut and a crisis ensue, which prompted the FBI investigation into the mess.

It may represent an extreme scenario, but it is obviously within the realm of possibility for any minor league town, along with other probabilities of risk short of any extreme.

There is some latent hostility in the takeover of the community planning process

“This is a poison pill,” Councilman Jerry Maynard said, using a corporate term typically applied to measures that discourage hostile takeovers.

--The Tennessean covering CM Maynard's attack on stronger regulations

on Sulphur Dell ballpark developers

Don't even think about commenting on a new ballpark, peons. You are fresh out of time.

Your ignorance is your bliss. What you don't have time to know about this ballpark deal cannot hurt you (at least until 2014 when it is too late to change anything):

Once they break it, we will have bought it, ready or not.


UPDATE: Alright, there are several significant things I am learning that I believe I should share. Not like any of us has time do anything about them:

• The agreement with the state contains a provision that Metro will pay the parking costs of state workers displaced by a ballpark at LPField, along with the costs of a shuttle service to carry them from and back to their cars.
• The Mayor has crafted a proposal to expand this year's already approved capital budget by $10,000,000 more to accommodate a new ballpark at Sulphur Dell. He will present that at the next council meeting.
• The Sounds are currently losing $1,000,000 per year, which may explain why the Mayor is not contactually binding them to sharing the costs of development, but instead relying on their good nature to volunteer the money.

If those are the some of the new things we are learning in less than one month, how many more are we going to learn after council approves this plan on December 10 at final reading?

Titanic feudal peonage

A long time ago Nashville started paying subsidies, including millions out of each year's Metro Water budget, to attract and keep the Houston Oilers / Tennessee Titans here. Supporters acknowledge that the economic impact of pro sports teams is negligible, given the subsidies, but somehow, their logic stipulates, the community spirit teams create (when they win, of course) makes the financial expense worth the blow to the pocketbook.

But given an October Atlantic article about how the public subsidies alone (without ticket sales or merchandising revenues) make a few people wealthy beyond the unending wealth they already possess, how good can the transaction be for the community?

Judith Grant Long, a Harvard University professor of urban planning, calculates that league-wide, 70 percent of the capital cost of NFL stadiums has been provided by taxpayers, not NFL owners. Many cities, counties, and states also pay the stadiums’ ongoing costs, by providing power, sewer services, other infrastructure, and stadium improvements. When ongoing costs are added, Long’s research finds, the ... Tennessee Titans have turned a profit on stadium subsidies alone—receiving more money from the public than they needed to build their facilities. Long’s estimates show that just three NFL franchises—the New England Patriots, New York Giants, and New York Jets—have paid three-quarters or more of their stadium capital costs.

Almost none of the NFL football teams are publicly owned. All are owned by wealthy families, which means that Bud Adams, owner of the Titans, is "converting public subsidies and tax favors into high living for a modern-day feudal elite."

Say what you will about the so-called "intangible" benefits of having a professional team in your city. The feudal lords of the National Football League soak up most of the tangible benefits that the NFL's serf-cities hand them.