Posted by Ilya Somin:
The New York Times on Public Funding for the New Yankee Stadium:
http://volokh.com/archives/archive_2009_03_29-2009_04_04.shtml#1238896116
I have written several posts criticizing the massive public financing
of the new Yankee Stadium, which has received more government
subsidies than any other stadium project in American history (see
[1]here for the most recent, with links to earlier ones). Yesterday,
the New York Times had [2]an interesting article on the evolution of
sports stadium financing in New York:
In dimensions and decor, the new [Yankee] stadium, handsome and
comfortable, is meant to evoke the old one. But the resemblance is
only concrete deep. This is not history, but a costume party, a
rigging of familiar geometry. It disguises a radical departure from
New York�s baseball history: the embrace of public subsidy � around
a billion dollars when all the costs are added � for private
wealth.
The first incarnation of Yankee Stadium opened in 1923. The owner,
Jacob Ruppert, bought private land, raised private funds for the
construction, and maintained the place with money he made in ticket
sales. Ruppert and his successors paid taxes on the property: the
land alone was assessed at $1.75 million in 1923. By 1970, the
stadium and land were valued at $5 million.
If you were to page through the annual city tax rolls, you would
find the valuation of Yankee Stadium � as well as the Polo Grounds
in Manhattan and Ebbets Field in Brooklyn, the homes of the Giants
and Dodgers � listed right alongside the other big properties in
the city, like Rockefeller Center, the Metropolitan Life building
and Loews Paradise theater.
What do those old tax rolls tell us?
They say that for much of the 20th century, baseball in New York
was recognized by the government as another commercial venture,
with all the opportunities and responsibilities of owning property.
Not at the new �cathedral of baseball.� In fact, the stadium is
being treated by the government as if it were a house of worship,
not a place to sell $10 cups of beer. The partnership that owns the
team has a 40-year lease on what had been city parkland. The
partners will pay neither property tax nor the �payments in lieu of
taxes� that are made when a private business venture occupies
public space.
The fact that sports stadiums were routinely built and financed with
private funds up until the 1960s and 70s - at a time when the business
of pro sports was far less lucrative than today - undercuts owners'
claims that they need government subsidies to stay in business.
Indeed, in that earlier era, sports team owners not only paid for
their stadiums themselves but also paid property taxes on them at the
same rates as other landowners.
Ironically, as the NYT article points out, the Yankees opposed public
financing and tax exemptions for the construction of the rival New
York Mets' Shea Stadium in the early 1960s. Then-Yankees General
Manager Al Weiss warned that publicly funded sports stadiums would
become "white elephants" for city governments. Weiss' prediction has
turned out to be accurate. Today, [3]public funding for sports
stadiums routinely fails to provide economic benefits that even begin
to approach their costs.
References
1. http://volokh.com/archives/archive_2008_09_14-2008_09_20.shtml#1221763928
2. http://www.nytimes.com/2009/04/04/nyregion/04about.html
3. http://volokh.com/archives/archive_2006_08_13-2006_08_19.shtml#1155864420
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