WASHINGTON, May 16 (UPI) -- Public subsidies for sports facilities don't pay off in economic benefits, a professor of urban and regional planning said.
"With most of these public-private partnerships, the public sector creates the opportunities and the private sector reaps all the rewards," said Tim Chapin of Florida State University.
In his doctoral research, Chapin asked whether sports stadiums generate downtown redevelopment. "I looked at Baltimore and Cleveland as my two big cases," he told United Press International in a phone interview from Tallahassee.
"I found that the Camden Yards ballpark has done remarkably little for the city in terms of urban redevelopment," he said. "Most of the glitter in downtown Baltimore has been there long before the ballpark. ... It was touted as the anchor for revitalizing the west side of downtown Baltimore." But in nearby rundown neighborhoods, about the only economic benefit is that residents charge fans $20 to park on game days.
"Every reputable, empirical study has concluded that these are not good financial investments," said Chapin, who prepared his study for the Lincoln Institute of Land Policy.
Why, then, have sports tycoons been able to get away with socializing the cost of doing business?
"It's a good sell." Chapin replied. "If you're the mayor of a town like Baltimore or Cleveland, and they say, 'Let's build a new ballpark,' you say, 'Sounds good to me.'
"It's the type of project that gets a lot of press. If you're there when it actually opens, you can cut the ribbon and sort of take credit for it.
"And the voters have short memories when it comes to this stuff. When the ballpark opens and 50,000 people are there to see a game, they tend to say, 'Wow! This is actually pretty neat.' They don't realize that they may be paying a lot of money for it."
Sports stadiums have been built with public money in the United States for almost half a century.
Chapin said he probably was the first to look specifically at urban redevelopment, but many studies -– beginning in the early 1970s -- have shown that cities generally do not make money from these projects.
So why have we heard so few arguments against them?
"I actually think there's more of that than we think there is," Chapin answered. "But that side of the story is often very poorly funded." Opponents are often characterized as malcontents and misanthropes who don't want to spend money on anything.
"The sports teams spend a lot of money and hire very big, powerful consulting firms to generate these glossy studies to suggest that there's tremendous impact." But these studies inflate the benefits and understate the costs, he said. "They make tremendous assumptions that invariably don't hold true."
Chapin said a consultant in Cleveland predicted that the Gateway Complex would generate some 28,000 jobs. "But it turned out that it was well less than 2,000 jobs," the professor said. And those that are created are usually low-paying seasonal service-sector jobs that cannot serve as the basis for a robust local economy.
How do people keep getting away with making these unfounded claims?
"There's wonderful sociological theory that talks about the idea of a growth machine," Chapin replied. "The idea of a growth machine is that powerful people who own land in downtowns are very good friends with mayors and city councils, the people who run newspapers, the bankers and the construction industry. And they all want this to happen, because it's good for them for whatever reason. They do a real good job of selling something that, if you look at the details, doesn't make sense.
"But what's the old saying? Never overestimate the intelligence of the American voter. They tend not to get very educated about things. They sort of take what's given to them.
"The growth machine is very good at packaging ideas and swaying people through sheer force of will sometimes."
Of course, this is the sort of thing journalists are supposed to sniff out.
"I think you'd find more (of such reporting) than you think you'd find," Chapin said. "At the same time, these mega-projects are very attractive to big newspapers."
In a statement prepared with FSU's Jill Elish, Chapin added more detail.
Publicly financed stadiums are a growing trend, he said. In the 1990s alone, more than 40 major league facilities were built, at a cost of more than $9 billion. About 55 percent of that was public money.
"I'm a firm believer that the public should be involved to some degree," Chapin said, "but the local governments should be able to get some of the money back to at least help them pay off the debt."
Debt service is only one cost that tends to be underestimated. Others are the cost of land, construction, operation and maintenance, the relocation of other businesses, police and ambulance services for public events, new highway interchanges, water and sewer lines, and lost tax revenue.
UPI asked Chapin what he found in Cleveland.
"In terms of taxes and jobs, the Gateway Complex didn't do much," he answered. "But it's done a very good job in terms of revitalizing a portion of the downtown. The Gateway District, when they began planning for that project in the early 1980s, was essentially a big parking area. They'd knocked down all these old buildings, and it was sort of an eyesore. "
Is Cleveland an exception to the trend in that respect?
Chapin replied that he wanted to learn if stadiums and arenas catalyze redevelopment. "In the case of Cleveland, the answer is yes, and in the case of Baltimore, the answer is no. So what I concluded was that they offer opportunities for redevelopment. Now, that's a different question from, 'Is it worth it?'
"Economically, if you trace dollar flows and ask, 'Did the public sector get back what it put into the project?' the answer's still no. Cleveland is still paying for that stadium. It cost more than they thought it would.
"There's a lot of economic ... costs and benefits that are attached to these facilities," Chapin said.
For example, the Gateway Complex has brought in thousands of suburbanites who used to be "deathly afraid" of coming to downtown Cleveland. "That's a tremendous benefit," he said.
But at the same time, the land is "forever tied up in that," lost to tax revenue or "whatever other uses might have popped up.
"There's also tremendous opportunity costs. If you spend $200 million on a stadium, that's $200 million you can't spend on other stuff."
The cost of Cleveland's Gateway Complex has been estimated as high as $470 million.