The stadium scam: Read 'Field of Schemes'
Don't believe any promises about a Providence stadium deal being "revenue neutral.'' All deals for professional sports stadiums are overwhelmingly for the benefit of the team owners. This note was sent along to me to respond to the attempt by Rhode Island House Speaker Nicholas Mattiello and his pals to cheat the public with a deal to put a baseball stadium in prime land in downtown Providence. They have thought that Rhode Islanders were too stupid and/or passive to stop this special-interest scam.
"A message for those elected officials still supporting the PawSox stadium deal: With all the data and analysis now available ) a ‘yes’ vote on a stadium deal allows for only one explanation. You can no longer run your mouth about it being good for business (see Forbes, see WSJ). And you can no longer pretend it will encourage development in the neighborhood and benefit anyone but the owners (see sports economist Victor Matheson and John Oliver.) -- and, ultimately, their political friends.
"Still not convinced and need a book for the beach? Try “Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profits” by Neil deMause and Joanna Cagan. It came out in 2008!''
"Field of Schemes is a play-by-play account of how the drive for new sports stadiums and arenas drains $2 billion a year from public treasuries for the sake of private profit. While the millionaires who own sports franchises have seen the value of their assets soar under this scheme, taxpayers, urban residents, and sports fans have all come out losers, forced to pay both higher taxes and higher ticket prices for seats that, thanks to the layers of luxury seating that typify new stadiums, usually offer a worse view of the action.''
Charles Chieppo: Providence stadium bogus 'economic development'
BOSTON
As long as governments are made up of human beings, we can't expect them to be perfect. But they should learn from their mistakes, such as the whopper that Rhode Island state officials made in 2010 when they plowed $75 million into 38 Studios, a now-defunct video-game company started by former Boston Red Sox pitcher Curt Schilling.
Fast-forward five years, and another proposal that combines baseball, business and politics is on the table in Rhode Island. The owners of the Pawtucket Red Sox, Boston's top farm team, are asking for millions of dollars in taxpayer subsidies as part of a plan to build a downtown ballpark in neighboring Providence.
Under the proposal, the owners would spend $85 million to build the stadium and a parking garage. The state would take out a 30-year lease on the stadium land, for which taxpayers would pay $5 million annually in rent. The team would lease the stadium back from the state for $1 million per year, leaving state taxpayers on the hook for $4 million a year, or $120 million over the 30-year lease term.
The team is also asking city taxpayers for help. They want Providence to sign an agreement that would exempt the land from property taxes for 30 years.
The owners are following what has become a well-worn script for teams looking for stadium subsidies, warning that they will likely leave Rhode Island if the deal isn't approved. They've also commissioned the requisite economic-impact study, which estimates that the stadium would generate $12.3 million a year in direct spending for the local economy and about $2 million annually in state tax revenue. As usual with such studies, the owners call the projections "conservative."
Perhaps Holy Cross College economist Victor Matheson said it best when he told The Atlantic that, when it comes to these impact studies, "take whatever number the sports promoter says, take it and move the decimal one place to the left. Divide it by ten, and that's a pretty good estimate of the actual economic impact."
Building a minor-league baseball stadium in Providence would add little net new money to the local economy. The majority of fans would come from close by, meaning that they would likely spend their entertainment dollars at an area movie theater or restaurant if they weren't going to a game
As for benefits to businesses around the stadium, they tend to be limited to just a few blocks. And with 72 home games, what happens during the other 80 percent of the year?
The last time that Rhode Island leaders dabbled at the intersection of baseball, business and politics, it cost their constituents $90 million (the $75 million in principle invested in 38 Studios plus $15 million in interest). Some may conclude that such non-economic benefits as local pride or entertainment value would make a Providence stadium worth the investment, but they should know better than to view the proposal as genuine economic development.
Charles Chieppo (Charlie_Chieppo@hks.harvard.edu) is a research fellow of the Ash Center at Harvard's Kennedy School. This piece originated at governing.com.