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by Mike Krieger
\nLiberty Blitzkrieg<\/p>\n
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Like pretty much everything in the modern U.S. economy, wealthy and connected people fleecing taxpayers in order to earn even greater piles of money is also the business model when it comes to sports stadiums. <\/strong>Many cities have tried to make voter approval mandatory before these building boondoggles get started, but in almost all cases these efforts are thwarted\u00a0by a powerful coalition of businessmen and corrupt politicians. Sound familiar? Yep, it a microcosm for pretty much everything else in America these days.<\/strong><\/p>\n To get you up to speed, here are a few excerpts from an\u00a0excellent Pacific Standard<\/em> magazine article<\/a>:<\/p>\n Over the past 15 years, more than $12 billion in public money has been spent on privately owned stadiums. Between 1991 and 2010,\u00a0101 new stadiums were opened across the country<\/a>; nearly all those projects were funded by taxpayers.<\/strong> The loans most often used to pay for stadium construction\u2014a variety of tax-exempt municipal bonds\u2014will cost the federal government at least\u00a0$4 billion<\/a>\u00a0in taxpayer subsidies to bondholders. Stadiums are built with money borrowed today, against public money spent tomorrow, at the expense of taxes that will never be collected. Economists almost universally agree that publicly financed stadiums are bad investments, yet cities and states still race to the chance to unload the cash. What gives?<\/em>\u00a0<\/span>\u00a0<\/em><\/p>\n To understand this stadium trend, and why it\u2019s so hard for opponents to thwart public funding, look to Wisconsin. Last month, Governor Scott Walker\u00a0signed a bill<\/a>\u00a0to spend $250 million on a new basketball arena for the Milwaukee Bucks. (The true cost of the project, including interest payments, will be more than\u00a0$400 million<\/a>.)<\/strong><\/em><\/p><\/blockquote>\n Isn\u2019t Scott Walker supposed to be \u201cMr. Fiscal Conservative?\u201d<\/p>\n The story of what\u2019s happening in Milwaukee is remarkable, if not already familiar. Step one: A down-on-its-luck team is\u00a0purchased by a group of billionaire investors<\/a>. Step two: The owners nod to their \u201cmoral responsibility<\/a>\u201d to keep the team in its hometown,while simultaneously lobbying for a new stadium. Step three: The team\u00a0threatens to abandon<\/a>\u00a0its hometown for greener pastures\u2014and newer facilities\u2014in another city. Step four: The threat\u00a0scares up<\/a>\u00a0hundreds of millions of public dollars in stadium financing. Step five: The new stadium opens, boosting the owners\u2019 investment, while sloughing much of the financial risk onto taxpayers.<\/strong> As\u00a0New York Times\u00a0columnist Michael Powell\u00a0wrote<\/a>, \u201cFrom start to desultory end, Milwaukee offered a case study in all that is wrong with our arena-shakedown age.\u201d<\/em><\/p>\n That\u2019s not to say the Bucks plan was entirely unopposed. Last year, a coalition of religious and community groups known as Southeastern Wisconsin Common Ground tried to fight the arena proposal. It called for a voter referendum on the bond issue, and lobbied for money to improve Milwaukee\u2019s public parks and playing fields.<\/strong> Powell explains the rest:<\/em><\/p>\n The local business community\u2014which includes several members who have ownership shares in the team\u2014dismissed such ideas as impractical.\u00a0\u201cThe Bucks took control of the strategy from the start,\u201d said Bob Connolly, a member of Common Ground. \u201cThey pushed the referendum idea right to the side.\u201d\u00a0Months later, when Common Ground leaders turned to usually friendly local foundations for more funding, they found themselves turned away. You are, they were told several times, too political.<\/strong><\/em><\/p>\n The lesson is clear: It is incredibly difficult to fight these projects. And Milwaukee is not alone. In St. Louis, for example, a judge recently\u00a0struck down a city ordinance<\/a>\u00a0requiring voters to approve public spending on a new stadium for the Rams.<\/strong> Back in June, when Glendale, Arizona, tried to back out of its\u00a0atrocious deal<\/a>with the National Hockey League\u2019s Coyotes, the team\u00a0quickly slapped the city with a lawsuit<\/a>. Meanwhile, in building a new billion-dollar home in Minneapolis, the Minnesota Vikings found a\u00a0loophole<\/a>\u00a0around a state law mandating that all public spending on sports teams be put to a vote.<\/em><\/p>\n Not surprisingly, publicly funded stadiums face the least opposition in cities with strong growth coalitions, which Eckstein and Delaney\u00a0define<\/a>\u00a0as the \u201cinstitutionalized relationship between headquartered local corporations and the local government.\u201d<\/strong> A coalition can claim to represent the interests of a community\u2014not an outrageous claim on its face, since it comprises the powerful and prominent local leaders\u2014while shielding team owners from both direct criticism and grassroots opposition. This is precisely\u00a0what\u2019s happening<\/a>\u00a0in Milwaukee. Here\u2019s the\u00a0Times\u2019 Powell again:<\/em><\/p>\n The hedge fund owners proved deft with ownership shares, handing these out to prominent Wisconsin businessmen and Republicans, including the developer Jon Hammes. Hammes has become national finance co-chairman for Walker, a Republican presidential candidate. The\u00a0Capital Times\u00a0recently reported that a political action committee connected to Hammes contributed $150,000 to the governor in late spring.\u00a0<\/em><\/strong><\/p>\n Economists have proposed\u00a0antitrust lawsuits against leagues<\/a>\u00a0and\u00a0stricter naming rights for teams<\/a>, as Slate\u00a0suggested in March<\/a>, but neither idea has gained much traction. A\u00a0Florida proposal<\/a>\u00a0would have shared team revenues with the public<\/strong>\u2014a somewhat radical idea that Deadspin boldly declared \u201cThe Best Idea for Stadium Financing We\u2019ve Ever Heard<\/a>\u201c\u2014but it was quickly\u00a0deemed illegal<\/a>.<\/strong><\/em><\/p>\n<\/blockquote>\n Sharing revenues with the taxpayers funding the stadium: Illegal.<\/p>\n Blatantly corrupt private-public partnership cartels: Perfectly legal.<\/p>\n Two words: Banana Republic.<\/strong><\/p>\n In case you forgot the ultimate casino-gulag partnership of them all\u2026<\/p>\n America in 2013: Florida Football Stadium Named After a Private Prison Company<\/a><\/p>\n <\/ins>\n
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