$867 million in federal subsidies for three NYC sports stadiums a big loss
A recent Brookings institute study shows that federal government subsidies of big-ticket sports stadium construction are essentially money down the drain, The Real Deal reports. Three New York City stadiums–Yankee Stadium, Citi Field (both completed in 2009) and the Barclays Center–have accounted for a significant portion of these subsidies in the form of tax-exempt bonds, which have resulted in the loss of $3.7 billion in federal government revenues since 2000.
Together, they’ve been the recipients of $867 million in direct and indirect subsidies. The aforementioned losses include lost tax revenue from issuing exempt bonds and the indirect proceeds high-income bond holders receive. By this measure, Yankee Stadium leads the pack, accounting for $492 million in lost federal revenues. Citi Field and Indianapolis’ Lucas Oil Stadium are tied for second place with $214 million each in lost revenue. Brooklyn’s Barclays Center is in third place with a federal tab of $161 million.
This trend goes back to 1953, when the Boston Braves moved to Milwaukee because of a new stadium constructed with public money. Prior to this, most stadiums were built privately. There was an attempt in 1986 by Congress to reform the practice, but it backfired with state and local governments providing financing packages for federal subsidies. It’s this previous measure that the authors feel is today’s remedy–elimating the “private payment test” so that any stadium being used for “private business use,” which is any professional sports stadium, is not eligible for federal tax-exempt financing.
The authors also say that, “there is little evidence that stadiums provide even local economic benefits,” and that “decades of academic studies consistently find no discernible positive relationship between sports facilities and local economic development, income growth, or job creation.”
[Via TRD]
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Barclays Center image via AECOM
