Public Isn't Always Willing to Pay for New Stadiums

Article excerpt

NEW YORK -- Seventy-five years ago, Jacob Ruppert and Tillinghast Huston built Yankee Stadium for $2.5 million, without debates over where to locate the stadium, how much money the city would chip in or how many luxury suites were needed to maximize their cash flow. It was their money, no arguments.

Today, it is almost impossible to find a city where there isn't fierce, even ugly, debate. From New York to Pittsburgh to Milwaukee to Seattle, governments and taxpayers have been faced with the question of how much to pay for building new stadiums or arenas -- or risk teams fleeing to other cities. At the same time, economists continue to cast doubt on the monetary benefits cities reap from new playing fields.

Such a debate has erupted in New York between Mayor Rudolph Giuliani, who wants to use at least $600 million in city business taxes to help finance stadiums for the Yankees and Mets, and City Council President Peter Vallone, who wants a November referendum to let the voters decide. Giuliani, who sarcastically dismissed Vallone's call for a referendum, said he was prepared to invoke little-used powers under the City Charter to block a vote in November. If the experience of other cities is any guide, the mayor may have good reason to want to avoid such a vote. While referendums have passed in some cities over the past few years, voters in others have rejected measures to use tax money to build new arenas and made their political displeasure known. On Tuesday, for example, voters in two North Carolina counties roundly defeated a plan to raise money from taxes on food and baseball tickets to finance a stadium to lure the Minnesota Twins to the region. The rejection of numerous plans by the Minnesota Legislature to publicly finance a new stadium led to the team's owner, the banker Carl Pohlad, to tentatively agree to sell the club to a Hickory, N.C., businessman. Last November in Pittsburgh, voters in an 11-county area overwhelmingly rejected a half-cent sales tax increase intended to bankroll new stadiums for the Pirates and Steelers, the expansion of a downtown convention center and other projects. The previous May, in Columbus, Ohio, voters defeated a 1/2-cent sales-tax increase that would have financed the construction of a hockey arena and a soccer stadium. And in San Francisco, voters have repeatedly rejected using tax dollars to finance a new stadium for the Giants. But if those cities are examples of voter dissatisfaction -- and sometimes disdain for using public funds to help out wealthy team owners -- they also provide lessons for government officials on coming up with other, more creative tactics. When Pittsburgh voters turned down the sales-tax increase, politicians went to work on alternative financing. Now a hodgepodge of proposals called "Plan B" has developed, including using a portion of an existing county sales tax, a ticket surcharge, a tax on visiting athletes, and hefty contributions from the teams. …