A recent article in the NY Times about the longevity of debt servicing for demolished stadiums prompted me to revisit the contentious topic of building a baseball stadium in downtown Birmingham. Again, to preface this: I’m not opposed to baseball per se. I played the sport myself for years; Don DeLillo’s “Pafko at the Wall,” about the pennant game between the Giants and the Dodgers in 1951, is one of my favorite pieces of literature. However, I don’t let my love of baseball overcome the critical spirit. Whereas the Heaviest Corner’s previous jeremiad against the baseball stadium focused on land use, energy, parking and the fact that stadiums can become a source of blight for urban communities, this article will focus primarily on the monetary side of the stadium. When everyone in the civic body is lauding a project, in the spirit of objectivity, I think it is advantageous to hear out the opposing side of the argument, which no one seems to be making.
According to the NY Times article, residents of Seattle and New Jersey are still servicing debt for stadiums that were demolished long ago. Given Birmingham’s historical inability to finance and follow through with projects, particularly megaprojects, the city should take heed and consider the counter-arguments to stadium building instead of naively accepting the platitudes that pass for economics among developers and franchise owners. A lot of people are cheering on the stadium without understanding or researching the economics of professional sports franchises.
The stadium is currently proposed to be financed by a lodging tax. To my knowledge, there is no financial support from the state (correct me if I’m wrong), so that as usual Birmingham will be funding this solo. Take one look at the city’s ailing bus system, which is financed almost solely by the city of Birmingham, with paltry fees collected from surrounding municipalities (observe that when the BJCTA was about to axe several Max Bus routes none of the municipalities that benefit from the Max service offered to help offset the debt) to see what might become of a megaproject financed solely by a city lodging tax, and its not as though Birmingham is a hotspot for the lodging industry. Because Birmingham gets very little help from the state, the city is often shanghaied into pursuing otherwise worthwhile projects alone.
Two recent articles on AL.com (here and here) quote several public officials touting the proposed baseball park. From these articles it is clear that our public officials are just parroting the same economic platitudes they picked up in an economics for dummies book. I understand that our public officials are probably benevolent in their intents here, but that’s no reason not to question the prudence of a proposal.
The report was apparently commissioned by developers and investors, so is there any surprise that the conclusions of the “analysis” were positive? Because sports franchises have such mythological power in our society, teams can seduce local officials and hired consultants into subsidizing professional sports teams with taxpayer monies. Economic impact studies are commissioned detailing the local and regional benefits, but frequently reflect the interests of those who commissioned them. Notice also that the article says, “the report touts the benefit of the new park to the Birmingham Barons, concluding that the downtown location is more convenient than the Barons’ current home in Hoover and would draw more spectators.” Now, what is good for the Barons is not necessarily good for the city. Bell is also quoted as saying, “”Everything is positive within the draft.” If everything is positive within the draft, perhaps a healthy dose of skepticism should be in order?
Public ownership of sports facilities has increased over the decades and franchise owners can get rich off such schemes, and in turn the public supposedly gets non-quantitative consumption benefits associated with living in a city that hosts a pro sports team. There are, of course, those who are willing to trade quantitative benefits for intangible goods, but the burden of a sports arena is not limited to just those who enjoy the pastime. Oftentimes, a team or franchise owner threatens a municipality: either build a new stadium, update the fixtures, or we move to another city that wants us more. In this sense, franchises might be likened to mining operations that go from town to town stripping them of their resources before moving on to the next operation. When a team abandons a stadium, the local municipality or state is left with the bill. Recall that the Late Republic of the Roman Empire was at its most decadent when gladiatorial matches were at their acme.
Above is a graph from the New York Times demonstrating the number of stadiums built with public and non-public funds as well as demolished stadiums still in need of debt servicing.These are obviously NFL teams with stadiums much larger than anything that might be built in Birmingham, but the same economic theory applies across sports.
The lodging tax could be redirected for other uses, such as updating local infrastructure, retaining talented municipal employees, investing in affordable housing, public transit or Birmingham’s crippled public school system, etc.
Households and individuals acting as agents of their own economic interests must strategize their spending and limitless needs and wants to conform to a limited income. A new sports arena establishes competition between entertainment options. Instead of a night at the Alabama Theater, or a special exhibit at the BMA, they might instead spend the income they have allotted for entertainment on a baseball game.
Economists have attempted to quantify the negative impacts of a local sports franchise on worker productivity and found that in cities with major sports franchises, workers waste office hours discussing game outcomes. Although the initial losses seem paltry, when aggregated they can lead to substantial losses in productivity, income and tax revenue. While I’m not totally convinced of this argument myself, workplace downtime is essential for both worker productivity and psychological health, and that “bonding” over a local sports team solidifies rapports in the workplace.
Then there is the argument that a city is not “cosmopolitan” unless it has a stadium, which is philistine in the extreme, but I have heard people sincerely claim this, as if every city in America needed a competitive professional sports stadium. Birmingham has always suffered from a deep, chronic inferiority complex, so if every other mid-sized city has a downtown stadium, the reasoning seems to be that Birmingham has to have one too so it can compete. But why can’t Birmingham invest in the amazing infrastructure it has, and be the only mid-sized city in America NOT to have a downtown stadium? But many municipal government officials suffer from the myth that building “big things” is good for economic growth and development and civic pride.
Lastly, megaproject stadiums are not ahistorical, static entities. They evolve over time and are subject to economic vicissitudes, changes in ownership, etc. Regions Park, Legion Field and Rickwood Field, once prosperous and popular attractions, should all be viewed as the potential future fate of a downtown stadium. When the franchise owner decides that the existing facility is outdated, passe, or doesn’t have enough capacity, that downtown baseball stadium is going to look like Legion Field. One of the tenets of smart growth is investment in pre-existing infrastructure. Redundant infrastructure is inefficient and wasteful from a materials standpoint. The metro area has three underused stadiums as it is. Invest in Rickwood and Legion Fields. If any section of town needs economic development, it is the areas surrounding Legion Field and Rickwood Field. But using a baseball stadium in the same way highway huggers try to use interstates as a form of economic development simply isn’t sustainable economically or ecologically. The current proposed site of the baseball stadium in the light-industrial warehouse district by the interstate could be repurposed for any number of uses. If City Hall wants to invest in an Entertainment District, why not rehab some of those warehouses and build it next to the Railroad Park? As if the only solution to dealing with warehouse properties was to bulldoze and asphalt them. Birmingham has repurposed warehouse districts successfully elsewhere in the city (Pepper Place, for example), so why not adjacent to the Railroad Park?
Even if they built the stadium, sports fans would just drive into the city, park and watch a game and then drive back to the suburbs. The stadium would just become a playground for suburbanites like City Stages was. When I lived in Boston, during a Red Sox game the subway was crammed with commuters from the North Shore. No one wants to live next to a baseball stadium anymore than they want to live next to a strip mine or a nuclear power plant.
There is a growing body of literature in academic economics suggesting that stadiums constructed with public subsidies are boondoggles that actually lower net income, tax revenues and quality of life. Below are a few quotes lifted from the NY Times article reflecting this. Because they’ve been taken out of context to support my argument, I would encourage readers to also consult the entirety of the NY Times piece as well:
“How municipalities acquire so much debt on buildings that have been torn down or are underused illustrates the excesses of publicly financed stadiums and the almost mystical sway professional sports teams have over politicians, voters and fans.”
“With more than four decades of evidence to back them up, economists almost uniformly agree that publicly financed stadiums rarely pay for themselves. The notable successes like Camden Yards in Baltimore often involve dedicated taxes or large infusions of private money. Even then, using one tax to finance a stadium can often steer spending away from other, perhaps worthier, projects.”
“Stadiums are sold as enormous draws for events, but the economics are clear that they aren’t helping,” said Andrew Moylan, the director of government affairs at the National Taxpayers Union. “It’s another way to add insult to injury for taxpayers.”
“Residents of Seattle’s King County owe more than $80 million for the Kingdome, which was razed in 2000. The story has been similar in Indianapolis and Philadelphia. In Houston, Kansas City, Mo., Memphis and Pittsburgh, residents are paying for stadiums and arenas that were abandoned by the teams they were built for.”
The story is the same all over the country - why should Birmingham be any different? And when this future team, whoever it is, abandons the stadium, as they inevitably will, in search of bigger stadiums and better seats with sweetheart leases, Birmingham will be left with yet another Legion Field, this time in its urban core. Public investment in sports franchises as a means of economic growth is a thing of the past, and Birmingham is only demonstrating just how stuck in the past it is by being hoodwinked by the blandishments of developers and franchise owners. The same holds of the Beltline project. Although it may be futile to make an argument against sports franchises in the Deep South, where college football is the second largest religion, the message of these quotes to Birmingham is this: learn from the mistakes of other cities. If baseball stadiums were economically sustainable, and paid for themselves, they wouldn’t need support from tax revenues.