Questions, answers on stadiums

February 25, 1996|By Jon Morgan, a reporter for The Sun.

Here are the answers to some commonly asked questions about the proposals to build two National Football League stadiums in Maryland -- one for Baltimore's team and another in Prince George's County for the Washington Redskins:

What will Baltimore's stadium cost us?

The deal calls for the state to spend $200 million: $190 million to design and build the 70,000-seat stadium and $10 million to purchase additional land or construct a parking deck to meet the agreed upon minimum number of parking spaces for the Orioles and football team. In addition, the state will spend $2 million renovating Memorial Stadium for use while the new facility is built.

How will the new stadium be paid for?

The $200 million will be raised over the next five years from several sources: $87 million from the sale of bonds; $15.5 million from the refinancing of existing Maryland Stadium Authority bonds; $5 million from a surcharge on season tickets called "permanent seat licenses"; $70.6 million in sports lottery revenue; and MSA cash on hand and income from Camden Yards.

What's the interest going to cost us?

A lot. Between now and the year 2026, Maryland will pay $92 million on the $87 million worth of bonds.

How will the debt be repaid?

Chiefly from special sports lotteries, but also from rents paid by the Orioles, the football team and warehouse tenants as well as admissions taxes and $1 million a year from Baltimore.

Baltimore city pays $1 million a year?

The city has been paying that since Oriole Park opened; the amount won't change with the football stadium. It was a gesture of support by the city that got the 1987, twin-stadium funding bill passed. The city gets 20 percent of the admissions taxes raised as well as about $200,000 a year as payments in lieu of property taxes.

Have we paid off Oriole Park yet?

Far from it. Between now and the year 2020, Maryland will pay $295 million in principle and interest to bondholders for the construction of Oriole Park, and another $130 million for the land that sits under both stadiums.

So we're spending more than a half-billion dollars on stadiums?

Yes and no. Economists use something called "present value" to estimate the corrosive effect of inflation on money. So while $517 million will be shelled out on stadium debt over the next 30 years, it is much less in 1996 dollars.

Couldn't we build schools or prisons with that money?

Yes, but not as many as you may think. First of all, the stadium will be built with "revenue bonds," a type of borrowing that can only be used on money-making projects like stadiums and convention centers -- not prisons or schools. But the money that will be used to repay the bonds every year could be used for any purpose: about $6 million for the football stadium and a total of $20 million for the twin-stadium Camden Yards complex.

How much money is that in the grand scheme of things?

If you think it's a misplaced priority, every dollar spent is too much. But $6 million is not a large part of the state's $15 billion annual budget. For comparison, the state last year spent $1.7 billion on aid to local schools, $6 million to operate the new central police booking facility in Baltimore and $3.4 million running the Baltimore Zoo. The Pratt Library has an annual budget of about $20 million.

But supporters say no tax dollars will be used.

That's technically accurate. The bonds will be repaid largely with sports lottery games. But there's no evidence lottery players differentiate between the various instant games. That means every $1 spent on a stadium game could mean $1 less spent on another lottery game -- the proceeds of which would go to the state treasury.

I thought the project would generate enough tax revenue to pay for itself.

Estimates of the annual new taxes generated from the stadium range from $5.5 million to $10.7, meaning that may be true. But such estimates are hard to make with precision because many of the tax dollars collected at the stadium would be raised elsewhere if no team played here.

What do we get out of it?

That depends on who you believe. Stadium construction will see many well-paying jobs created in the city for a few years. The long term impact is harder to figure. A pair of state studies came up with estimates of $33 million a year and 534 jobs, or $110 million and 1,394 jobs. In general, most independent economists say the impact of a football team is minor because much of the money spent at games would otherwise go to movie theaters, bowling alleys and other entertaiment venues. Few jobs are created -- the team itself will employ about 75 people -- and $200 million could bring the state a significant employer.

What about the intangibles?

Supporters of the project say there is no way to measure a major-league sports franchise's contribution to a city's image and quality of life. Oriole Park has changed the way people view Baltimore and, for many fans, enhanced their lives. Fans who lived through the heyday of the Colts know the impact the team had on its city.

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