Private funds have worked in other cities

Financing

Baseball In Washington

December 16, 2004|By Childs Walker | Childs Walker,SUN STAFF

With a configuration that allows home runs to splash into the bay and a home team that routinely draws sellouts, San Francisco's SBC Park is often described as one of baseball's finest venues.

The park - built entirely with private funds - also is a gold standard for the many economists who say cities are foolish to pay hundreds of millions in public dollars to provide stadiums for professional sports teams.

Those economists are lauding the District of Columbia Council's vote Tuesday to require substantial private financing for a new baseball park near the Anacostia River. They say cities never recoup their ballpark expenditures and should look to San Francisco, which rejected four public financing appeals, as a model for sensibility.

"The vote shows that resistance to these stadium deals is galvanizing," said Robert Baade, a sports economist at Lake Forest College in Illinois. "There's a realization that they're not all they're cracked up to be."

Baade and other economists argue that stadiums do little to create jobs, attract surrounding businesses or draw tourists. They say that at best, cities receive unquantifiable boosts in self-image.

But many people who have worked on stadium deals say council members and economists are being shortsighted.

`Public functions'

"Baseball teams fill very important public functions," said Stan Kasten, former president of baseball's Atlanta Braves, the Atlanta Hawks of the National Basketball Association and the Atlanta Thrashers of the National Hockey League and chairman of Philips Arena in Atlanta. "The people who criticize these deals are looking at a very, very narrow definition of the returns teams bring."

The Washington-area's other major league sports venues were financed with mostly private funds: FedEx Field in Landover, home of the National Football League Redskins, and the MCI Center, where the NBA Wizards and NHL Capitals play.

Plan might not work

But that doesn't mean such a model would work for baseball, said Martin Klepper, an attorney for Skadden, Arps, Slate, Meagher & Flom who worked on the Redskins deal.

"The NFL is a much more profitable league," he said. "The question here is if baseball produces enough of a revenue stream to support the financing of a team and the financing of a stadium. I'm not sure."

Klepper hopes the council will be more flexible in offering public money.

"It's amazing to me that people don't see the economic benefits baseball will bring to D.C.," he said.

Washington Mayor Anthony Williams said the new team and ballpark could create billions of dollars in new development for Washington.

Ballpark construction would support 3,500 jobs and generate $5 million in new tax revenues, according to city projections. Annual team and ballpark operations would create more than 350 jobs and nearly $30 million in new tax revenues.

Vigorous debate

Economists, politicians and team officials have vigorously debated the pros and cons of stadium deals in recent years as professional leagues have pressured dozens of cities to pay up or risk losing their teams.

Though the oldest stadiums, such as Wrigley Field in Chicago and Fenway Park in Boston, were built with private dollars, public funding has been a major component of most stadium deals in the last 35 years. Both Oriole Park at Camden Yards and M&T Bank Stadium were built almost entirely with public money.

Former Orioles owner Edward Bennett Williams spent much of the 1980s wrangling with city and state officials for stadium money, always with the implicit threat that he could move the team to Washington. In 1987, Williams told legislators that the era of private financing was over.

Polls showed voters would have rejected the plan, but lawmakers went along and approved a twin-stadium plan for Camden Yards, then an industrial park.

In 1995, Maryland lawmakers balked at the deal that lured the Cleveland Browns to Baltimore, claiming it was too generous. Even though it had a signed contract with the state that called for no investment toward construction, the team agreed to contribute $24 million over 30 years and lawmakers went along. The NFL franchise later changed its name to the Ravens.

Covering costs

In the years since, cities from San Diego to Milwaukee to Philadelphia have agreed to cover most of the costs for baseball stadiums. Others, such as Minneapolis, have resisted and been threatened with losing their teams. Baseball Commissioner Bud Selig listed a publicly financed stadium as a virtual pre-requisite for the city that would obtain the Montreal Expos.

There are two exceptions: San Francisco and St. Louis, where the Cardinals are paying about 75 percent of the bill for a park set to open in 2006. Under the amended deal approved Tuesday by the D.C. Council, half the cost of a downtown stadium would be privately financed.

Critics of public stadium deals say they hope these examples indicate a new trend.

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