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The Dollars and Sense of Public Financing of Professional Sports Arenas

- May 30, 2008


Those of us who reside in the nation’s capital are reveling at the very idea of having “our” team, the Washington Nationals, playing in brand-new stadium (pictured above). The team is lousy and the fans are staying away in droves, but at least we can bask in the civic glory of having financed a dandy new playpen for the ballplayers. And now our mayor, who opposed that project while he was a member of the city council, has bought into the idea big-time, having signed onto a plan to spend $125 million or so to help build a new soccer stadium just across the Anacostia from the new ballpark. He’s also said to be flirting with the idea of erecting a new football stadium to try to lure the Washington [insert unmentionable profesional football team name here] back into the District from the crummy 91,000-or-so-seat house that Jack Kent Cooke built just a decade ago out in suburban Landover (nee Raljohn).

The local success story here that everyone is trying to repeat is the Verizon (nee MCI) Center, the basketball arena over on Seventh Street where the local Wizards and Mystics play. They, like the Nationals and the [insert unmentionable professional football team name here], aren’t very good, but the new downtown facility has sparked considerable redevelopment in a previously run-down part of town. That’s great, but what more generally can we learn from it?

Not much, it turns out.

There’s a fairly substantial research literature on this very question, and the results (though inevitably being somewhat mixed — this is social science, after all) give little aid and comfort to all the local developers and civic boosters whose idea of progress stems from an over-active Edifice Complex. Here is a nice piece by Dennis Coates, an economist at the University of Maryland-Baltimore County, that splashes cold water all over developers’ claims about the benefits of public financing of sports facilities.

[Hat tip to Scott Adler]

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