The unreasoning faith in baseball as a restorative for the city is just that, unreasoning. While you're celebrating the deal to bring baseball back to Washington, understand just what it is you're getting: a large publicly financed stadium and potential sinkhole to house a team that's not very good, both of which may cost you more than you bargained for and be of questionable benefit to anybody except the wealthy owners and players. But tell that to baseball romantics, or the mayor and his people, and they act like you just called their baby ugly.
It's lovely to have baseball in Washington again. But the deal that brings the Montreal Expos to Washington is an ugly baby. Let's be clear: The real and only benefit of a stadium is that people derive pleasure from it. It's not an especially wise financial thing for the city.
Washingtonians will have to subsidize $440 million in stadium building projects, which Mayor Anthony A. Williams will have to sell to the D.C. Council as a "good investment" despite a wealth of unbiased and informed research that shows it's a bad one. A stadium isn't a good investment, according to Stanford University economist Roger Noll, "It's a toy." While the emerald chessboard folks and rotisserie wonks may think new business and concession taxes are a fair price to pay for the whap of the old horsehide, some lower-income residents don't agree, and neither do 70 percent of Washingtonians polled last summer who objected to public financing, and neither do three incoming members of the D.C. Council.
"Any independent study shows that as an investment, it's silly," says Noll, the co-author of "Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums." "If they're trying to sell it on grounds of actually contributing to economic growth and employment in D.C., that's wrong. There's never been a publicly subsidized stadium anywhere in the United States that had the effect of increasing employment and economic growth in the city in which it was built."
Chris Bender, a communications director for the mayor's office, disagrees.
"We don't invest this much time and energy in toys," he said. "We invest in baseball because we think it brings significant economic benefit to the District. It's a huge engine. It brings development, and at a faster pace at an area where it otherwise wouldn't have happened."
There is major divergence between "studies" conducted by baseball and its allies, and independent academic research. The more independent research has shown that "stadium fetish," as Scott Wallsten, a resident scholar at the American Enterprise Institute, calls it, is a fallacy: Publicly built stadiums rarely increase tax revenues, revitalize neighborhoods or generate economic growth. And the jobs they do create are notoriously low paying. "The only people who say there's a financial return are consultants for baseball," says Noll.
In fact, research shows that stadiums and arenas have a terrible track record of delivering promised economic windfalls. According to Jean Ross of the California Budget Project, which studied public financing of pro stadiums in that state, pro baseball economic impact reports typically ignore several important factors. Take the notion that the new stadium will "pay for itself" through higher revenues. That may not be strictly true. "They don't ask the question, what are people going to spend less on if they spend more on baseball?" Ross says.
That kind of economic development promised for the Anacostia Waterfront never happened in Arlington, Tex. Remember when our current president and former Texas Rangers owner pushed through a public financing plan for that stadium in 1991? The area near the ballpark remains a blighted neighborhood with the highest crime rate in the city, and none of the offices, condos and retail stores that were supposed to thrive along a river walk have been built. President Bush realized $15 million from the sale of the team and stadium to Tom Hicks. Same story in Chicago, where a new stadium for the White Sox was supposed to spur economic development, but little or none occurred. And in Milwaukee.
The backers of this deal love to use MCI Center as an example of what can happen. But there are some significant differences between that arena and the proposed baseball stadium. MCI Center is half the size of a baseball stadium, and is tucked neatly into downtown, right on top of a Metro stop, and it's in use more than 220 days a year, between the Wizards, Mystics, Georgetown and various concerts. And it was by and large privately financed.
The promoters of baseball in Washington tell you that taxpayers won't feel a thing. But you will indeed feel it, and here's how. The city intends to tax big business to pay for the stadium. Two things will happen. First, businesses will raise their prices, and the effective income of district residents will therefore go down. And two, when a gap opens between prices in the District and prices in Maryland, people will stop buying in the District and shop there instead.
Here is something else you should understand about what you're getting, and giving: In order to succeed financially, the new team will need loyal fans who are willing to buy good reserved seats and attend games 20 or 30 times a season. These days it costs a family of four about $150 to go to a game. That adds up to about $3,000 a year. Who can afford that? Wealthy people.
"They're the real beneficiaries of the subsidy," says Noll. "It's taxing ordinary people for a stadium attended by upper income people, and then the income generated goes to even higher income people, namely players and owners. Basically, you're taxing people who make $30,000 a year to generate a toy for people who make $200,000 a year, and income for people who make millions of dollars a year."
Just across the county line there is a privately built stadium, FedEx Field, that is the key to the most profitable financial empire in all of sports, the Redskins. And downtown there is a privately built basketball arena that is hailed as a model of civic leadership and urban development, MCI Center. Why shouldn't that same model prevail here?
Because MLB intimidated the city into building it a free stadium. The blind acceptance of that is amazing. Here's the worst thing about this deal: It creates no incentive for the owners of this team to stay in Washington. They will be getting the short end of the TV stick; they will be paying a premium for the team, and they have no vested interest in the real estate. They'll enjoy big crowds for a season or two but the novelty will wear off, and then what? When the team isn't very good and they don't have enough TV revenue and the crowds stop coming out, what keeps them from pulling up stakes? And going to Charlotte, or Vegas, or San Juan?
So congrats to D.C. on winning back baseball. Just know what you're getting.