Cities ready to offer tax monies for new soccer stadiums

Cities continue to see sports stadiums as good uses for tax dollars. This time, it involves soccer stadiums:

Officials from Cincinnati, Detroit, Nashville, and Sacramento appeared in New York on Wednesday to place their bids with Major League Soccer for an expansion team. Slots for two teams are now up for grabs in the league’s plans to expand, so cities are lining up to lob promises of tax incentives for stadium construction at the MLS. Picture the mayors of each of these cities lined up for a free kick on goal.

Cincinnati, for example, has secured $200 million in private funds to build a stadium for FC Cincinnati, and the city has pledged up to $75 million in public money to pay for the infrastructure associated with a stadium. Nashville promises $25 million in tax dollars toward build-out costs for a $275 million Nashville Soccer Club stadium, which would be paid for through a public-private financing deal. Representatives for Sacramento Republic FC argued for a plan that would cost the city $46 million to realize a privately financed $226 million stadium.

Meanwhile, the Detroit Express would play on Ford Field, the home of the National Football League’s Detroit Lions, meaning that the proposed soccer team’s owners—who also own the Lions, the Detroit Pistons, and the Cleveland Cavaliers—would merely have to pony up the $150 million franchise fee plus some smaller costs in adjusting the existing stadium.

Perhaps in their favor, the cities and taxpayers would not be investing so much as is required for a top-four sport stadium.

At the same time, this approach is likely a bad idea. The research is pretty clear: the winners of taxpayer funded stadiums are the team owners who tend to already be wealthy people. Cities desperately want to boost their status and look trendy and acquiring a new sports team, particularly one in a sport that is thriving and looks like it is on the rise (just see the number of new teams in MLS in recent years). But, research shows that if do not build these stadiums and acquire teams, residents and visitors will just spend their money elsewhere.

Another interesting piece of the MLS expansion is that it is involving some medium-size big cities. Think Sacramento: they have a NBA franchise and nothing else. Orlando had a NBA franchise, nothing else. Cincinnati has the NFL and MLB. Austin has no major team. MLS expansion offers some new places a chance to get in the sports game and signal that they are major players.

Holding a World Series parade in a sprawling big city

The Houston Astros won the World Series and held a victory parade Friday in downtown Houston. Downtown Houston exists but it seems odd to hold a parade in the central part of a city that has a reputation for sprawl and a lack of zoning. Some quotes about sprawling Houston starting with a list of “The American Cities With the Worst Sprawl.”

Texas and bigness again. Houston takes up 627 square miles, making it more than twice as large as Singapore with about 40% as many residents. Houston is sprawl defined, and that lack of density is the reason it makes our list. Dubbed “The Blob That Ate East Texas,” Houston is one of those quintessentially American cities not limited by any natural geographic barriers like mountains or bodies of water. Sprawl was a business decision for developers, as there’s a lot less risk building horizontally than vertically.

But Houston is discovering that sprawl isn’t a permanent blight, and the city has seen significant private and public investment in its urban core. Over the past eight years, Houston has completely reimagined its transit network by opening two new light rail lines and expanding another. Two additional lines are in the works with one slated to be completed by 2019. Houston also grew its bike sharing network from just 18 bikes in 2012 to more than 300 now. (Administrators are aiming for 1,000 by the end of 2017.)

The economy of Houston according to The Economist in March 2015:

FOR a view of Houston’s economy, get in a car. At the intersection of the Loop and Freeway 225, two motorways in the south-east of the city, you drive over a high, tangled overpass. To the east, where the port of Houston sits on Buffalo Bayou, the skyline is an endless mass of refineries, warehouses and factories: Houston is an oil town. To the west, glistening skyscrapers and cranes puncture greenery. In between, the landscape is a sprawl of signs advertising motels and car dealerships.

Houston is not pretty, but it thrives.

From a April 2000 guide to Houston in the New York Times.

Famous as a city without zoning, Houston is a sprawling metropolis, laced with highways as serpentine as ant tunnels, a place so vast that popular myth holds that a motorist can drive for an hour at 55 miles an hour and never get from one end of the city to the other.

Is it true? Probably not. But the city’s sprawl tends to obscure just how much is actually going on there.

Did all that sprawl contribute to a different kind of victory parade compared to one in a city with a more traditional urban core? Did the sprawl change how many people attended? (A reminder: Houston is the fourth largest city in the country and may someday soon pass Chicago for third place.)

Did Peyton Manning really lead to the revival of Indianapolis?

Lost within the Vice President’s protest of a protest at the Indianapolis Colts game was the retiring of Peyton Manning’s number. A great NFL quarterback – but also the savior of Indianapolis?

So now Indianapolis, with its compact downtown packed with hotels and restaurants, has had a Super Bowl—and the city performed so well the NFL might go back for a second one day. Indianapolis has won a Super Bowl. Indianapolis has had Final Fours, men’s and women’s. Indianapolis is even hip, with Manhattan-caliber restaurants like Bluebeard. On Saturday, with two big conventions and a Colts game in town, downtown was bursting at the seams; there was a line at St. Elmo’s. And a crowd of 10,000 to 12,000 people came to the city to watch the unveiling of the half-ton bronze statue for the man who, more than anyone, made it possible. GM Bill Polian always maintained Lucas Oil Stadium got built on the back of Peyton Manning, and the former two-term governor, Mitch Daniels, echoed that in remarks to the adoring crowd. Locals were giving Daniels a hard time about the cost of Lucas Oil Stadium early this century, and he said: “Just build it. Peyton will fill it.” Fitting, too, that the shiny upscale JW Marriott—representing boom times in the first 17 years of this century for $320-a-night rooms in ritzy downtown hotels—could be seen through the legs of the bronze number 18.

“He didn’t do it alone,” Letterman said. “But by God, look around us. He changed the skyline. This used to be a small town. This man has changed the skyline.”

Never wonder again about the effect of a winning quarterback on a city, a state, a region. It’s why every team that doesn’t have Aaron Rodgers or Matt Ryan spends so much time and money looking for one. As Browns owner Jimmy Haslam told me this summer: “There’s nothing that compares to it. You need a great starting pitcher, a great closer in baseball. You need a great point guard in basketball. But there’s not one position that comes anywhere close in sports, I don’t think, to quarterback in football. If you ask any one of our football people, they’d all say getting the quarterback right is number one. I can tell you this: It’s on the top of our list daily. Once you get that, the game’s much easier.”…

Manning got emotional talking to the crowd. The crowd—at least via signs from as far west as Hawaii, as far east as New Jersey—ladled love on him for an hour. “WE LOVE YOU MAN,” punctuated the affair three times from the crowd. A friend, Angie Six, was in the middle of it and texted me afterward: “Being a part of the crowd was a truly moving experience, enough to make this fan and those around me a little misty-eyed. Standing shoulder to shoulder in the shadow of Lucas Oil Stadium, I saw a diverse crowd of Colts fans: young, old, black, white, Hispanic, men, women. We are all Hoosiers, proud to claim Peyton as our own. When Peyton left to play for Denver, we watched heartbroken from afar. We never had a chance to say thank you. Today, we were able to express our gratitude in person, and the crowd was giddy. The woman behind me said, ‘What a great day to be a Colts fan.’”

I do not buy these two common arguments made by sportswriters and others:

(1) stars and championships can change the course of major cities and regions and

(2) sports truly bring together communities in ways that other spheres or events cannot.

Development and community-building does not work this way. Cleveland finally winning a championship does not change everything. The Bulls winning six championships in the 1990s followed by the White Sox, Blackhawks, and the Cubs (!) winning in the following decades has not solved the problems facing many poor neighborhoods. J.J. Watt raising a lot of money in response to hurricane relief in Houston is a drop in the bucket compared to what is needed to clean up and more importantly help Houston and other regions develop ways to be resilient in the face of disasters. Peyton Manning becoming the most recognized face of Indianapolis – even though he is from Mississippi and the team dumped him when they thought they could do better without him – is a nice story but there are plenty of players who do similar things (just not at one of the most visible positions in sports).

This does not mean that winning or doing good things in the community are bad. Indeed, following sports is worthwhile in the long run when your team finally wins and team and player efforts to help communities are much appreciated. But, cities and regions are much bigger than this. Cities and regions can recover from major teams moving away. (Does anyone make a serious case that Seattle lost big when losing the Supersonics or that San Diego is going to decline with the Chargers now in Los Angeles?) People will find other ways to spend their money and local officials will continue to use whatever tools they can – including sports – to promote economic development and boost the status of their community.

I would enjoy seeing academic research on the influence of players and teams on local communities. Even in places where the teams are intimately wedded to the common insider perceptions of what a place is – think the Pittsburgh Steelers – what influence does a team really have? Perhaps Indianapolis is a unique case of sports contributing to economic development because Manning’s stardom came alongside a thriving amateur sports scene (from high school basketball to the NCAA). But, can we also imagine an alternate universe Indianapolis where the city changes over several decades with no influence of major sports?

Fighting your own city’s Olympics bid

One of the founders of the grassroots No Boston Olympics group discusses what made their movement successful to scuttle the city’s 2024 bid:

I think the most important talking point we had was around the taxpayer guarantee. The International Olympic Committee requires host cities to sign a contract saying taxpayers will be responsible for cost overruns. And the boosters behind Boston 2024 made all sorts of promises about how the public would be protected. But they weren’t able to produce anything substantive that showed that, and they were still asking for the blank check. So it was hard for the public to trust the boosters and ensure there wouldn’t be costs to pay in the case of overruns, as there have been in all of the recent Olympics. [Editors’ note: According to a study from University of Oxford, no Olympics since 1960 have come in under budget; they average a cost overrun of 156 percent.]

We had a broad coalition of people who came to us for any number of reasons. Some people were concerned about the taxpayer guarantee, others didn’t want disruption to their life for the three weeks, others were concerned about militarization of police and restriction on rights that occurs when hosting mega-events. At our victory party, there were people in socialist alternative t-shirts sharing a beer with people in t-shirts with the Don’t Tread On Me flag representing the Tea Party right. We had been able to form an incredibly broad coalition, and that’s something I think doesn’t happen enough.

One of the great takeaways here is that we are lucky to live in a democracy where we can have a robust Olympics debate. No Boston Olympics was outspent 1,500-to-1 by the boosters; we spent less than $10,000. But we had the facts on our side and a press willing to tell both sides of the story. I think we are lucky that’s the case. The day after the bid was pulled, I received a phone call from the primary backer of the bid [businessman John Fish] and his words to me were, “Democracy worked.” That was a pretty profound and gracious thing for him to say….

There is a misconception that the IOC cares that the transit system works well when they are choosing the city to award the games to. In 1996, they awarded the games to Atlanta over Toronto and Melbourne, both of which have far superior transit systems than Atlanta. Boston 2024 never had a plan for investing new or additional resources in transportation. All that they produced in their two-plus years of existence was a wish list of projects they would like to see happen. But if they happened, they would come at the expense of other projects already in the planning process, because they weren’t advocating for new resources or revenue to grow the pie. I’ve lived in Boston my whole life and never owned a car, so there is no bigger supporter of investment in transit that I am, but this bid was never going to do that.

Residents of few major American cities would want to be on the hook for something so large, the Olympics or something more mundane like a major infrastructure project. At the same time, the Olympics only needs one city willing to host (just like NFL owners only need one city like Las Vegas to make terrible deals for the city) and just a few who agree in order to work out a more favorable deal. Perhaps this gets at a basic question plaguing many cities: why do major projects always seem to have major cost overruns?

Could we reach a point where no major city wants the Olympics? It is interesting to consider what might happen then: move to a permanent site, whether an existing city (and they do exist with all the facilities within a region – see Los Angeles) or a new location created just for this (I imagine some authoritarian leaders or business magnates might be interested)? Downsize their expectations? Scuttle the whole project?

Las Vegas willing to pay record public subsidy to have NFL

How much power does the NFL have? Enough to have major cities commit incredible sums of public monies:

Las Vegas appears poised to claim the mantle of World’s Most Expensive Stadium from East Rutherford, New Jersey, where the Jets and Giants play in the $1.6 billion MetLife Stadium. (Los Angeles Stadium, Stan Kroenke’s project that will host the Rams and Chargers, is estimated at $2.6 billion—but that cost includes parts of the surrounding entertainment district.*)

Clark County taxpayers will contribute $750 million to the new arena, a record for a sports facility—about $354 per resident, taken from an increased tax on hotel rooms. That tax currently pays for schools and transportation, in addition to tourism-related expenditures.

Stanford economist Roger Noll said it was the “worst deal for a city” he had ever seen…

The state’s figures to justify that new tax are… ambitious. Its forecasts suggest 450,000 new visitors every year drawn by the 65,000-seat stadium, spending an average of 3.2 nights per visit. About a third of tickets are supposed to be purchased by tourists, although no other city manages 10 percent. Why half a million people would fly across the country to watch a team that no one wants to pay $20 to see in Oakland is not clear.

Even with the studies that show stadiums don’t contribute anything to cities, it seems that someone is always willing to pay. In this case, it wasn’t just Las Vegas: Oakland tried to put together a last-minute deal that they claimed would require even less of the team:

Schaaf told ESPN Friday she believes Oakland’s new stadium plan is viable.

“At the end of the day, this is the decision of the Raiders and the NFL,” Schaaf said. “What I am confident about is, if the Raiders want to stay in Oakland, we have a viable plan to build them a stadium with no upfront money from them, in financial terms that I believe are more favorable to them than the terms in Las Vegas — what we know of them.”

I’m still waiting for a city mayor or other big-name official to publicly bid a major sports franchise good riddance when they ask for a lot of local money. Perhaps that would be bad form – local officials are usually in the business of trying to attract everyone they can – but it could also send a strong signal about how private interests cannot overrule the long-term public interest.

The most important annual statistical moment in America: the start of March Madness

When do statistics matter the most for the average American? The week of the opening weekend of March Madness – the period between the revealing of the 68 team field to the final games of the Round of 32 – may just be that point. All the numbers are hard to resist; win-loss records, various other metrics of team performance (strength of schedule, RPI, systems attached to particular analysts, advanced basketball statistics, etc.), comparing seed numbers and their historic performance, seeing who the rest of America has picked (see the percentages for the millions of brackets at ESPN), and betting lines and pools.

Considering the suggestions that Americans are fairly innumerate, perhaps this would be a good period for public statistics education. How does one sift through all these numbers, thinking about how they are measured and making decisions based on the figures? Sadly, I usually teach Statistics in the fall so I can’t put any of my own ideas into practice…

Comparing the McMansions of Matt Ryan and Tom Brady

Relive some of the excitement of Super Bowl by comparing the McMansion of Matt Ryan in Duluth, Georgia versus Tom Brady’s homes:

I’d say Matty Ice picked himself the most conventional McMansion possible…

But what his house, or houses? I bet he has no taste…This house in Brookline, Massachussets? You’re kidding me. It’s kind of tasteful. Okay, it’s great, it’s perfect…What about the house in LA? I bet that’s hideous…You know what though, Tommy Boy? You are not McMansion material…

The winner here is Matt Ryan for keeping it real.

All those hours of coverage of the big game and you didn’t see important information like this. Both clearly have large homes but there are notable differences. This analysis suggests this comes down to personal taste but I think there are some other factors at work:

  1. Brady operates in different locations where expectations about large homes may be different. Compared to the Atlanta area, are there were fewer McMansions in Brookline (probably) or in the Los Angeles area (maybe not but there are also more legitimate mansions)?
  2. Brady operates in a different social circle than Ryan. With his model wife, Brady has to fit in with a range of famous people while Ryan is with the football crowd. Both have plenty of money but there is a difference in social class and taste a la Bourdieu.
  3. Both grew up in suburban areas: Ryan in Exton, Pennsylvania (outside Philadelphia) and Brady in San Mateo, California (Bay Area). This could influence both wanting to live in suburban areas now.
  4. Ryan is younger than Brady and perhaps he hasn’t had the time or experience to move to a more “mature” home.

Overall, I suspect many pro athletes have homes critics would call McMansions.