Sacramento and Washington, DC Threaten to Use Eminent Domain to Take Property to Build Sports Stadiums

Nick Sibilla of the Institute for Justice describes Sacramento and Washington, DC’s ill-advised plans to use the threat of eminent domain to acquire property to build sports stadiums on:

In less than a week, two capital cities are preparing to use eminent domain to build professional sports stadiums. Talk about foul play.

The Sacramento city council voted 7-2 on August 13 to help the Sacramento Kings negotiate with the owner of a Macy’s. As the Sacramento Bee points out, “The city’s involvement in the talks carries with it a key negotiating tool: the threat of seizing control of the property through eminent domain.” That Macy’s Men Store is the last property the Kings have yet to acquire for the arena and may be condemned if negotiations fail. But just because they’re called the Kings doesn’t mean they should have the right to seize peasants people’s land.

Construction hasn’t even begun and the Kings are already corporate welfare queens: the city council has voted to provide the arena $258 million in public funding. Unfortunately, sports subsidies are increasingly common.

Over in Washington, D.C., officials are prepared to authorize eminent domain to build a new stadium for the DC United, the worst team in Major League Soccer. This 20,000 seat stadium is expected to cost $300 million, with half of that coming out of the taxpayers’ pockets. Yet the team sold for $50 million in 2012. In other words, the United will be getting a brand new stadium that’s worth six times as much as the team itself. [links in original post omitted].

Government subsidies for sports stadiums are almost always net losers for the communities that enact them. Using eminent domain to take the property just compounds the losses endured by taxpayers with additional harm inflicted on property owners, many of whom are unlikely to be fully compensated for their losses. Standard compensation formulas only consider the market value of the land taken, while ignoring the “subjective value” that many owners place on their land above that amount (and even full fair market value often isn’t actually paid).