I have written several posts criticizing the massive public financing of the new Yankee Stadium, which has received more government subsidies than any other stadium project in American history (see here for the most recent, with links to earlier ones). Yesterday, the New York Times had an interesting article on the evolution of sports stadium financing in New York:
In dimensions and decor, the new [Yankee] stadium, handsome and comfortable, is meant to evoke the old one. But the resemblance is only concrete deep. This is not history, but a costume party, a rigging of familiar geometry. It disguises a radical departure from New York's baseball history: the embrace of public subsidy — around a billion dollars when all the costs are added — for private wealth.
The first incarnation of Yankee Stadium opened in 1923. The owner, Jacob Ruppert, bought private land, raised private funds for the construction, and maintained the place with money he made in ticket sales. Ruppert and his successors paid taxes on the property: the land alone was assessed at $1.75 million in 1923. By 1970, the stadium and land were valued at $5 million.
If you were to page through the annual city tax rolls, you would find the valuation of Yankee Stadium — as well as the Polo Grounds in Manhattan and Ebbets Field in Brooklyn, the homes of the Giants and Dodgers — listed right alongside the other big properties in the city, like Rockefeller Center, the Metropolitan Life building and Loews Paradise theater.
What do those old tax rolls tell us?
They say that for much of the 20th century, baseball in New York was recognized by the government as another commercial venture, with all the opportunities and responsibilities of owning property.
Not at the new "cathedral of baseball." In fact, the stadium is being treated by the government as if it were a house of worship, not a place to sell $10 cups of beer. The partnership that owns the team has a 40-year lease on what had been city parkland. The partners will pay neither property tax nor the "payments in lieu of taxes" that are made when a private business venture occupies public space.
The fact that sports stadiums were routinely built and financed with private funds up until the 1960s and 70s - at a time when the business of pro sports was far less lucrative than today - undercuts owners' claims that they need government subsidies to survive. Indeed, in that earlier era, sports team owners not only paid for their stadiums themselves but also paid property taxes on them at the same rates as other landowners.
Ironically, as the NYT article points out, the Yankees opposed public financing and tax exemptions for the construction of the rival New York Mets' Shea Stadium in the early 1960s. Then-Yankees General Manager George Weiss warned that publicly funded sports stadiums would become "white elephants" for city governments. Weiss' prediction has turned out to be accurate. Today, public funding for sports stadiums routinely fails to provide economic benefits that even begin to approach their costs. Perhaps it is time for New York and other cities to take Weiss' warning to heart.
UPDATE: The original version of this post wrongly referred to to George Weiss as "Al Weiss." The mistake has now been corrected.
Related Posts (on one page):
- Exorbitant Ticket Prices at the New Yankee Stadium:
- The New York Times on Public Funding for the New Yankee Stadium: