This article was slanted specifically towards the discussion of the new Arlington stadium that is going to be built for the Dallas Cowboys. Only half of the cost is covered by Jerry Jones, but the numbers can be misleading and debatable. I thought I would pass on excerpts of this article because it has the potential to effect any city and sports franchise. For your reading pleasure, I have taken out some of the information specific to the Cowboys, but I can link to it if you are interested in reading the full version. Demolishing Sports Welfare Two court cases could mean the end of publicly funded stadiums Daniel McGraw When Dallas Cowboys owner Jerry Jones asked Arlington, Texas, voters to pay for a fancy new stadium last November, he did not call the classic plays from the sports welfare handbook. He could not say that America's Team needed a state-of-the-art facility to compete, since Texas Stadium (in the Dallas-adjacent suburb of Irving) has more luxury suites than any other in the National Football League, and the Cowboys won three Super Bowls in the 1990s. He could not say he was financially strapped, since his franchise ranks sixth in the NFL in profits and second in revenue, according to Forbes magazine. Most important, he did not use the team owners' favorite and most effective threat?to move to a new city?because the Cowboys have always had very strong local fan support; the Dallas?Fort Worth media market is the fifth-largest in the country, and Dallas Cowboys is a powerhouse global brand name. But Jones had three key deadlines to beat. His lease in Irving was scheduled to run out in 2009, so a new stadium deal needed to be done quickly. Electorally speaking, there was no better time to pass a tax increase than during the high-profile presidential vote of 2004; special elections usually draw low turnouts, and the anti-tax older folks show up in droves. But perhaps the most important deadline of all loomed in 2005, when the window for public financing of sports stadiums in the United States may be slammed shut by two court decisions expected to be handed down during the year. Kelo v. New London, which the Supreme Court is scheduled to rule on by summer, could decide once and for all when or even whether governments have the right to use eminent domain to acquire private property for the benefit of private businesses. Meanwhile, Hamilton County v. Cincinnati Bengals Inc., which is being heard in federal court in Cincinnati, is challenging football's federal anti-trust exemption, forcing all NFL teams to open their closely guarded books, and arguing that the Bengals' demand of build-it-or-we-can't-compete is tantamount to fraud. ..... From 1990 to 2003 there were 66 major construction and renovation projects for professional sports stadiums and arenas in the U.S., costing $17.3 billion, according to the League of Fans, a sports welfare watchdog group founded by Ralph Nader. Sixty percent of the funding, or an estimated $10.3 billion, came from the public purse. With the economy and stock market no longer booming, and with the public becoming more skeptical about the rosy economic claims of billionaire team owners, the era of easy money already was drawing to a close. Now the two court cases are poised to determine whether the fund-raising tactics of professional sports teams and their local boosters are even legal. ......... Opponents of stadium deals argue that teams and local governments are getting around the public use issue by placing the stadium or arena in the ownership of a "public sports authority." The property is then tax exempt, and the teams pay nominal rent that is often less than they would have owed in property taxes. The lease arrangements are often lopsided in favor of the teams; many, for instance, allow the franchises to move after a certain time if revenues do not hit projections. This threat to pull stakes and run gives teams strong leverage to renegotiate. If the sports facility were privately owned, there would be no lease to haggle over, and the team would be less willing (and able) to leave. Without eminent domain, acquiring enough property for a stadium could become expensive. A handful of property owners could hold up an entire complicated deal. "If the court makes the ruling that this is not a valid use of eminent domain, there will be some problems," says Scott Powe, a law professor at the University of Texas. "Huge problems. No doubt, there will be lots of litigating." .......... The city of Arlington never asked to see the Cowboys' books before deciding to put the issue before voters. As with the Texas Rangers stadium before it, eminent domain likely will be invoked to assemble land for the football stadium; the Arlington City Council already has threatened to use it if any property owners decide to hold out. Such spurious claims in the service of forcing small property owners to sell to larger ones have become all too common. If the Supreme Court requires the justifications to be even slightly more rigorous, and if Hamilton County succeeds merely in publicizing the NFL's notoriously secret finances, then the balance of power will shift away from the teams. And if the judges take decisive action, 2005 could be the year the public stopped lining the pockets of billionaire owners and millionaire players by paying for the places where they earn their living.
Interesting article, but I have to take issue with it. People talk so much about how bad it is that public funds are making these owners rich, but what they are completely neglecting is the fact that new stadiums are GREAT for local communities. Take, as an example, the new Twins stadium that we are trying to get passed. People that oppose the stadium are doing so because the owner's contribution will be approximately equal to the expected appreciation in team value, thus making the contribution a wash. However, what people are not taking into account is that a new stadium brings new life and new economic development to an area. This is why pro sports teams get all of their breaks...their net impact is tremendous. Now I do have some trouble with eminent domain being used to build a stadium. Its an issue which I haven't put in a lot of thought, but has its interesting aspects...
The main reason I posted this was to bring up the lawsuits pending and the eminent domain issue. The whole article was slanted against the new Cowboys stadium for two reasons. The writer did not believe that the city of Arlington has gotten a return on the baseball stadium built in the early 90s. Conversely, GW turned in a nice return. What made this worse to the writer was the fact that he felt that Jerry Jones half of the investment was risk free in that it would be covered by other opportunities without really much investment on his part. I left much of this out because it seemed to be a little too much of a rant to be a good news story. In fact, it truly was more of a private editorial than a news story. I didn't know what statistics were fact or fiction, so I left it out. I found the lawsuits and eminent domain to be interesting issues to watch progress. WHOLE ARTICLE My personal opinion is too agree with you on the benefits to the local economy. However, I would also say that some of what a new stadium brings can be difficult to measure.
<div class='quotetop'>QUOTE (N_Burleson4life)</div><div class='quotemain'>I just don't see why they need a new stadium</div> What factors would cause you to consider a new stadium?
Regarding the eminent domain issue, I am reminded of an occurence here in Minnesota. A few years back, Best Buy corporation reached an agreement with the city of Richfield, MN (a suburb of Minneapolis) to build their headquarters in Richfield. In order to build their headquarters there, they needed to use the power of eminent domain to get dozens of families out of their homes. Now, the process of doing this was obviously painful. The homes that they built over have been there for years. It was not a rich neighborhood, but not a troubled neighborhood either. There were some indications that the town was headed in the wrong direction, and there was certainly no room for economic increases in that city. The city has seen significant improvements in their community since the Best Buy headquarters were put in, but we are still left with the question as to whether or not they did the right thing. I can see the benefit that it brought, but the end does not justify the means. Let me ask you this: is there any situation in which using eminent domain is appropriate for privatized business?
<div class='quotetop'>QUOTE (vikingfan)</div><div class='quotemain'>Let me ask you this: is there any situation in which using eminent domain is appropriate for privatized business?</div> I don't have a specific example, but I'm sure there are good examples. I wasn't saying it was good or bad, but it was good for a discussion. I think you could just as easily argue whether or not it is also appropriate for public good as well as private. Ultimately, it is a government decision that will better its area. Whether it is a public issue or a private issue, it is the same....<u>in theory</u>. I sympathize with private home owners where their land has sentimental or even historical value. Additionally, I don't think "market value" and "replacement value" are many times even close. It is also a difficult decision to decide whether to implement eminent domain. Is this the only option or the best one? How much difference is there between option 1 and option 2 in both harm and good? Obviously, it is a case by case basis. Individually, I think people are not emotional enough about the subject until it happens to them personally, so I expect little change. But to answer your question, a legitimate reason to invoke eminent domain for a private business must mean that there is a public benefit to doing it. In that end, there is little difference between that and other perks such as tax breaks, etc. Starting to sound like a barber shop subject. Sorry - I forgot where I was.
<div class='quotetop'>QUOTE </div><div class='quotemain'>Let me ask you this: is there any situation in which using eminent domain is appropriate for privatized business?</div> I think that if an area is really dying or going to hell (like Flint, Michigan, for example) and a major corporation wants to come in, create thousands of jobs and resurrect the entire city economy, then it's worth it when weighed against the portion of the city that's most directly affected. It always sucks when people lose their homes, but I've never seen a case where the owner loses money on their house. Then again, how do you put a price on nostalgia and memories? Tough call. *shrugs* Good subject for debate...
