The Dallas Morning News has provided more details of the scale of hidden subsidies for the Texas Rangers‘ new $1 billion stadium plan, to where we can finally estimate an actual public price tag for the project, which, remember, would replace a 22-year-old stadium with an even newer one so that the games can have air-conditioning. The full package of goodies now includes:
- The city would still be providing $500 million in cash, bonded out and then repaid over time by the 0.5% sales tax surcharge, 2% hotel tax surcharge, and 5% car rental tax surcharge currently being used to pay off the Dallas Cowboys’ stadium. This much the city of Arlington revealed at the start, presenting it as a “50/50 split” of costs between the Rangers owners and the public.
- As revealed previously, Arlington would buy the Rangers’ 48.6 acres of parking lots for nothing, then lease them back to the team in perpetuity for no money. This would have the effect of exempting the Rangers from property taxes on their parking lots, which the News estimates would save the $481,000 a year in property taxes. In present value, that’s worth about $7 million to the team owners.
- As also revealed previously, Arlington would build a new 2,000-space parking lot on land similarly given by the team to the city and then leased back as a property-tax dodge. That would save the Rangers owners about $145,000 a year in property taxes (present value: around $2 million), plus city officials estimate building the lot will cost around $4 million, for a total of $6 million.
- Rangers owners Ray Davis and Bob Simpson would get to use new ticket and parking tax surcharges to help fund their share of construction, which is worth about $150 million in present value, but as I’ve noted before, most of the cost of ticket and parking surcharges ultimately ends up coming out of the team owners’ pockets. So I’m inclined to dismiss this one as a public subsidy.
- The Rangers owners are getting $100 million in cash and tax breaks for Texas Live!, an entertainment district near the stadium that was previously approved by the city, and which is supposed to break ground later this year. That’s not a subsidy for the stadium per se, in other words, but it is money that the city is giving to Davis and Simpson.
- Once the city’s stadium bonds are paid off, the Rangers owners would get to stop paying the city their $2 million a year in rent and instead put it into a fund for future stadium improvements. The value of this will depend on when the bonds get paid off — the News notes that the Cowboys’ stadium bonds were retired ten years early, but it’ll all depend on what future tourist tax receipts look like, which is inherently unpredictable. If we use that as a best guesstimate, $20 million in rent rebates 20 years in the future would come to $6 million in present value.
- Not discussed by the News piece is the fact that the Rangers’ share of stadium payments would actually pay off bonds being sold by the city, meaning if their own revenues (from PSL sales, naming rights revenue, etc.) fell short, the public could be on the hook for more. No way to put a price tag on this, but it’s an added risk of a blank check added to everything above.
Add it all up, and we’re at a minimum of $519 million in public subsidies for the Rangers stadium project, plus another $100 million for Texas Live!, with the possibility that the final price tag could ultimately go higher. And, more to the point, Davis and Simpson would get all the revenues from the new place, while the public “partners” would get just a thin trickle from new sales tax receipts, which even if you bend over backwards to assume the best-case scenario would only amount to $31 million over the next 40 years. That’s a vastly inequitable deal no matter how you slice it, but I guess when your baseline is “How big a check do we have to write the Rangers to be absolutely sure they won’t even think about moving to Dallas never ever?“, this is the kind of deal you get. Arlington voters, the ball’s in your court now.