Good morning! Are you ready to have NHL commissioner Gary Bettman commissionersplain to you about why public subsidies for sports venues are great and you are wrong if you think otherwise? I sure hope so, because Bettman was off and running yesterday in an interview with Yahoo Finance sponsored by Prudential (or maybe an interview with Prudential sponsored by Yahoo Finance — it’s so hard to tell from the backdrop):
There are academicians who agree with this and disagree with this in theory, but I disagree with them: Having a professional sports team as your anchor tenant, if you do it the right way, can literally transform a city. Look at Chinatown in Washington, D.C., after the Verizon Center was built. Look at L.A. Live, built around Staples Center. Look at what’s happened in Edmonton, where they’re revitalized downtown. Look at what’s going on in Detroit. All of these around new arenas, where an entire area of a city has been vitalized, or revitalized, created a new tax base, brought businesses, residences, people downtown to live.
This argument — look at what’s going on around new arenas, who are you going to believe, some number crunchers or your own eyes — requires ignoring a lot of things: that “revitalization” often only takes place because the land was being held fallow in anticipation of new development in the first place; that D.C.’s Chinatown is now unaffordable to its former Chinese-American residents because it’s been remade as a playground for arenagoers; that even the most active arenas are dark about half the year and more than half of each day, and so may not be the best thing for local businesses unless they’re running a pizzeria that can get people in and out super-quick; and, yes, that those number crunchers have found time and again that any arena-related increase in tax receipts in one neighborhood is countered by a corresponding decrease elsewhere in a city, since you’re just moving spending around, not creating it out of thin air. On the other hand: Look! An arena! Lots of people! What’s not to like?
Bettman then pivoted to his real point, which was how sad it is when a team owner wants a new arena, and for some reason some crazy mayor won’t give him one:
And Calgary, the Flames were trying to do the same thing, and they have been spectacularly unsuccessful in reaching an agreement with the city on how to move forward. And they’ve announced that they are no longer pursuing a new building, which is unfortunate, because they’re playing in the oldest building in the league, and at some point their sustainability gets jeopardized if they don’t have the same types of facilities, amenities, revenue-producing opportunities that other franchises have.
Sustainability — we’re now into another of the items in the stadium-grubbers’ playbook, which is how can we compete without a new building like all the other kids have? Of course, the Flames owners are currently turning a profit of about $20 million a year and say they can only afford a new arena if someone else pays half the costs, so really the only “revenue-producing opportunity” here is to get public cash. Still, it’s the oldest building in the league (note: not actually the oldest arena in the league), don’t you know that old things are bad?
Anything else on your mind, commissioner?
When you’re creating new taxes that wouldn’t otherwise exist but for the development of an arena and the surrounding area, I don’t think it’s unreasonable to devote some or all of those taxes to paying off what’s been created, and which otherwise wouldn’t exist.
This is the argument for TIFs, and I already typed in all the dialogue from the Odd Couple “Casino Night” episode to explain this once, so go read that again to explain why it’s nonsense. Or just re-read Geoffrey Propheter’s study linked above to see why “otherwise wouldn’t exist” is nonsense. But then, who you gonna believe, a guy with a spreadsheet or a man with a fancy backdrop and a job that requires him to say these things?