One of the first stadium controversies I covered on this site — so long ago that I can only find dead links to it — was the plan to spend several hundred million dollars on a domed football stadium in Birmingham, Alabama, something that voters rejected in a referendum way back in 1998. The dream never died, though, and now local officials are moving full speed ahead on a plan for a $174 million, 55,000-seat stadium that would host the University of Alabama-Birmingham and a USL expansion team and other stuff too, presumably, and really I just need to quote liberally from AL.com here:
During a Wednesday afternoon meeting, [Birmingham Mayor Randall Woodfin] proposed the city contributing $3 million a year for 30 years to the expansion and renovation of the BJCC which includes a stadium and renovations to the Legacy Arena.
AL.com describes this as “allocating $90 million,” but in present value it’s really more like $45 million. Or to put it another way, it’s the same as taking out a mortgage for $45 million and then paying it off over 30 years.
The city’s contribution would come each year from excess lodging tax and funds that have previously been going to city debt service, the mayor said.
“Excess” would imply here that the city doesn’t need it any more for debt service? So it would be going into the general fund? Doesn’t the city need money in its general fund?
Woodfin said the city doesn’t have the money to fund its priorities such as crime and neighborhood revitalization, but the city can’t afford not to invest in its infrastructure.
The city definitely needs money in its general fund.
The BJCC Authority is committing $10.7 million to the annual debt service on the project. Jefferson County has committed $1 million a year for 30 years.
So that’s $10.7 million a year from the BJCC Authority, $1 million a year from the county, and $3 million a year from the city? UAB is kicking in $4 million a year in lease payments (over the first ten years, anyway), so all that would be just about enough to pay off bonds on a $300 million project, which is what the whole thing is projected to amount to. But where will the rest of that public money come from?
State legislation that would levy an additional 3 percent automobile rental tax in Jefferson County for the support of the BJCC has been advertised for the 2018 legislative session.
This rental sales tax is expected to generate $3.5 million a year for 30 years.
A new car rental tax, if it passes the state legislature. Check.
And why should Birmingham taxpayers want to do all this?
The expansion of the BJCC is projected to generate $9.9 million in additional tax revenue for the city, according to the BJCC.
That’s $9.9 million annually, apparently, which would clearly make this a great investment for the city (if less so for county car renters, who’d bear the bulk of the costs), but which also seems completely implausible. I can’t find whatever study the BJCC is using to support its claims, but we can do the math ourselves:
Let’s say UAB sells out six home games a year — kind of ambitious since this is a football program that actually considered shutting down a few years back out of lack of interest, but let’s go with it. That’d be 330,000 fans a year. Add in 100,000 soccer fans a year, which would be pretty good for a USL team. Birmingham has a 6% local sales tax, so to generate $9.9 million in tax revenue, those 430,000 fans would have to spend $165 million — or $384 apiece, per game. (If we assume, I dunno, ten sold-out concerts and international soccer games a year, which is getting into the realm of wish fulfillment, then you might get it down to $150 in spending per fan, which isn’t much more realistic.) And this would all have to be money that wouldn’t be otherwise spent within Birmingham, so it would entirely depend on local college football and minor-league soccer mostly appealing to fans from outside the city limits.
On the one hand, this is clearly a far better idea than spending half a billion dollars on a domed stadium to lure an NFL team like city leaders were considering two decades ago. On the other, it still doesn’t appear to make a damn bit of sense. AL.com quotes Mayor Woodfin as saying, “We can net new revenue (from renovating BJCC and building new stadium) to create fund that will go 100 percent to neighborhood revitalization,” which doesn’t make sense either grammatically or mathematically, but the mayor said it, so it has to go into the newspaper, right? I should stop pretending that journalism is actually a thing anymore, shouldn’t I?