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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

The Dollar Game: New Stadium Decision Stadium Projects Teeming Thirty Completed Since ‘87; Dozens More Sought

Lynda V. Mapes Staff writer

From Baltimore to Seattle, America is in the middle of a stadium building boom.

In Washington, voters statewide will decide June 17 whether to blow up the Kingdome and replace it with a $425 million football/soccer stadium and exhibition hall.

If it doesn’t get a new stadium, the Seahawks pro football team says it will leave Seattle.

Nothing unusual about that: Of 113 pro sports teams across the country, 39 say they are unsatisfied with their facilities and are threatening to leave, according to Fitch Investors’ Service in New York City.

If all 39 teams got their way, taxpayers would shoulder $7 billion to $8 billion in debt to build sports palaces over the next 10 years.

Since 1987, more than 30 new sports facilities have been built, at a total construction cost of $5 billion, according to David Freedman, director of the public finance department at Fitch.

The proposed Seahawks stadium and exhibition center will be paid for in part with a $100 million contribution from billionaire Paul Allen.

But half of that is estimated to come from the sale of licenses for seats in the stadium. The total cost would be paid with $27 million in tax breaks, tax hikes, and $300 million in state general obligation bonds that would put state taxpayers in debt for 23 years.

If they say yes, Allen promises to buy the Seahawks, providing local ownership for the team. He also pledges to cover any cost overruns.

He calls it a public-private partnership. But his company’s books would be exempt from public disclosure laws. And as is typical of stadium deals around the country, the public would shoulder most of the project’s cost.

Allen’s company, Football Northwest, would get nearly all the revenues from the stadium and exhibition center.

Some cities have cut much better deals. Others, far worse.

Consider Cleveland, home of the Gateway Complex, opened in 1994. It includes two new facilities, Jacobs Field for baseball, built at a cost of $173 million, and the $155 million Gund Arena for basketball.

Cuyahoga County taxpayers got stung for $21.5 million in cost overruns for the Gateway Complex, which also did not generate the money expected to pay off bonds for construction.

That’s because leases in the facility are so generous to the teams, said Steven Letsky, director of accounting for Cuyahoga County.

It’s likely the county will have to shell out $70 million to cover the construction debt over the next 10 years.

Meanwhile, $45 million worth of parking garages built by the city of Cleveland for the facility don’t generate enough money to pay off the debt issued to build them.

Under the deal struck with the teams, if the garages make money, the city splits it with them. But if they operate at a loss, the city eats the whole enchilada. So far, that’s costing the city $2 million to $3 million a year.

Yet city residents are enthusiastically backing a third stadium, this time for football.

“It’s a feel-good issue,” Letsky said.

“From a purely financial point of view, this facility just doesn’t generate any real dollars. If you analyze it that way it’s a loser. But Cleveland didn’t want the image of losing a baseball or basketball team. It helps our image that we are willing to do these things.”

In San Antonio, Texas, voters just paid cash for the $186 million Alamodome, raised with a five-year, .05 percent general sales tax increase.

The dome opened in 1993, and hosts the Spurs basketball team. Just four years later the team has decided the arena is inadequate. Team owners say they can’t make enough money there.

An initiative will go on the ballot this year to pay for a new arena.

“In my opinion this is a great facility,” said Mike Abington, who runs the Alamodome. “But they don’t have the sky boxes and club seats that can pay the $11 million players’ salaries. It’s the economics of pro sports. Every team in Texas wants a new building or they are going to move.”

St. Louis has cut a sweetheart deal with the Rams football team. City, county and state taxpayers paid the full cost of a $299 million stadium and convention center expansion.

The public also built the team a training center, covered its moving costs, and paid the team’s old debts back in California.

Once in the new stadium, the team negotiated a lease that gives the Rams three-quarters of operating and advertising revenue and all the money from concession and novelty sales.

Nancy Milton, spokeswoman for the St. Louis Convention and Visitors Commission, said people have shown great enthusiasm for the team and the new facility.

One measure was the sale of personal seat licenses, which fans buy to secure the right to then buy season tickets. “We asked if people were interested, and got $74 million in the mail,” Milton said.

While the team didn’t pay anything for the facility, it has contributed to the value of the building and prestige of the town, Milton said. “People felt the community was not as big league as it could be. It just wasn’t all the city it could be without pro football.”

Other cities have driven harder bargains.

In Charlotte, N.C., the Carolina Panthers football team paid most of the $248 million cost of Erickson Stadium, which opened last year.

The city contributed land and road improvements worth about $60 million for the stadium. Most of the money to build the stadium came from the sale of personal seat licenses.

In San Francisco, voters will decide Tuesday whether to go along with building a new stadium for the 49ers football team.

The $325 million project would be paid for with $225 million from the team, and a $100 million loan from the city. The loan would be paid off with proceeds from a $200 million mall to be built adjacent to the stadium, generating 6,500 permanent jobs. The team has guaranteed a quarter of those jobs will go to local residents.

The bonds to build the stadium are guaranteed by a private insurer, so the city can’t get stuck holding the bag, with the premium paid out of stadium revenues.

Nonetheless, the proposal is regarded as a tough sell. It took three times to get voter approval for a baseball stadium for the Giants, even though it was paid for by the team.

“San Francisco is cranky like that,” said Kandace Bender, press secretary for Mayor Willie Brown.

“They don’t ever want to spend money on sports franchises. They think it should be spent on other things, like schools.”

Stadium plans, including the Seahawks’ proposed new digs, are usually pushed in part with the promise that the new facility will detonate an economic boom and create new jobs.

But they seldom do.

Four recent studies on the economic impact of professional sports found there was little or no economic benefit to communities that invested in stadiums, and some cities actually took a bath because the stadiums didn’t produce enough money to cover operating expenses, let alone debt service.

In Maryland, the Congressional Research Service reported last year that Baltimore’s football stadium subsidies to attract the former Cleveland Browns will cost $127,000 for each job created.

That’s 21 times more than the $6,250 it costs to create jobs through Maryland’s economic development fund.

Allen Sanderson of the University of Chicago figures if job creation is the goal, it would be cheaper in general for cities to hire a helicopter and just throw wads of $20 bills out the window.

“At least then your only up-front costs are the rental of the helicopter. And the money will stay in the community and generate new spending. You can’t say that with most of these stadiums.”

But stadiums aren’t only about job creation. Having a pro team in town means tons of media exposure, as television audiences tune in games.

In a city like San Antonio, where tourism is the second most important industry in town after the military, having a pro team also helps lure visitors, Abington of the Alamodome said.

The team makes city residents feel more big-league. Big enough, maybe, to build another new stadium four years after opening the last one. After all, they would hate to lose their pro basketball team.

“People hate taxes,” Abington said in his Texas drawl, “but they love their Spurs.”

, DataTimes ILLUSTRATION: Graphic with map and 3 photos: The stadium building boom

MEMO: This sidebar appeared with the story: LOOKING FOR ANSWERS What Referendum 48 proposes: Spending $327 million in public money to tear down Seattle’s Kingdome and build a new stadium for football and soccer, as well as an exhibition hall and parking. An additional $100 million would come from software billionaire Paul Allen, who would buy the Seahawks pro football team. Where the public money comes from: $101 million from a state sales tax credit to King County; $127 million in revenue from new state lottery games; $52 million from a 10 percent stadium ticket tax; $40 million from extension of hotel/motel tax collected in King County; $4 million from stadium parking tax; $27 million from state sales tax break on construction; $14 million from interest earned on $50 million Allen pays into an escrow account up front. Note: Total is more than $425 million because the funding package provides a contingency reserve and money for community and youth athletic facilities around the state. Source: House Finance Committee

This graphic ran with the story: THE STADIUM BUILDING BOOM The business of building stadiums and arenas for professional sports teams is booming. Here are some examples of recent projectst they cost and how they’re paid for.

PRIVATELY FUNDED: Stadiums: 1. San Franciso - Pacific Bell Park $255 million; opens year 2000; baseball; 42,000 seats. 2. Philadelphia - CoreStates Center $210 million; 1996; basketball/hockey; 42,000 seats.

Arenas 3. Chicago - United Center $175 million; 1994; basketball/hockey; 21,711 seats. 4. San Jose, Calif. - San Jose Arena $170 million; 1993; hockey; 17,190 seats. 5. Salt Lake City - Delta Center $168 million; 1991; basketball; 19,911 seats. 6. Boston - Fleet Center $160 million; 1995; basketball/hockey; 17,565. 7. Milwaukee - Bradley Center $80 million; 1988; basketball; 18,663. 8. Detroit - Palace at Auburn Hills $70 million; 1988; basketball; 21,454.

PUBLICLY FUNDED Stadiums 9. Atlanta - Georgia Dome $214 million; 1992; football; 71,594 seats. 10. Baltimore - Baltimore Football Stadium 1998; $200 million; 65,000 seats. 11. Chicago - Comiskey Park $150 million; 1991; baseball; 44,321 seats. 12. St. Petersburg, Fla. - Thunderdome $147 million; 1990; baseball; 47,600 seats.

Arenas 13. San Antonio - Alamodome $186 million; 1993; basketball; 20,662.

PUBLIC/PRIVATE FUNDING Stadiums 14. Cincinnati - Ohio River stadium 76 percent public funding; $540 million; year 2000; football/baseball; 70,000 seats. 15. Phoenix - Bank One Ballpark 75 percent public funding; $338 million; 1998; baseball; 48,500 seats. 16. Seattle - Mariner Stadium 89 percent public funding; $414 million; 1999; baseball; 45,000 seats. 17. St. Louis - TransWorld Dome 96 percent public financing; $299 million; 1995; football; 65,300 seats. 18. Nashville, Tenn. - Cumberland Stadium 76 percent public financing; $294 million; 1998; football; 76,000 seats. 19. Tampa Bay, Fla. - Tampa Bay Stadium 63 percent public funding; $265 million; 1998; football/general; 65,000 seats. 20. Milwaukee - Miller Park 64 percent public financing; $250 million; year 2000; baseball; 42,500 seats. 21. Charlotte, N.C. - Erickson Stadium 24 percent public funding; $248 million; 1996; football; 72,350 seats. 22. Denver - Coors Field 72 percent public financing; $215 million; 1995; baseball; 50,100 seats. 23. Baltimore - Oriole Park at Camden Yard 96 percent public funding; $210 million; 1992; baseball; 48,000 seats. 24. Arlington, Texas - Arlington Baseball Stadium 74 percent public funding; $191 million; 1994; baseball; 42,292 seats. 25. Cleveland - Jacobs Field 88 percent public financing; $173 million; 1994; baseball; 42,400 seats. 26. Jacksonville, Fla. - Gatorbowl 91 percent public financing; $137 million; 1995; football; 73,000 seats. 27. Miami - Joe Robbie Stadium 3 percent public financing; $125 million; 1987; baseball/football; 73,000 seats.

Arenas 28. Portland - Rose Garden 13 percent public financing; $262 million; 1995; basketball; 21,400 seats. 29. Cleveland - Gund Arena 97 percent public financing; $155 million; 1994 basketball, 20,562 seats. 30. Tampa Bay, Fla. - Ice Palace 62 percent public financing; $139 million; 1996; hockey; 19,500 seats. 31. St. Louis - Kiel Center 45 percent public financing; $135 million; 1994; hockey; 18,500 seats. 32. Buffalo, N.Y. - Marine Midland Arena 29 percent public financing; $122 million; 1996; hockey; 21,000 seats. 33. Seattle - Key Arena 62 percent public financing; $120 million; 1995; basketball, 17,102 seats. 34. Tempe, Ariz. - America West Arena 40 percent public financing; $90 million; 1992; basketball/hockey; 19,023 seats.

Source: Seahawks Stadium and Exhibition Center Financing Task Force; January 16, 1997 Staff graphic: Vince Grippi

This sidebar appeared with the story: LOOKING FOR ANSWERS What Referendum 48 proposes: Spending $327 million in public money to tear down Seattle’s Kingdome and build a new stadium for football and soccer, as well as an exhibition hall and parking. An additional $100 million would come from software billionaire Paul Allen, who would buy the Seahawks pro football team. Where the public money comes from: $101 million from a state sales tax credit to King County; $127 million in revenue from new state lottery games; $52 million from a 10 percent stadium ticket tax; $40 million from extension of hotel/motel tax collected in King County; $4 million from stadium parking tax; $27 million from state sales tax break on construction; $14 million from interest earned on $50 million Allen pays into an escrow account up front. Note: Total is more than $425 million because the funding package provides a contingency reserve and money for community and youth athletic facilities around the state. Source: House Finance Committee

This graphic ran with the story: THE STADIUM BUILDING BOOM The business of building stadiums and arenas for professional sports teams is booming. Here are some examples of recent projectst they cost and how they’re paid for.

PRIVATELY FUNDED: Stadiums: 1. San Franciso - Pacific Bell Park $255 million; opens year 2000; baseball; 42,000 seats. 2. Philadelphia - CoreStates Center $210 million; 1996; basketball/hockey; 42,000 seats.

Arenas 3. Chicago - United Center $175 million; 1994; basketball/hockey; 21,711 seats. 4. San Jose, Calif. - San Jose Arena $170 million; 1993; hockey; 17,190 seats. 5. Salt Lake City - Delta Center $168 million; 1991; basketball; 19,911 seats. 6. Boston - Fleet Center $160 million; 1995; basketball/hockey; 17,565. 7. Milwaukee - Bradley Center $80 million; 1988; basketball; 18,663. 8. Detroit - Palace at Auburn Hills $70 million; 1988; basketball; 21,454.

PUBLICLY FUNDED Stadiums 9. Atlanta - Georgia Dome $214 million; 1992; football; 71,594 seats. 10. Baltimore - Baltimore Football Stadium 1998; $200 million; 65,000 seats. 11. Chicago - Comiskey Park $150 million; 1991; baseball; 44,321 seats. 12. St. Petersburg, Fla. - Thunderdome $147 million; 1990; baseball; 47,600 seats.

Arenas 13. San Antonio - Alamodome $186 million; 1993; basketball; 20,662.

PUBLIC/PRIVATE FUNDING Stadiums 14. Cincinnati - Ohio River stadium 76 percent public funding; $540 million; year 2000; football/baseball; 70,000 seats. 15. Phoenix - Bank One Ballpark 75 percent public funding; $338 million; 1998; baseball; 48,500 seats. 16. Seattle - Mariner Stadium 89 percent public funding; $414 million; 1999; baseball; 45,000 seats. 17. St. Louis - TransWorld Dome 96 percent public financing; $299 million; 1995; football; 65,300 seats. 18. Nashville, Tenn. - Cumberland Stadium 76 percent public financing; $294 million; 1998; football; 76,000 seats. 19. Tampa Bay, Fla. - Tampa Bay Stadium 63 percent public funding; $265 million; 1998; football/general; 65,000 seats. 20. Milwaukee - Miller Park 64 percent public financing; $250 million; year 2000; baseball; 42,500 seats. 21. Charlotte, N.C. - Erickson Stadium 24 percent public funding; $248 million; 1996; football; 72,350 seats. 22. Denver - Coors Field 72 percent public financing; $215 million; 1995; baseball; 50,100 seats. 23. Baltimore - Oriole Park at Camden Yard 96 percent public funding; $210 million; 1992; baseball; 48,000 seats. 24. Arlington, Texas - Arlington Baseball Stadium 74 percent public funding; $191 million; 1994; baseball; 42,292 seats. 25. Cleveland - Jacobs Field 88 percent public financing; $173 million; 1994; baseball; 42,400 seats. 26. Jacksonville, Fla. - Gatorbowl 91 percent public financing; $137 million; 1995; football; 73,000 seats. 27. Miami - Joe Robbie Stadium 3 percent public financing; $125 million; 1987; baseball/football; 73,000 seats.

Arenas 28. Portland - Rose Garden 13 percent public financing; $262 million; 1995; basketball; 21,400 seats. 29. Cleveland - Gund Arena 97 percent public financing; $155 million; 1994 basketball, 20,562 seats. 30. Tampa Bay, Fla. - Ice Palace 62 percent public financing; $139 million; 1996; hockey; 19,500 seats. 31. St. Louis - Kiel Center 45 percent public financing; $135 million; 1994; hockey; 18,500 seats. 32. Buffalo, N.Y. - Marine Midland Arena 29 percent public financing; $122 million; 1996; hockey; 21,000 seats. 33. Seattle - Key Arena 62 percent public financing; $120 million; 1995; basketball, 17,102 seats. 34. Tempe, Ariz. - America West Arena 40 percent public financing; $90 million; 1992; basketball/hockey; 19,023 seats.

Source: Seahawks Stadium and Exhibition Center Financing Task Force; January 16, 1997 Staff graphic: Vince Grippi