Sports stadiums: Who really should pay?

For Anthony Williams, the mayor of Washington, this week's deal to return Major League Baseball to the nation's capital after a 34-year absence represents the crown jewel of his career.

In his view, and in that of other baseball supporters, the agreement for a new stadium - to be located in a blighted section of Washington's southeast waterfront - will provide economic development and a psychic boost to a capital city that often feels the poor stepchild of the federal government it hosts. "It's more than baseball," Mayor Williams exulted Tuesday, counting off projected benefits, such as 3,500 jobs and $15 million added annually to the city's tax base.

To the plan's detractors, the deal to build a new stadium for the former Montreal Expos - renamed the Washington Nationals - with largely public funds smacks of corporate welfare at a time when the national trend has, in fact, moved toward increased private financing for Major League Baseball stadiums.

Since 1998, the last 10 new major-league ballparks have averaged 60 percent public financing, according to the Sports Business Journal. Financing for the D.C. stadium could end up at 90 percent, funded through a gross-receipts tax on business. The ultimate cost of the stadium package, including purchase of the land and infrastructure improvements, has been estimated to be between $440 million and $584 million.

To economists, after years of analysis, the bottom line on ballpark financing deals is unquestionable: Stadiums do not generate net economic growth.

"Subsidized stadiums require subsidies forever," says Scott Wallsten, a resident fellow at the American Enterprise Institute in Washington. "And they don't generate benefits to the neighborhood, typically. The jobs they create are small in number, low paid, and temporary."

What's stunning to Andrew Zimbalist, an expert on the economics of baseball at Smith College in Northampton, Mass., is that Washington did not use its inherent leverage to cut a better deal for itself with Major League Baseball. Of the cities trying to lure the Expos their way, including Portland, Ore.; Las Vegas; and Monterrey, Mexico, Washington presented the most lucrative profile: Its metropolitan area, the nation's eighth-largest media market, contains some of the wealthiest ZIP codes in the country.

Even when the stadium deal appeared on the brink of demise a week ago, after City Council chairwoman Linda Cropp passed an amendment requiring that half the stadium cost be covered by private financing, city leaders still did not play hard with Major League Baseball - even though no other city in the running had any kind of firm stadium proposal on the table.

There was little time to spare. Washington faced a Dec. 31 deadline to agree to a stadium deal, and the Nationals are scheduled to play their first game on April 4, 2005. Their first home game is to be played on April 14, 2005, at a renovated RFK Stadium, the Nationals' home field until the new Anacostia River stadium is built.

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