Stadium Deal Called a Winner for City

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The New York Sun

Since Mayor Bloomberg stepped into City Hall, he has pledged repeatedly not to saddle taxpayers with large bills for sports stadiums. His backup stadium plan, announced Sunday evening after a week of rushed negotiations aimed at keeping alive the city’s bid for the 2012 Olympics, seems to fulfill that promise.


Nationally, taxpayers generally pay for between 60% and 70% of the cost of new stadiums, according to sports economists. In the new deal at Shea Stadium, however, the city and state governments would pay roughly 20%, while the Mets would pay the rest.


“The Mets deal, as I understand it, is certainly better for the city than the average stadium deal is for the average city,” a leading sports economist, Andrew Zimbalist, said yesterday in a telephone interview.


The site of the new stadium would be adjacent to the current Shea Stadium in Queens. Construction costs to the Mets are projected at somewhere around $600 million.


The facility would open in time for the 2009 baseball season. If the International Olympic Committee picks New York City as host of the 2012 Summer Games at its July 6 session in Singapore, the Mets might play at Yankee Stadium for the 2012 season to allow for the use of an expanded version of the new baseball stadium as the Olympic stadium.


The Queens stadium, absent an expansion for the Olympics, would be much smaller than the facility proposed for the Jets. Also, it would not be built on a platform over rail yards and it would not have a roof. Those and other factors would make its total cost far less than the $2.2 billion estimated for the New York Sports and Convention Center, as the Bloomberg administration dubbed the planned Jets stadium.


As in the Bloomberg administration’s original Olympic stadium proposal, the direct costs to taxpayers of the Mets stadium would go only toward infrastructure.


That is very different from the financing schemes that have characterized baseball fields erected in recent years across the country.


Tax dollars paid for about 83% of both PNC Park at Pittsburgh and Great American Ball Park at Cincinnati. Taxpayers shouldered 68% of the bill for Minute Maid Park in Houston. In 1991, when President Bush was an owner of the Texas Rangers, he and his business partners convinced taxpayers to finance $135 million of the $190 million bill for a new ballpark in Arlington, Texas.


The best deal for taxpayers was at San Francisco, where the city spent $40 million, which covered infrastructure improvements necessary to build SBC Park, while the San Francisco Giants spent $291 million. That stadium, which opened five years ago, was the first privately financed ballpark in Major League Baseball since Dodger Stadium was built in Los Angeles in 1962.


The Giants financed their stadium by selling naming rights for about $50 million, selling personal seat licenses to fans, and borrowing $175 million for construction. The director of government affairs at the National Taxpayers Union, Paul Gessing, said the team’s owners financed the stadium privately because the San Francisco market is “very attractive” from a business perspective and the city’s voters rejected public financing four times during the 1980s and 1990s.


“It was the repeated voter refusal to pay and then some behind-the-scenes deals,” he said. “They decided to finance on their own.”


An expert in the economics of professional sports, Mark Rosentraub, said many stadiums are built with large public subsidies because “if a city loses a team, they may well not get another.”


“Hence there is an uneven playing field when it comes to negotiations, and MLB always has the upper hand,” he said.


He also said cities will pay for the excitement and image that come with baseball.


Mr. Rosentraub, a dean at Cleveland State University, said the economic impact of the proposed Mets stadium would depend on how the surroundings are developed. In the next week, the city is expected to announce the finalists for developing neighboring Willets Point.


At a press conference in Queens yesterday afternoon, the mayor vowed to stimulate significant changes in Willets Point. He also said that while the Shea project is his second choice, it’s nonetheless a good choice – especially because the project is largely privately financed.


In response to a question about his views on public financing of stadiums, Mr. Bloomberg said: “This city has enormous needs, and we’re going to invest our money in infrastructure, but infrastructure that pays us back and infrastructure that creates jobs in this city and influences the neighborhoods around them.”


The mayor acknowledged that if the city is picked as the site of the 2012 games, the city and state governments would have to chip in $50 million each to pay for the new stadium to be converted to an Olympic venue – a cost that would not have existed under the Jets proposal, which failed to win approval last week by the Public Authorities Control Board in Albany.


The city notified the International Olympic Committee of its new proposal in a telephone call yesterday.


It remains unclear exactly how the last-minute change of plans could affect the city’s chances next month, but the mayor said he is “optimistic.”


“The facility that we would build around the new Shea Stadium would be world-class. It is located right by an enormous amount of mass transit. It is an easy way to provide security, and those concerns really are paramount in the minds of the Olympic organizers. It’s close to the Olympic Village. It’s close to the hotels where a lot of people would be staying,” he said, adding that the International Olympic Committee would view those features as “positive.”


In the next few weeks, he said, the city will work very hard to convince as many as possible of the 115 Olympic voting delegates of the merits of the newly revised plan. Olympic rules lay out specific guidelines regulating when prospective host cities can talk to delegates. Contact is allowed at sanctioned events, one of which is Friday and Saturday in Ghana.


Mr. Bloomberg said that he, Deputy Mayor Daniel Doctoroff, and Mayor Dinkins, among others, would travel, as planned, to Africa to promote New York’s bid.


“We have shown that we know how to get things done. Even when we have reversals, we come right back,” Mr. Bloomberg said. “We don’t walk away.”


The New York Sun

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