City leaders seem to think stadia promote economic development: despite expert testimony to the contrary. Why are they so misguided? Maybe they want to be. After all, people love football in this country. And stadia are huge projects that draw lots of media attention.
City leaders justify stadia as job creators; and so they are willing to pay public money for them. Research shows, however, that stadia create few permanent jobs. There are construction jobs, but most other employment is of limited quality and quantity. City leaders also justify stadia as revenue-generators: including sales and hotel taxes. Research shows stadia generate “replacement economics.” Families will replace a trip to the movies with NFL tickets; they will not use disposable income for both. This is not economic growth. It is revenue cannibalized from other parts of the city.
Stadia in the absence of subsidies are fine; but subsidies are the problem.
Subsidies flow to wealthy owners and high-income football players, but not to typical taxpayers. Your average taxpayer can barely afford to enjoy the stadium for which their money subsidizes. Consider this: a family of four need somewhere between $400-600 to enjoy an NFL game and a few hotdogs. Should a portion of their income also pay for the stadium?
AEG proposes to build Farmers Field in downtown Los Angeles. Majestic Realty proposes the other option: Football Stadium at Grand Crossing, in the City of Industry. Both proposals claim 100% private financing, but this is simply not true. AEG needs the City to provide bond guarantees and offsite infrastructure. Majestic needs public funding for traffic mitigation. These are subsidies. Yes, L.A. wants an NFL team, but private developers and the handful of owners who will profit, should pay.
– Paige Battcher, 2nd Year MPL and Master’s in Specialized Journalism, Concentration: Economic Development and Richard Green, Director of the USC Lusk Center for Real Estate
Read more from Paige here!
Great post. And this just touches on the economics, not even the physical planning or design issues of the project. The location of the stadium doesn’t make as much sense as people think. Placing the stadium literally right next to the 110 brings up a number of safety concerns, both automobile safety (studies have shown that increased signage and lights along freeways increase the likelihood of an accident, not that that should come as a surprise to anyway) as well as public health (everybody in the stadium for a game is sitting that close to one of the busiest freeways in the country for 4 hours every sunday? no bueno for the lungs). In addition, the fact that the stadium site is so close to LA Live and Staples Center means that economic impacts on the surrounding area will be minimal. I know this may not exactly be feasible in LA, but when it comes to stadiums and similar structures I always liked the way Denver did it–Denver placed Coors Field near the northeastern edge of the revitalized and recently gentrified LoDo district–a few blocks away from the pedestrian activity of the 16th street mall, but still within walking distance. This has helped further revitalize LoDo and downtown Denver as a whole as visitors can park in the city, walk around LoDo or 16th street as they grab a bite to eat, a drink at a local bar, or some Rockies merchandise, and then head to the game. Isolating Farmers’ Field in between the freeway and LA Live doesn’t help revitalize the struggling areas of Los Angeles.