Six reasons DC taxpayer money shouldn’t buy some rich guy a stadium

I’m sure there are more.

DC’s lameduck Council, with the full support of the lameduck Mayor Gray and Mayor-elect Bowser, have agreed to borrow up to $140 million ($200 million counting tax giveaways) so the foreign billionaire who owns the DC United soccer team can build a private stadium for his private franchise land we all buy for him. Happy New Year, Washingtonians!

If you suspect we are being had, fear not, the DC government has an incomprehensible 400-page report to hand you to prove how smart they are. Hopefully they are smarter than the consultants who wrote it, who managed to botch the only important question in it – how much economic activity will the stadium generate? They were off by only about 200%.

So yes, like nearly all publicly-funded stadiums, this is a bad deal. And you don’t even have to be indifferent to Major League Soccer to see this. It’s in the data. Stanford Economist Rodger Noll has basically debunked all of these deals for some pretty straightforward reasons, which he supports with solid research:

  1. The economic benefits of stadiums are usually inflated, or just made up. Economic outcomes are notoriously hard to predict, and in this case, the initial estimate that the economic consultants gave was $70 million too high. The revised number is about $30 million, with an estimate that the stadium may pay itself off after 30 years. Bet you $30 million DC United wants another stadium before that happens. Either way, that’s a loss to the city in economic terms.
  2. Most stadiums are empty most of the time. When they’re empty, they are giant empty swathes of land that are generating no economic benefit to anyone. Football stadiums are the worst – they usually host 10 games plus about as many concerts and other events in any given year. A new DC United would host 20 matches or so, plus other events. But the fact that the taxpayer-funded, privately-owned Washington Nationals stadium is just down the street would limit the potential for these kinds of events, wouldn’t you say? And the DC Council is already talking about building the oblong football team a new stadium too. How many outdoor venues with lousy acoustics can Bon Jovi fill in one city every year?
  3. Costs are almost always more than estimates. The baseball stadium was over budget by about $140 million. Even the cost estimated for buying this land for DC United is under question – think the owners (developers Akridge) are going to let go of the one piece of land under consideration?
  4. Those who benefit also donate to the campaign funds of those who make decisions. No shit.
  5. Most stadiums are designed to make money for their operators, and certainly not for the cities that surround them. We have a great example of this in FedEx Field, home of the oblong football team, which is conveniently located somewhere off a highway in some cheap marshy woodlands in Prince George’s County, in a biblical sea of parking lots. Not a lot of additional spending going on here – you pay Dan Snyder to park, you pay him to get it, you pay him to eat and drink, then you wait in your car to go home. DC United’s stadium should be better served by surrounding restaurants, but not because the stadium developer actually wants them there. Every beer sold outside is one that could be sold inside. Ever wonder why no stadium allows you to leave and come back in anymore? It’s not because of security.
  6. Just because people spend money on sports, doesn’t mean they wouldn’t have spent it. Part of the whole farce is this assumption that people come in to the city for a match, spend money at bars or restaurants as well as the stadium, then return to their homes in other jurisdictions. Well, what’s to say they wouldn’t have gone downtown that day anyway? DC is a huge draw for tourists, diners, theatergoers, and the like. Do they need a somewhat better soccer stadium to help them decide how to spend their money?

Why do teams want new stadiums? Two reasons. Elite seating, and designs that facilitate more spending from everyone else. Elite seating is the high-margin earner of the stadium itself, and are attractive only to an elite crowd of buyer. And design is more about the placement of concessions and the ability of fans to spend money on food, souvenirs, and other novelties for every spare second of their stay. Stadium designers get better at this stuff every year, and they’ve gotten a lot better since RFK Stadium, the current DC United home, was built.

There are stadiums that work for cities. This isn’t one.

Noll has some criteria for a stadium that may pay off, even potentially enough to be worth taxpayer subsidy. By and large, these are:

  1. Located downtown, ideally with little or no parking available, so people have to ride public transport and spend money en route to and from
  2. Are unique gathering assets in the city – perhaps the city has no other convention center or large theatre that could hold events of similar size
  3. Host as many games as possible, ideally both a hockey and a basketball team. These two sports will cover at least 100 events per year, five times more than soccer and ten times more than football.

By these metrics, DC United’s stadium will fall far short, and will be another giveaway to corporate developers and a sop to the jingoism of the government. Which is surprising, because I can’t imagine enough people were even aware that we had a soccer team to be inspired to support or oppose the deal.

One writer even demonstrated that buying DC United would be cheaper for the taxpayer than building them a stadium. My fellow advocates have been pushing the DC government to spend a few million cleaning up our somewhat dilapidated commercial streetscape on Kennedy Street NW, which will soon host dozens of locally-owned, locally-serving businesses. For the money we’re going to spend on this stadium, we could have bought market rate three-bedroom apartments for 650 homeless families in the District.