This April, voters in Jackson County, Missouri, will decide whether to extend the sales tax that has helped Kansas City's two biggest sports teams, the Chiefs and Royals, build and maintain their stadiums.
In reality, it's not exactly an extension of an existing tax that generates about $50 million a year for sports complexes shared by teams. The Royals, who currently play at Kauffman Stadium, a stone's throw from the Chiefs' Arrowhead Stadium, are hoping to build a new venue downtown. Tax revenue can only be used at existing locations. So the Royals approached Jackson County officials and asked for a new contract. They had hoped to put a proposal on the April ballot that would keep the tax levy at 38 cents but allow the revenue to be used for a new stadium.
When a professional sports team attempts to transfer, public servants are routinely drawn into the fray, whether they wish to do so or not. Public money is at stake, including $850 million in state and local aid for the Buffalo Bills' new stadium and $1.26 billion in public funds for the Tennessee Titans' new stadium in Nashville. Both are currently under construction. Officials in Philadelphia, Washington, D.C., and Northern Virginia are considering proposals for new arenas for NBA teams.
It's now a routine job for elected leaders to mediate between government, local communities, taxpayers and teams looking to build new venues. “There's a huge incentive to be seen as, 'We did something.' We created so many jobs and helped bring growth and excitement to this city.” Nashville said Ron Shultis, director of policy and research at the Beacon Center of Tennessee, a conservative think tank. “And there's a status symbol there, too.”
In Kansas City, there were few details about the Royals' plans. Jackson County Executive Frank White, himself a Hall of Famer and five-time MLB All-Star second baseman for the Kansas City Royals, said he wanted a stronger commitment from the team before agreeing to put it to voters. I was hoping for
Instead, the team submitted their request directly to the Jackson County Council, which approved the referendum in early January. Mr. White vetoed the bill, saying it was “not a good deal for taxpayers.” Congress then overrode the veto by a vote of 7-2. Only after that did the Royals announce where they wanted to build. The project would require the demolition of several blocks in downtown Kansas City.
“It's just creating unnecessary hardship,” said Megan Marshall, one of the two Jackson County legislators who voted to uphold the veto.
valuable possession
Large development projects can bring economic benefits to cities, and acquiring these projects is one way many public officials find success. Nothing in development is bigger than a stadium or arena. They create many jobs in the construction industry, employ others permanently, and attract many people who spend freely both at the venue itself and at nearby businesses for special events. Although the benefits are often exaggerated, many who are skeptical of public financing of these projects acknowledge that they represent significant economic opportunities for their jurisdictions.
Home to the NHL's Capitals and NBA's Wizards, Washington's Capital One Arena has helped transform the surrounding area. Now, Ted Leonsis, the majority owner of both teams, wants to build a new arena, and officials in Washington, D.C. and Northern Virginia are vying for the privilege. The team recently announced a deal to build a new home in Alexandria, Virginia, pending a public financing deal that makes its way through the state Legislature.
“There's no denying that these types of arena projects provide very unique placemaking, entertainment, retail and restaurant enhancements,” said Virginia Senate Majority Leader Scott Surovell.
Surovell introduced a bill to provide state funding for the project on behalf of Republican Gov. Glenn Youngkin, who has made building a new stadium a priority. The proposal was moving quickly, but before it was held up in a Senate committee, Democratic Party Chairwoman Louise Lucas said it was “not ready for prime time.”
The deal relies on financing through tax increases. The state issued more than $1 billion in bonds to pay for the initial cost of the arena, and the developer plans to pay that money back over the next few years with tax revenue from games and concerts.
This type of subsidy is often seen as an advantageous measure for governments because it does not involve a direct allocation of taxes. However, there is a risk if the developer is unable to repay the bond. “I think economics is [the arena development] “It's probably a good deal for the taxpayers,” Surovell said. “We're having internal discussions, discussions about whether the level of risk to the taxpayers is appropriate for this project.”
While the project sparked debate in Congress, the momentum behind it helped move several other items forward, Surovell said. For the first time in more than 20 years, Virginia has a Republican governor and a Democratic legislature. Knowing that the arena project was a priority for Youngkin made trading other budget horses easier. Surovell said he agreed to introduce the bill only on the condition that Youngkin commit to increasing support for Washington's Metro Transit system, which is weathering a budget crisis.
Other Democratic priorities are on the table as well, including new marijuana laws and raising the minimum wage. “Having something this important to the governor should help him accomplish some of his short-term policy goals,” Surovell said.
But the clock is ticking. “I don't know if that's going to happen,” he admits.
Yong Kim/TNS
There are no local subsidies in Philadelphia.
The Philadelphia 76ers are pitching their new arena to local officials. The team wants to build an arena on the site of an ailing shopping mall adjacent to downtown's bustling Chinatown. The project has been extremely unpopular in Chinatown and other neighborhoods since it was first proposed. Chinatown residents have spent decades resisting large-scale projects that they feel would negatively impact their neighborhoods. But many in the city support it.
The economic benefits of building a new arena for a team in the same city are debatable. While the project will certainly create new construction jobs, long-term upside potential may be even more limited. Nashville's Beacon Center opposed spending public money on a new Titans stadium, in part for ideological reasons, but also because the stadium and the economic benefits that come with it already exist, Shultis said. says.
“These stadium subsidies don't pay for themselves, especially for new stadiums, because much of the economic benefit of having a team was generated in the original stadium,” he says. “It's not a fact of the stadium itself, it's what happened inside the stadium.”
Local grants are not being considered in Philadelphia, according to the 76ers and city officials. However, the project still requires support from the city council, including a partial street strike. City Councilman Mark Squilla has been a central figure in negotiations from the beginning. He says his role is to help reduce, offset and diffuse the arena project's potential harm.
That's only if the project makes any progress. The city is conducting an impact study with funding from the team. Squilla is waiting for the results before sponsoring legislation to move the project forward. Projects must consider public safety, trash, parking, and traffic concerns. Concerns about gentrification could be alleviated by the provision of affordable housing and commitments to local businesses. “If we want to be successful, if this is ultimately going to move forward, we have to make sure that the concerns of those closest to the project are alleviated by some benefit,” Squilla said. .
He said he doesn't support spending city money on the project. But the team could still seek funding from the state Legislature. “I'm not saying the state can't fund them,” Squilla said. “All I have is a promise from them that they will not seek public funds from the city.”
Big bucks on table in Missouri
Most government officials would like to attract new sports arenas within their jurisdictions and preserve existing ones. But they don't want to be taken advantage of in the process. In Missouri, Jackson County Executive White, in a message accompanying his veto of the sales tax proposal, said that while the Chiefs and Royals are “undoubtedly important assets to our communities,” funding for a new stadium would not be available. He said the delivery process “must be careful, transparent and prudent”. It's in the best interests of our taxpayers. ”
“From our perspective, there are benefits and drawbacks to potential developments, and we were seeking to magnify those benefits and mitigate potential harm to the community,” White's chief of staff said. Official Caleb Clifford says: “Unfortunately, we believe it is premature to put it on the ballot at this time.”
One concern is the slow development of the team's plans. The other is the sheer size of the investment Jackson County is making in his MLB team and his NFL team (both profitable enterprises). The $50 million a year the sales tax brings into team facilities is greater than any other investment the county makes, more than its investments in parks, roads, bridges and hospitals, Clifford said.
In negotiating the new sales tax with his team, White wanted to find new ways to fund long-standing needs in the Kansas City area, from public safety to housing. “County executives were trying to find a way to get real revenue to address these issues,” Clifford said.
Nick Wagner/TNS
It's hard to fight a winner
One group gearing up to oppose the sales tax on the November ballot is Kansas City housing advocacy group KC Tenants. Building the Royals' proposed stadium downtown would involve high-profile land and demolition, which would cause immediate disruption to people and businesses in the area, says Tara Raghuveer, founding director of KC Tenants. . The group is also concerned about gentrification and forced displacement of surrounding neighborhoods.
Raghuveer believes some county officials are trying to oppose the deal. The amount of public subsidies the team is seeking ($2 billion in sales tax revenue over 40 years) would be reinvested in some areas of permanent need in Kansas City, such as affordable housing. That could be transformative, she says. “Actually, I think some people think that’s wrong,” Raghuveer says, using her expletive. “When we're talking about solving people's problems, we're never talking about that level of scale. Only when we're solving problems for private enterprise.”
Still, the link between professional sports and civic identity is strong. Raghuveer acknowledges the difficulty of people's efforts to vote against what the Super Bowl champion Kansas City Chiefs stand for. “If Pat Mahomes cuts her 15-second ad, we're toast,” she says.
