On a busy streetcorner in downtown Brooklyn, the steel girders are starting to rise. After a decade of protests by residents (including local celebrities like Steve Buscemi, Jennifer Egan and Jonathan Lethem) and innumerable lawsuits, developer Bruce Ratner’s vision of a new arena to bring the New Jersey Nets basketball team to Brooklyn—with the aid of about $500 million in city and state subsidies—is taking root, with a scheduled opening in September 2012.
Yet Atlantic Yards, as Ratner has dubbed his twenty-two-acre development project on the edge of the bustling neighborhood of Prospect Heights, won’t look much like the image he first unveiled in 2003. The “Miss Brooklyn” office tower, which was supposed to bring jobs to the community, is gone, a victim of the virtual collapse of New York’s commercial real estate market. Meanwhile, the condo towers that were supposed to provide more than 2,250 units of affordable housing are unlikely to be built anytime soon, if at all. (The latest plan involves a “modular” building, akin to stacking shipping containers thirty-four stories high.) The Nets, meanwhile, are spending two seasons playing in Newark’s Prudential Center, another heavily subsidized building ($200 million fronted by taxpayers) that was supposed to revitalize its surrounding neighborhood but that still rests among the same discount stores and fast-food joints that lined Market Street before the arena opened in 2007.
It’s a story that could have been told in almost any American city over the past two decades. Owners of teams in the “big four” sports leagues—the NFL, MLB, NBA and NHL—have reaped nearly $20 billion in taxpayer subsidies for new homes since 1990. And for just as long, fans, urban planners and economists have argued that building facilities for private sports teams is a massive waste of public money. As University of Chicago economist Allen Sanderson memorably put it, “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”
Studies demonstrating pro sports stadiums’ slight economic impact go back to 1984, the year Lake Forest College economist Robert Baade examined thirty cities that had recently constructed new facilities. His finding: in twenty-seven of them, there had been no measurable economic impact; in the other three, economic activity appeared to have decreased. Dozens of economists have replicated Baade’s findings, and revealed similar results for what the sports industry calls “mega-events”: Olympics, Super Bowls, NCAA tournaments and the like. (In one study of six Super Bowls, University of South Florida economist Phil Porter found “no measurable impact on spending,” which he attributed to the “crowding out” effect of nonfootball tourists steering clear of town during game week.)
Meanwhile, numerous cities are littered with “downtown catalysts” that have failed to catalyze, from the St. Louis “Ballpark Village,” which was left a muddy vacant lot for years after the neighboring ballpark opened, to the Newark hockey arena sited in the midst of a wasteland of half-shuttered stores.
“Public subsidies for stadiums are a great deal for team owners, league executives, developers, bond attorneys, construction firms, politicians and everyone in the stadium food chain, but a really terrible deal for everyone else,” concludes Frank Rashid, a lifelong Detroit Tigers fan and college English professor. Rashid co-founded the Tiger Stadium Fan Club in 1987, and for the next twelve years he fought an unsuccessful battle against Michigan’s plans to spend $145 million in public funds to replace that historic ballpark. “The case is so clear against this being a top priority for cities to be doing with their resources, I would have thought that wisdom would have prevailed by now.”