Plans abounding for new sports stadiums across the US, carrying hefty public costs

Standing on a portable stage erected at home plate of the Milwaukee Brewers stadium, Wisconsin Governor Tony Evers recently praised the professional baseball team as an “essential part” of the “culture and identity” and the “economic success” of the state.

With fanfare, Evers then approved $500 million in public aid for the stadium renovation, adding to a notable series of blockbuster deals. This year alone, about a dozen franchises and Major League Baseball have taken steps to build new or improved stadiums.

A new wave of construction of sports facilities is underway. One driven, in part, by a race to keep up with rivals and that could collectively cost taxpayers billions of dollars despite economists’ skepticism that stadiums will boost local economies.

Although the Brewers primarily cited the need for repairs, many of the other new projects are much more than that. In some cases, sports teams are even seeking a new boost in public financing for state-of-the-art stadiums, while public entities are still paying off debt from the last round of renovations a couple of decades ago.

“These facilities are not physically obsolete. It’s not like the concrete is falling and people are in serious danger if they attend a game,” said Rob Baade, a retired economics professor at Lake Forest College in Illinois.

“Teams are clamoring for new stadiums because it is in their economic interest to do so,” Baade said, adding: “The new stadium model is one that extends beyond the stadium walls.”

New or improved stadiums provide team owners with new revenue opportunities from luxury suites, restaurants, shops and other developments, especially for those who control the nearby area.

For many, Los Angeles Rams owner Stan Kroenke is the model: His $5 billion stadium opened in 2020 as the centerpiece of a sprawling development that will feature apartments, offices, retail stores, public parks and a theater.

The difference, however, is that Kroenke is financing the project privately, after uprooting the Rams from a publicly funded stadium in St. Louis that was still being paid for.

The Kansas City Royals unveiled two options for a new $1 billion ballpark in August as part of an overall $2 billion development. The Tampa Bay Rays followed suit in September, unveiling plans for a $1.3 billion baseball stadium as the centerpiece of a $6.5 billion development in St. Petersburg, Florida, that also features housing, retail, restaurants and bars and a black history museum.

They joined the Jacksonville Jaguars, Buffalo Bills and Tennessee Titans, who have announced plans or begun construction of new multi-billion-dollar stadiums with luxury amenities.

All of those projects also featured public funding, including $760 million in local bonds that the Nashville City Council approved along with $500 million in state bonds to pay for the Titans’ new $2.1 billion stadium. As part of the deal, the Titans agreed to pay the remaining $30 million in public debt owed for their current stadium, which opened in 1999.

When the Baltimore Ravens announced a $430 million publicly funded renovation this month, the football team’s senior vice president of stadium operations said the facility “is already considered by many to be top of the line.” But “we must continue to be innovative and engaging,” said Rich Tamayo.

The trend extends beyond baseball and football.

On Dec. 12, Oklahoma City voters approved a 1-cent sales tax for a new Thunder basketball team stadium that will cost at least $900 million. The next day, Virginia Governor Glenn Youngkin announced a $2 billion development proposal to attract basketball’s Washington Wizards and hockey’s Washington Capitals to a new stadium surrounded by a performing arts center, hotels, convention center, housing and retail stores.

The emerging stadium construction cycle has a “level of extravagance that has increased enormously” and is projected to peak around 2030, said JC Bradbury, an economics professor at Kennesaw State University in Georgia, who has been following the projects.

Behind the pitch for new stadiums is the assumption that teams can go elsewhere if they don’t get what they want, a rare but realistic possibility highlighted by MLB’s approval last month for the Oakland A’s to move from California to Las Vegas.

The team’s new $1.5 billion baseball stadium in Nevada will receive $380 million in public financing. It will be built not far from the $2 billion Las Vegas Raiders football home, which opened in 2020 with $750 million in public funding from hotel room taxes.

The Raiders and A’s previously shared the Oakland-Alameda County Coliseum, which had been renovated at taxpayer expense in the 1990s to lure the Raiders back from Los Angeles. The remaining $13.5 million of public debt from that renewal will be paid off in February 2025, by which time both teams could be gone.

Ken Rettberg, a longtime A’s fan, is frustrated both by the A’s impending departure and the generous public aid that benefits wealthy team owners.

“It’s crazy… how they can get away with giving away taxpayer money. It’s completely absurd,” said Rettberg, a software engineer who lives near Oakland.

Wisconsin officials feared the Brewers might leave, too, taking their tax money with them.

In approving public aid for the Brewers stadium on Dec. 5, Evers stated that “losing this team would have had a ripple effect on families and communities across this state.” He said the equipment generates billions of dollars of annual economic impact and supports thousands of jobs.

Brewers principal owner Mark Attanasio said other cities inquired, but “we never considered going anywhere else.” Records show the Brewers spent $575,000 lobbying lawmakers from January to June.

American Family Field, home of the Brewers, opened in 2001 during the height of the latest round of nationwide stadium construction, as cities replaced multi-use facilities with glitzier, sports-specific structures. Public funding covered nearly three-quarters of the $392 million cost.

The latest deal for Wisconsin’s stadium includes nearly $674 million for renovations, including a total of about $500 million from the state, county and city.

Ultimately, not everyone supports efforts to renovate or replace stadiums, or the trend of asking taxpayers to shoulder the cost.

The Titans’ new stadium has the largest public subsidy in the country for a professional sports facility. But voters issued a rebuke in September, electing as mayor a progressive councilman who voted against the subsidy.

In February, the Chicago Bears purchased a former suburban horse racing track as a potential site for a new football stadium and surrounding development, but have yet to move forward with the potentially controversial move from downtown. The Illinois Sports Facilities Authority still owes $589 million through 2032 on public bonds issued for the renovation of the Bears’ current stadium two decades ago.

Many economists argue that public financing of stadiums is not worth it because sports tend to divert discretionary spending from other forms of entertainment rather than generating new revenue.

“When economists are asked whether we should fund sports stadiums, they can’t say ‘no’ fast enough,” Bradbury said. “Yet when you ask a politician, they can’t say ‘yes’ fast enough.”

Public opinion seems mixed.

A survey conducted last year for the Global Sport Institute at Arizona State University found that 60% of respondents considered professional sports teams to be a necessary cultural component of communities. However, less than half believed that state and local governments should provide public funding for sports stadiums.

A proposal to build a new Royals stadium closer to downtown Kansas City prompted thousands of fans to join a Facebook site to protest keeping the current stadium. The large public funding is part of their objection.

“We have a perfectly good stadium that was recently renovated and we’re still paying for it,” said Royals fan Jim Meyer, the website’s administrator. And he added: “There’s no real reason to replace it.”