World gets wise to Olympics boondoggle while Atlanta soaks its citizens for a Braves stadium

posted at 10:01 pm on May 28, 2014 by Mary Katharine Ham

I have watched with some amusement this week as city after city after city dropped out of the running to host the 2022 Winter Olympics because slow economic times, dwindling revenues, ballooning entitlement responsibilities, and a finally protesting public scared many of them off the huge boondoggle that is being a host city. The city and country with the honor of hosting each Olympiad has often spent buckets of taxpayer money, borrowed buckets more, created entirely new developments and traffic woes in already congested areas, and giant sports structures for which there will be no inhabitants once the international circus leaves town. They do all of it to chase that elusive combination of prestige and economic growth an Olympics embodies. The prestige is a far more tangible and likely byproduct, it turns out, than economic benefits.

People skeptical of public spending boondoggles have known this for some time. We’ve seen it in studies again and again.

An August 2013 study from the non-partisan Institute on Taxation and Economic Policy reports that states and localities are allocating $50 billion a year to corporate tax incentives (with $20 billion and counting going to major American sports teams since 1990) and that “despite the enormous expenditures being made on these programs, the evidence suggests that tax incentives are of little benefit to the states and localities that offer them, and that they are actually a drag on national economic growth.”

In Wisconsin:

Publicly financed sports arenas do not provide a positive economic impact to communities, according to a new report released Friday by the city’s Legislative Reference Bureau…

The reference bureau report cites studies showing publicly financed sports venues have not paid off economically for the city, county or state governments financing them. The report cites the work of Andrew Zimbalist, a sports economist at Smith College, who has questioned the economic impact of new sports arenas.

“One should not anticipate that a team or a facility by itself will either increase employment or raise per capita income in a metropolitan area,” Zimbalist said in 2009.

In Minnesota:

Let’s look at this particular deal. The stadium costs $975 million on paper, with over half coming from public funds, $348 million from the state and $150 million from Minneapolis—not through parking taxes or other stadium-related user fees, but with a new city sales tax. In return, the public gets an annual $13 million fee and the right to rent out the stadium on non-game-days.

Vikings ownership, NFL commissioner Roger Goodell, and local politicians make a typical pitch for the deal: the stadium will attract investment to the area; local establishments will see a rise in game-day sales of $145 million; jobs will be created, including 1,600 in construction worth $300 million ($187,500 per job?!); tax revenues will increase $26 million; property values will rise; and, of course, the perennially underachieving team’s fortunes will improve.

Such arguments are always trotted out for these sweetheart deals, but the evidence regarding the economic effects of publicly financed stadiums consistently tells a different story. For example, Dennis Coates and Brad Humphreys performed an exhaustive study of sports franchises in 37 cities between 1969 and 1996 and found no measurable impact on per-capita income. The only statistically significant effects were negative ones because revenue gains were overshadowed by opportunity costs that politicians inevitably ignore.

New York:

The New York Yankees’ new $1.3 billion stadium—the most expensive ever built in the United States—is being made possible by a generous grant from an increasingly familiar sponsor: the taxpayer…

Sanderson and other economists say while new stadiums create jobs in areas such as construction, food services, concessions, and security, these opportunities are either temporary or low-paying. In addition, the vast majority of fans who use stadiums are local, thus no new money is brought into the community.

At the same time, revenues being brought in by teams are, for the most part, redirected out of the community to the league, to owners who rarely invest in the local community, and to players who, more often then not, do not live where they play.

“You have kind of a reverse Robin Hood effect;” Sanderson said. “A situation where you are transferring income from average taxpayers to above-average income groups—owners, players, and fans who regularly attend games.”

In Cincinnati (whose deal is too bad to even do justice to with excerpts).

But Krakow was not having it:

Krakow is dropping its bid for the 2022 Winter Olympics after residents voted overwhelmingly against the plan, the Polish city’s mayor said Monday in the latest blow to a race already in disarray.

Almost 70 percent of voters opted against hosting the games in the referendum on Sunday. The turnout was nearly 36 percent, enough to make the vote valid.

The insanely expensive Sochi Olympics (thanks to corruption!) no doubt helped tip the scales, as did apparent misconduct with the press by the former head of this bidding process in Poland.

And, viral lists of abandoned sports structures of the Olympics can’t help, either. The downsides have become more transparent lately than they’ve been in the past.

Meanwhile in Atlanta, which managed to host an entire Olympics without bilking taxpayers (Back then, everyone complained the Games were too “corporate.”), now can’t manage to get the Braves or some other private entity to fund its new stadium.

The Atlanta Braves reached an agreement with Cobb County on an operating agreement that will obligate the county to borrow up to $396 million to build the team’s new stadium, the Atlanta Journal-Constitution reports…

The proposed new stadium will cost $622 million, with $392 million coming from the public. That includes $368 million in bonds, $14 million in transportation sales tax and $10 million in cash from businesses in the Cumberland Community Improvement District.

The deal was done in secret because of fear the public would revolt, and opponents of the plan were not allowed to speak at the meeting where the Cobb County officials voted to approve it.

Democracy!

The Atlanta Falcons hope to build a new stadium in 2017. Go full Krakow on these guys, Atlanta.

As for what to do about the Olympics, Greg Pollowitz has an idea.

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Ratso!

Bakokitty on May 28, 2014 at 10:03 PM

These things only benefit politicians and developers but they still get away with selling it to the public as being a benefit to them.

crankyoldlady on May 28, 2014 at 10:07 PM

They are soaking Fulton County not so much Atlanta.

The surrounding taxpayer towns which keep the urban area afloat will be the ones screwed.

Much like Birmingham’s inner-city hoodlum Chris McNair whose cronies and self looted the non-freeloader Jefferson County suburbs for that 3.2 billion dollars.

viking01 on May 28, 2014 at 10:13 PM

Sochi Olympics: Meh

stopped watching it right about when bob costas did…..

see what I did there?/

ted c on May 28, 2014 at 10:14 PM

Even more damning — Olympics too expensive for profligate New York spender Bill de Blasio. Of course, that doesn’t mean he won’t find 100 other ways to spend the same amount of taxpayer dollars, but still…

jon1979 on May 28, 2014 at 10:15 PM

I worked for Los Angeles City at the time of the 1984 Olympics, at best USC college had an improved swim stadium post the games. but the window dressing on the Colosseum were not enough to keep the Rams Football team there. The Forum Arena no different. the costs are now exponentially more. Any smart city better think long and hard before jumping on this ship of fools.

Bakokitty on May 28, 2014 at 10:16 PM

World gets wise to Olympics boondoggle while Atlanta soaks its citizens for a Braves stadium

I’m not sure what your definition of soak is, but isn’t Cobb County soaking its citizens?

reddevil on May 28, 2014 at 10:16 PM

The Braves current stadium opened in 1997.

bw222 on May 28, 2014 at 10:17 PM

Wow. The ladies are on a roll this evening. Taxes, Healthcare and energy.

Allah’s stuck in a Johnny Cab.

With Hillary.

I’d have a bag over my head, too.

Just funning you, Allah.

trigon on May 28, 2014 at 10:19 PM

I had figured it would be Fulton Cty as usual so if it’s Cobb Cty. then Cobb Cty….

viking01 on May 28, 2014 at 10:21 PM

Who in their right mind would want an Olympics in their city anyway? It’s a traffic and hotel nightmare, plus nothing but a one-worlder magnet for countries and people who hate America.

We should also pull out of the Olympics and for that matter the UN, forever, as we kick the UN’s ass off our shores.

TXUS on May 28, 2014 at 10:22 PM

Foxboro Stadium, New England Patriots, privately funded by owner Robert Kraft with no expensive PSLs.
High priced tickets and parking pay the freight, not the taxpayer.

philw1776 on May 28, 2014 at 10:39 PM

Yeah but the new Vikings stadium has already paid dividends in winning a Super Bowl bid, 2016 I believe. Woo hoo. Or something.

But have you seen the massive swinging glass doors the place will have? Massive doors!

Bishop on May 28, 2014 at 10:44 PM

The way these leagues and owners extort taxpayers for these monuments to their egos is nothing short of criminal. If Atlanta can’t make a go of it, supposedly, in a stadium that’s not even 20 years old, they have no business having a team in the first place. Or, let them pay for it themselves…Cobb County taxpayers ought to be out there with torches and pitchforks at the offices of the morons who OK’d that “deal”.

changer1701 on May 28, 2014 at 10:45 PM

Those of us who took legit ECON 101 classes have been arguing against “fake” economic activity connected to the olympics, etc. for decades. it’s the broken window theory, just on a large scale.

mankai on May 28, 2014 at 11:06 PM

Yeah but the new Vikings stadium has already paid dividends in winning a Super Bowl bid, 2016 I believe. Woo hoo. Or something.

But have you seen the massive swinging glass doors the place will have? Massive doors!

Bishop on May 28, 2014 at 10:44 PM

It will be great getting NFL Championship Number 15 in Minnesota.

Steve Eggleston on May 28, 2014 at 11:07 PM

The way these leagues and owners extort taxpayers for these monuments to their egos is nothing short of criminal. If Atlanta can’t make a go of it, supposedly, in a stadium that’s not even 20 years old, they have no business having a team in the first place. Or, let them pay for it themselves…Cobb County taxpayers ought to be out there with torches and pitchforks at the offices of the morons who OK’d that “deal”.

changer1701 on May 28, 2014 at 10:45 PM

Torches and pitchforks don’t bother these thieves. They already view the public as peasants too ignorant to be included in decisions.

Now, rope can have an effect. Hang just a few, and the others begin to look over their shoulders.

Adjoran on May 28, 2014 at 11:18 PM

Ironically, the Braves’ current stadium was built for the 1996 Olympics and was converted into a baseball stadium as originally planned. And yet now it’s already considered out of date and needs to be replaced. I own a coat that’s older than that stadium and I haven’t needed to replace it yet.

J.S.K. on May 28, 2014 at 11:29 PM

They’re trying to pull that secrecy crap here in Richmond, VA, with a new minor league ballpark. They want to build it downtown. Most Richmonders don’t want their taxes hiked. Oh, and our city schools are crumbling. But sure, give tens of millions of dollars to millionaires so they can have a nicer stadium and charge us more money to see the games.

So far, the people of Richmond are having none of it.

Meryl Yourish on May 28, 2014 at 11:38 PM

Atlanta is 3 counties. I’m pretty sure it’s Cobb County soaking its citizens.

lorien1973 on May 28, 2014 at 11:39 PM

I’ve wondered for decades why cities would want the Olympics.
The one at Atlanta was a stunning disaster to the locals, tricked into setting up vendor stands (with a high fee) and losing their shorts.
Surprising no city officials fell down the stairs.

To say nothing of the Olympic Goon Squad running roughshod on local businesses who use in any way any logo, word or COLOR that could be construed as being in any way associated with the Olympics without paying, paying, paying.

No. Say no.

Tard on May 28, 2014 at 11:40 PM

If these sports arenas are such a great thing, the promoters should be able assemble a bond package and have it subscribed without taxpayers taking a bath over it guaranteeing them. That they don’t do this is clear evidence right there that the promoters don’t believe their own BS.

So why do so many city councils believe that crap? Is it all just over some free tickets?

ss396 on May 29, 2014 at 12:05 AM

The Braves current stadium opened in 1997.

bw222 on May 28, 2014 at 10:17 PM

Not even 20 years…..and it was built during the supposed Renaissance era of park building, when they moved from symmetrical multi-purpose stadiums to unique one-of-a-kind-parks….

itsspideyman on May 29, 2014 at 12:48 AM

I lived in Atlanta for five and a half years and just moved away a few months ago for military duty. While some are annoyed about the cost of the stadium, that annoyance is more than offset by the joy of the Braves moving closer to where the bulk of their fans are in North Fulton, Cobb, and Gwinnett Counties. Right now, Turner Field is in a bad location with difficult access and egress to the nearby interstates. Game day also clogged traffic going into and out of the city. It’s also in a rough area of town. The proposed new area is in a much nicer area of town, with a plethora of shops and restaurants and much easier access to the interstate.

So, tut-tut all you like about the absurdity of moving from a stadium that will be barely 20 years old when it is demolished. The fans want the move. The franchise wants the move. The net economic benefit will be an enormous boon to the area. One can debate, I suppose, whether the tax payer should foot the bill there, but the long term economic growth will be outstanding.

Dafyd on May 29, 2014 at 1:43 AM

The net economic benefit will be an enormous boon to the area. One can debate, I suppose, whether the tax payer should foot the bill there, but the long term economic growth will be outstanding.

Dafyd on May 29, 2014 at 1:43 AM

We have sports stadiums all over the place and our economy still sucks and our cities are continuing to rot, are taxing their middle class out of existence, and are facing the prospect of defaulting on their bond debts.

I never could see how benefiting a few greasy spoons, T-shirt/souvenir vendors and folks hawking beer and hot dogs on a few days out of the year could really be all that much of a “boon” to any urban area. Small to mid-sized city…mmmmaybe.

Dr. ZhivBlago on May 29, 2014 at 2:14 AM

Who would want to live in a city large enough to be considered for the Olympics?

Meremortal on May 29, 2014 at 3:34 AM

I lived in Atlanta for five and a half years and just moved away a few months ago for military duty. While some are annoyed about the cost of the stadium, that annoyance is more than offset by the joy of the Braves moving closer to where the bulk of their fans are in North Fulton, Cobb, and Gwinnett Counties. Right now, Turner Field is in a bad location with difficult access and egress to the nearby interstates. Game day also clogged traffic going into and out of the city. It’s also in a rough area of town. The proposed new area is in a much nicer area of town, with a plethora of shops and restaurants and much easier access to the interstate.

So, tut-tut all you like about the absurdity of moving from a stadium that will be barely 20 years old when it is demolished. The fans want the move. The franchise wants the move. The net economic benefit will be an enormous boon to the area. One can debate, I suppose, whether the tax payer should foot the bill there, but the long term economic growth will be outstanding.

Dafyd on May 29, 2014 at 1:43 AM

I’ve driven through Atlanta many times when the Braves were letting out, so I can appreciate what you go through. If the citizens want it, there shouldn’t be a problem.

However, I’ve driven up and down I-85 I-285, I-75, and I-20, and if there’s a gap in the traffic for 50 miles in either direction, I’ll eat my hat. :)

itsspideyman on May 29, 2014 at 4:29 AM

They need permanent Olympic sites, for both winter and summer games. Why build new infrastructure every four years, just to have most of it sit unused afterwards and cities saddled with a huge debt. Makes no sense.

HornHiAceDeuce on May 29, 2014 at 6:09 AM

First of all, the Braves Stadium is not being financed by Atlanta. It’s moving from the city of Atlanta to Cobb County. They are paying for it. The city ignored the issues at Turner Field for years, so the Braves gave up. The people of Cobb County voted to have the stadium. I guess they think it will work for them.

The Falcons new stadium, replacing the Georgia Dome, has already been approved. It is being built in the city of Atlanta. Supposedly it is being paid for by the team and the city. Again, if they want it, fine. Taxpayers can vote out the politicians who approve thee things.

Bet on May 29, 2014 at 6:37 AM

[Turner Filed] was built during the supposed Renaissance era of park building, when they moved from symmetrical multi-purpose stadiums to unique one-of-a-kind-parks….

itsspideyman on May 29, 2014 at 12:48 AM

I would challenge that. It was built as the Olympic Stadium, then later retro-fitted for the Braves. Even though that was the plan from the start, I have to believe it’s not a very good baseball park, though I have never attended a game there.

HornHiAceDeuce on May 29, 2014 at 7:40 AM

I do economic impact statements as a business. General statements about what does or does not help the economy of a community are meaningless. Economic impact statements are science, not speculation, so without seeing the actual hard data, the reports are mere politics and feelings….not science

georgealbert on May 29, 2014 at 7:42 AM

Bet on May 29, 2014 at 6:37 AM

One of the points, is the people who vote for these things, are not fully informed.

They are often the people who rail against the 1%ers, and here they are, handing the wealthiest, even more of their money.

The people who make out the most are the owners…and when they sell, the state/county/city, do not get a cut of the deal, even though they were instrumental in the increase of value of the team.

These stadiums only help the contractors and owners…everyone else loses.

right2bright on May 29, 2014 at 8:25 AM

Dafyd on May 29, 2014 at 1:43 AM

In Atlanta – it will never work out because no one in Atlanta goes to professional sporting events anyway. Terrible pro sports town.

If the local taxpayers are stupid enough to do it, wonderful.

Zomcon JEM on May 29, 2014 at 9:15 AM

SLC could host the winter games tomorrow.

All the Olympic venues have been in continuous use since 2002.

We made enough money off the games to fund them well into the future.

Thank you, Mitt Romney.

Sebastian on May 29, 2014 at 9:22 AM

I voted against the stadium deal because any fool could see it was a horrible deal and politician’s promises to give a future tax break are always hollow. The Bengals were brutal and the city and county were both total wusses. When the Bengals threatened to leave, a smart commissioner would have sent them several hundred U-Haul boxes, but ours dropped his pants and begged, “Please, sir, may I have another?”

Of course, Bedinghaus was angling for that Bengals job all along.

Funny thing – Riverfront Stadium was used for both Bengals and Reds games. There was nothing wrong with it when it was demolished. A simple modernization as all that was needed.

I don’t blame the Reds. Their ballpark came in under budget and it is self sustaining.

Shortly after the deal went through, I was having dinner at an Olive Garden with my sweetie. The waiter was very friendly and enthusiastic. When I complimented him on his attitude, he said it was because the Bengals deal had gone through and he was a big fan.

Instead of a tip, I left him a note that said, “As a homeowner, I am paying for your stadium. You’ll be happy to know that your tip is being spent to keep the Bengals in Cincinnati.”

Cricket624 on May 29, 2014 at 9:36 AM

I would challenge that. It was built as the Olympic Stadium, then later retro-fitted for the Braves. Even though that was the plan from the start, I have to believe it’s not a very good baseball park, though I have never attended a game there.

It’s not a great stadium. In fact, I have a hard time telling the difference between Turner and the new Minor League Park they built in Gwinnett. I agree the area that Turner Field is in is awful. I hope the city does something constructive with it.

Bet on May 29, 2014 at 9:46 AM

Atlanta is just correcting a bad mistake it made when it built Turner Field. It’s a decent stadium but not really major-league level, and it is in a crummy area of the city that has not improved and is difficult to get to. It will be interesting to see a MLB franchise relocate to the suburbs where the fans are. Many NFL and NBA teams have done it with good results. But to my knowledge none of those used taxpayer money (NFL teams in New England and Washington built their football palaces with all private money, and I think Detroit did too.) Only the former Los Angeles Angels have moved out of a city to a suburb.

It’s too bad Atlanta can’t do what Baltimore and Philadelphia have done and put the sports facilities together in one place. They should have put a new stadium where the Aquarium and the new Coca-Cola center are, close to the Georgia Dome and near MARTA.

I can’t fathom that they are going to build a new baseball stadium AND replace the Georgia Dome though. Thate seems insane to me.

rockmom on May 29, 2014 at 10:26 AM

Here’s another quadrennial boondoggle for you:

Xasprtr on May 29, 2014 at 10:47 AM

As pro teams are sold, the actual citizens of the communities should be able to buy stock in the team, much like Green Bay. In this way, no owner could threaten to pack up in the middle of the night and run off. If the owners (citizens) feel a new stadium is needed they could then vote for it. Time to get the government out of sports.

hip shot on May 29, 2014 at 11:35 AM

I wish I had the negotiating skills of Mike Brown of the Bengals. Everybody could deride him, yet in the end he makes a fortune. I guess that Ivy League education more than paid off. If you don’t care about public opinion you can turn crap into gold.

cat-scratch on May 29, 2014 at 12:05 PM

I’d like to separate out the Olympics from the local sports venue discussion. The two are similar, but not similar enough for the same answer to apply to both.

The idea of having the Olympics in the same city twice in a row is good, but doesn’t go far enough. I believe the answer is to hold the Summer Olympics at the same venue every time. My preference would be Greece for sentimental reasons, but really anyplace with predictably good weather would do (like California). The facilities could be funded by all participating countries and be available for use all the time, much like the national Olympic training facilities now found in the US and most other countries. Finding a permanent home for the Winter Olympics might be bit more problematic, but Austria would be my choice there (if we can find enough Austrian translators).

Knott Buyinit on May 29, 2014 at 12:05 PM

Atlanta is just correcting a bad mistake it made when it built Turner Field. It’s a decent stadium but not really major-league level, and it is in a crummy area of the city that has not improved and is difficult to get to.

rockmom on May 29, 2014 at 10:26 AM

It is well-known around the National League that the outfield has no back lighting, allowing flyballs to get lost in the twilight. There is no way to prevent it or get used to it, so it does not present any “home-field advantage.”

Got a 37′ Green Monster in left field at Fenway? No problem.
Ivy-covered brick in Wrigley? Don’t run into the wall!
A berm in center field in Houston? Be prepared!
PacBell has a bizarre right field corner complete with doorways and weird caroms that remind you of playing stickball as a kid, and everybody loves it.
Roger Maris hit 61 homers into a short right field overhanging porch, and early major leaguers hit inside-the-park homers into the Polo Grounds’ wide open acreage that extended 440′ from home plate.

All those anomalies added character and fun to the game.

But no backlighting in the outfield that results in millionaire athletes looking like 8-year-old teeballers? That’s not added character, that’s a stupid architectural design flaw.

Does that entitle them to a new stadium? Nah.
But personally, I’d hate coming to work every day knowing that someone else’s incompetence could make me look like a fool on national TV.

rwenger43 on May 29, 2014 at 12:12 PM

“Torches and pitchforks don’t bother these thieves. They already view the public as peasants too ignorant to be included in decisions.

Now, rope can have an effect. Hang just a few, and the others begin to look over their shoulders.

Adjoran on May 28, 2014 at 11:18 PM ”

Nah….just shooting a few of em, from a long way off, will make the point.

Sgt Stryker on May 29, 2014 at 12:16 PM

Atlanta is just correcting a bad mistake it made when it built Turner Field. It’s a decent stadium but not really major-league level, and it is in a crummy area of the city that has not improved and is difficult to get to.

rockmom on May 29, 2014 at 10:26 AM

My situation is the exception to your rule. I come in on I-20 and have easy access to the park. I also come early and stay late, because I try to get value for my ticket.

I know there is no easy access to people trying to avoid I-20.
I also wonder why so many fans come in the 3rd inning and leave by the 8th, no matter the situation.

Of course, I only attend 1-2 games a year [following the rest on the Braves' largest-in-the-world radio network] and only attend games on my Off days. The bread-and-butter, bill-paying fans’ preferences should matter a lot more than mine.

I have read where people defend Atlantans’ lack of attendance at Braves games due to the failure to have a Marta stop in the parking lot. Do you think that would make much difference?

rwenger43 on May 29, 2014 at 12:23 PM

Sometimes I think that the stadia add to the blight.

Vast open parking lots, infrequent use, trash blowing in the wind.

I never could see how benefiting a few greasy spoons, T-shirt/souvenir vendors and folks hawking beer and hot dogs on a few days out of the year could really be all that much of a “boon” to any urban area. Small to mid-sized city…mmmmaybe.

Dr. ZhivBlago on May 29, 2014 at 2:14 AM

In contrast, Athens, Clemson, Columbia all do great business on college game days–all over town.

rwenger43 on May 29, 2014 at 12:35 PM

Release the Kraken Krakow!

Ward Cleaver on May 29, 2014 at 2:03 PM

Who could be opposed to these wonderful sites? ;) After all, look at how wonderful the Coliseum looks after all these years! What could go wrong today pursuing the same thing?!;)
Tell a lie often enough and fools will believe anything!

russedav on May 29, 2014 at 4:09 PM

How about a performance tie in to the city/county that taxes folks to pay for arenas and stadiums.

Miss the playoffs – lowest interest rate and extended bond terms. Make the playoffs – higher interest rate and keep current bond terms. Win a Championship – max interest rate and accelerate bond payments.

The problem is sweet heart deals are given regardless of performance – which leads to declining revenue and owners who then use the same blackmail to either get another shiny new building or move to another dopey city that agrees to the same terms.

Odie1941 on May 29, 2014 at 5:13 PM