Greater Greater Washington

Stadiums aren't about the money

Why do cities keep building stadiums, despite study after study showing they don't make money? Simple: They're cultural amenities that people want, and are willing to pay for.


This doesn't make money either.
Photo by \Ryan on flickr.

When Mayor Gray announced the DC United stadium deal last month, he kicked off a public debate about stadium-building. Much of the debate has focused on whether or not the deal will make DC any money.

But the fact that stadiums often lose money is largely irrelevant. So do museums, libraries, and opera houses. Stadiums fall into the same category.

Smart communities try to squeeze some economic development out of stadium deals, because they may as well, but that's always a side benefit. At the end of the day it isn't the main reason cities build stadiums.

It's true that the privately-owned sports franchises that use stadiums reap a disproportionate benefit from public financing deals, but that's also irrelevant to the stadium-building decision. Pro sports franchises are also cultural amenities that lots of people want and will pay for.

This is why decades of policy wonk hand-wringing over the money has rarely convinced anyone to stop building stadiums. That criticism, true as it is, simply does not invalidate the perceived benefit.

Cross-posted at BeyondDC.

Dan Malouff is a professional transportation planner for the Arlington County Department of Transportation. He has a degree in Urban Planning from the University of Colorado, and lives a car-free lifestyle in Northwest Washington. His posts are his own opinions and do not represent the views of his employer in any way. He runs the blog BeyondDC and also contributes to the Washington Post Local Opinions blog. 

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"So do museums, libraries, and opera houses. Stadiums fall into the same category. "

museums, libraries and opera houses arguably function as educational institutions, and we are willing to subsidize education because of a host of benefits - to distill them, a more educated, cultured public is a social benefit. Also librbaries and museums (but not opera houses, usually, and of course not stadiums) tend to have high fixed and low marginal costs so pricing entry to them to maximize revenue will result in suboptimal usage (stadiums and opera houses can use variable pricing to get around this problem)

Arguably the provision of local sports broadcasts (free) is an external benefit. But of course some of us dont need a local team for that. Even if you do, that just establishes that its good to have a team in your market area - it does not have to be in your jurisdiction. Plenty of people in PWC get to watch Nats games on TV. People as far away as Newport News can consider the Redskins their home team.

The yen for hometown sports teams is real, but I think its perhaps more complex than "oh well its just like libraries"

And yeah, some of what I said might indicate some reluctance to support opera houses and other performing arts spaces. AFAICT that reluctance is out there. I certainly don't see a consensus in Arlington for the Artisphere, for example (and thats cheaper, with I think more direct development externalities, than a stadium)

by AWalkerInTheCity on Aug 6, 2013 1:57 pm • linkreport

Rarely can you find a publicly financed deal for "museums, libraries, and opera houses" that are fully private, for-profit companies. Stadium deals are massive giveaways to the for-profit private sector.

by Sean on Aug 6, 2013 1:59 pm • linkreport

Good argument, Dan.

I also want to point out that the current D.C. United stadium deal doesn't use a dime of taxpayer money in the form of cash or issuing bonds.

by Cavan on Aug 6, 2013 1:59 pm • linkreport

[This comment has been deleted for violating the comment policy.]

by Sean on Aug 6, 2013 2:00 pm • linkreport

Let's not forget that sports leagues are essentially monopolies; leagues effectively control how many cities can have teams. This leaves cities vulnerable to exploitative franchises who demand newer and more expensive stadiums over and over again. Public financing of private stadiums are orders of magnitude larger than that of libraries and museums, which are typically not-for profit institutions. I would also argue that it's not that many people want to pay for these stadiums, it's that city leadership often does not want to be held responsible for losing a team to another city.

by Siddharth Kulkarni on Aug 6, 2013 2:02 pm • linkreport

"I also want to point out that the current D.C. United stadium deal doesn't use a dime of taxpayer money in the form of cash or issuing bonds."

https://en.wikipedia.org/wiki/Opportunity_cost

by AWalkerInTheCity on Aug 6, 2013 2:05 pm • linkreport

The D.C. United stadium deal will also cause an expansion of the tax base in the District. Buzzard Point is currently an empty parking lot. The Reeves Center isn't making any tax money either.

Sean, it's not trolling. Stadiums are the 21st-century version of the 19th century city theater. Back in the 19th century, everyone would go to the theater/opera house for their entertainment. It was only in the 1880's/'90's that baseball became popular enough to compete with the theater as a place of public gathering for entertainment.

Now, the Kennedy Center was built with public funds. Yet, the National Symphony Orchestra doesn't work for free. I don't see anything wrong with that. It is simply disingenuous to pretend that one form of entertainment is more of a civic asset than another. At the end of the day, the theater charges tickets to see live entertainment just like a pro sporting event. The only difference is that the content in the theater is predetermined while the sporting event isn't. That's part of the allure of it.

I like putting on a stylish suit and watching the National Symphony Orchestra. I also like putting on a D.C. United jersey and watching live sports. If I absolutely had to choose between the two, I'd pick D.C. United. Doesn't mean I'm going to go on and on about how venues like the Kennedy Center shouldn't exist regardless of whether it is privately financed and expands the tax base for its host jurisdiction.

by Cavan on Aug 6, 2013 2:11 pm • linkreport

Oh please.

Museums, libraries, opera = educational
Stadiums = Not educational

Museums, libraries, opera = non-profit
Stadiums = for private profit

Museums, libraries, opera = no additional revenue streams
Stadiums = TV deals, sponsorships, etc

Museums, libraries, opera = open most of the year
Stadiums = 102- times a year

Museums, libraries, opera = open to all income levels
Stadiums = exclusively for the richer and upper classes

by JJJJJJ on Aug 6, 2013 2:13 pm • linkreport

@AWalkerInTheCity: If "opportunity costs" are all DC ultimately gives up for the stadium for DC United the city will have gotten off easier than 98% of local governments who have had new stadium built in the last 20 years.

by Kevin on Aug 6, 2013 2:14 pm • linkreport

But the fact that stadiums often lose money is largely irrelevant.

Boy, your definition of irrelevant differs greatly from mine. If that is true, then how much money it loses is also largely irrelevant. But that isn't.

Is it possible that having a sports team located in the city provides some public good like a road, a school or a theater does. Sure.

But you will have to prove not only that a public benefit exists, but that it exceeds the costs and that it can't be had any other way. So, considering that, whether or not it costs money is terribly relevant (and more so since supporters often claim the opposite).

by David C on Aug 6, 2013 2:15 pm • linkreport

I also want to point out that the current D.C. United stadium deal doesn't use a dime of taxpayer money in the form of cash or issuing bonds.

True. But it uses land, which is worth cash.

By this logic. If DC bought land with cash, then later traded that land for helicopters for each CM, they could say that they didn't use a dime of taxpayer money in the form of cash or issuing bonds and you'd be OK with that.

by David C on Aug 6, 2013 2:17 pm • linkreport

"AWalkerInTheCity: If "opportunity costs" are all DC ultimately gives up for the stadium for DC United the city will have gotten off easier than 98% of local governments who have had new stadium built in the last 20 years. "

If the total value given is less. But why does it matter if its cash or land? Is this like the (early) middle ages, when govts paid for services in land because cash was almost unobtainable?

If the US govt had paid for the Iraq war by selling federal land, would that have made it cheaper?

Im sure lots of other local govts could have paid for stadiums by handing out things of value in lieu of cash. It just never occured to them that giving up an asset worth 100 million is "cheaper" than giving up 100 million in cash.

by AWalkerInTheCity on Aug 6, 2013 2:19 pm • linkreport

Back in the 19th century, everyone would go to the theater/opera house for their entertainment.

And those were not paid for with public money.

by David C on Aug 6, 2013 2:19 pm • linkreport

I call BS on this. Stadiums do not lose money per se. American cities lose money on stadiums, which is totally different. And they do it because they hand out the money to the gigantic corporations that are the modern professional sports teams.

Much smaller teams in much smaller markets in Europe (where there can be competition between different teams in the same city) have no problem whatsoever in building and profiting from their stadiums. They just build them accordingly to what the market demands (yeah, capitalism and free markets are very strange concepts for american sports).

by Miguel on Aug 6, 2013 2:20 pm • linkreport

AWalkerInTheCity, you're just wrong about opportunity cost. If the Reeves Center site would be so easy to sell off at auction, why didn't D.C. already plan to do so? Simple. Auctioning off public property is an extremely messy proposition that is fraught with lawsuits and potential corruption.

Also, how do you value the Reeves Center? Do you appraise the land? Not really, as any developer would have demolition and cleanup costs as the building is functionally obsolete. Would you factor in the costs of paying taxes while the HPRB tells you that you can't build until you take off two stories?

Next, how do you value getting a new Reeves Center in Anacostia that will house the offices still in the old building AND provide new headquarters for the city police and fire departments without using any city funds?

It's easy to point at the large parking lots at the RFK site and identify opportunity costs. That's not really the case with the D.C. United stadium. The city will get new tax revenue at Buzzard Point, new tax revenue at 14 and U NW, new tax revenue at Anacostia (though that will lag by at least a decade) in addition to new police and fire headquaraters all without spending any cash or bonds.

It would take a decade unraveling the legal mess at the Reeves Center site if you did the three parts seperately. That's not opportunity cost as you're describing it. The opportunity cost is actually in the opposite direction. If D.C. doesn't do this swap, they're taking on the huge opportunity costs of not getting all the benefits without paying cash or bonds.

by Cavan on Aug 6, 2013 2:20 pm • linkreport

Why do cities keep building stadiums . . . They're cultural amenities that people want, and are willing to pay for

So you claim. Yet even when majorities of residents, taxpayers, and even actual voters oppose the use of public money to subsidize the profits of private sports monopolies, the stadiums get built anyway. The conclusion that better fits the evidence is that stadiums are built despite a public that is unwilling to pay for them.

A more accurate answer is that stadiums are built with public funding because a set of narrow, politically-connected interests receives the overwhelming benefits, and is happy to divert money from small businesses, education, health care, and ordinary taxpayers to themselves. These interests include influential developers, construction firms, and union leaders; politicians who receive donations from the same and who also enjoy the perks of attending games in luxury boxes, and, of course, the owners of the sports teams and leagues themselves.

Combined with political corruption and a lack of two-party political competition in many urban areas (and hence an inability by voters to hold accountable the politicians who squander their money on stadiums) and the maddening support given to league monopolies or pseudo-monopolies by national politicians, and you get the results we see.

by Bitter Brew on Aug 6, 2013 2:24 pm • linkreport

"AWalkerInTheCity, you're just wrong about opportunity cost. If the Reeves Center site would be so easy to sell off at auction, why didn't D.C. already plan to do so? Simple. Auctioning off public property is an extremely messy proposition that is fraught with lawsuits and potential corruption. "

Its hardly more messy or "corrupt" than the proposed deal.

"Also, how do you value the Reeves Center? Do you appraise the land? Not really, as any developer would have demolition and cleanup costs as the building is functionally obsolete. Would you factor in the costs of paying taxes while the HPRB tells you that you can't build until you take off two stories?"

The auction process itself takes care of that.

When you evaluate the land for purposes of the deak, how do you factor in those costs?

by AWalkerInTheCity on Aug 6, 2013 2:25 pm • linkreport

[This comment has been deleted for violating the comment policy.]

by Cavan on Aug 6, 2013 2:25 pm • linkreport

I do agree in part, but I disagree in part. Education has been a core government role for a long time. If these were publicly accessible recreation facilities it might be one thing, but it seems like this really falls under the entertainment category. Maybe thats what they should do, and just lease the space to DC United for the season on a long term contract. On the otherhand, DC does build things like music venues in parks so its certainly a gray area. BUT aren't those events free to the public? Especially with a for-profit business benefiting why is the argument not to just raise ticket prices if people want it?

by Alan B. on Aug 6, 2013 2:25 pm • linkreport

"Next, how do you value getting a new Reeves Center in Anacostia that will house the offices still in the old building AND provide new headquarters for the city police and fire departments without using any city funds?"

wait akridge is building the new offices in Anacostia for DC free of charge?

by AWalkerInTheCity on Aug 6, 2013 2:26 pm • linkreport

@J6 - right on all those comparisons. Even generous to stadium supporters ("102 times a year" is pretty much a best case, baseball scenario).

by Bitter Brew on Aug 6, 2013 2:29 pm • linkreport

1. I would argue that spectator sports (different from participating in sports) do not provide the same role as a museum or library - which are places of education. They are similar to opera houses or theaters (which are places of entertainment).

2. When for profit corporations start getting hundreds of millions of dollars for museums then we can compare apples to apples.

3. American sports are the perfect analogy for the crony capitalism which runs American. Public risk, private profit. Amazingly, Europe, which is so socialist in so many ways, is really cut throat capitalist when it comes to sports - imagine if the NFL had promotion/relegation.

by TomA on Aug 6, 2013 2:29 pm • linkreport

Also, how do you value the Reeves Center? Do you appraise the land? Not really, as any developer would have demolition and cleanup costs as the building is functionally obsolete. Would you factor in the costs of paying taxes while the HPRB tells you that you can't build until you take off two stories?

Next, how do you value getting a new Reeves Center in Anacostia that will house the offices still in the old building AND provide new headquarters for the city police and fire departments without using any city funds?"

None of this is very hard. The DC government does it all the time - it's not like they haven't sold land before. Or bought land to build something on. While it's true there might need to be some contracting costs and such - those are going to occur under the stadium swap as well. In this case, "$100 million" means, well, "$100 million" - as in, the DC government could, if they wished to, get $100 million for this stuff, or they could trade it for the stadium/land in Anacostia. The only debate is whether the benefits of this deal are worth the $100 million or not. But AWalkerInTheCity is completely correct - just because it's land doesn't make it less valuable.

by Matt on Aug 6, 2013 2:30 pm • linkreport

They're cultural amenities that people want, and are willing to pay for.

Sure, that's legitimate. But why should Dan Snyder or Jerry Jones get to keep all the money that's made from it?

There maybe an example of a museum using public funds to go to a private individual/organization. I'd say the same criticism should apply to them.

by drumz on Aug 6, 2013 2:33 pm • linkreport

"It would take a decade unraveling the legal mess at the Reeves Center site if you did the three parts seperately"

Im not sure why that has to be the case - the issues at Reeves arent like McMillan or Hines - the community seems to universally want it redeveloped.

But, for the sake of argument, lets say you are right. reeves cannot be auctioned for cash. Why not swap for it something more valuable than a stadium, more intrinsic to public purposes. Trade it to a contractor for the street car lines, say. Or anything else in the capital budget. Exchange it for affordable housing. Whatever.

by AWalkerInTheCity on Aug 6, 2013 2:33 pm • linkreport

If the Reeves Center site would be so easy to sell off at auction, why didn't D.C. already plan to do so?

We don't really know the answer. But probably because this is easier. That doesn't mean it's better. In fact, the easy way is often not the best way. Don't you think that's a more credible answer then:

"Auctioning off public property is an extremely messy proposition that is fraught with lawsuits and potential corruption."

Because if there is one thing we know about the the DC government, it's that it will jump through hoops to avoid corruption? [And exactly what lawsuits do you foresee?]

by David C on Aug 6, 2013 2:35 pm • linkreport

Its hardly more messy or "corrupt" than the proposed deal.

Just because you say it doesn't make it so. Where is the corruption? Just because you say that it would be better for the city to auction everything off in a public auction doesn't make it so.

The auction process itself takes care of that.

If only it were that simple. Didn't you see the post earlier today complaining about the outcome of an auction in Shaw? Do you think there will be a lawsuit there?

At the end of the day, this is always going to be a value judgement. D.C. United could structure a deal where in addition to paying for their own stadium, they provided everyone with unicorns that belched glitter, you'd still be against it.

You don't like sports or stadiums, period. No amount of fact about the benefits for the city will convince you. You look at bad deals and point to them to make your point. I point to success stories like the Verizon Center (and you can't claim it had nothing to do with Penn Quarter/Chinatown revitalizing as even noted anti-sports guy Richard Layman now concedes that point) to make my point.

You know what other project was picked apart with various studies and claims about it being too expensive etc.? Metro. Now, I'm not claiming that the D.C. United stadium and Buzzard Point and the Metro are the same thing as they're clearly not. Regardless, the parallel is there in that they were both ultimately value judgements. You couldn't convince the highway lobby that the Metro was worth it any more than you could convince a GGW contributor like me that paving over everything inside the beltway would have been a good idea.

I can point all the numbers I want about how this particular deal will be good for the city and you'll always tell me I'm wrong without actually knowing much about why. It just feels that way. I like to think I'm different in that I try to point out the numbers and mechanisms and even wrote a post about it back in May. However, I am a partisan so that means something about where my value judgement would fall.

by Cavan on Aug 6, 2013 2:35 pm • linkreport

Remember when the Metropolitan Museum of Art threatened to move to St Louis if it didnt get a new wing with skyboxes?

Museums and Libraries dont threaten to leave for another town or city 25 years after their building was built.

by Richard B on Aug 6, 2013 2:36 pm • linkreport

I find the argument in this post hard to swallow, but the insinuation that theater venues such as the Kennedy Center are open to all income levels is equally laughable. Sure, anyone and everyone can attend the once per week Millennium Stage events, but I highly doubt "The Book of Mormon" is an option for all income levels.

by Andy on Aug 6, 2013 2:36 pm • linkreport

Is it really fair to say that corporations and other owners are being subsidized by the city? Are the teams really more profitable than the average investment these owners would make?

Or does the reduced cost from the subsidies mainly free up cash to pay higher salaries to the players?

Do we know?

by JimT on Aug 6, 2013 2:36 pm • linkreport

If the city can raise 300 million dollars for a new stadium, why can't it raise 900 million and buy the team? Then it can enjoy the profits, the security of knowing it will never leave, and if it wants to increase said profits it can build / renovate the stadium.

by Richard B on Aug 6, 2013 2:37 pm • linkreport

"But the fact that stadiums often lose money is largely irrelevant."

Since their ability to generate revenue is a core part of the argument for stadiums, I'd say their track record in doing so is quite relevant.

by Andy on Aug 6, 2013 2:39 pm • linkreport

Richard B, the city isn't raising $300 million.

The team will pay $150 million to build the stadium. The city will swap land with a private landowner. The private landowner will then develop its new parcel at 14th and U NW into something that will generate taxes. The extra $150 million is the combined appraised value of the two parcels of land that are being swapped.

The city will pay nothing in cash or bonds.

by Cavan on Aug 6, 2013 2:41 pm • linkreport

Is it really fair to say that corporations and other owners are being subsidized by the city?

Yes. The Nationals make about $34M in profits each year. This is enough to cover the interest and principle on the debt DC carries for the stadium. But they don't. Basically, we pay them to play here. If that's not a subsidy, I don't know what you call it.

Are the teams really more profitable than the average investment these owners would make?

Does that matter?

by David C on Aug 6, 2013 2:42 pm • linkreport

David C, while I don't think that Nats Park should have been publically financed, none of the bond service comes from regular city funds. They come from a special hotel tax. That tax is currently generating more money than what it takes to pay off the bonds. It's actually been a net surplus so far.

Again, I don't think that the Nats Park deal was as good as it could have been but it's not as black and white as you present it. In your world, Stadiums = bad. Period.

However, in the real world, it's not so simple. There are plenty of stadium success stories just as much as there are examples that ended up being bad deals.

by Cavan on Aug 6, 2013 2:46 pm • linkreport

Arguably the provision of local sports broadcasts (free) is an external benefit.

Local sports broadcasts aren't free these days outside of the NFL. To watch the Nationals, Capitals, Wizards, or United, one has to have a cable or satellite package. The Nats have a handful of games that air on DC20 during the year, and that's it. The only time you'll see the Caps on free, over-the-air TV is a national NBC broadcast, which they get 3-4 a year. And that's it.

I'm paying a boatload of money so I can watch local sports. It's ridiculous. But I keep doing it because I don't have other options.

by Birdie on Aug 6, 2013 2:48 pm • linkreport

"Where is the corruption? Just because you say that it would be better for the city to auction everything off in a public auction doesn't make it so."

where is the corruption you complain of in the auction process? The same possiblity is here, and more so, because only one developer gets a chance to make an offer for the property.

"If only it were that simple. Didn't you see the post earlier today complaining about the outcome of an auction in Shaw? Do you think there will be a lawsuit there?"

In that case the city made a conscious decision to ask for things other than $$. In the stadium deal the city will not get affordable housing, or promised harris teeter, or an extended street grid. They will get whatever Akridge can build by right. I very simple auction could do the same thing.

"Ayou'd still be against it.

You don't like sports or stadiums, period. "

Ive been to Nats Park for games several times. I enjoy sports. I am not convinced the soccer stadium is a bad deal, nor am I convinced by all the arguments against Nats Park.

But good deal or bad, its a matter of weighing the benefits vs the costs. and the costs do not cease to be costs because they are not paid in cash.

"You know what other project was picked apart with various studies and claims about it being too expensive etc.? Metro."

Metro was paid for with cash. The arguments for and against it were about the extent of the benefits. thats a worthwhile argument to have. But to pretend that costs are not costs, because they are paid in kind instead of in cash, seems to me to be quite wrong, and to border on the dishonest.

by AWalkerInTheCity on Aug 6, 2013 2:48 pm • linkreport

"Museums, libraries, opera = no additional revenue streams
Stadiums = TV deals, sponsorships, etc"

You sure about this?

There's a huge Ralph Lauren logo right next to the Star Spangled Banner over on the Mall. I listen to NYC's Metropolitan Opera on the radio while I'm running errands on Saturday. That's not getting broadcast out of the goodness of someone's heart. "Benefactor" and "sponsor" are the same thing in my book.

by Another Nick on Aug 6, 2013 2:50 pm • linkreport

"Arguably the provision of local sports broadcasts (free) is an external benefit.
Local sports broadcasts aren't free these days outside of the NFL"

dude. its baseball. You listen on the radio. Ive completely cleaned my kitchen while hearing the Nats blow a lead and then leave half a dozen runners stranded in scoring position.

by AWalkerInTheCity on Aug 6, 2013 2:51 pm • linkreport

For 2nd rate towns having a sports team with their name matters for prestige. However, whether the stadium for the team is in the core of a major city or in the suburbs doesn't matter a hoot.

It's the Washington Redskins, not the Landover Redskins.

Let these burgs that think getting a team's stadium in their town means something have them.

by Tom Coumaris on Aug 6, 2013 2:51 pm • linkreport

Since their ability to generate revenue is a core part of the argument for stadiums, I'd say their track record in doing so is quite relevant.

Andy, how do you measure that revenue? On gross receipts at stadium events? On taxes collected off stadium events? Off taxes generated from development induced by the stadium? How do you measure that last question? What development is directly due to the stadium and what development is a snowball/halo effect?

Again, the issue isn't as black and white as you reflexive anti-stadium people try to present. There have been good stadium deals like Verizon Center or Camden Yards. There have also been bad ones like FedEx Field but that last one isn't all terrible as Prince George's makes a lot of taxes off of events there even though the stadium was privately financed.

by Cavan on Aug 6, 2013 2:51 pm • linkreport

Saying that stadiums don't make money is like saying rail service never turns a profit, except for all the money everyone else makes on their back and in turn help vitalize a local economy. The more you integrate it into town the better as you spark up the surrounding community and reduce infrastructure costs and maintenance towards getting people there.

by Thayer-D on Aug 6, 2013 2:55 pm • linkreport

none of the bond service comes from regular city funds. They come from a special hotel tax.

Not true. The bond services are paid for out of 4 pots - stadium rent (~$4.5M per year), a special sales tax for stadium-related purchases (~$10M), a cut of the utility taxes paid by every non-residential taxpayer (~11M), and a gross-receipts tax on businesses making more than $5 million a year (~33M).

Now with the possible exception of the two smallest funding mechanisms, the rest comes from taxes. Taxes paid by DC businesses. Even ones that are far away from the stadium. Even ones that COMPETE with the stadium for entertainment dollars. DC could just tax those businesses in the same way and use the money to do something else. So, again, opportunity costs.

And then, there is the ~$200M that wasn't borrowed. That came from somewhere.

And then all the other hidden money (police use, lawyers to buy the land, etc...) that aren't included anywhere.

So you're wrong on the facts. And it wouldn't matter if you weren't. We could just use that awesome hotel tax to pay for schools right?

by David C on Aug 6, 2013 2:58 pm • linkreport

I'm not anti-stadium. I'm anti-bad arguments.

I would say the stadium's ability to generate revenue and spur development are different issues.

I don't know the traditional means of calculating net stadium revenue, and is difficult as you mentioned. However, this does not make the discussion irrelevant. If you'd like the discussion off the table, those pushing for the stadium should refrain from touting its ability to generate revenue.

by Andy on Aug 6, 2013 2:58 pm • linkreport

C'mon Cavan. There's a difference between being "anti-stadium" and being against public funding.

Can I prove the United stadium will enrich Erick Thohir at the expense of DC taxpayers? No. But are the benefits to DC sufficiently unlikely that the proposal would have been DOA if, say, well-known libertarian billionaire David Koch were the beneficiary rather than the unknown Thohir. Unquestionably.

by CaBi Driver on Aug 6, 2013 3:03 pm • linkreport

For 2nd rate towns having a sports team with their name matters for prestige. However, whether the stadium for the team is in the core of a major city or in the suburbs doesn't matter a hoot.
It's the Washington Redskins, not the Landover Redskins.

Let these burgs that think getting a team's stadium in their town means something have them.

So if the Redskins decide to move to Los Angeles that wouldnt hurt DC's pride?

by Richard B on Aug 6, 2013 3:04 pm • linkreport

Not arguably, investment in the arts and culture has other economic benefits that public financing in sports does not. It can support economic development in various knowledge-based clusters.

cf. the arguments in _New Wealth of Cities_ by John Montgomery.

Part of this has to do with the difference between arts as production and arts as consumption.

Sports entertainment is all about consumption (unless you're Under Armour), so you have to impute "cultural value" in terms of pride, fun, etc., rather than economically.

There are limited additional economic benefits (the research on the ec. value merely demonstrates that spending on sports displaces spending on other forms of entertainment.)

The other problem is that as people have pointed out, the monopoly structure of professional sports means that the economic value of "the investment" by "the public" in the stadium or arena is for the most part captured by "the team owner(s)" in the increased value of the team, and as I have discussed in my own entries on this broad subject, the "public investment" in the "team" is not recognized through a kind of property participation in the increased value of the team, which can come back to the jurisdiction when the team is sold.

If "the public" got a form of Class B or preferred stock that paid out for the value of the "public investment" in the facilities when the team is sold, I'd have absolutely no problem with public spending on such activities.

WRT Cavan's point. The only reason PG makes any money from the Redskins is because of the local admissions tax on the ticket. Otherwise, they'd reap squat.

The reason that Verizon Center is a better deal is not just the deal but the location of the building. It's designed to strengthen the area around it. To some extent that is the case with Camden Yards, not really, but it's close enough to Downtown that spillover benefit, a little, can't be helped. (It's actually not in a location with a lot of other potential benefits, as it is hemmed in, other than what further improvement that could be sparked in Inner Harbor and nearby Downtown--neither of which is doing particularly well by the way.)

So the location issue is a key issue generally. If done well, it's a way for the city to do much better than it would otherwise. E.g., all the stadiums in Philadelphia or Atlanta don't have the economic value locationally that similar facilities do in Washington proper, Madison Square Garden, the new Barclays Center in Brooklyn, etc.

charlie could shed light on the Cleveland example. WRT them, historic preservation and real estate consultant Don Rypkema makes the general point that the ec. impact of stadiums tends to be a 1.5 block radius, no more.

I haven't been back to Detroit for years and years. I wonder if the football stadium downtown is positive or not. It's the only centrally located within the core professional football stadium that I can think of.

by Richard Layman on Aug 6, 2013 3:05 pm • linkreport

"There's a difference between being "anti-stadium" and being against public funding. "

Im not necessarily against public funding in all cases. Im open to arguments on the benefits, including spurring local development.

I am against misleading statements about costs though - like the refrain that the costs are less because land is being swapped, rather than cash provided. To be fair, I don't think even Mayor Gray is saying that anymore.

by AWalkerInTheCity on Aug 6, 2013 3:06 pm • linkreport

Surely already noted by previous comments, but...

"So do museums, libraries, and opera houses. Stadiums fall into the same category. // It's true that the privately-owned sports franchises that use stadiums reap a disproportionate benefit from public financing deals..."

Have to disagree, in part. I am willing to agree that stadiums can provide a cultural / social benefit, and perhaps even an economic benefit -- particularly with those that have high numbers of home games or can be easily reprogrammed for other activities, if properly integrated to bring customers into the neighborhood & if infrastructure is adequate.

However, I also believe that the for-profit structure does influence some degree of change in how to perceive the deals... I see the comparisons to public non-profit institutions rather apples/oranges in this manner. Those instituations cannot afford their own buildings without government support, as that is the foundation of their very existence. Private for-profit sports teams, on the other hand, do introduce an additional consideration.

If we as a city believe that the cultural/social benefits justify the potential economic costs, then absolutely: democracy in action. But people's opinions tend to be slanted by the question of fairness when public dollars are given to private industry's profits.

(Of course... if we publicly owned the sports teams- it's a wholly different question!)

by Bossi on Aug 6, 2013 3:06 pm • linkreport

oh damn, besides location, the other issue is the number of events, and the time scheduling of them. I have argued for a long time that Verizon events are scheduled at a time to "force" people to go directly to the arena after work and spend their money inside, not at nearby restaurants etc., in order to not miss the action. That's a negative.

But that there are concerts, both basketball and hockey, plus college basketball games (GU), means that there are more than 100 events there every year, which makes a tremendous difference.

Just on the basis of the number of events, avoiding public spending on football stadiums should be a priority. (Plus the tailgate phenomenon reduces local economic benefit as well.)

by Richard Layman on Aug 6, 2013 3:09 pm • linkreport

I'm sorry, but this argument is risible. Yes, sports stadiums are an amenity many people want. That's great. Cinemas are also a popular amenity, as are restaurants. But we don't hand out public money to subsidize cinema construction or build restaurants at taxpayer expense, because these enterprises are operated on a for-profit basis by the private sector, which will provide us with movie theaters and restaurants according to demand. Museums and theaters are generally not profitable, but deemed worthwhile amenities, so we provide public funds to non-profit entities to run them. Professional sports franchises are for-profit enterprises which could perfectly well afford to build their own facilities, but they prefer instead to extort money from municipalities, socializing the risk while privatizing the profits. This is a consequence of allowing professional sport leagues to artificially restrict the supply of teams, thus driving up demand. If they were not allowed to do so, investors would be begging cities to allow them to build stadiums at their own expense in rich markets like DC. Alternatively, if sports franchises were operated on a non-profit basis for the sole benefit of the community, fewer people would object to spraying them with taxpayer money. But the notion that it's reasonable to hand over taxpayer dollars to wealthy corporations and team owners just because a stadium is a nice thing to have in your city is ludicrous.

by alurin on Aug 6, 2013 3:12 pm • linkreport

The business around the Verizon Center are packed before and after events. Hence their annoyance with the NHL lockout, for example.

by Andy on Aug 6, 2013 3:14 pm • linkreport

I'm pretty happy with Arlington's decision regarding Nat's stadium. We basically said, sure you can build it here. What will we give you? A permit. Stadiums keep getting built not because the public is willing to pay for it, but because there is always someone dumb enough to think that a stadium is an economic development silver bullet. The group/area most desperate for that development will throw every public dollar they can at landing the stadium. The sports teams only need to play the jurisdictions against each other and take the best deal.

by JohnB on Aug 6, 2013 3:14 pm • linkreport

for people into the ec. value of culture discussion, lately I have been introduced to some important work out of Italy by Walter Santagata and Luciana Lazzeretti. Both are economists, so the work can be a bit turgid, but they make the distinction between industrial cultural districts (e.g. glass, fashion, design) of various sorts, museum cultural districts, and more general metropolitan cultural districts.

This journal article, predating his book, sums up John Montgomery's arguments:

http://halliejones.com/Resources/CulturalQuarters.pdf

by Richard Layman on Aug 6, 2013 3:15 pm • linkreport

"So if the Redskins decide to move to Los Angeles that wouldnt hurt DC's pride?"

I think it would be a huge boon to civic pride if the Landover Racial Epithets moved to L.A.

by Sean on Aug 6, 2013 3:15 pm • linkreport

If they were not allowed to do so, investors would be begging cities to allow them to build stadiums at their own expense in rich markets like DC

alurin, D.C. United is asking the city to let them build a stadium at their own expense.

by Cavan on Aug 6, 2013 3:18 pm • linkreport

(alurin -- getting back to the "market" discussion in the entry on the project on W Street, "we do" at times subsidize for profit provision of cinemas, restaurants, music halls, and other businesses, depending on the market conditions in the particular districts, and whether or not we want to see those offerings. Boston has a great restaurant support initiative. MoCo funded a goodly portion of the Fillmore, for profit, and AFI in Silver Spring, nonprofit. DC has a supermarket funding program--well it did, I don't know if it was renewed. Mayor Gray has suggested providing TIF support for cinemas in Anacostia, etc.)

by Richard Layman on Aug 6, 2013 3:18 pm • linkreport

@David C: I am just wondering whether the true beneficiaries of municipal largesse are players, rather than the owners. As I think you intimate, I guess it does not really matter since many of the players are even more wealthy than the owners. But since people keep implying that the corporations are the beneficiaries, I thought I would suggest that it is probably more accurate to say that team owners and players are being subsidized.

If the Lerners are making $30 million per year on an investment of $450 for the team, this is not necessarily a larger return than what they might get on any investment. They would have successful businesses with or without the Nats. Most of the players, by contrast, are making alot more than would they would be doing were they not playing baseball.

Regarding FedEX Field: I think it is worth noting that then-PG County Executive Wayne Curry irritated his predecessor, then-Governor Glenndenning by refusing to pay for much of anything in the way of infrastructure improvements, while still holding up the Redskins for various amenities for PG County residents. The state was in the midst of a big-time giveway for a new stadium for the Baltimore Ravens, so it felt obliged to pay for various road improvements to the new Landover Stadium being built by the Redskins.

I'm not sure whether Mr. Curry simply did not care whether the Redskins built the stadium, or knew that Glenndenning would come through with the money if he didn't, but PG basically gave up nothing for that stadium.

Interesting that as good as he was on smart growth, Mr. Glendenning had a real weak spot for football stadiums, leaving us with two white elephants.

by JimT on Aug 6, 2013 3:18 pm • linkreport

(DC also gave TIF money to the Spy Museum and the Nat. Museum on Crime and Punishment. Despite the presumption that "museums" are nonprofits, these two entities are for profit ventures.)

by Richard Layman on Aug 6, 2013 3:19 pm • linkreport

I'd agree that stadiums aren't like theaters or opera houses. However, the post confuses what is being purchased by a jurisdiction. Yes, on the surface it appears that a city is buying a stadium but what they are really buying is a sports team. The price of that team is whatever money they need to pay for it in the form of stadium contributions, infrastructure improvements, etc..

Once you call the stadium the price of purchasing a team (or more accurately, leasing for 30 years), then every argument about whether the person selling you the team will profit makes no difference. The only thing that matters is whether the enjoyment the team brings to people is of greater value than the net cost of the team.

The Roman Colusseum didn't make the Roman government any money. But, I'm pretty sure Rome didn't think building it was a waste of money even though most events were free and open to the public (at least for the cheap seats). The concept of publicly funded entertainment is as old as Rome and is as modern as concerts in Central Park or Screen on the Green.

Yet even when majorities of residents, taxpayers, and even actual voters oppose the use of public money to subsidize the profits of private sports monopolies, the stadiums get built anyway.

But, cities also lose teams even when the majority of residents are willing to pay to keep them. See: Baltimore Colts and Brooklyn Dodgers.

Museums, libraries, opera = open to all income levels
Stadiums = exclusively for the richer and upper classes

Opera is for the masses but baseball is for the elite? Not sure about that one...

by Falls Church on Aug 6, 2013 3:21 pm • linkreport

1. opera is pretty clearly in a different case from libraries and museums. Though IIUC today cities rarely build opera houses - they build multipurpose performing arts centers, that are sometimes used for free events, and sometimes used by perf arts companies for their events. The analogy in sports would be a publicly owned stadium that can be and is used for multiple starts. Like, er RFK stadium. Which isnt that much older than Kennedy center btw. What would be the reaction if the NSO asked for a new, symphony orchestra only, venue, because the Kennedy center was too old, not designed speficially for symphonies, and had too few luxury boxes?

2. Screen on the green and concerts in central park dont charge admission. If we baseball or soccer tickets were free, that would be an entirely different analysis

by AWalkerInTheCity on Aug 6, 2013 3:34 pm • linkreport

'multiple sports'

by AWalkerInTheCity on Aug 6, 2013 3:36 pm • linkreport

@Falls Church: With respect to baseball, treating the transaction as the purchase/lease of a team rather than a stadium highlights the problem of MLB's antitrust exemption. If the cabal of major league owners did not have a judicially-created (and reinforced by legislative passivity) right to a monopoly, cities would pay a lower price to own or lease a team.

by Bitter Brew on Aug 6, 2013 3:37 pm • linkreport

Screen on the green and concerts in central park dont charge admission. If we baseball or soccer tickets were free, that would be an entirely different analysis

City's could make going to a sports stadium free. They'd just have to pay the owner's of the team more money. They could pay an annual fee to the owners that equals their expected ticket sales and give away tickets to residents. I don't think that would be a good idea, but if your objection is that the city's sports subsidy isn't sufficient to make attendance free, there's a way around that.

Similarly, the government could choose to make Metro free if they spent more on the Metro subsidy.

Bear in mind, concerts in Central Park are only free for people because the city overs the cost of putting on the concert.

by Falls Church on Aug 6, 2013 3:40 pm • linkreport

If sports teams are local cultural amenities that should be supported by local tax dollars, why aren't they owned by the DC government, or some WMATA-like governing body that would run them on behalf of the greater Washington region? I'm fine with subsidizing sports as a public amenity; I'm much less fine with subsidizing Dan Snyder.

by Dan Miller on Aug 6, 2013 3:51 pm • linkreport

What would be the reaction if the NSO asked for a new, symphony orchestra only, venue, because the Kennedy center was too old, not designed speficially for symphonies, and had too few luxury boxes?

The government would probably refuse and the NSO would have little choice but to accept since they don't have a lot of options. OTOH, refuse a new stadium to a sports team and they're very likely to move.

If the cabal of major league owners did not have a judicially-created (and reinforced by legislative passivity) right to a monopoly, cities would pay a lower price to own or lease a team.

Yeah, we'd be much better off if they didn't have an antitrust exemption. Until that changes, team owners and players have all the power.

by Falls Church on Aug 6, 2013 3:52 pm • linkreport

I think it would be a huge boon to civic pride if the Landover Racial Epithets moved to L.A.

Now we are talking!

by Richard B on Aug 6, 2013 3:55 pm • linkreport

Until that changes, team owners and players have all the power.

No they don't. When MLB told us that if we don't give them a $600M baseball stadium they'll go to Portland, we had the power to say "Boys, I hear Portland is a wonderful city. I'm sure you're going to love it in the 22nd largest TV market."

by David C on Aug 6, 2013 4:00 pm • linkreport

another oddness, speaking of the ec. value of these various "deals." The Newseum paid market value for a piece of city property, something like $100 million, in 2000, to get that prime location on Pennsylvania Ave. NW.

http://www.freedomforum.org/templates/document.asp?documentID=2981

DC used the money to fund various ec. dev. initiatives for a few years (e.g., the money paid for the Main Street program for awhile).

DC United is getting a way better deal.

by Richard Layman on Aug 6, 2013 4:02 pm • linkreport

"The fact that stadiums often lose money is largely irrelevant."

Stadiums are sold to the public promising the opposite, so it's actually very relevant.

by BW on Aug 6, 2013 4:14 pm • linkreport

Just returned from a weekend in Pittsburgh, and enjoyed Saturday evening at PNC Park. The area where the ballpark was built had been a mix of outsourced industry and decayed housing. Now there's a heritage trail along the river, and the stadium(s) draw enough people to the neighborhood to bring it to life with new restaurants and shops in repurposed historic structures. And with the new restaurants and shops, there are new apartments - some involving spectacular adaptive reuse of old industrial sites like the Heinz Lofts (the old Heinz plant). Oh, and there's also a bike trail along the river and the subway has been extended from downtown across the river and it has stops at PNC Park (Pirates) and Heinz Field (Steelers). (The Steelers, by the way, pay for the Sunday extended service from downtown, which is free to riders)

We can disagree whether stadiums are a good deal for taxpayers (most often they are ripoffs), but Pittsburgh is an example of how building a stadium can help bring an area to life. (The Verizon Center certainly sped up DC's development around Gallery Place.) The key is that it be part of a neighborhood, and not an island surrounded by parking lots.

When a stadium does work to bring a neighborhood to life, it may be hard to quantify the benefits (increased real estate and sales taxes, etc;) because - as in the case of Gallery Place - the development probably would have happened eventually. But who knows when?

But I would argue that every nickel that was spent for infrastructure etc for Verizon Center has been repaid many times over with the rebirth of the surrounding neighborhood. Those MD and VA folks who come to the hood give DC taxpayers a dime out of every dollar they spend here.

And it looks like PNC Park and Heinz Field are starting to pay development dividends as well.

by Mike S. on Aug 6, 2013 4:15 pm • linkreport

Late to the party, as usual. So apologies if I missed something in relation to the below.

@JJJJJJ:
Museums, libraries, opera = non-profit
Stadiums = for private profit

Not so in all cases. Libraries, maybe. But there are many for-profit museums in the US, and loads of for-profit opera companies (note the number that closed during the recession due to lack of audience - I remember a time, not too long ago, when nearly every state had two or three decent regional companies)

Museums, libraries, opera = no additional revenue streams
Stadiums = TV deals, sponsorships, etc

At least with the Metropolitan Opera, that's not so. Besides live performances, there are the Live in HD moviecasts, the radio broadcasts, the Sirius radio broadcasts, the gift shop monies... This is nearly unique in the US, but hardly so in Europe, and I believe there are some indications that other American performing arts organizations will be following the model. And for museums, how many of them have gift catalogues?

Museums, libraries, opera = open most of the year
Stadiums = 102- times a year

Not always. Large opera houses are frequently in use year-round. But I can think of numerous venues in this area alone that aren't.

@David C:And those were not paid for with public money.

In the US, perhaps. (Frequently so.) In Europe? Not so much. Most of the major European houses were publicly funded one and two centuries ago. (Although I do realize that funding for the arts in Europe is different than it is here.)

by Ser Amantio di Nicolao on Aug 6, 2013 4:21 pm • linkreport

I would feel better if supporters would stop trying to justify it on economic grounds and admit that it is an amenity that they want the city to provide. If no one wanted parks they would cancel the parks program, but I guess most of us want them so we have them.

by Alan B. on Aug 6, 2013 4:21 pm • linkreport

If sports teams are local cultural amenities that should be supported by local tax dollars, why aren't they owned by the DC government, or some WMATA-like governing body that would run them on behalf of the greater Washington region?

That's a good question. I'd say the main reason that governments shouldn't get into the sports ownership business is that they have little experience or competency in that area. It's a lot easier to lose money buying an MLS team than to make money. In fact, there have been previous attempts prior to MLS to setup pro soccer leagues that went bankrupt.

As for the Redskins, good luck buying them for less than $1.5 billion. At that price tag (assuming DC is able to borrow that much money), you're betting the entire future of the city on its ability to manage the team in a way that doesn't lose money.

by Falls Church on Aug 6, 2013 4:25 pm • linkreport

Verizon is debatable since it's tax exempt, holds prime downtown real estate, and keeps asking for more handouts.

I think Alkridge's goal with DCU is to build a huge empty buffer between the low income housing to the north and the other land Alkridge owns in Buzzard's Point to the south.

by Tom Coumaris on Aug 6, 2013 4:25 pm • linkreport

When MLB told us that if we don't give them a $600M baseball stadium they'll go to Portland, we had the power to say "Boys, I hear Portland is a wonderful city. I'm sure you're going to love it in the 22nd largest TV market."

If you're implying that they wouldn't have chosen Portland because it's a small market, I present to you the Sesttle Supersonics move to OKC.

Ok, I'd agree that teams and owners don't have ALL the power. What they do have is monopoly power.

by Falls Church on Aug 6, 2013 4:46 pm • linkreport

@Falls Church--but isn't that $1.5 billion price tag predicated on the continued existence of huge subsidies from DC and the surrounding governments, in the form of new stadiums and other concessions? I'm pretty sure that if Dan Snyder can make money running a football team, the Greater Washington Football Association would as well.

by Dan Miller on Aug 6, 2013 4:52 pm • linkreport

It's a totally different issue when a team threatens to leave an area vs. moving to the suburbs.

by Tom Coumaris on Aug 6, 2013 4:55 pm • linkreport

I am going to disagree with commenters who see sports stadiums as not educational or cultural: its just a matter of who is defining what is cultural and educational, and a particularly elitist one that says we should spend money on opera but not baseball.

I still think we should not fund sports stadiums
1. The public pays the money, and the benefit goes to a private corporation. Most art galleries have significant private endowments and donations, and are asking the government for help in running a nonprofit outfit.
2. The cost benefits are much different. A gallery generates a regular and long term stream of economic activity around an area. A sports stadium is only active for a few select events, and these are so large that they actually hurt a lot of other economic activities. Try getting anywhere when there is a redskins game. There was a study about 20 years ago showing that the positive economic impact of a single exhibition was greater than a sports event, and without the negative externalities.
3. Most funding of sports stadiums is mired in politics and suspect deals on a scale that does not occur for most art venues
4. No one is asking for several hundred million for an art gallery that will be considered passe in 20 years when the team will come along asking for more.
5. Unlike a stadium, if an art gallery is a flop, the building can be readily repurposed for other uses.
6. An art gallery etc is usually specifically chartered in a single place, and is unlikely to move (Detroit bankruptcy aside). Sports teams move all the time, leaving the city holding the bag.

by SJE on Aug 6, 2013 5:04 pm • linkreport

I'm pretty sure that if Dan Snyder can make money running a football team, the Greater Washington Football Association would as well.

Dan Snyder was a marketing wiz kid who built a fortune through his ability to monetize brands. As owner of the skins, he's been very innovative in developing lots of new ways to squeeze money oit of fans through new revenue streams and incessant promotion. Snyder is stupid in a lot of ways but he's a genius at milking a brand. He even found ways to make money off the cheerleaders who used to be viewed as a stadium amenity rather than a revenue stream.

He was also lucky enough to buy the team for $700M and it would now cost double that, so interest payments on the loans used to buy the team would be a lot higher. Take all that away (great marketing and a low purchase price) and you could easily lose money buying the redskins.

If we could go back in time and buy it for $700M, yes, I'd agree that would be worth considering.

by Falls Church on Aug 6, 2013 5:08 pm • linkreport

Btw, I believe Jack Kent Cooke's sons were barely making any money from the Skins and that was part of the reason everyone thought Snyder was insane to pay what seemed like way too much money at the time for the team.

by Falls Church on Aug 6, 2013 5:14 pm • linkreport

JohnB wrote: "I'm pretty happy with Arlington's decision regarding Nat's stadium. We basically said, sure you can build it here. What will we give you? A permit."

And it's not a coincidence that Virginia is the state with the largest population without any major league sports teams. They're 12th in population; Alabama is next largest at #23.

This might be fine with most Virginians but for better or worse it is a clearcut example of the results of being unwilling to "play ball" with stadium subsidies.

"The group/area most desperate for that development will throw every public dollar they can at landing the stadium. The sports teams only need to play the jurisdictions against each other and take the best deal."

That may often be true but to D.C. United's credit while they have listened to pitches from other jurisdictions the current ownership made it clear that they were committed to staying in the District.

As a fan of United AND a longtime taxpayer/homeowner in DC I care both about keeping the team and the city not getting ripped off. I think if an independent valuation of the land in SW and the Reeves Center allows for the city to be properly compensated (up to and including getting cash from Akridge in addition to their SW parcel) then this MAY be a win-win-win-win-win (United, city, U Street neighborhood, Ward 8, and Akridge).

by Kevin on Aug 6, 2013 5:19 pm • linkreport

@Falls Church - The Supersonics/Thunder were moving to OKC no matter what as soon as the group from OKC bought it. They wanted the team to be located in the area the live...even if Seattle vs. OKC is #12 vs. #41 on the media market rankings. And they're now losing money (not making as much as they could have) because of it. An owner who is only concerned with making as much $ as possible would have left the team in Seattle...and MLB (a consortium of the owners) did not care about anything other than where the team could make the most money (since MLB does revenue sharing). Top 10 media markets do not need to fight to keep sports teams.

by 7r3y3r on Aug 6, 2013 5:46 pm • linkreport

Top 10 media markets do not need to fight to keep sports teams. by 7r3y3r

LA lost teams to Oakland and St Louis.

And good for them.

DC should demand a Green Bay type arrangement if a cent of public cash goes to a new sports stadium.

by JJJJJJ on Aug 6, 2013 6:16 pm • linkreport

LA lost teams and constantly has teams coming to it to ask for "incentives" to move there. So far, LA has refused. Guess what? LA still has a great economy and cultural life. It also does not lack for sports teams, just not an NFL team.

This also shows why the title of this post is bogus: if it wasnt about the money, why does the second largest media market in the country lack an NFL team if not for the fact that the city refuses to pay?

by SJE on Aug 6, 2013 6:52 pm • linkreport

7r3y3r: the move to OKC shows that the $161 million improvements to their arena, paid by OKC, were were a large part of the motivation to move since it made little sense otherwise.

by SJE on Aug 6, 2013 6:58 pm • linkreport

My arguments about sports teams apply far less to basketball and football, because (a) there are lots of games (b) the facilities are multipurpose. NFL teams are the worsts offenders, with special stadiums for less than a dozen games a year.

by SJE on Aug 6, 2013 6:59 pm • linkreport

but Pittsburgh is an example of how building a stadium can help bring an area to life. (The Verizon Center certainly sped up DC's development around Gallery Place.)

Both of these examples follow the usual pattern for those trying to show that stadiums drive development. Namely this.

A. The area where the stadium is was once awful
B. Then they put a stadium in.
C. Now it is great.

The deduction seems to be that B led to C, even without really explaining why that is. Why would a stadium lead to a trail being built? Why would a stadium cause restaurants to pop up or restaurants drive the development of apartments (isn't it usually the other way around)? Who cares? You've seen the timeline right? B happened before C so it must be the cause.

But it's also likely that something else happened before B. Something that caused the stadium to be built there and the neighborhood to recover. In the case of the Verizon Center, it was a change in the zoning law

"Just a few decades ago, the idea of creating a “living downtown” in Washington seemed improbable. Many in the city wanted the core to remain a 9-to-5 office zone without residents or night life. Only after a new zoning law narrowly passed in the 1980s — and ensured a critical mass of downtown housing — did pioneering projects begin to sprout."

and the completion of the Green line that runs through there in 1999. Mayor Williams replaced Mayor Barry in the same year and that gave investors confidence. The whole area north of there was rezoned to allow denser buildings which prodded owners to sell to developers who would build.

And the rebirth of DC was going on citywide. If Gallery Place were the only area in DC to suddenly become a transformed urban neighborhood with all the latest amenities then that narrative might make sense. But it basically followed the pattern of about a dozen different areas in DC that all changed at the same time.

I don't know about Pittsburgh, but I'd bet we'd see similar effects there. Namely, the whole city has turned around, and the stadiums got on board, but they aren't the cause.

by David C on Aug 6, 2013 8:52 pm • linkreport

I'd say the main reason that governments shouldn't get into the sports ownership business is that they have little experience or competency in that area. .

I'd say that governments are already the largest owners of sports in the country. Would you care to guess who is the highest paid public employee in just about every state?

by David C on Aug 6, 2013 8:55 pm • linkreport

wrt to "governments" and "sports ownership" and my point about profit participation, I am not referring to "ownership" from an operations standpoint. More like how Carlos Slim lent money to the NY Times, Prince Alaweed to Citibank, or Warren Buffett to lots of businesses.

They give money. They get preferred stock with a high dividend.

I don't care about an annual dividend, only a high payout when the team sells. It would be a recognition that the public investment should have an ROI greater than "pride."

by Richard Layman on Aug 6, 2013 9:06 pm • linkreport

So strange that on a day that the Washington Post may be leaving DC, people argue that a sports stadium gives a town prestige.

by Tom Coumaris on Aug 6, 2013 9:55 pm • linkreport

Richard Layman: Good point. Warren Buffett gives a huge amount to charity, but he uses his own money. The money he holds in trust for others he invests wisely. Our politicians are not using their own money, but that of the public.

by SJE on Aug 6, 2013 10:07 pm • linkreport

It's surprising to hear people discounting the MCI's effect on downtown. Sure, it would have eventually come back, but anyone who remembers it's clear impact on that area would know it had a palpable effect. DC may not "need" the soccer stadium, but it will have a clearly positive effect.

Ever since the Romans platted towns all over Europe with stadiums nestled with-in their grids, cities have thrived with the public "theater" with-in the urbis. How the deal nets out I'll leave to the number crunchers, but as a citizen, it's wierd to say a flush of potential consumers dumped weekly into a certain neighborhood will not have a positive effect on that hood's /cities economy, if, and it's a big if, the design, urban planning, etc, is done right. Like the Baltimore stadiums being cut off on several sides, yes, it's enlivened some surrounding streets, but it could have been much more.

It's not just about the immediate revenue the repiepts might bring in, it's about the spill over effects, the saved costs having the stadium accesed primarily by transit like fewer traffic fatalities, cleaner air, healthier people, and more socialization. Let's not get ripped off, but there are so many intangible benefits to keeping the peoples entertainments ensconsed in the city.

by Thayer-D on Aug 7, 2013 6:54 am • linkreport

I would feel better if supporters would stop trying to justify it on economic grounds and admit that it is an amenity that they want the city to provide.

Isn't that exactly what this piece did?

by dcd on Aug 7, 2013 7:48 am • linkreport

I am going to disagree with commenters who see sports stadiums as not educational or cultural: its just a matter of who is defining what is cultural and educational, and a particularly elitist one that says we should spend money on opera but not baseball.

I was thinking this as well. I am wholly against public financing of stadiums for a multitude of reasons, but discounting sports as an educational and cultural phenomenon certainly is elitist. Sports are an integral part of education at every level in this country. And there are few, if any, other things in this day and age that bring together a city like a (successful) sports team. A sense of community is something that we all benefit from.

Again, I'm not suggesting stadiums or arenas should be built on the public dime. But to wave sports away as providing no cultural benefits, while the local opera house and museum are public treasures is snotty on a level that's hard to describe.

by dcd on Aug 7, 2013 7:58 am • linkreport

Why do I finance so many of these private projects disguised as public ones? Because I often fly and rent a car, and rental car fees pay for them. I am tired of paying for other cities' stadiums...and all these extra travel fees that gouge visitors at airports.

by mekak8 on Aug 7, 2013 7:59 am • linkreport

dude. its baseball. You listen on the radio. Ive completely cleaned my kitchen while hearing the Nats blow a lead and then leave half a dozen runners stranded in scoring position.

I am torn between two comments:

a) You cleaned your kitchen on Monday night? (Aargh.)

b) If you clean your kitchen every time the Nats blow a lead and leave a small village on the basepaths, you have the cleanest kitchen in town.

by dcd on Aug 7, 2013 8:01 am • linkreport

If you clean your kitchen every time the Nats blow a lead and leave a small village on the basepaths, you have the cleanest kitchen in town.

Fact.

by MLD on Aug 7, 2013 8:16 am • linkreport

" a particularly elitist one that says we should spend money on opera but not baseball"

I would strongly object to using public money to build a new single purpose opera house, when the opera is already housed in a decent, 60 year old, multipurpose performing arts venue. That just doesnt have enough luxury boxes. I would also object to say Fairfax spending public dollars to try to compete with other jurisdictions to locate the opera in FFX, when it functions well in DC. (and given the Corcoran saga, thats not an academic question)

by AWalkerInTheCity on Aug 7, 2013 9:15 am • linkreport

Our sports teams are part of our civic culture and history. They are part of the shared experience of generations of families. They help bind cities together. They help define the seasons for us. Thus I'm happy my city helped get us the Nats, Wizards, Captials and will keep the United. Its simply as it should be. It doesn't have to be profitable. Its what big cities do.

by Chris Hamilton on Aug 7, 2013 9:30 am • linkreport

Sure, it would have eventually come back, but anyone who remembers it's clear impact on that area would know it had a palpable effect.

So it had an impact and that's how you know it had an impact? As I recall, that area was still kind of sketchy even 4 years after it opened. What I don't see here is any evidence to back up the claim that it had an impact.

by David C on Aug 7, 2013 9:40 am • linkreport

Ever since the Romans platted towns all over Europe with stadiums nestled with-in their grids, cities have thrived with the public "theater" with-in the urbis.

The romans built their stadia on the outskirts of their cities 2000 years ago and the cities have grown up around them.

by Richard B on Aug 7, 2013 9:43 am • linkreport

it's wierd to say a flush of potential consumers dumped weekly into a certain neighborhood will not have a positive effect on that hood's /cities economy

Not weekly. Closer to once a month. And many of those people are simply being moved from somewhere else in the city.

And 20,000 dumped in for 3 hours at a time for 20 games is year is the same as ~150 people per hour all year long. So build apartment complexes with 250 units and you're doing better.

it's about the spill over effects

OK. How much are those spill over effects worth?

by David C on Aug 7, 2013 9:45 am • linkreport

there are few, if any, other things in this day and age that bring together a city like a (successful) sports team.

So true.

by David C on Aug 7, 2013 9:49 am • linkreport

and that really terrible incident in LA.

http://abcnews.go.com/US/san-francisco-giants-fan-bryan-stow-coma-attacked/story?id=13298349

Actually, it is that kind of stuff that turned me off organized, professional sports for the most part. I went to a college (U MIchigan) where football especially was very big. Seeing people get in fights because Michigan lost seemed very pointless to me. I used to say "whether or not they win or lose, I still have to take my finals."

by Richard Layman on Aug 7, 2013 10:10 am • linkreport

The Romans built amphitheatres for several reasons. One was to stamp their cultural presence on the local populace, like the Europeans building churches. Another part was that the local populace might find themselves part of the spectacle if they misbehaved: public executions, feeding to the lions etc, were both entertainment and part of controlling through fear. Finally, the entertainment was used to distract people from their problems: the Colloseum in Rome was more active and more gory in times of economic and political turmoil, especially in the waning days of the Empire. The vicarious suffering or victory of others was cathartic, and bloodier the better. The Taliban, the Saudis and others still do public excecutions.
If you think we aren't any different, tell me how many times people watch replays of NASCAR crashes, hockey fights, etc. How much violence do you see associated with big sporting events?

Now, tell me, are any of those GOOD reasons why we should be building stadiums?

by SJE on Aug 7, 2013 10:17 am • linkreport

old industrial sites like the Heinz Lofts (the old Heinz plant).

I suspect that these are apartments were waiting for with great Anticipa-ay-tion."

Um, the public wants stadiums? Then why do they vote against them when they are put to referendum?

Baseball referendum strikes out with voters

St. Paul voters reject tax for stadium

Prop. 457: Voters say 'No' to Glendale measure

Sometimes It's so easy to state things as fact even when you are wrong.

by Mike on Aug 7, 2013 10:46 am • linkreport

Finally, the entertainment was used to distract people from their problems...Now, tell me, are any of those GOOD reasons why we should be building stadiums?

Yes, escapism is a good reason to have entertainment. Just as true for gory football as the latest violent summer blockbuster.

What's great about movie theaters is that we can get the private sector to build them for us. If someone knows how we can force sports owners to do the same, I'd love to know.

by Falls Church on Aug 7, 2013 11:28 am • linkreport

Re: Layman's preferred stock idea

That's a solid idea that shpuld be pursued. It's similar to college sports where the government has no role in in dailys operations but still gets a stake in the franchise.

by Falls Church on Aug 7, 2013 11:30 am • linkreport

we may not be able to get the sports owners to build stadiums for us, but Arlington and Alexandria have perfected the art of getting the District to build them for us ;) We stil get a home team, gory entertainment (but please Bryce Harper getting hit by a pitch is not worth it) and the chance to argue about ethnic epithets, all without handing over either cash, or decrepit office buildings in prime locations. All NoVa doesnt get, is a the spur to development from the physical presence of a stadium (the Half Street effect) which I think is still the only real reason to subsidize a stadium - and as Dave C points out, must be weighed against the other potential uses for given parcels.

by AWalkerIntheCity on Aug 7, 2013 11:37 am • linkreport

Dan makes the most important point by implication...in that stadiums and other publicly supported civic structures create amenities that many people live in the city for. The DC United deal is a plus for the city because it requires no additional financial burden on the city and it does the most important thing...it becomes a catalyst. In Buzzard Point on U Street and in Anacostia. Together these three projects represent positive change for land, infrastructure and neighborhoods that would take years otherwise. It is difficult to estimate the "value" of quality of life but in every regard a developed buzzard point linking capital hill to the riverfront, a tax generating mixed use building on U Street instead of the Reeves monstrosity and a new government center boosting the fortunes and future of Anacostia w development, jobs and access literally transform. This is one of the situation where everyone is a winner. Government should spark change and in this case this is government working at it's best...for once.

by BorninDC on Aug 7, 2013 11:40 am • linkreport

The DC United deal is a plus for the city because it requires no additional financial burden on the city

Aside from the $150 million expense

and it becomes a catalyst.

A highly dubious claim.

In Buzzard Point on U Street and in Anacostia.

We could sell the U Street property and build an office space in Anacostia without involving soccer. Let's not get all these things tangled up. Selling the Reeves Center is probably a good idea. Building a new facility in Anacostia is probably a good idea too. Using the profit from this to purchase land for a soccer stadium and build infrastructure to support it - in contrast to doing any of several thousand other things with it - is what we're trying to evaluate here. And so far all we've got is that it will make people feel good (and also the Romans). That's a lot of money to make people feel good when we have other needs to consider well.

by David C on Aug 7, 2013 11:48 am • linkreport

Im going to make a case that the DCU stadium will have less impact than Nats Park.

The land for Nats Park and many adjacent parking lots (which will some day be developed) were acquired under eminent domain from former entertainment venues. The presence of those venues, though missed by some, was likely a deterrent to the kinds of development that has taken place in the area in recent years. Absent eminent domain, the departure of those venues would have taken much longer, and the development significantly delayed. And despite Kelo, I dont think DC would have exercised eminent domain just to build office buildings or apts, or even a movie complex.

By contrast, a chunk of the buzzards point land is already owned by a developer (akridge) and another is owned by a firm with a good relationship with Mark Ein. That area has less need of eminent domain to transform.

by AWalkerIntheCity on Aug 7, 2013 11:59 am • linkreport

Like it or not, professional sports teams are quasi-public cultural amenities for cities around the world. With that being the case, there is a role for public participation in the creation of venues for them to play in.

The basics of the DC United deal seem to be good:

-The city's contribution is based on things the city can and should do well: site assembly, some infrastructure work, environmental remediation. This is not much different than other environmental remediation projects, or government assistance via infrastructure spending for a private development, or government assistance in site assembly for a privately-funded cultural facility.

-The team is contributing the cost of the stadium itself, unlike other stadium deals such as Nationals Park. They will be responsible for cost overruns.

-The partnership contains a clause for revenue sharing, ensuring that the gains appreciated at the site are shared between the private team owners and the public sector.

Yes, perhaps it would be simpler for the city to just auction off the Reeves center. But that wouldn't get the city any closer to fulfilling the goal of helping DC United get a new stadium so that we can continue the public benefit of having a professional soccer team in the city. It's easy to say that an auction is a better course of action if you don't agree with the public purpose of a soccer stadium in the first place; but if you do agree that this is a problem that needs to be solved, then the basic structure of the agreed-upon deal seems like a pretty good partnership with appropriate sharing of risks and costs.

by Alex B. on Aug 7, 2013 12:02 pm • linkreport

In this case...without the stadium and the deal that the team put together over a couple of years this opportunity would not exist. District government is not particularly nimble as we've noticed and there is little or no track record of the city creatively and fairly (if debatable) dispensing/developing these varied projects. In a perfect world we "could" do a lot of things...that said, we live in DC...this project like other complex and large ones involving tax dollars should be examined closely however on the surface and a bit below it from what I've seen this is a good deal for everyone.

by BorninDC on Aug 7, 2013 12:09 pm • linkreport

AWITC, I agree that the argument for Nats Park is stronger because of the District's use of eminent domain, but then the price was higher too.

AlexB professional sports teams are quasi-public cultural amenities for cities around the world.

Well, I think this is the source of the problem, and you're breezing over it pretty quickly. Yes, assuming this really awful policy is standard and unchangeable, this is a pretty good plan. But I reject that. LA has done just fine without football.

perhaps it would be simpler for the city to just auction off the Reeves center. But that wouldn't get the city any closer to fulfilling the goal ....

It would not only be simpler, but I argue it would likely be more profitable. And it would certainly get DC closer, because we'd have a big pile of money which we could then use to do the things we're going to do under this deal.

In this case...without the stadium and the deal that the team put together over a couple of years this opportunity would not exist.

True. If we had not put this deal together, this deal would not exist.

But the opportunities to sell Reeves to a developer, to build a structure in Anacostia and to buy land in Buzzard's Point to build a soccer stadium on would all still exist.

In a perfect world we "could" do a lot of things...that said, we live in DC

So, if I just lower my standards for what I want my government to achieve, then I'll see how good this is? I can see the ad slogan now "DC, don't expect much from us."

by David C on Aug 7, 2013 1:05 pm • linkreport

I think we're all forgetting about who's going to own this land. It sounds like some people think that we're going to be spending 150 million on this land and giving it to the soccer team. This is false. The District will maintain ownership of the land, leasing it to the team for a dollar per year throughout the useful life of the stadium. Meaning, in 35 or whatever years, when this thing has run its course, DC still owns this land... And given the development plans in the area between Buzzard Point, The Wharf, and the Navy Yard, the District will probably be sitting on a very VERY valuable piece of land that we can then re-purpose. So while the team might be getting a very generous lease deal out of this, it's false to say that DC is giving away 150 million dollars' worth of real estate in perpetuity.

by JES on Aug 7, 2013 1:15 pm • linkreport

"Just returned from a weekend in Pittsburgh, and enjoyed Saturday evening at PNC Park. The area where the ballpark was built had been a mix of outsourced industry and decayed housing."

Actually, it was Three Rivers Stadium's parking lot. It was a railyard before that, I think. There might have been something between "railyard" and "parking lot" phase. If I remember right, Heinz Field sits on the site of an old department store warehouse. Although that could be where the casino is now.

But for as nice as they made the North Shore with the stadiums (that whole Federal St section of town is mostly new businesses), it lives in the shadow of the Allegheny Center disaster

by Another Nick on Aug 7, 2013 1:17 pm • linkreport

this isn't necessarily about lowering your/our standards...this would be a complex deal for any municipal government to pull off. The properties are in three different wards with council members who have a variety of interests involved and who quite frankly do not work well together. Politics is always messy as I know you know but right now in the three affected wards you have council members who have extreme self interests at stake and that is is where the messy and near impossible to define "politics" happens. In my mind, the city is reaping a lot of public good for the land swaps with a reasonable investment.

by BorninDC on Aug 7, 2013 1:22 pm • linkreport

Well, I think this is the source of the problem, and you're breezing over it pretty quickly.

I don't mean to breeze over it at all, I mean to highlight it! You're nitpicking the details of the deal, when you really disagree with the entire premise.

Yes, assuming this really awful policy is standard and unchangeable, this is a pretty good plan. But I reject that. LA has done just fine without football.

Ok, but that isn't really an argument against the idea that professional sports are cultural amenities with some non-zero value to the public. LA does fine without an NFL team, but that doesn't mean they don't value professional sports. LA contributed approximately $71 million to the Staples Center to get that project off the ground (as well as additional help with site assembly via eminent domain - sound familiar?), but balked at larger contributions in the past for an NFL stadium.

LA did not reject the premise at all, but rather weighted the value against the cost.

Point being, there is a value to the public, and that depends on looking at the structure of the deal. You can reject that idea if you like, but if you want to argue that the value to DC is zero, then let's argue that.

It's one thing to assess whether this is a good deal or not. It's another if your baseline assumption is that a good deal on a stadium like this is impossible.

by Alex B. on Aug 7, 2013 1:23 pm • linkreport

How about a numeric metric $ per night the facility is filled (and please, lets all act like we understand opportunity cost) Whats the $ per night for DCU? Vs Nats Park? Vs Verizon? Vs say, the Staples center?

And can we weight that by the appeal of the sport in addition to the nights the facility is open? Do as many people follow DCU on radio and TV as follow the NAts or Skins? Can we use front page mentions on the WaPo Sports section as a metric?

What does it mean to a city to not have, drum roll, a major league SOCCER team? Is that worth 100 million? 50 million? 10 million?

by AWalkerIntheCity on Aug 7, 2013 1:35 pm • linkreport

You're nitpicking the details of the deal, when you really disagree with the entire premise.

I don't mean to be nitpicking the details of the deal. I mean to criticize the way that all the non-soccer parts are being lumped in with the stadium. It's like saying "we're going to spend money on a stadium and new schools for kids" and then asking critics of the stadium part "What, you don't like schools?"

I don't know enough about the details to nitpick them.

I do believe that having an MLS team in the city has some value that is non-zero. I'm still waiting for someone to tell me what that value is. Because until someone can define it, no one can possibly make a credible case that this is a good deal.

"We give $150 million and in return we get a new school in Anacostia and a spiflik of yamtol."

"What's yamtol and how much is a spiflik of it worth?"

"What, you don't like schools?"

but that isn't really an argument against the idea that professional sports are cultural amenities with some non-zero value to the public.

No it's not. It's an argument against the idea that it need be "quasi-public". MLS can pay for all of this themselves. They just don't want to. And life will be fine, possibly even better, if we let them. You say there is a problem to be solved here, and maybe there is, but I fail to see how the problem is the city's.

by David C on Aug 7, 2013 1:49 pm • linkreport

Can whatever agreement is signed please include the following:

"Under no circumstances may the name of a mayor be placed on a building constructed at the location. Violation of this law is a misdemeanor. Violation of this law using 'Marion Barry' or 'Vince Gray' are felonies."

A) When no longer the mayor, it's confusing. B) It's egomaniacal and has no place on a huge building overlooking a street. A two foot by two foot plaque should suffice.

by Mike on Aug 7, 2013 2:05 pm • linkreport

"Because until someone can define it, no one can possibly make a credible case that this is a good deal."

Scary thought. Like the GDP being revised upward because of all the creative energy being tabulated now in the USA. One might be able to, but given the variables, probably a fools errand due to subjectivity. Someone's charming neighborhood is another's slum.

by Thayer-D on Aug 7, 2013 2:05 pm • linkreport

No it's not. It's an argument against the idea that it need be "quasi-public". MLS can pay for all of this themselves. They just don't want to.

They are paying for most of it, and they want to - but that doesn't mean there isn't a role for public assistance.

Stadiums of all shapes are big, they require larger sites than you're likely to find in a city. This means they could use some help with site assembly, which the government can do very well. Enter the DC government.

I do believe that having an MLS team in the city has some value that is non-zero. I'm still waiting for someone to tell me what that value is. Because until someone can define it, no one can possibly make a credible case that this is a good deal.

The city has put their draft term sheet out there. That's the deal they negotiated.

by Alex B. on Aug 7, 2013 2:12 pm • linkreport

The basics of the DC United deal seem to be good...

To the basics, I'd like to add a variation of Layman's idea. DCU is currently valued under $50M. How about a clause that says whenever the team is sold in the future, the city will get X% of the sales price over $50M. And, if the team ever moves to a different city, DC will get X+Y% of the fair market value of the team based on an independent third party appraisal.

by Falls Church on Aug 7, 2013 3:30 pm • linkreport

Alex B: are you saying that the term sheet of the city represents the true value of the endevour, instead of a post hoc justification for spending the citizen's cash?

by SJE on Aug 7, 2013 3:34 pm • linkreport

LA has done just fine without football.

Correlation doesn't imply causation. This is like saying that Dallas has done fine as a mostly auto-oriented city.

I do believe that having an MLS team in the city has some value that is non-zero. I'm still waiting for someone to tell me what that value is. Because until someone can define it, no one can possibly make a credible case that this is a good deal.

Is there research that puts an indisputable number on the incremental value created by the H ST Streetcar? To my knowledge, there's still a healthy debate over how much of H ST's development would have happened regardless of a streetcar (or, I should say without the *promise* of a streetcar. Obviously, all of the development thus far has happened without a streetcar).

These things are hard to nail down and sometimes you have to go with an approach that's less than 100% scientific or indisputable.

by Falls Church on Aug 7, 2013 3:38 pm • linkreport

can you quantify the deal? Tell me, to the nearest 10 million, what this costs the city? Vs the alternative where they sell Reeves center (and any other city owned RE thats in the deal) to the highest bidder, and dont contribute to a soccer stadium?

The amount is not infinite, and its not zero. 150 million has been bandied about, but then some sayno, that not really it.

Without knowing the cost how can you compare it to the benefits?

by AWalkerIntheCity on Aug 7, 2013 3:40 pm • linkreport

David C:
"LA has done just fine without football."

Agreed but the Staples Center, which is a central part of the LA Live development has been a significant catalyst for the redevelopment of much of downtown. Two decades ago, much of downtown LA was void of life. This is changing rapidly.

by 202_cyclist on Aug 7, 2013 3:44 pm • linkreport

"Is there research that puts an indisputable number on the incremental value created by the H ST Streetcar? To my knowledge, there's still a healthy debate over how much of H ST's development would have happened regardless of a streetcar (or, I should say without the *promise* of a streetcar. Obviously, all of the development thus far has happened without a streetcar).

These things are hard to nail down and sometimes you have to go with an approach that's less than 100% scientific or indisputable."

In general street car project BCA involves estimates of ridership, incremental ridership versus bus alternatives, and estimates of property value change (usually using other cities as a comparison) ArlCo did that for PikeRail - I believe all DC has done is a land use study for the entire street car system. Its imperfect of course - all transit ridership (And highway use) forecasts have uncertainities, and development estimates due to an amenity like that are imprecise. But one does them. And for costs, people usually take the cost of the project - how much to put the tracks down, to buy the equipment, etc - not fancy footwork of swaps implying no cost.

For a swag, lets take all the development thats gone into the area close to Nats Park. Multiply by one third, attributing 2/3 to what would have happened anyway. Now take one quarter of that - cause Buzzards point is more constrained physically, cause soccer has fewer nights busy than baseball, and cause at least part of the property was already in developer hands. How much is that?

Similarly for the value of having the team, to the metro area, there must be some way to measure that eh? Take the entire revenue of DCU broadcasts, and assume that there is consumer surplus over the revenue. Come up with a ratio to the revenue. See if any reasonable number amounts to very much.

that you can't do a perfect BCA doesnt mean you can't take a stab at an order of magnitude one. As an order of magnitude, many light rail lines (but not all) work. I suspect far fewer stadium deals do.

by AWalkerIntheCity on Aug 7, 2013 3:50 pm • linkreport

are you saying that the term sheet of the city represents the true value of the endevour, instead of a post hoc justification for spending the citizen's cash?

Of course not. I am saying that the framework for the deal is right there for people to assess themselves.

As for the 'true' value of the deal: This is not a math problem; people will assign different values to something like a soccer stadium because they have different values, and feel differently about sports.

But that doesn't mean the city hasn't attempted to define the deal here.

by Alex B. on Aug 7, 2013 4:01 pm • linkreport

In general street car project BCA involves estimates of ridership, incremental ridership versus bus alternatives, and estimates of property value change

The estimates of property value change have to isolate the effect of the infrastructure. For Tysons that easy because the property value changes are a direct result of upzoning which is a result of the Silver Line. With H ST, you don't know how much of the property value change would have happened without the promise of a streetcar. Unlike Tysons, H ST didn't need the actual infrastructure for the property value increase to take place.

For a swag, lets take all the development thats gone into the area close to Nats Park. Multiply by one third, attributing 2/3 to what would have happened anyway. Now take one quarter of that - cause Buzzards point is more constrained physically, cause soccer has fewer nights busy than baseball, and cause at least part of the property was already in developer hands. How much is that?

I think the above analysis is reasonable. But, it's not the indisputable rock solid kind of evidence some folks seem to be asking for. For example, some folks dispute whether even the Verizon Center added much value on the thinking that Chinatown would have developed regardless.

by Falls Church on Aug 7, 2013 4:01 pm • linkreport

Is there research that puts an indisputable number on the incremental value created by the H ST Streetcar?

Let's just say there is not. In fact there is no study - indisputable or otherwise. Do you think that becomes a reason to make large financial decisions by one's gut?

by David C on Aug 7, 2013 4:02 pm • linkreport

Two decades ago, much of downtown LA was void of life. This is changing rapidly

Two decades ago, much of downtown was void of life. This is rapidly changing.

by David C on Aug 7, 2013 4:04 pm • linkreport

The trends to move to the exurbs has reversed and more people are moving into cities. To ascribe it to MLB or stadiums is ludicrous. Who ever moved to a city because a certain professional sports team was there?

by Mike on Aug 7, 2013 4:10 pm • linkreport

"This is not a math problem; people will assign different values to something like a soccer stadium because they have different values, and feel differently about sports."

It is so a math problem, just a particular kind of math problem.

Take the costs of the stadium. Subtract the tangible benefits. Assuming the result is still a net cost, the difference is what the intangible value of having the team must be worth to make this a good idea. Once we have that number we can argue if its reasonable. We can divide that number by the population, or the number of soccer fans, or something like that to get a better determination. Kinda who when WAMU asks you for money they say "this is only X bucks a month - is morning edition as important to you as a Latte"

That its not something a computer can spit out the right answer to does not mean its purely about the gut.

by AWalkerIntheCity on Aug 7, 2013 4:12 pm • linkreport

"think the above analysis is reasonable. But, it's not the indisputable rock solid kind of evidence some folks seem to be asking for. For example, some folks dispute whether even the Verizon Center added much value on the thinking that Chinatown would have developed regardless."

I dont know if Dave C is asking for a rock solid number. Im not. Im asking for SOME number. Once you have that, you can advance the discussion further, intelligently. Like "the development benefits are really key, and the decision is close so - if the skeptics are right that only 10% of development near nats park is due to baseball, and not one third, then this is a bad idea". But as long as its "this is valued because its just what everybody wants, and the cost is actually negative because this will revive anacostia" then theres no framework for discussion.

I think the discussion of PikeRail has been illuminating. Its gotten to such issues as the crucial role of volume constraints in making streetcars a better choice than buses in mixed traffic, to the question of understanding "bus stigma", and to examination of development patterns and the paths of influence from rail transit to development. I dont think youd have gotten that if ArlCo had just said the streetcar is a cultural amenity, period, and the cost is zero because of a land swap.

heck, Dan must be familiar with the debate over artisphere. Where ArlCo has compared cost per user to the library system. Leading to more useful discussion.

by AWalkerIntheCity on Aug 7, 2013 4:18 pm • linkreport

"Who ever moved to a city because a certain professional sports team was there? "

Japanese and taiwanese eople like baseball. Flushing New York is now predominatly asian. QED.

by AWalkerIntheCity on Aug 7, 2013 4:19 pm • linkreport

"Let's just say there is not. In fact there is no study - indisputable or otherwise. Do you think that becomes a reason to make large financial decisions by one's gut?"

Where is the study that ensured the Silver Line boosters that having transit out to the burbs would make economic sense? Where's the study that told smart investors to buy up city properties because they could read trends from various cultural shifts happening in the 1980's and 90's? By that standard, almost anything worthwhile wouldn't be worth a thing. Life isn't lived by numbers alone, and having to prove that to someone who insists on them won't dissuade people who can read society from things other than flow-charts.

by Thayer-D on Aug 7, 2013 7:48 pm • linkreport

Where is the study that ensured the Silver Line boosters that having transit out to the burbs would make economic sense?

Again, let's say there isn't one. Does it, in your opinion, make sense to make large economic decisions for the public by one's gut? It is (just in case you didn't notice) a yes or no question.

by David C on Aug 7, 2013 9:22 pm • linkreport

Taxpayer-funded stadiums are the "bread and circuses" of 21st Century civic life. Juvenal said it best --

… Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses...

An entertained public is a distracted public which tolerates corruption, career politician antics, higher taxes and public debt, and special pleader/special interest control of government.

Having said that -- Let's Go Nats! When the World Series is here I will look back and say Yes, I was there back in 2013 when they couldn't string two wins together, or even two hits. As for their stadium, are they to be faulted because the District was willing to effectively guarantee and underwrite their biggest capital costs? Few businesses would turn away that kind of access to taxpayer money.

by Patrick Shaughness on Aug 8, 2013 1:30 am • linkreport

"I don't know about Pittsburgh, but I'd bet we'd see similar effects there. Namely, the whole city has turned around, and the stadiums got on board, but they aren't the cause."

With all due respect, you are right that you don't know about Pittsburgh. Or, at least, you are ignoring the reality that it was somewhat of a one-horse town and that horse left town when the steel industry declined in the '60's and '70's and collapsed in the '80's.

That led to a mass migration of young adults seeking jobs elsewhere. That, and the move to the suburbs that began in the 50's led to a decline in the city's population from 686,000 in 1950 to less than half of that today. In fact, for several decades, not a single building permit was taken out to construct a single family home within the city limits.

Parts of the city were becoming depopulated, including the near North Side and Manchester. (I worked my college summers in Manchester, and knew the area quite well) Many key areas saw abandoned factories and abandoned industrial support buildings taking up huge swaths of real estate. Jobs left and then people left.

The collapse of the steel industry was to Pittsburgh and the Mon Valley what the decline of the Big Three was to Detroit. And much has been written recently (including a Paul Krugman piece in the NYT) about why Pittsburgh is rebounding while Detroit has gone into bankruptcy.

That's an interesting topic, because Pittsburgh has had its share of misguided urban development: East Liberty and Allegheny Center being at the top of the list.

I would argue that the city has done well because it has diversified and gambled on high tech, higher education, and medical (solid bets), while bolstering its cultural base. The stadiums provided at least the illusion of forward progress, repurposing a decaying portion of the city that was depopulating faster than the rest of the area.

The 'burgh ain't Paris (though it is the Paris of Appalachia), but it is a good case study of an industrial city managing to survive the loss of its key industry by trying a whole lot of things - and having at least some of them work. It didn't become Detroit, or Cleveland, or any number of other rust belt cities.

But the idea that people would have moved to Downtown or the North Side simply because people have moved to other central cities is not grounded in the realities of a city rapidly losing population and a city being forced to cut services to neighborhoods becoming depopulated. The critical mass of Pittsburgh was moving rapidly in the wrong direction, and forces majueres were need to turn things around. The stadiums helped do that, though we can argue about how much and at what cost.

Do not compare the Pittsburgh example - and the two stadiums - to what we all see here in DC. Compare instead to Detroit, Cleveland, Buffalo, et al. This was triage. And the patient survived.

by Mike S. on Aug 8, 2013 6:02 am • linkreport

The Silver Line would be like a Stadium deal if (a) it was operated entirely by a private company (b) costs $50 a ride (c) is only open a few days a year and (d) the company, the trains and everything just leave one day, leaving the city has 50 miles of purpose built track.

by SJE on Aug 8, 2013 7:34 am • linkreport

"Again, let's say there isn't one. Does it, in your opinion, make sense to make large economic decisions for the public by one's gut? It is (just in case you didn't notice) a yes or no question." So how did the decision to build the Silver Line happen if there wasn't a study to conclusivly show it profited the region? And I have noticed how you frame questions and then ask for a yes or no answer, but then again I've noticed you seem to avoid dealing with anything that can't be boiled down to a black or white analysis. It's either a clear cut choice or it's a gut decision, nothing in between. Sure.

by Thayer-D on Aug 8, 2013 8:35 am • linkreport

"They're cultural amenities that people want, and are willing to pay for."

What a lede. Doesn't the entire pitch for public fund rest specifically on the notion that sports fans *will not* fund new stadiums? If they would do so, why would we ever need public funding?

by Michael Hamilton on Aug 8, 2013 9:16 am • linkreport

Mike S, I don't see how any of what you wrote contradicted what I wrote. Namely:

"I would argue that the city has done well because it has diversified and gambled on high tech, higher education, and medical (solid bets), while bolstering its cultural base."

That the stadiums created "an illusion" is not a particularly strong case for them being a catalyst. Unless Doug Henning is somehow a part of it.

by David C on Aug 8, 2013 10:00 am • linkreport

Thayer and Dave C

If you google on Silver Line EIS you will find an FTA doc discussing Silver Line phase 1. It does not give a summary benefit cost, but shows some significant benefits, and also criticizes MWAA for not adequately documenting a number of issues. On the basis of that FTA did provide funds, though not as much as they could have, IIUC.

If you wish to rehash whether Silver Line phase 1 and/or phase 2 was a good idea you are free to do so. There are a number of debatable issues. I would suggest that the extent of formal study was considerable, as was the public debate. I would note that FTAs main concern was not whether or not there were benefits to improved transit on the corridor, but whether the incremental benefits over BRT had been adequately explored. Fairfax preferred rail because of a strong belief that rail would not only have higher ridership, both immediately and long run, but that it would do more to reshape development patterns. I am quite sure no one at MWAA, in the counties, or the Commonwealth wanted rail just because they considered rail "a cultural amenity"

by AWalkerIntheCity on Aug 8, 2013 10:18 am • linkreport

So how did the decision to build the Silver Line happen if there wasn't a study to conclusivly show it profited the region? And I have noticed how you frame questions and then ask for a yes or no answer, but then again I've noticed you seem to avoid dealing with anything that can't be boiled down to a black or white analysis.

That's because the Silver Line is a red herring.

Is your point that that was a bad decision? OK. Fine. So we shouldn't make another bad decision.

Is your point that I have supported it without a similar study but now oppose this? I'm pretty sure that that isn't true, but what if I just concede it. That means I'm a hypocrite, but it doesn't mean I'm wrong.

Look, if you're going to tell me that this project has value because of some non-monetary benefits then you should really have an idea of what those are and what those are worth. Would this project be a good idea if it cost $200M? $300M? $1B? $1T? Right now, you can't answer that question. And if you can't then you really can't argue that this project as currently proposed is worth the price.

Your repeated dodge of a simple yes or no question only demonstrates how poorly supported the whole "the stadium is worth it for cultural reasons" argument is.

[By the way, GGW linked to a study not too long ago about what a stadium's "cultural value" is. So, someone has tried to quantify that. I'm not looking for a conclusive number, I'm looking for an estimate with some thought behind it.]

by David C on Aug 8, 2013 10:36 am • linkreport

"So how did the decision to build the Silver Line happen if there wasn't a study to conclusivly show it profited the region?"

Fairfax concluded it benefited fairfax. MWAA concluded it benefited MWAA. The commonwealth concluded that if they could screw the unions, it was worth putting a couple of hundred million into it. FTA concluded that while a better analysis of the BRT alternative would have been good, it was still worth putting in some federal dollars.

Where in that is there a regional question? the only regional entity is MWCOG, which mostly coordinates and to a much lesser extent prioritizes projects. MWCOG wasnt going to say no to the lead priority of Fairfax and Virginia.

What Fairfax wanted out of the silver line is clear. A new Tysons. With BRT only, its hard to imagine gathering the support to upzone Tysons. Whether that ends up being good for fairfax, or the region, is debatable. But there are LOADS of numbers around what they hope to achieve.

by AWalkerIntheCity on Aug 8, 2013 10:42 am • linkreport

Becasue you demand a yes or no answer dosen't make the question simple, only that you want a simple answer.

My point is that becasue it's impossible to know with the "simple" precision how much revenue a stadium can generate dosen't make mean it dosen't generate revenue. Can anyone point to a study showing the precise value of an education vs. family support in a young person's potential income? You believe there isn't any value in DC providing funds to extablish a stadium, others believe there is. I think variables like design and location are vital, but your standard of proof could be turned around. Show me the study that it isn't true.

I can't give you something conclusive or even an estimate, simply to point out how I see markets working and how I saw MCI work in that area. I know we disagree, but I was there from the begining with the Insect Club, 9:30 club, and Jaleo's bar and remember all the talk with Jose Andres and others about what MCI meant to their interests in investing there. Your standard of proof isn't what made the initial investors go into that area. There's an art to the science.

"That means I'm a hypocrite, but it doesn't mean I'm wrong."

Not sure I get that either.

by Thayer-D on Aug 8, 2013 11:31 am • linkreport

I think variables like design and location are vital. Show me the study that it isn't true

Well, design and location are vital. But even under the best of situations they probably aren't worth it.

http://www.uwlax.edu/faculty/anderson/micro-principles/stadiums.pdf

"The
impact of the sports stadium alone on the rest of an urban core, however, is likely
to be small. Neither a football stadium hosting ten games annually, nor a baseball
park with 81 games, is likely to induce many rational independent retailers to invest
in adjacent businesses. Among other things, the 1990s genre of sports facilities are
designed like European walled cities, seeking to enclose all commercial activity and
revenue flows within its confines—making the life of area retailers all the more
tenuous. Only when a sports venue is complemented by a year-round business
district or residential neighborhood will there be appreciable independent investment activity."

I would bold the last sentence if I could. In other words, it's not the stadium, it's the business district or residential neighborhood that creates independent investment activity.

So yes, it's vital that a stadium be built in a good environment. But it's like saying that a donut is part of a complete breakfast if paired with toast, a banana and scrambled eggs with spinach. The donut is superfluous (and possibly even harmful).

by David C on Aug 8, 2013 11:51 am • linkreport

Is there research that puts an indisputable number on the incremental value created by the H ST Streetcar?

Let's just say there is not. In fact there is no study - indisputable or otherwise. Do you think that becomes a reason to make large financial decisions by one's gut?

I'm saying the stadium deal should be held to the same standard of analysis as other large infrastructure projects. That standard based on things like the H ST streetcar is somewhere between totally scientific and a gut decision. If you think greater rigor has been applied to past large financial decisions such as the streetcar, I'm open to that possibility if you can show it. Otherwise, it seems like you're holding the stadium deal to a higher standard.

I don't think there's an objectively "correct" level of rigor to which large financial decisions should be held to (above a certain minimum threshold). What's important is that the same standard is applied equally and fairly when it comes to things that various groups want.

There is a rationale for paying for a stadium so the region can have a soccer team. It's just that it's difficult to quantify the benefit in a totally scientific way (although estimates using methodologies like AWITC's could be made). That's similar to the case with streetcars.

In general street car project BCA involves estimates of ridership, incremental ridership versus bus alternatives

So a deal to get a sports team could be partly based on estimates of stadium attendance and the incremental number of sports fans created.

by Falls Church on Aug 8, 2013 12:39 pm • linkreport

Is your point that I have supported it without a similar study but now oppose this? I'm pretty sure that that isn't true, but what if I just concede it. That means I'm a hypocrite, but it doesn't mean I'm wrong.

This sounds a lot like the driving advocates argument -- "I concede that spending all that money on a highway project wasn't done with a proper study showing the benefits outweigh the costs. But, that doesn't mean I'm wrong to oppose your streetcar proposal because it doesn't have a proven BCA."

It's easy to come up with reasons why the project you don't personally favor should be held to a higher standard to prove its worth.

by Falls Church on Aug 8, 2013 12:51 pm • linkreport

What's important is that the same standard is applied equally and fairly when it comes to things that various groups want.

So even if that standard is bad, that's irrelevant to you? What's important is that we keep doing things the same way?

Either this is a good way to do things (without accounting for benefits) or it is not. Why can't someone just tell me which they think it is? Or at what price point they think this plan would be bad?

Bringing in all of these other projects is a distraction. We're talking about THIS project. We're talking about THIS funding. Is THIS project a good use of money? If your point is "Well, we've made this same mistake before, and so it's not fair to stop now" I kind of think you've lost the argument.

by David C on Aug 8, 2013 1:01 pm • linkreport

"In general street car project BCA involves estimates of ridership, incremental ridership versus bus alternatives

So a deal to get a sports team could be partly based on estimates of stadium attendance and the incremental number of sports fans created."

except incremental ridership has benefits in terms of reduced congestion, emissions, etc. No one has suggested building H Street streetcar in order to get more trolley fans.

You have three categories of benefits. A. Tangible societal benefits from the activity itself B. Development stimulus C. "its cool, we like having it"

Streetcars get A and B (some folks may really be motivated by C, but that appears in no official document) Stadiums by B and C. B - development - is the overlap. The requirements for a thorough analysis of B should be comparable for each. So far DC HAS done a study of development for the street car system (I dont recall but I guess buried in it are numbers for H Street) So far I have not seen that for DCU.

but comparing the tangible benefits of transit, to the intangibles of soccer fandom, seems a bit of a stretch. if it must be done, I do suggest the metrics I mentioned above. I suspect that most people will not like the stadium based on those results, and I suspect thats consistent with the results of some referenda.

I am wondering why the references are so much to the regional benefits of this. Are Va and Md going to chip in on the cost?

by AWalkerIntheCity on Aug 8, 2013 1:05 pm • linkreport

"This sounds a lot like the driving advocates argument -- "I concede that spending all that money on a highway project wasn't done with a proper study showing the benefits outweigh the costs. But, that doesn't mean I'm wrong to oppose your streetcar proposal because it doesn't have a proven BCA.""

but thats transportation vs transportation, at least. (note some folks may well oppose both highway and transit investments). Not sure why thats relevant to stadia. The comparison Dan brought was to cultural venues like libraries, museums, and opera houses. I think we've clarified how a stadium is unlike a library or museum. But could be like a perf arts venue, esp a single use opera house. But single use opera houses arent really being built anymore, that I know of.

by AWalkerIntheCity on Aug 8, 2013 1:08 pm • linkreport

It's easy to come up with reasons why the project you don't personally favor should be held to a higher standard to prove its worth.

Indeed. But that's not an excuse to have no justification for a project. So far we have this:

"It's worth something."

"How much?"

"You can't put a value on it"

"Is it $150 million?"

"You can't put a value on it"

So, I remain unconvinced. If you want me to agree that spending $150M on something is a good idea, you'll have to take a stab at putting a value on it.

If you don't feel that people did that with some other project where you were unconvinced of the value, then you should have asked for that.

by David C on Aug 8, 2013 1:44 pm • linkreport

" would argue that the city has done well because it has diversified and gambled on high tech, higher education, and medical (solid bets), while bolstering its cultural base. The stadiums provided at least the illusion of forward progress, repurposing a decaying portion of the city that was depopulating faster than the rest of the area."

Since this isn't "Greater Greater Pittsburgh," I'll keep my response to this brief:

Pittsburgh was almost TOO good at this! Tons of us had to leave because you have to go somewhere else to get the experience/get promoted up the chain just to return to the city to find a good job. Seemingly everyone between 22 and 35 left, only to return to spawn like salmon.

by Another Nick on Aug 8, 2013 5:53 pm • linkreport

What Another Nick said.

Every word of it.

Spot on, especially the demographic hole with young adults having to leave to find work elsewhere when the industrial base collapsed.

by Mike S. on Aug 8, 2013 6:26 pm • linkreport

Mike S. -- you make a very good point about the stadiums in Pittsburgh, that they re/confirmed the value of the city, and they were a "cultural" and other investment in the city when otherwise trends favored the suburbs.

(FWIW, I wrote another post about PGH that Richard Florida once said was a great summing up of why PGH has been able to stabilize. http://urbanplacesandspaces.blogspot.com/2010/05/urban-economic-development-strategies.html)

I think it's fair to say, as much as I argue against ascribing to Verizon Center all of the "reason" for the revitalization of what used to be called the East End (mostly because the other part of downtown re-builded out and they needed to keep constructing in order to be active developers + the point David C. has made about the Living Downtown plan), thinking back to when that deal went down, similarly it was a huge sea change in the nature of the investment and cultural climate in the region.

As you and I would remember back then, it was a big deal for Abe Pollin to move from PG County back to DC. DC still had Marion Barry as Mayor, the Control Board, etc. Trends were not favorable. None of the trends favored the city then. And there was no sense that the changes wrought by the election of Anthony Williams were even forseeable.

And it's true to some extent about the Nationals too. (Although as someone else pointed out, the Virginians are smarter about getting other people to subsidize their entertainment, they just have to take longer to get there.)

Although at that time development was moving to Capital Riverfront anyway because of the movement of many Navy functions to the Navy Yard, and the related movement of contractors to the general vicinity, the plan for the rebuilding of Capper-Carrollsburg, which pre-dated even landing the Nats by 8 or more years, etc.

But if the Nationals had located somewhere else, outside of the city, there would have been some deflation within the city about the value of the city.

That being said, there's only so much of this that you need. I'd argue a soccer stadium is probably a better ROI than football because it's smaller, costs a lot less, has a lot more events, and can be used for other events besides (concerts, etc.).

Football to me seems a no win situation. It costs many hundreds of millions of dollars. The stadium is barely used. It requires massive parking lots.

The thing that does piss me off about pro sports in the city is that most other jurisdictions end up taxing pro athletes on their "day's income" while playing in their city.

DC can't do that because of the commuter tax prohibition. So the only income taxes we'll get from these people is if they live here.

I forgot to suggest this during the Nats beginning time, I probably wrote about how Pro Baseball fought the creation of an exemption from this provision in the law for pro sports events.

I would make stadium deals involving public funds conditional on this element. If MLB says no. Then no f*ing city money. Same for the other sports. And all get public funding of some sort.

Relatedly, I said how the Nationals should have been required to pay for late night Metro service on an as needed basis as part of their deal with the city, etc.

It bugs me that cities do not get these types of provisions in these deals.

----
I could write about the H St. streetcar stuff as some people did, but streetcar in DC doesn't have the same development opportunity as it does in Portland or Seattle. It raises different issues, which I still haven't come up with a pithy phrase to describe. Basically, although this is true in Portland especially as well, it enables a transit-intertwined/no car urban lifestyle--at least if you live and work in the places served by it.

That's worth a lot, even the cost of the streetcar. H st. does have different build out opportunities if you think about the extended route (Hech. Mall, northern parking lots of RFK), but there are only a couple of other significant opps, 600, 800-900 blocks, 300 blocks.

Most of the on H St. developments would have happened without a streetcar, probably. The H St. plan was done before the streetcar plan.

by Richard Layman on Aug 10, 2013 6:28 am • linkreport

I guess another way to think about the Nationals is that their election to be in DC was a denouement, a confirmation that the upward trends/trajectory favoring DC would continue.

by Richard Layman on Aug 10, 2013 6:30 am • linkreport

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