Some Major League Baseball Teams Refrain From Seeking Handouts For New Parks
Written by Lou Ortiz on March 13, 2008
By Lou Ortiz
The Florida Marlins were said to have dug deep to fund their new $525 million ballpark, but local officials and Major League Baseball failed to mention that stadiums elsewhere are being planned and built with little or no public help.
In some cities where public money is being used, contributions from municipalities are sometimes less than what Miami-Dade County is giving the Marlins, despite statements to the contrary from county and Major League Baseball officials.
"This is not atypical," said County Manager George Burgess about the stadium financing before commissioners approved the agreement with the Marlins last month.
Robert A. Dupuy, president and chief operating officer for Major League Baseball, echoed similar sentiments. "This is on the very high side of team contributions," he told the commission.
Mr. Burgess said that governments usually provide 70% of the financing. "It has not been easy to get to this point," he said. "This is a prudent investment."
County Mayor Carlos Alvarez agreed. "We’re not building a stadium for the Marlins," he said. "We’re building a stadium for Miami-Dade residents."
The county is footing $347 million of the stadium bill and the City of Miami $13 million.
"Prior to World War II, Major League baseball parks were built almost exclusively with private funds," says a study conducted on baseball stadiums by the University of Dayton in Dayton, Ohio.
"In recent decades local governments have allocated billions of dollars to subsidizing construction of facilities for Major League Baseball," the study says.
But the San Francisco Giants broke that trend in the late 1990s when management decided to privately finance Pacific Bell Park, now known as AT&T Park. It opened in 2000.
"When Giants’ owners came up with the idea of raising private money to finance the ballpark, at an eventual cost of $357 million, financial experts told them they were crazy," an article in the San Francisco Examiner reported in October 2000.
"No one had privately financed a baseball park since 1962, when Dodger Stadium was built in Los Angeles," the newspaper said.
"No new taxes and no money from San Francisco’s general fund were used to build the ballpark," Major League Baseball says in its Web site.
"The Giants lease the land on which the ballpark sits from the Port of San Francisco, at a fair market value," the site says.
Michael Ozanian, an editor at Forbes magazine, was quoted in the Dayton study as saying the Giants "should serve as a model for other teams. They’ve proven that you can finance a stadium, without going to the taxpayers, and succeed."
At least one other team is following the Giants’ lead.
The Oakland Athletics are planning to build a $400 million to $500 million stadium in Freemont, CA, without the public’s help. The stadium is projected to open by 2012.
"The anticipated funding for the ballpark will be a combination of private equity and the application of the value of land use entitlements that will be generated by the activities of the ballpark and the adjacent ballpark village developments," according to Major League Baseball.
The proceeds from a massive development project in the vicinity of the proposed ballpark — land owned by the team that the City of Freemont is expected to rezone — would help finance the stadium.
The team would "create a $1.8 billion baseball village… a 200-acre complex that would include a shopping mall, hotel, school, 3,000 housing units and a 32,000-seat ballpark, the smallest in Major League Baseball," A’s co-owner Lew Wolf told the Examiner newspaper last year.
Housing units in the complex are expected to sell for an average of $675,000, according to an article in the Oakland Tribune. The hotel is expected to have 100 rooms, the newspaper said.
On the East Coast, the New York Mets are shouldering most of the cost for their new $632 million stadium, which is to open in April 2009, according to the team’s Web site.
The City of New York will contribute $90 million in capital funds and the state $75 million for infrastructure, the team says. The combined $165 million is a lot less than Miami-Dade and Miami are giving the Marlins.
The New York Yankees franchise is also bearing the brunt of the cost for the team’s new $1.02 billion stadium. The Yankees are to contribute $800 million and the city $220 million. The park is to open in 2009.
In St. Petersburg, the Rays are planning to build a $450 million waterfront stadium on the site of the current Al Lang Field. But voters there will get a say — through a referendum this year — on whether the stadium will rise, unlike Miami-Dade, where the electorate didn’t get a chance to decide.
If approved, the Rays team is to contribute $150 million toward construction, besides the proceeds from the sale of the St. Petersburg land where its current stadium, Tropicana Field, is located.
The domed Tropicana Field cost $115 million when built and financed entirely through general obligation bonds issued by the City of St. Petersburg. The stadium opened in 1998.
Years later, the city funded 79% of renovations at the ballpark, totaling $85 million, and the team paid 21%.
According to a November St. Petersburg Times article, the Pinellas County Property Appraiser’s Office has estimated the value of the Tropicana Field land at about $121 million. But the property could sell for as high as $200 million.
The Rays also hope to get $60 million from the state in future sales tax revenue rebates from food, beer and merchandise sales in the new park, the Times said.
The Marlins tried and failed to get a $60 million subsidy for a new stadium from the state for a number of years.
In Miami-Dade’s agreement, the Marlins are to ante up $155 million for construction of a ballpark, but $35 million of that is to be financed through county bonds and be repaid by the team over time at $2.3 million a year as stadium rent.
The Marlins also seek $4.4 million in sales tax exemptions and waivers on $1.7 million in local impact fees to help lower their share of the construction costs.
Overall, Major League Baseball and team owners have been busy getting localities like New York City and Miami-Dade to commit public dollars totaling more than $1.4 billion to build stadiums.
The agreements come in the wake of a banner year in 2007 for Major League Baseball, with nearly 80 million fans filling stadiums and revenues topping $6 billion, up from $5.4 billion in 2006.
"The total major league attendance of 79.5 million, an average of 32,785 per game, was an increase of 4.5% from 2006," the Milwaukee Journal-Sentinel, hometown newspaper of Commissioner Bud Selig, reported last fall.
The league also had "hundreds of millions of dollars coming in via television and radio broadcasts, on both the national and local levels, and Major League Baseball’s Internet division producing income far beyond original expectations, the game is doing business like never before," the newspaper said.
In speaking against the Miami-Dade Marlins deal, Commissioner Katy Sorenson quipped that governments shouldn’t be in the business of building new stadiums for millionaire team owners with million-dollar ballplayers. Commissioner Sorenson voted for the ballpark subsidy, however. She said the vote was necessary in order for the port tunnel, trolley and Museum Park projects contained in the so-called Global Agreement to happen.
Despite professional baseball’s success, Washington, DC, is footing the entire bill for a new $610.8 million stadium for the Nationals.
In Minnesota, the Twins are relying on $350 million from Hennepin County to pay for the team’s $522 million stadium. The team is to pay $130 million toward construction of the ballpark, which is to open in 2010. The Minnesota Legislature approved the stadium.
Miami-Dade Mayor Carlos Alvarez called the Marlins stadium agreement a victory for residents after the county commission approved the agreement Feb. 23.
"Now, Marlins fans will be able to watch games in a true ballpark and our community can count itself among the nation’s great baseball cities," the mayor said. "A stadium will not only contribute to our economy, but to our quality of life."
But the Dayton study says: "In all, billions of dollars that could have been used for tax cuts, education, or roads" have gone "to subsidize baseball facilities."