The financial cost to the public of building a football stadium
I wrote on this topic last week ("San Diego may do better without the NFL: Economically, almost anything beats public funding for a new Chargers stadium") but it's worth mentioning again because of a shocking column in the San Diego Union-Tribune.
It's shocking because the column says that putting public monies towards football stadium has insubstantial value. It focuses on the high cost of stadiums, of which about half is publicly funded, based on recent stadium construction projects. From the article:
A good start would be to fully appreciate why funding a new NFL stadium is such a bad business idea for the public.Long's work was published as Public-Private Partnerships for Major League Sports Facilities.
For openers, it’s incredibly expensive. Based on recent NFL deals in mid-sized markets like San Diego’s, the Chargers are unlikely to settle for less than a $1.2 billion venue, with just $200 million or so coming from its owners.
About half of the construction cost, say $600 million, would come from the public. The rest, $400 million, presumably would come from fans as “seat licenses” and an NFL loan financed by club seat revenues, along with naming rights from an advertiser.
And the public generally doesn’t get an accurate estimate of longer-term costs, such as foregone property taxes, upkeep and operating subsidies, according to a 2012 study of public-private deals by University of Michigan planning and sports management professor Judith Grant Long.
Such hidden costs add 25 percent to the average total project, she estimated. If you’re keeping score at home, being average would push San Diego’s public tab to $900 million.
One alternative suggested by the columnist is to develop the proposed location for a new stadium as a new campus for San Diego State University, which rejects 70% of its applicants, in part because the university's campus is constrained.