Thursday, May 30, 2013

To Smart Growth, Sustainable Development, Downtown Arena Ball Parks and the Politicians Who Love Them: Just Say No

Today's post is written jointly to all residents of cities out there who are thinking of embracing "smart growth" and/or burdening yourselves with the debt of a downtown arena stadium to spur economic development as well as to anyone in El Paso who is considering voting for Steve Ortega for Mayor in the June 15th run off election.  I have just one word of advice for both of you--don't.

El Paso has spent the last couple of years trying to figure out how to redefine itself.  Our rabidly "progressive" city council passed a new landscape ordinance which requires more greenspaces and less parking as a part of a plan to beautify our city.  Our newly adopted master plan calls for smart growth and a redeveloped downtown where multi-storied, mixed use buildings comprised of retail on the bottom and apartments on the upper levels will line narrow streets.  We are spending $27 million on upgrading our notoriously badly run bus system--Sun Metro.   And the crowning jewel of this new, green us is a brand new Triple A ballpark stadium which we are building on the site of our former city hall.  We imploded the latter building, which was only about 30 years old, on April 14, and moved our city offices, so that we could build a new arena stadium for a minor league baseball team which is moving to El Paso.  Combined costs for moving the city offices, imploding city hall and building the arena ball park were initially estimated at between $85 and $100 million.  After two years of meetings and investment in a public relations firm, we even have a new city motto--"El Paso: It's All Good."

The problem, of course, is that it's not all good.  Our redevelopment comes at the cost of nearly half a billion dollars.  According to a news story by KVIA-TV's Matthew Smith,  our city will not break even on the stadium expense for 250 years.  That is at the current cost of $50 million, but this past Tuesday the team owners came back to city council requesting an additional $10 million for "upgrades" to the stadium that were not part of the original plan.  The official groundbreaking ceremony for the stadium happened today, although construction began a couple of weeks ago, and already we are short on the budget for this boondoggle. The project manager says that if the additional funds are not appropriated--which presently they are not, since city council refused to allocate the extra money--voters will not get the ballpark they were promised.

As it happens, the voters did not get any say on this project in the first place.  If they had, I am quite certain that there would be no stadium under construction and city hall would still be standing.  City council made the decision to build the stadium without waiting for an election because they said that this was too great an opportunity to pass up.  Voters did vote on nearly half a billion dollars in quality of life improvement bonds and a new hotel tax, but these ballot issues were sold to us with the explanation that the stadium was a "done deal".  El Pasoans could not be trusted to understand the benefits of the stadium well enough to be allowed a vote on it, so we could vote only on whether we as a city would pay for the costs with higher property taxes or whether visitors would pay for it with higher fees.

Since the contractors are already asking for more money, I am wondering whether anyone on city council considered the cost of upkeep, maintenance or repairs on this project.  While the city won't recover it's initial expenditures for 250 years, it appears that the stadium will probably be needing some upkeep within the next twenty years which appears to be about the average life expectancy of a stadium.

Consider Lackawanna County, Pennsylvania, which, in 1989, built a $25 million 10,000 seat baseball stadium, the largest baseball stadium in Northeastern Pennsylvania.  In 2008, Pennsylvania asked taxpayers for $35 million to upgrade the stadium.  Those funds were to be matched by the redevelopment program grants for a presumed expenditure of $70 million dollars.  By 2011, the stadium was requesting an additional $40 million in renovations. 

Who is going to pay the costs of the upgrades and repairs for our stadium?  One of the team owners, Paul Foster, openly balked at the suggestion that he and his partners and the city should split the cost of the additional $10 million that the contractors are already requesting.  Who is going to foot the bill for the remaining expenses?  As deputy city accounting manager Bill Studer told Matthew Smith in that KVIA-TV interview last fall, "They [minor league downtown sports arenas] all lose money from a strictly accounting thing."

But these costs are inconsequential compared to the benefits of a downtown stadium--right?  Wrong.  Stadiums lose money from a strictly non-accounting thing too.  According to a study conducted last year by Colgate University, only 8 of 55 downtown stadiums constructed with at least 25% public funds are currently fostering economic development.  A February 2, 2012 article on titled, "As Superbowl Shows, Build Stadiums for Love and not Money" candidly addresses this issue.  According to Bloomberg, "Public funding for sports stadiums has been found in dozens of studies over several decades, to fall short of the promised benefits and to cost taxpayers more than expected."  Bloomberg cites a study by Harvard associate professor of urban planning Judith Grant Long, who found that the cost of public funding for stadiums typically runs 40% higher than initially promised.  These stadiums are the gift that keeps giving--taxpayers continue to pay for the stadiums decades after they are no longer in use.  Further, stadiums do not bring economic development to most regions; they just move entertainment dollars around the city.  Bloomberg cites a study by Jordan Rappaport and Chad Wilkerson of the Federal Reserve bank of Kansas City which says that even when bringing in a professional sports team the number of jobs created "is almost certainly less than 1000 and likely to be much closer to zero."  Other studies cited in the same article indicate that bringing in sport teams kills some jobs and reduces wages.  The higher taxes needed to fund stadium projects--such as our hotel tax--can have the net effect of dissuading would-be visitors, and the types of jobs the stadium produces are low wage seasonal jobs.   Bloomberg's conclusion: "public funding for new sports stadiums should be up to voters to decide.  Cities should make sure the public has access to independent evaluations of the costs and benefits of building a stadium--not just the inflated 'economic-impact studies' done at the behest of team owners and publicized in the media."

The stadium, combined with the Smart Growth projects downtown and the huge debt that our city is amassing in bonds, will have the net effect of draining revenues from other areas of the city and leaving our city with a profound shortfall.  At present, no one is considering this downside to all of our new spending. Instead, our current mayor won an award as one of the world's top five mayors for embracing smart growth and sustainability.   The New York Times featured our city in an article this week about how we are embracing the future by getting rid of our city hall and building a downtown arena stadium.  I wonder how many of those in our city who read this week's story also know that The New York Times in 2011 wrote stories about how the young "creative class" that we want so badly to bring to El Paso was moving into downtown Detroit to revitalize its downtown.  And yet, in spite of a massive federal bailout of the auto industry, a downtown stadium, and renewal efforts sponsored by Dan Gilbert, founder of Quicken loans, on May 13th Detroit announced that it has a $167 million cash shortfall and that it cannot pay its bills.  If Detroit is forced to file bankruptcy, it will become the largest city in the United States ever to do so.  First place in that category belongs right now to Stockton, California which was forced to file bankruptcy last year after a 15 year spending spree that included building a downtown arena stadium and a new city hall.  Stockton's city hall cost $35 million and sported a $197,000 monthly payment.  When Stockton defaulted and could no longer pay, Washington Mutual foreclosed on the building housing the city government.  One important difference between Stockton, California and El Paso, Texas--according to the U.S. Census Bureau in 2011 Stockton's median income was just over $55,121 annually while El Paso's median income was just over $39,000. 

New York Times columnist economist Paul Krugman insists that our country does not have a debt problem--in spite of the fact that the U.S. is almost $17 trillion in debt.  He says that we are in fine shape fiscally and should actually be spending more money on infrastructure as our gift to the next generation rather than getting our house in order.  No wonder the New York Times is glowing about El Paso's expenditures. 

The controversy over the Triple A stadium has accomplished something else--it has eclipsed concerns that the citizenry might have about sustainable development and smart growth.   The city's new master plan moves to encompass more and more of our city into "smart zones" where property can be taken by eminent domain for the greater good and where land rationing and unreasonable zoning restrictions drive up the costs of housing for everyone, and yet that story is not being covered.  We are too busy looking at the stadium.

Right now, El Paso is having a Field of Dreams experience as city council, the owners of the Triple A baseball team that is moving here, and progressives around the nation whisper in unison, "if you build it, they will come."  But Field of Dreams was just a movie--a Hollywood fantasy in which transforming a cornfield into a baseball diamond changed the lives of the people in a community.  In real life, massive debt does matter, for a nation and for a city.  As our taxes continue to rise, services continue to drop and our city does not experience the economic boom that has been promised, we are going to deeply regret the day we allowed our city to go down in flames.  If we don't get our house in order now, in a few decades we may again find ourselves in national headlines for a new, more humiliating distinction, as we take the number one spot for the largest city in the nation to declare bankruptcy. 

Right now we cannot stop the ball park--it is already under construction--but we can refuse to allocate one more dime for it.  We can stop the expansion of "smart growth" by demanding that the city planning office stop rezoning areas of our city.  We can vote in a pro-business mayor and insist that all of our representatives immediately stop throwing away our hard earned dollars and return to fiscally sensible policies.  We can demand a balanced budget and insist that we don't spend what we don't have.  And if we are successful then I propose a new city motto--"El Paso, Texas, Where Solvency is Cool".  That won't get us an article in The New York Times, but it will sure feel great when we are paying our taxes and looking at the city budget.

El Paso deserved better than what we are getting.  Your city, wherever it is located, does too.  So when the snake oil salesmen come to your town promising downtown redevelopment involving "green" housing, smart growth and sustainable development anchored by an arena stadium or some other massively expensive entertainment venue paid for by public funds, do yourselves a favor.  Just say no.

Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her novel, The Planner, about an out of control, environmentally-driven federal government implementing Agenda 21, is available on Kindle and in paperback. For more information, visit her website at

1 comment:

  1. Great article. Thank you Alexandra. As I started reading, it was like a slap in the face. This is EXACTLY what's happening right now in Cobb County, Georgia and the Atlanta Braves organization. Our county commissions pushed it through without a referendum, they said it would cost taxpayers approximately $300 million, however several months later that figure has jumped to over $600 million over 30 years. Outrageous. Thanks again for the information.