Sports Stadium Economics
February 21, 1997 SPORTS STADIUMS:
by Staff Journalists, The Daily Republican Newspaper
TAXPAYER FACE NEW COSTS!
WASHINGTON DESK - The public cost of bringing pro football to Maryland seems to be going up and up.
Maryland taxpayers thought they had seen the end of dollars going for stadiums last spring, when the General Assembly approved $270 million to help finance new facilities for the Baltimore Ravens and the Washington Redskins. But Maryland Gov. Parris N. Glendening (D) recently proposed an additional $14 million in unanticipated spending for transportation improvements associated with the two projects.
Meanwhile, the $200 million financing plan for the Baltimore Ravens stadium at Camden Yards has run into several problems that mean state officials must find $10 million more to plug a gap. The state lottery, for example, is generating less revenue for the stadium than forecast last year, and a promised $5 million contribution from season ticket licenses failed to materialize.
Stadium officials insist they can cover the shortfall without returning to the General Assembly for more funds, but some lawmakers are skeptical. They said the sports facilities continue to draw precious dollars from other priorities, a familiar argument in last year's raucous stadium wars in Annapolis.
"These stadiums have become this huge vacuum cleaner, sucking up all public funds in sight, beyond even the huge amounts provided last year," said Sen. Christopher Van Hollen Jr. (D-Montgomery).
Van Hollen helped lead efforts last year to block state spending on the two stadium projects. Under the plan promoted by Glendening and enacted by the General Assembly, the state will spend $200 million on the Ravens stadium and $70.5 million in infrastructure costs to support the Redskins stadium being built in Landover by team owner Jack Kent Cooke.
With construction of both stadiums well underway, even stadium opponents seem disinclined to make much of a fuss over the added expenditures. But they can hardly resist saying "I told you so," because they warned last year that the ultimate cost could be well beyond the $270.5 million in state funds already committed. "The skies are black with chickens coming home to roost," said Del. D. Bruce Poole (D-Washington), another stadium opponent. "I don't think it's egregious, and I don't know that it's intentional. But it does go to show that these are projects of largess, and they have a way of going on and on."
John A. Moag Jr., chairman of the Maryland Stadium Authority, said Friday that he expects the authority to build the Baltimore stadium on time for the 1998 football season and within budget. He said the authority is considering a range of options to raise new revenue if needed, including selling rights to name the new stadium.
"I would not ask the Maryland General Assembly for a penny more for the project," said Moag, a Baltimore lawyer and lobbyist.
A new cost associated with the Baltimore stadium is an extra $4 million to build a more elaborate light rail station. Previously, state officials had estimated that the station would cost $2 million. But Glendening proposed spending $6 million in state funds in his recent transportation budget.
Stadium authority Executive Director Bruce H. Hoffman, who minimized the light rail cost during last year's debates, said the original proposal would have required fans disembarking from trains to follow a circuitous route to the stadium. So transportation officials now plan a pedestrian overpass and connecting ramps.
Also, the state was to receive $5 million under the 1996 financing plan from the sale of $80 million worth of so-called personal seat licenses by the Ravens. But the Ravens have scaled back plans for selling the licenses, and stadium authority officials say they no longer expect to receive the $5 million.
In addition, lottery officials said revenue from sports-related lottery games are falling about $5 million behind projections. The Baltimore stadium financing plan calls for $32 million in lottery revenue annually for the next three years. While lottery officials have said they hope to make up the difference, they say they may have to tap other lottery revenue to do so. That would siphon away money that otherwise would go to education, public safety or other government programs.
There are other potential financial issues. Stadium authority officials are negotiating the purchase of a Baltimore nightclub, Hammerjacks, that occupies space needed for parking. They have already spent several million dollars for other parking sites. Hoffman and Moag said they expect to be able to provide the parking for less than $10 million, the amount set aside under the stadium plan, but some lawmakers worry the cost could be higher.
The stadium authority also is negotiating with the Baltimore Orioles baseball team, which is seeking to invoke the "parity" provisions of its lease with the state entitling the team to treatment comparable to the Ravens. While the Orioles are demanding a number of concessions, Moag said he is confident that, in the end, the state will not suffer financially.
In Landover, the state cost of the Redskins stadium has grown by about $10 million, despite assurances by state officials last year that Cooke would pay for any road work beyond $70.5 million. The extra cost primarily involves new exit ramps sought by local politicians.
In an interview Friday, Glendening said the two new ramps would have been built eventually to accommodate growth but are being accelerated because of the new stadium. But legislative critics said the project is leapfrogging other critical, unfunded transportation projects.
"It puts me in a very difficult position," said Del. Michael A. Crumlin (D-Prince George's), whose district includes communities affected by the new stadium. "I voted against the stadium because I thought it was an inappropriate use of state funds. Now I find myself confronted with voting for even more funds from the state for a project I don't want, because it is in my back yard."