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Top of the News: Commentary
SHOULD NEW JERSEY DEEP-SIX THE SIXERS' BID?
It's the kind of deal that sports-starved communities dream about. For a mere $150 million, give or take a few bucks, Camden (N.J.) could have the honor of calling the Philadelphia 76ers its hometown team. So why is Governor-elect Christine Todd Whitman offering a Bronx cheer to the plan to move the 76ers across the Delaware River? Simply put, she's not sure her state can afford the glamour of yet another pro sports team.
She might be right. In recent years, the quest for big-league status has led such cities as Baltimore, St. Louis, Jacksonville, Fla., and Charlotte, N.C., to pledge millions of taxpayer dollars in attempts to woo professional teams. The payoff likely will be mixed, at best (table).
BALLPARK BONANZA. Proponents argue that sports facilities eventually pay for themselves--and usually require little beyond initial public backing for the bonds that finance them. Even where the payback may be years away, backers say spin-off development of nearby restaurants and retail sites make the arenas cost-effective. Case in point: Baltimore, where a two-year-old publicly financed baseball stadium has boosted business in the touristy Inner Harbor.
But elsewhere, the payback from such public investments may be too distant and too slight. In Camden, for instance, a $52 million aquarium has drawn well over 1 million visitors in two years, but has spawned little construction. If the private market makes such a judgment, is it really smart for government to second-guess it?
There are growing signs that financially strapped governments may be thinking twice before opening their piggy banks to wealthy team owners. In suburban Washington, a consultant told local officials they might not be able to recoup a $100 million investment in a proposed baseball stadium. In Massachusetts, legislators are balking at a bill that proposes hanging on to the New England Patriots with a $700 million convention and sports center.
And despite the NFL fervor that swept Jacksonville before the team was awarded an expansion franchise last November, four council members opposed the deal struck with the team's owners. It calls for the city to finance the $121 million renovation of the stadium--plus pick up what councilman John Draper estimates as $1 million in annual costs for utilities, wages for game-day personnel, and other expenses. Jacksonville is left scrambling to find money to hire additional police officers and to finance a $53 million port expansion. "I have a real philosophical problem with this," says Draper. "We're subsidizing a multimillion-dollar, profitmaking organization."
Back in New Jersey, Whitman, who takes office Jan. 18, is balking at a term-end agreement reached by outgoing Democratic Governor James Florio to house Philadelphia's NBA franchise in a proposed new arena in depressed Camden. Florio staffers say no tax money would be "directly" involved, but Whitman has ordered an independent economic review of the plan. She promises 76ers owner Harold Katz an answer by mid-January.
WELFARE HOOPS? In all likelihood, says municipal-finance expert Sam Katz, New Jersey would have to subsidize the Camden deal. While financing details are being kept secret, the Philadelphia Inquirer reports that initial plans call for about $144 million in state- and county-backed bonds, plus guarantees of $7 million a year in revenue to the Sixers--with the promise that the state would make up any shortfall. Such terms would surely run afoul of Whitman's vow that tax dollars not pay for arena construction or operations. What's more, any hit on the treasury complicates her promise to cut state income taxes 10% a year for three years for most residents.
The risk for Whitman is that she could be tarred as the governor who drove pro basketball away from a struggling city--which also happens to be Florio's hometown. Fortunately, it wouldn't be the first time New Jersey said no to pro sports when terms were not to residents' liking: In 1987, voters overwhelmingly rejected a proposal to pay for a baseball stadium to lure a team to the state. Other states should follow New Jersey's lead.
If Whitman can avoid laying out taxpayer funds, the deal may be worthwhile. Otherwise, she should send a message to team owners that taxpayers would rather cheer for pro franchises than pay for them.Joe Weber