Daniel Snyder and the City Council have been dancing around the question of a new billion-dollar stadium for DC’s NFL team for years. But as with so many other questions, the new incoming presidential administration could completely redefine the debate.
Trump has touted a plan to spend up to a trillion dollars on a job-creating infrastructure plan, mostly through tax exemptions. Since this program won’t actually hand out cash, but instead will allow for things like tax-free construction, all those billions will only be available to entities that actually pay taxes in the first place – i.e. private companies. So the “infrastructure plan” won’t actually give any money to public utilities like roads or schools.
While this is a tragedy (“Sad!”) for our shabby public schools and pothole-riddled highways, there is an upside for District taxpayers who are loath to give away public funds for a ludicrously pretentious football stadium that will be owned by a billionaire. Even if some public money does end up subsidizing the construction of a new stadium – through tax-exempt construction, for example – it will be far less than in the doomsday scenario we’ve seen in so many other cities of, say, the City Council writing Daniel Snyder a check for the entire cost of construction after he threatens to move the team to West Virginia. (Though in that scenario, I suspect a lot of locals would offer to help him pack.)
Still, even if the stadium is only subsidized by tax exemptions, that’s still tens or hundreds of millions of dollars that are being transferred from District coffers to Snyder’s pocket. But there’s an avenue to preventing that.
Since the kind of public-private partnership that’s become so popular in the last couple decades relies on basically giving public tax money to private companies, there are a lot of restrictions on what kind of projects can be greenlit. One of the main requirements is profitability. Public money can’t be used to fund private construction of, say, the road through your neighborhood, because that road doesn’t generate any profit. But it can be used to build a new toll road, because that brings in the dollars. (Hence the puzzling number of toll roads throughout the suburbs.) It’s a stupid prerequisite, and there’s more than a little irony in the fact that our public infrastructure has gotten so crappy because the way we’ve set up funding it favors building new moneymaking boondoggles over just fixing the old infrastructure.
But this profitability requirement could end up giving the District significant leverage when it comes to the question of a new football stadium. Because it’s becoming more and more clear that big publicly-funded stadiums are anything but profitable. This contradicts decades of conventional wisdom that stadiums create jobs and revitalize neighborhoods, a logic that’s been used in dozens of cities around the nation to use taxpayer money to build modern-day coliseums for billionaires who don’t need the subsidies in the first place. (There’s a lot of truth in the joke about how rich people stay that way because once you have money, no one makes you pay for anything.)
The idea of the job-creating, magically-gentrifying stadium never passed the smell test in the first place, and now there’s a lot of data showing that football stadiums especially are a terrible deal for the cities that fund them. Roger Noll, a Stanford economist and former member of the President’s Council of Economic Advisors, has been at the forefront of stadium debunking, mainly through pointing out the obvious. NFL teams play eight to ten games a year; the other 355 days of the year, the stadium is closed and empty. The vast majority of the jobs created are part-time, ten-days-a-year gigs like beer vendors and parking attendants, and projects of a similar scale – shopping malls, or factories – generate hundreds of times more tax revenue, as well as far more jobs. The truth is, stadiums are terribly unprofitable deals for cities.
What does this mean for the chances of a DC football stadium? It means that the City Council could (and should) take a hard line against subsidizing Snyder’s stadium, even if the result is that the team doesn’t come back to the District. Let Maryland pay hundreds of millions of dollars for eight-day-a-year jobs and a trickle of tax revenue.
BY FRANKLIN SCHNEIDER