At a recent New School University forum entitled, “Urban Conversations: U.S. Mayors and Innovative Leadership,” three mayors – Tom Murphy of Pittsburgh, Kay Barnes of Kansas City, and Gavin Newsome of San Francisco - talked about how they had handled stadium issues in their cities. The panel was moderated by George Stephanopoulous. The following is an edited transcript of the discussion.
George Stephanopoulos:Let me ask about something New York is going through right now, the huge controversy of whether to build a new football stadium on the West side. Mayor Tom Murphy of Pittsburgh, you succeeded after losing a referendum and then pushing it through the state legislature, is that correct?
Mayor Tom Murphy, Pittsburgh:We sort of said we’re going to do it anyway.
George Stephanopoulos:And you [Mayor Kay Barnes of Kansas City], that’s where you were successful. You brought in arenas but not a new baseball stadium. Talk about the experience and what the difficulty was in getting public support for it.
Mayor Kay Barnes, Kansas City:We had an interesting experience in Kansas City with our arena issue; it was not doing well in the polling early on. [But then] we received a call from the leadership of Enterprise Car Company, which has its corporate base in St. Louis: Under no circumstance would they support what we had put on the ballot, which was an increase in rental car fees and hotel fees to fund the public portion of the arena. They said to us, "we’re going to go after you. We will spend whatever it takes to fight you in this campaign." And the more they spent, the more it helped us. Because it created this situation where they were the enemy, and we played up the St. Louis part, because there’s always this competition within Missouri between St. Louis and Kansas City. They ended up spending over one million dollars against us in the campaign and we won by 61 percent, thanks to Enterprise. So it was an interesting political experience to see the value of an identified enemy and then really making that the focal point of the campaign. We learned a lot in that experience and we’re all very excited about what the arena will mean in terms of our downtown revitalization.
Mayor Tom Murphy, Pittsburgh:Let me just say that I was caught between belief and reality on this. I fundamentally don’t believe that the public ought to be investing in ballparks. That said, we have built a new football stadium, a new baseball park and a convention center, and we spent $1 billion doing so. We did that because that’s the reality of life; that’s the market place. For a city like Pittsburgh or Kansas City, small markets competing with George Steinbrenner, who’s spending $200 million on [players for] a team when we spend $20 million on a team. So it was a question to us of losing the teams, and it's hard to imagine a Pittsburgh without the Pittsburgh Steelers or the Pittsburgh Pirates, after having lost the steel industry. So the reality was [we had] to put a deal together. We went out to the public, had a referendum, 70 percent of the people voted against the referendum saying, "we don’t want to use public money." Two months later, I said, "we’re building them anyhow," and figured out a way to put the money together. That’s not how you gain popularity with the electorate.
George Stephanopoulos:And once you’ve done it though how is it?
Mayor Tom Murphy, Pittsburgh:There are still people who are upset about it.
Mayor Gavin Newsom, San Francisco:Well, with respect, eat your heart out because we built a baseball stadium without any public subsidy: PacBell Park. And it’s an extraordinary stadium even if it’s not the number one stadium. Every mayor’s going to sit here and say, â€Football stadiums are a great economic stimulus.’ I think one of the great experts is your colleague, George Will, on this, who has made it crystal clear to me; he said, "You Mr. Mayor will be saying that, but you will be wrong when you do." Well I don’t want to prove George right on anything. So I’m not going to say it. The fact is football stadiums are not a great economic stimulus, they are just not great for the economy. It’s a sort of myth.
With baseball stadiums, however, you can make a very different argument and [a good example of] that argument, I think, is PacBell Park -- now called SBC Park. It’s just an extraordinary city that’s being built: 6,000 housing units around this area; a fixed light rail system; University of California San Francisco, which is our institution of higher learning where biotech and life science and nanotech really were conceived.
Our 49ers stadium, though, we’re in the midst of that discussion and we passed an initiative that allowed for $100 million – barely passed – in revenue bonds. So it’s not a general obligation bond, it’s got to be paid back with some revenue component. It’s a way of subsidizing, modestly, the construction, but not a way of ultimately giving away a city subsidy, except in a bond capacity.
George Stephanopoulos:Is the basic critical problem you all face here when you’re trying to get the financing that the voters say, â€listen we’re going to be paying for overpaid players and greedy owners’?
Mayor Tom Murphy, Pittsburgh:Well you get two messages from the voters: Don’t use public money for ball parks to pay for the greedy owners, but don’t you dare let these teams leave. So you’ve got a mixed message in the same breath; that’s part of the challenge of how you put together a plan and move forward.
George Stephanopoulos: And at the end of the day what pushes you to do it -- the fear of losing the team or the actual benefit of what having the stadium can bring?
Mayor Kay Barnes, Kansas City:I think it is fear of losing the team as much as anything. We get referred to all the time as small markets in major league baseball and football, and certainly that is true in many ways. But the reality is that it is a very important part of a city’s image, large or small. As cranky as the voters will get over that kind of subsidy, when push comes to shove, I think there is a recognition that it may well be worth the investment, not only to â€keep the team for psychological reasons,’ but also for economic development reasons. The baseball stadium is an excellent example of that in almost any community. That’s why we see almost all that are being built, at this point, being built in a downtown, or very near a downtown area, simply because it is an economic development stimulus.
Mayor Gavin Newsom, San Francisco:And what we’re seeing with football stadiums – and this is our discussion of the 49ers – is that you want to anchor them in mixed-use development. You want to create a component where you’ve got housing, perhaps hotels, you’ve got retail components, so it’s all packaged together, so you can legitimately make that argument. But a stand-alone stadium, with just a few games a year, you’re not gonna make an [effective] argument. For example, our number one issue in San Francisco is homelessness. If I’m going to say that I’m going to subsidize a multi-billionaire by getting him over $100 million in subsidies, but I can’t help people out there in the streets dually diagnosed with drug and alcohol addictions and bi-polar disorder, boy I’ve really made a difficult decision on the basis of my morality and judgment.
Mayor Tom Murphy, Pittsburgh: The economics of it are really that arenas make the most sense. They are used 250 times, so they generate a lot of activity. Baseball is next. Football, it’s hard to justify a football stadium on economic development purposes for 14 weeks, 12 games a year. Â
HOCKEY AND BASKETBALL ARENAS
Location: |
Brooklyn, New York
|
Vancouver, British Columbia | Philadelphia, Pennsylvania | Denver, Colorado |
Date: | 2006 (Projected) | Opened September 1995 | 1996 | Opened 1999 |
Uses: | Nets basketball games, concerts, other events. | Professional basketball, hockey, and lacrosse games, concerts, and 2010 Olympics. | Professional basketball and hockey games, concerts, circuses, 2002 NBA All-Star Game, and other events. | Pepsi Center hosts professional basketball, hockey, lacrosse, and arena football games, concerts and other events. |
Size: | Seats 20,000 | Seats 20,004 | Seats 21,600 people | Seats 19,000 people |
Projected Cost: | $435 million (projected) | $160 million (Canadian) | $206 million | $160 million |
Public Cost: | $150 million in government funds for streets and rail connections. | $13 million from the city and state. | $4.5 million in infrastructure, $2.25 million for construction sales tax rebates and $2.1 million annually for property tax exemptions. | |
Private Financing: | Nets owner Bruce Ratner plans to pay for the arena, the centerpiece of a $2.5 billion commercial and residential development that would stretch for three blocks along Atlantic Avenue. | Primarily privately financed by General Motors Canada, which paid $18.5 million for 20-year naming rights. | $200 million, which includes naming rights at $40 million over 21 years and an undisclosed additional cost eight years afterward. | Privately financed by investors and through the sale of luxury boxes. Pepsi paid an estimated $68 million for naming rights. |
Voter Referendum? | No | No | No | No |
At Issue: | Opponents say as many as 1,000 people will be evicted from their homes. They also say that the majority of the new housing will not be affordable to current residents and fear an influx of traffic. The project will use Tax Increment Financing, which diverts future property, sales and income taxes in a designated district until the developer can pay off the costs of the project. | While the General Motors Place arena will host the hockey games for the 2010 Winter Olympic Games, government officials are committing $400 million to build other venues for other events. | In Philadelphia, all the major sports teams – football, baseball, basketball, and hockey – wanted new venues. The new arena was the first built and opened in 1996. Though the teams wanted a larger public subsidy, the owners had to pay for most of it privately. The old arena, The Spectrum, is still open and used for concerts, minor league hockey games, and other events. Philadelphia has recently built a new football stadium for the Eagles and a new baseball stadium for the Phillies, both with public subsidies. | In 1986, Denver’s McNichols Arena was renovated at a cost of $12.5 million to the city, but owners of basketball and hockey teams wanted a new one. In return for breaking the lease on the old building, the city wanted the teams to agree to stay in Denver for 25 years. The teams resisted. Two years later an agreement was reached. With new stadiums for baseball and football that used public subsidies and tax increases also planned, owners were forced to finance it primarily with private money. |
Benefits Promised: |
The arena, designed by architect Frank Gehry, will be a tourist attraction featuring a skating rink, restaurants, and stores. In addition to the arena, the Atlantic Yards plan calls for six acres of park land, 4,500 apartments, 2.1 million square feet of commercial office space, and 300,000 square feet of retail space to be built over a 10-year period. Officials promise to create 15,000 construction jobs, over 10,000 permanent jobs, and 400 permanent jobs at the arena. |
General Motors Place was built in 1995 to showcase professional sports, concerts and other events. | The new arena was designed to bring more high profile events to the area. | The Pepsi Center is part of an area dedicated to sports and recreation. It is located near a football stadium, baseball stadium, and Six Flags amusement park. |
Benefits Delivered: | The Vancouver Grizzlies basketball team moved to Memphis in 2001. The lacrosse team folded. And in 2005, the arena did not host any games by the Canucks because the professional hockey season was suspended over contract disputes between owners and players. | In addition to sports, the arena has drawn other events such as the Republican National Convention in 2000. | The arena was recently voted the top basketball arena by USA Today. |
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