Towns are pushing for subsidized stadiums, while others struggle to keep them afloat

While some North Carolina communities are working to build sports complexes with taxpayer-subsidized funds, the struggle of others with empty stadiums may be a cautionary tale.

Meantime, there is an effort underway to bring an MLB team to either Raleigh or Charlotte. 

Gov. Roy Cooper, Carolina Hurricanes owner Tom Dundon, and former state budget director Charlie Perusse are prepping a bid for an MLB team based out of either Raleigh or Charlotte.

“The prospective owners will demand that taxpayers subsidize their team by building a ballpark for it,” wrote John Hood, president of the John William Pope Foundation, in a recent column. “Some politicians will fold quickly (as Governor Cooper already has). But others will understand that a tax dollar spent on a baseball park represents a tax dollar not spent on a core public service, or not available to taxpayers to spend on a good or service of their choice.”

The city of Leland was looking to build a new sports stadium but has put a temporary hold on that project. Additionally, Greensboro is considering a new tax on food and beverage businesses that would, in part, fund the construction and upkeep of new sports facilities in the Triad.

Gastonia and Zebulon

Conversely, the Gastonia Honey Hunters and Five County Stadium face financial peril. 

In November of 2023, the city Of Gastonia filed a lawsuit against the Honey Hunters for violating their lease agreement. Violations include “failing to meet its financial obligations,” as the lawsuit states.

Gastonia is not the only town with a struggling sports stadium. Five County Stadium, owned by Wake County and the town of Zebulon, needs upgrades to meet MLB and Player Development League (PDL) requirements for the 2025 season. In late 2022, the price tag for the proposed upgrades was $15 million. Five County Stadium was previously the home of the Carolina Mudcats, owned by the Milwaukee Brewers. The Mudcats will be relocating to a new stadium in Wilson, North Carolina, Tyler Barnes, vice president of communications for the Milwaukee Brewers, told the Journal.

The Mudcats’ new home will be a $63.3 million stadium, which the Wilson City Council unanimously voted to approve on December 15th, 2023. According to the city, the stadium will be funded by tax-exempt bonds. In addition, the city is applying for $7 million in grants to help with infrastructure costs.

“Council voted unanimously to enter a partnership to build a new downtown sports entertainment complex that would potentially include a 100-room hotel, multifamily housing and new commercial development,” according to the city of Wilson.

Leland

“Over the last 18 months, the Town of Leland has been exploring a proposal to potentially.
bring minor league professional baseball to the area. After careful consideration, the Town and REV Entertainment have mutually decided not to proceed with the proposed baseball stadium at this time,” according to a January 18th press release from the Town of Leland. “Although the conversation surrounding building a ballpark in Leland is pausing for now, there is hope it will continue in the future.”

While the Leland project is on hold, other financial options aside from tax revenue are being explored to fund the potential stadium. The county decided not to support the project financially back in April of 2023.

“The town of Leland is the driver at this point,” Commissioner Frank Williams (D-5) told Carolina Journal. “Some would love a stadium. Some want it but don’t want tax dollars to pay for it. Some want it so long as it isn’t anywhere close to their house.”

Williams said that his constituents have mixed views on this issue, but likely won’t get to voice their opinion on this issue at the ballot box.

“They may not realize yet that they won’t be able to vote on the issue,” said Williams.

the impact of public funding

Using tax dollars to fund a sports complex, poses the question of whether this is an appropriate use of government funds. Only some people are invested in sports, and many aren’t so invested as to purchase a ticket for an event.

“Fans financially support their teams voluntarily through ticket sales, merchandise, and creating tv and radio advertising dollars by watching and listening to games. It crosses an ethical line, however, when citizens are forced into financially supporting teams via tax dollars,” Brian Balfour, Senior Vice President of Research for the John Locke Foundation, told the Journal in an email.

Those in support of using tax dollars to fund such a complex will argue that it’s an investment in the economy and local businesses, as outsiders who come to attend events will often stay in hotels, eat at local restaurants, and make other investments to support local businesses and boost the economy.

“Economic research consistently finds a negative economic impact overall with subsidized sports stadiums and convention centers,” writes Locke Foundation policy analyst Jon Sanders in the 2022 Policy Solutions Guide. “Funds used to build the facilities have unseen opportunity costs not accounted for by impact studies’ projections. The projects habitually underestimate construction costs to seem affordable and wildly overestimate spending by the public.”

Balfour and Sanders point to private investors as an alternative to funding sports stadiums with tax revenue.

“Sports franchises are owned by some of the wealthiest people on the planet; why should taxpayers be forced to finance their facilities?” said Balfour. “For instance, the Los Angeles Rams opened the NFL’s most expensive stadium in 2020, entirely privately funded.”

The 2022 Policy Solutions Guide includes a chart of NFL stadiums and shows what percentage of each stadium is funded privately vs. publicly. The Carolina Panthers stadium in Charlotte is seventy-seven percent privately funded and twenty-three percent publicly funded. In addition, six NFL stadiums are one hundred percent privately funded.

A further issue with the economic argument in favor of subsidizing the stadiums is that the argument is based on the idea that money is not a zero-sum game. People have limited dollars, so if they aren’t spending them there, they are spending them elsewhere, most likely at a local business.

“People in cities without pro sports teams don’t just sit home and do nothing. Rather, they go out and spend their entertainment dollars on other things that create jobs and economic activity,” wrote John Mozena, president of the Center for Economic Accountability. “…a dollar spent by a fan at a subsidized stadium is a dollar they’re not spending at some other business in the community.”

The post Towns are pushing for subsidized stadiums, while others struggle to keep them afloat first appeared on Carolina Journal.

 

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