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Private funds have worked in other cities

THE BALTIMORE SUN

With a configuration that allows home runs to splash into the bay and a home team that routinely draws sellouts, San Francisco's SBC Park is often described as one of baseball's finest venues.

The park - built entirely with private funds - also is a gold standard for the many economists who say cities are foolish to pay hundreds of millions in public dollars to provide stadiums for professional sports teams.

Those economists are lauding the District of Columbia Council's vote Tuesday to require substantial private financing for a new baseball park near the Anacostia River. They say cities never recoup their ballpark expenditures and should look to San Francisco, which rejected four public financing appeals, as a model for sensibility.

"The vote shows that resistance to these stadium deals is galvanizing," said Robert Baade, a sports economist at Lake Forest College in Illinois. "There's a realization that they're not all they're cracked up to be."

Baade and other economists argue that stadiums do little to create jobs, attract surrounding businesses or draw tourists. They say that at best, cities receive unquantifiable boosts in self-image.

But many people who have worked on stadium deals say council members and economists are being shortsighted.

'Public functions'

"Baseball teams fill very important public functions," said Stan Kasten, former president of baseball's Atlanta Braves, the Atlanta Hawks of the National Basketball Association and the Atlanta Thrashers of the National Hockey League and chairman of Philips Arena in Atlanta. "The people who criticize these deals are looking at a very, very narrow definition of the returns teams bring."

The Washington-area's other major league sports venues were financed with mostly private funds: FedEx Field in Landover, home of the National Football League Redskins, and the MCI Center, where the NBA Wizards and NHL Capitals play.

Plan might not work

But that doesn't mean such a model would work for baseball, said Martin Klepper, an attorney for Skadden, Arps, Slate, Meagher & Flom who worked on the Redskins deal.

"The NFL is a much more profitable league," he said. "The question here is if baseball produces enough of a revenue stream to support the financing of a team and the financing of a stadium. I'm not sure."

Klepper hopes the council will be more flexible in offering public money.

"It's amazing to me that people don't see the economic benefits baseball will bring to D.C.," he said.

Washington Mayor Anthony Williams said the new team and ballpark could create billions of dollars in new development for Washington.

Ballpark construction would support 3,500 jobs and generate $5 million in new tax revenues, according to city projections. Annual team and ballpark operations would create more than 350 jobs and nearly $30 million in new tax revenues.

Vigorous debate

Economists, politicians and team officials have vigorously debated the pros and cons of stadium deals in recent years as professional leagues have pressured dozens of cities to pay up or risk losing their teams.

Though the oldest stadiums, such as Wrigley Field in Chicago and Fenway Park in Boston, were built with private dollars, public funding has been a major component of most stadium deals in the last 35 years. Both Oriole Park at Camden Yards and M&T; Bank Stadium were built almost entirely with public money.

Former Orioles owner Edward Bennett Williams spent much of the 1980s wrangling with city and state officials for stadium money, always with the implicit threat that he could move the team to Washington. In 1987, Williams told legislators that the era of private financing was over.

Polls showed voters would have rejected the plan, but lawmakers went along and approved a twin-stadium plan for Camden Yards, then an industrial park.

In 1995, Maryland lawmakers balked at the deal that lured the Cleveland Browns to Baltimore, claiming it was too generous. Even though it had a signed contract with the state that called for no investment toward construction, the team agreed to contribute $24 million over 30 years and lawmakers went along. The NFL franchise later changed its name to the Ravens.

Covering costs

In the years since, cities from San Diego to Milwaukee to Philadelphia have agreed to cover most of the costs for baseball stadiums. Others, such as Minneapolis, have resisted and been threatened with losing their teams. Baseball Commissioner Bud Selig listed a publicly financed stadium as a virtual pre-requisite for the city that would obtain the Montreal Expos.

There are two exceptions: San Francisco and St. Louis, where the Cardinals are paying about 75 percent of the bill for a park set to open in 2006. Under the amended deal approved Tuesday by the D.C. Council, half the cost of a downtown stadium would be privately financed.

Critics of public stadium deals say they hope these examples indicate a new trend.

"I think potentially, it could be a great thing," said Neil deMause, co-author of Field of Schemes, a book on stadium financing.

A good economic development deal creates a new job for every $5,000 to $10,000 spent, deMause said. Stadiums create a new job for every $250,000 spent.

"It's the worst bang for the buck you could possibly come up with," he said, adding that even Washington's amended deal won't benefit the city.

Economists say the District could be in a unique position to demand a better deal because of its growing population and rising income levels.

"Baseball really may not have anywhere else to turn," deMause said. "They've announced the team's name and started the process of selling tickets. And they know D.C. is the best option they have."

Stephen Fuller, an economist at George Mason University, worked on Northern Virginia's stadium bid, and said baseball officials seemed to want a team in downtown Washington.

'Some leverage'

"Washington has some leverage because the owners want to be here," he said. "It's the best market in the country."

Fuller said Washington leaders are right to ask for more private money but should have done so before announcing the Expos were coming.

The awkwardness of negotiations is compounded because the team has no owner, Klepper said. The attorney noted that banks were comfortable financing the Redskins stadium because owner Jack Kent Cooke was a known entity.

"I think the real challenge here is that an owner will have to buy the team at the same time he's financing a stadium," he said.

Even if such a deal were possible, it might handicap the team, Klepper added. "You don't want to strap the ownership with so much debt that it can't field a competitive team," he said.

Recent ballpark deals

................................................ Year..........................................Public

Name of stadium, city ..........opened ..........Total cost ...........money

Citizens Bank Park,

Philadelphia ......................... 2004 .......... $348 million ........... 50%

Petco Park, San Diego ......... 2004 .......... $449 million ........... 57%

Great America Ballpark,

Cincinnati ............................. 2003 ........... $290 million ...........82%

Miller Park, Milwaukee ...... 2001 ............ $322 million ......... 66%

PNC Park, Pittsburgh ......... 2001 ............ $228 million ......... 70%

Minute Maid Park,

Houston ............................... 2000 ............$266 million ............68%

SBC Park, San Francisco .. 2000 ............$306 million ............. 5%

Comerica Park, Detroit ....... 2000 ........... $395 million ............ 63%

Safeco Field, Seattle ............ 1999 ........... $517 million .............72%

Bank One Ballpark,

Phoenix ................................1998 ........... $355 million .............71%

Source: National Sports Law Institute of Marquette University Law School

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