Tax-Paying "Owners" Get No Dividends


Voters who would otherwise balk at public subsidies for businesses are approving huge sums for the construction of sports arenas across the country. Voters in Washington state approved by a narrow 51 percent construction of a new, $425 million stadium for the Seattle Seahawks football team.

  • Billionaire Microsoft co-founder Paul Allen plans to buy the team, but will only contribute one-quarter of the funds for construction of the Seahawks stadium.

  • The public's share of the cost will come from a $101 million diversion of sales tax revenues from the state's general fund, lottery revenue worth $127 million and the extension of a hotel tax in King County, which includes Seattle.

  • Those actually attending games at the new stadium will only pay 16 percent of construction costs through parking and admissions taxes.

  • Allen will receive 100 percent of the profits from the stadium, personal seat licenses, luxury seat sales, television rights and advertising, while taxpayer "owners" get only 20 percent of the profits from an adjoining exhibition center.

Experts say such arrangements are commonplace.

  • Since 1990, more than two dozen sports stadiums and arenas have been build in the U.S. and Canada.

  • Taxpayers in five cities -- Baltimore, Cincinnati, Cleveland, Nashville and St. Louis -- have shelled out at least $250 million each for luxurious athletic venues.

  • Seattle agreed to build a publicly subsidized $414 million baseball park for its Mariners team.

  • San Francisco voted to subsidize a new $525 million football stadium/shopping mall complex.

Critics point out that state taxpayers aren't the only ones who pay; taxpayers throughout the nation indirectly subsidize such stadium deals since the state and local bonds that finance construction are exempt from federal income tax.

Source: Michelle Malkin (Seattle Times), "If They Build It, You Will Pay," Wall Street Journal, June 25, 1997.


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