NCPA - National Center for Policy Analysis

REINING-IN SPORTS WELFARE

May 17, 2005

Local governments are loosely using the power of eminent domain in an effort to condemn private property for the construction of sports stadiums, according to Reason magazine. But the promised economic benefits of such projects has yet to be seen.

Typically, eminent domain is used to take private property for a public function, such as roads. However, more cities are using it for any project they deem economically worthwhile to their city, be it public or private.

  • The Institute for Justice reports that between 1998 and 2002, 10,000 cases have involved local governments transferring property from one private owner to another.
  • According to sports economists, half of stadium and arena construction after 1990 has involved using eminent domain, even for neighborhoods that would not be considered "blighted."

Furthermore, says Reason, sports venues cost taxpayers horrendous amounts of money, cost team owners very little, and do not bring promised economic benefits to host communities:

  • Between 1990 and 2003, sports venue projects in the United States cost a total of $17.3 billion, $10 billion of that amount coming from taxpayers.
  • Officials in Hamilton County, Ohio, have accused the league overseeing the Cincinnati Bengals of cheating them out of $600 million, after convincing the county they needed a new stadium in order to stay competitive.
  • Proponents of a newly-approved stadium in Arlington, Texas, claim the venue will bring $7 billion in revenue over 30 years, but economist Mark Rosentraub estimates that the city will actually lose $235 million.

Two cases are currently up before the Supreme Court involving using the power of eminent domain for the transfer of property from one private party to another. If the Court reins in local government powers, "sports welfare" may soon come to an end.

Source: Daniel McGraw, "Demolishing Sports Welfare," Reason, May 2005; Dana Berliner, "Public Power, Private Gain," Institute for Justice, April 2003.

For text:

http://www.reason.com/0505/fe.dm.demolishing.shtml

 

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