Back in 2004, when D.C. officials finally agreed to sink $600 million into building a new baseball stadium in the District, they made a lot of promises about economic development and revitalization. Former Mayor Anthony Williams, D, talked about “the rebirth of the Anacostia waterfront” at the groundbreaking.
As our own Bill Myers reported yesterday, those promises were as empty as Nationals Park during an August three-game stand against the Florida Marlins.
In the Nats’ third season at the Navy Yard, residents of near Southeast are asking questions like: “What did it bring here besides the stadium?” The answer: It brought a losing baseball team and $202 million (so far) in tax increases on non-baseball-related D.C. businesses.
What caught my eye in yesterday’s story was what Councilman Jack Evans, D, told Myers: “For all the anti-baseball people out there, we are balancing the budget on the profits of the stadium.” That might leave you with the impression that they’re balancing the budget on the profits of the stadium. And it simply isn’t true.
In 2009, rents and sales taxes from the stadium itself came to less than $17 million. Debt service on the stadium cost $32 million. So the District lost $15 million on the stadium last year. In fact, the District has lost a cumulative $48 million on the stadium since 2005. It is expected to lose $18 million more in 2010.
So why did Evans imply that the stadium is profitable? Not because the stadium is profitable (it isn’t), but because the promise of baseball also prompted the D.C. Council in 2004 to raise taxes on businesses to pay for the money-losing stadium. Those taxes — on utilities and on the gross receipts of businesses with more than $3 million in sales — are bringing in more revenue than the stadium is losing.
There two ways of looking at this. One is the way the council looks at it. They speak as though the gross receipts tax — which falls on “income derived from any activity whatsoever from sources within the District” — is somehow part of the stadium’s operation and should be counted as such. This position indicates a worldview in which government makes a “profit” by shaking down its residents and using their money to subsidize one of the worst and worst-attended (average so far this year: 20,760 per home game) baseball franchises in America.
If this were actually true, then the District could solve its budget problems by building several new stadiums every year.
The other way to look at the situation is to recognize a mistake after the fact, and to learn some hard lessons from it. For example, that stadiums do not pay, as dozens of other cities had already learned by 2004.
That huge public works projects like this one simply transfer wealth (in this case, from the District’s employers and consumers to a baseball team and to those who owned land around the stadium), but do not create wealth.
That the D.C. government has now skimmed $200 million from its economy that could have instead supported job creation and provided goods and services that people actually wanted.
Will D.C. politicians ever learn these lessons? As a lifelong Cubs fan, I’ll volunteer the answer: “Maybe next year.”
David Freddoso is The Examiner’s online opinion editor. He can be reached at [email protected].
