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Stadiums' cost $10B higher than thought, Harvard researcher says

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By Bloomberg News
Tuesday, Nov. 6, 2012, 7:34 p.m.

NEW YORK — Taxpayers spent about $10 billion more on stadiums and arenas for professional sports teams than they forecast, according to a new book by Harvard University urban planning associate professor Judith Grant Long.

The costs of land, infrastructure, operations and lost property taxes add 25 percent to the taxpayer bill for the 121 sports facilities in use during 2010, increasing the average public cost by $89 million to $259 million, up from $170 million commonly reported by the sports industry and media, she writes in the book “Public/Private Partnerships for Major League Sports Facilities.”

The book, released last month by Routledge, aims to help governments and taxpayers to reduce hidden subsidies to team owners by allowing them to compare stadium deals for their cities against those elsewhere. The average public-private partnership worked out to cost cities 78 percent and the teams 22 percent, she wrote.

“Given that popular reports set expectations of more or less equal partnerships between host cities and teams, these estimates of public cost indicate that the public/private partnerships underlying these deals are in fact highly uneven,” wrote Long, an associate professor at Harvard's graduate school of design.

Long's analysis added costs such as those for land, infrastructure and lost tax revenue, while subtracting money that flows back to states or cities from revenue or rent payments.

“Professional sports stadiums are as close as you can get to a controlled experiment in urban design,” she said.

The public is at a disadvantage in negotiating those deals with sports teams and leagues, which have a monopoly on the supply of franchises and opaque finances, Long writes. The total cost of sport facilities has received little attention from researchers in part “because most economic analyses demonstrate that sports facilities produce very few or no net new economic benefits relative to construction costs alone, and so, in this sense, more accurate cost estimates would only serve to reinforce a case already made.”

Long concludes that, regardless of profit-sharing or rent, “public partners should avoid paying building costs.”

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