A few miles outside of Los Angeles, in a business-tax-free haven of strip malls and strip clubs called the City of Industry -- under 800 residents and fewer than 100 voters -- ground is ready to be broken for an $800-million football stadium. The team to play there is yet to be determined. But the hope is that a wayward owner longing for luxury boxes will want to call it home.
The deal was celebrated by Gov. Arnold Schwarzenegger as both environmentally friendly and fiscally responsible. Earlier this year, residents voted 60 to 1 to approve a $500-million bond package, with some of the funds going toward public improvements to support the stadium. But the stadium, we are told, will be built with private funds by billionaire real estate mogul Ed Roski Jr. All he will want in return is a 40% stake in whatever team makes its way to Industry.
Environmentalists protested the waiver of state environmental laws, despite Schwarzenegger’s assurances that a new stadium is practically a rain forest and despite Roski’s repeated use of the word “green.” But all of us, from coast to coast, should be looking at this deal with a jaundiced eye, particularly sports fans.
As Neil deMause, coauthor of “Field of Schemes,” told me: “It’s a weird one, in large part because the City of Industry is so weird. Arnold’s claim that it’s entirely privately financed is a crock -- the land and infrastructure is being funded by property taxes -- but in a town with barely any actual people in it, you could legitimately argue that the industry in Industry is just voting to tax itself to bring the NFL to town.”
But this deal is destined to have a ripple effect across the country. Roski has made it clear that the plan will not be to push the National Football League for expansion but to lure an NFL team to move to the country’s second-largest media market. Beware, fans of the San Diego Chargers, Buffalo Bills, Jacksonville Jaguars, Oakland Raiders, San Francisco 49ers, Minnesota Vikings and St. Louis Rams. You are all on the list. Not only is there a chance you might lose the home team, it’s likely that your team owners will use the proposed Los Angeles Stadium as leverage for more tax breaks, more publicly financed construction and more corporate welfare.
The Chargers have already started this process, meeting with local officials about getting new digs in Escondido. Roski, when asked about being used this way, said: “I can’t worry about other cities and stadiums. We have been working to return the NFL to L.A. for a long time, and right now that is my sole focus.”
He should be worrying about it. Because NFL owners divide revenues evenly, there is no particular bang for your buck that comes with moving your team to Los Angeles. In addition, because of NFL blackout rules, which suspend local television coverage if tickets aren’t sold out, an L.A. team could be shutting itself out of the local television market.
But the main reason people should be up in arms is that building a stadium during an economic crisis to house a team that doesn’t exist is bonkers. Selling it as a cure for the crisis is even worse.
As studies from think tanks such as the Brookings Institution and the Cato Institute have shown, stadium funding never brings an effective return on its investment. More than $30 billion has been spent on stadiums over the last 25 years. That includes publicly funded stadiums such as the Nationals’ baseball park in Washington -- coming in at almost twice the projected budget -- and so-called privately funded parks such as AT&T; Park in San Francisco. There’s always a tab that taxpayers end up paying.
Then there is the promise of jobs. One of the more noxious aspects of Schwarzenegger’s signing ceremony last week for the bill exempting the project from environment laws was the staged presence of construction workers cheering him on. The governor, ostensibly a labor union foe when it comes to nurses or teachers, embraced the love of the camera-friendly hard hats.
Both Schwarzenegger and Roski have also promised Maria Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor, that concession workers and parking attendants will be paid “middle-class wages.”
“This is true economic development,” Durazo said. “It’s going to benefit everyone in our community.” The typical pay for these jobs is $7.65 an hour, which would be “middle class” if JFK were president.
There were many who thought that 2009 would begin an era of change. But stadium sweetheart deals and poverty jobs are sadly just more of the same.