TRAVERSE CITY, Mich. -- The <
economic advantages of building sports stadiums with public funds drew mixed reactions yesterday at a public finance conference here.
Dean Baim, an associate professor <
of economics and finance at Pepperdine University, said his studies on the economic impact of sports facilities such as stadiums show that economic growth as a result of those facilities depends on their locations.
He said that in larger cities, such <
as Los Angeles or New York, building or not building a stadium would make no difference because those cities are already cultural and commercial centers.
But in the case of Detroit, where <
the city and Wayne County have proposed a plan to build a new $200 million stadium for the Detroit Tigers baseball team mostly with proceeds from bonds backed by special county taxes, Mr. Baim said a stadium that would keep the team in the city would be positive. "If the Tigers move to Florida or wherever, it's one more notice that Detroit is a declining city," he said.
In an interview yesterday, Michigan <
Treasurer Doug Roberts expressed concern about a local government using its taxing authority for a sports stadium.
"My concern is the issue of priorities. <
For state and local governments, what is the highest priority and best use of the funds?" he said. "There are only so much taxes that can be raised."
Also attending the "Directions in <
Public Finance Conference," sponsored by the Michigan Department of Treasury, Municipal Bond Authority, and State Hospital Finance Authority, was Patrick Anderson, a director of Taxpayers United for the Michigan Constitution, a statewide taxpayers group. He blasted the use of government credit for private sector projects like sports stadiums, saying the practice can lead to bad loans.
He cited two existing sports stadiums <
in Michigan: the Pontiac Silverdome, where the Detroit Lions football team plays; and the Palace in Auburn Hills, home to the Detroit Pistons basketball team.
The publicly financed Silverdome <
depends on an annual state subsidy to stay afloat. The privately financed Palace is "a big cash maker for the Pistons," he contended.
Mr. Anderson also criticized a bill <
the Michigan legislature passed last year that allows Wayne County and five other counties to place on the ballot a tax package to finance stadiums or convention facilities. He said his group contends that one element of the tax package, a 1% tax on restaurant meals, is unconstitutional because the tax would increase the sales tax above the constitutional limit of 4%.
Lawyers for Wayne County have <
contended the restaurant tax is an excise tax and does not fall under the sales tax provision of the constitution. Mr. Anderson said his organization would fight any attempt by a county to get the tax package passed because of the sales tax question.
Mr. Roberts said this year "is not <
a good year" to go to the ballot with any tax increase given the impact of the recession on residents as well as governments.
With the exception of Wayne <
County, officials in the five other counties -- Kent, Muskegon, Oakland, Ingham, and Oakland -- have said they have no immediate plans to ask voters for the taxes. And Wayne County's plan for a tax referendum for Tiger Stadium is on hold at least for the remainder of the year.
Pat Kukula, director of strategic <
redevelopment for the Wayne County executive's office, said the county will not try to place the tax package on the ballot until there is a deal to sell the baseball team. And so far, there has been no announcement of a sale of the team.
County officials have said they <
would need to negotiate with the new owner on the stadium's site and the team's participation in the financing before proceeding with any building plans.
Ms. Kukula said the county <
missed the May 26 deadline for placing the tax package on the Aug. 4 primary ballot. Besides the 1% restaurant tax, the package also includes a 1% hotel/motel tax and a 2% car rental tax.
"We have instructed the Tigers <
that if we have not heard of an agreement by [May 26], we will not go on the ballot," she said.
Betsy Kanitz, an assistant to Tom <
Monaghan, the team's owner and the owner of Domino's Pizza, declined to comment on the sale of the team.
While Wayne County still has until <
Aug. 25 to place the taxes on the Nov. 3 general election ballot, Ms. Kukula said the county has an agreement with the Legislature not to put the Tiger Stadium taxes on that ballot.
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