Officials in Sacramento are furious that the owners of the Kings basketball franchise, the Maloof family, said they are backing out of a handshake deal in February to invest $73 million in a project to build a new arena downtown.
This publicly funded stadium issue has raged in cities across the United States, including Indianapolis, where the highly subsidized Lucas Oil Stadium hosted this year's Super Bowl, and Minneapolis, as Minnesota legislators ponder a deal to build a new football stadium for the Vikings.
But the story in California's capital, a city of 2 million with a perennial inferiority complex borne of being overshadowed by Los Angeles and the Bay Area, is not about the details of the deal or the wiles of mercurial owners of NBA teams. It's about the foolishness of city officials who pin urban renewal hopes and taxpayer dollars on sports complexes despite the public's declining willingness to pony up the cash.
Stories over the weekend quoted fans who feel betrayed by the Maloofs, but these feelings are hard to quantify. Some residents are no doubt upset, but others question whether this is the best use of public resources, especially now. Though the economy isn't as bad in Sacramento as in some other California locales, it's still depressed.
At the news conference last week in New York announcing their decision to abandon the plan, the Maloofs deferred to economist Christopher Thornberg, who argued that the city-backed deal was based on a "wildly overblown estimate of the kind of revenue value this arena will bring to the city." He said the project "would really put the city right on the edge of potential fiscal disaster."
The Maloofs' lawyer said revenue projections were based on boom years when the now-lowly Kings were in the championship hunt.
Economists have long understood that new arenas and sports stadiums rarely bring new economic activity into a city, but merely move entertainment money around the region.
"Economic growth takes place when a community's resources people, capital investments and natural resources like land become more productive," wrote the economists Roger Noll and Andrew Zimbalist in a still-quoted 1997 Brookings Institution study. "Building a stadium is good for the local economy only if a stadium is the most productive way to make capital investments and use its workers."
That almost never is the case. These deals are not about economic growth, but civic pride. Last year, after the Maloofs announced their plan to move to Anaheim, Sacramento Mayor Kevin Johnson talked about the need to keep the franchise to help Sacramento become a "world-class city."
But as I wrote in a column in The Sacramento Bee at the time, "Second-tier cities believe that professional sports put them on the map, although all they do is provide some unexceptional entertainment and enrich team owners, who cleverly manipulate the local inferiority complex to gain arena subsidies."
Sacramento officials spent their time and squandered taxpayer money on such dreams, while neglecting the nitty-gritty of municipal government and it shows throughout city neighborhoods.
The response to the column was positive, from people who understood that Sacramento is a perfectly nice place to live, but that keeping a team in town will never help it become a destination city.
Residents, apparently, are savvier than their leaders.
"If the Maloofs had wanted to embarrass Sacramento on a national stage, they brilliantly succeeded with the televised Manhattan press conference they orchestrated Friday," The Bee editorialized Saturday.
Yet Sacramento civic boosters will continue to be played as fools until they realize that the Kings are no more important to the local psyche than any other business franchise. Sacramento, a government town where state workers flee the city center at 4:30 p.m. every day, has myriad obstacles to creating a vibrant downtown. Blocks from the planned arena, the main shopping plaza is practically a ghost town.
Despite decades of subsidies, the main downtown drag, the K Street corridor, is known for vacant storefronts. An arena won't fix these problems.
Officials in California's first-tier coastal metropolises need to learn these lessons, too. Los Angeles leaders are pushing a downtown stadium despite the obvious traffic issues, while a competing group is offering a plan on the eastern edge of the San Gabriel Valley.
In San Diego, officials continue to promote an atrocious taxpayer-funded stadium deal to keep the Chargers from heading to Los Angeles, but they don't seem to be getting much traction.
Perhaps city officials everywhere will always be lured by the promises of big-league franchises. In that case, public skepticism is the best way to keep taxpayer dollars safe.
Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity.
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