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March 31 — The construction of stadiums and arenas for major league sports teams tends to draw overwhelming support from sports fans, elected officials and job seekers in the construction industry.
But industry observers told Bloomberg BNA in recent interviews that local communities and even members of the construction industry should attempt to suppress much of their support because promises of economic growth, and massive job creation, are rarely upheld.
Currently, officials and residents in Las Vegas and San Diego are weighing the costs and benefits of possibly contributing millions of dollars in public money to build new football stadiums over the next few years.
In October, San Diego Mayor Kevin Faulconer's office announced that a proposal for a new football stadium in the Mission Valley section of San Diego could be added to a regular election ballot for taxpayer approval in 2016. The proposed stadium could cost about $1.1 billion with up to $350 million in public financing.
San Diego Building and Construction Trades Business Manager Tom Lemmon told Bloomberg BNA that workers in San Diego are looking forward to the jobs that could be created from building a new football stadium, along with a convention center and several hotels near the stadium.
“Anytime you're building and putting people to work, I imagine those people are appreciative,” Lemmon said.
David Williams, president of the Taxpayers Protection Alliance, indicated that construction workers and local communities shouldn't bank on new sports stadiums improving the local economy.
“These stadiums really do not create the economic boom that is promised,” Williams told Bloomberg BNA. “And the construction jobs created, these really aren't long-term jobs. They are more short term. And that's assuming the contractors are not bringing in construction workers from other states,” Williams added.
Sports stadium construction has become somewhat controversial in recent years due to the large amounts of public funding usually contributed to help finance them.
In 2015, as part of a proposal to build a new football stadium for the St. Louis Rams, the city of St. Louis agreed to provide $150 million to finance its construction.
Local construction unions offered their support for the proposal. One month after the stadium proposal was drawn up, the St. Louis Building and Construction Trades Council, Eastern Missouri Laborers' District Council (EMLDC) and the Carpenters District Council of Greater St. Louis reached a project labor agreement for construction of the proposed stadium. The agreement called for a 24-hour schedule of three eight-hour shifts, five days a week( 60 CLR 1409, 2/26/15).
This modified schedule would have allowed construction on the stadium to be completed in about two years and three months, as opposed to three years without a 24-hour work schedule, St. Louis BCTC Executive Secretary-Treasurer Jeffrey Aboussie told Bloomberg BNA at the time.
The proposed stadium was expected to create about 1,500 construction jobs, providing lots of new opportunities in the midst of a “slowdown of construction activity and employment in St. Louis,” Aboussie said.
However, the jobs promised through the construction of the stadium will not materialize. Earlier this year, the National Football League announced that the St. Louis Rams are moving to Los Angeles, where another stadium will be built for their use.
Gary Elliott, business manager for the EMLDC, told Bloomberg BNA that his union is disappointed that its members didn't get the stadium construction work. He acknowledged that the project generated a lot of controversy because of the level of public financing involved.
Elliott said he has heard rumors that a soccer stadium may be built in St. Louis, but he added that such projects will always be controversial, even with the potential for lots of job creation.
“It's a two-edge sword. We want the work. We want the hours. But then you get into the age-old controversy of, do millionaire owners and billionaire owners need those kind of breaks?” Elliott said.
The answer to that question is no, Illinois Economic Policy Institute Policy Director Frank Manzo told Bloomberg BNA March 4.
“There is no economic reason for government to subsidize construction of new sports stadiums. It doesn't make sense for taxpayers to be subsidizing the rich,” Manzo said. “If it's going to be that great of an investment and you're a private owner, and you theoretically can just do it, the public need to just start saying no.”
Manzo said economists are nearly unanimous in their conclusions that publicly and privately funded stadiums produce minimal economic benefits for the communities where they are built. These stadiums turn out to be a redistribution of wealth from the taxpayers to the billionaire owners of the sports teams that campaigned to have the new stadiums built, Manzo said.
If taxpayers want to get behind a project that will benefit the masses, public works improvements deserve more of their support, Manzo said.
“Should we spend $250 million on a sports stadium, or should we spend $250 million on rebuilding the highway or higher education?” Manzo asked. “It's a matter of how efficiently we allocate taxpayer dollars. In the case of sports stadiums, this allocation has not been proven to grow the economy in any significant way. Investing in transportation improvements, where there are needs and growth is occurring, that has been definitely proven to grow the economy in the long term.”
Williams agreed, telling Bloomberg BNA that public road projects have the potential to put people to work over long periods of time. That's because roads need steady repairs and maintenance and eventual replacement due to years of daily wear and tear.
“A stadium is pretty much a one-shot deal, and they are supposed to last decades. The next time it's going to be replaced is 20-25 years,” Williams said.
But Manzo said he understands the lure of new sports stadiums, where the proposals often come with promises of immense job creation, especially if state and local governments aren't investing a great deal into infrastructure improvements.
“If you're a construction union and your members are out of work, in your internal conversations, you're asking if the best the governor can do is give us money to build a sports stadium, you think ‘we might was well take it,' ” Manzo said.
Williams said that any sort of construction is good for construction workers, but he uses St. Louis as a cautionary tale: In 1995, the city put up $280 million to help construct the existing Rams stadium, and it will be paying off that debt until 2021.
“If you look at what's happening in St. Louis now, those same construction workers are paying for an empty stadium for the next six years,” Williams said in reference to workers who pay local taxes.
Aboussie told Bloomberg BNA that building trades unions did everything possible, before the NFL made the decision to move the Rams, to demonstrate that they could build a new stadium for the team in record time.
Members of the building trades understand that “when you have a vibrant sports community and you have state of the art facilities, it also makes our downtown area thrive,” he said.
Despite the project not happening, Aboussie said the construction climate in St. Louis and Missouri as a whole has rebounded over the past year, and many tradesmen and women are going back to work.
“I think members always look to the big projects to be the saving grace. But to be in this industry you need a multitude of things to keep your people working. No one project makes or breaks your labor market in this town,” Aboussie said.
Elliott, business manager for the EMLDC, told Bloomberg BNA that if the opportunity arose to get behind another public or privately financed stadium, the Laborers wouldn't disregard it but would venture “cautiously” into it. “I think each proposal stands on its own merit,” Elliott said.
According to Williams, any publicly financed stadium that comes with promises of creating multiple construction jobs should be carefully considered and then rejected.
“These construction jobs, I understand how important they are. But they really are temporary. They aren't long-lasting. I think that we need to say no to this,” Williams said.
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