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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

US Senators aim to stop use of municipal funds to finance stadiums

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06-13-2017, 10:08 PM
  #1
LeHab
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US Senators aim to stop use of municipal funds to finance stadiums

http://www.espn.com/espn/story/_/id/...-fund-stadiums

On one hand I support but also realize other businesses are getting tax payer fundings and breaks. Will be interesting to see how far this gets and details.


Last edited by LeHab: 06-14-2017 at 08:49 AM.
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06-13-2017, 10:31 PM
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gstommylee
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So its not okay that sports gets tax breaks but its perfectly fine that non sports businesses gets federal tax breaks?

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06-13-2017, 10:34 PM
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Sens Mile
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I got all excited, thinking the Sens finally was able to shed the budget Melnyk approach, but it looks like im wrong.

ANd totally agree with the Senators doing this, franchise value and player salaries keep climbing huge- cities should not have to go into debt to pay for arenas without getting an investment out of the team

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06-13-2017, 10:55 PM
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Jeffrey93
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Should change the title to 'US Senators'. I thought the Ottawa franchise had come up with some great plan to finance their new arena without public money.

$3.2B for 36 venues isn't that bad. The tax revenue, jobs created, areas cleaned up, etc. are the benefit.

As gstommylee said...other businesses get tax breaks all the time, so what's the difference?

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06-14-2017, 12:19 AM
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canuckster19
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The Yankees get 431 million dollars?

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06-14-2017, 01:03 AM
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93LEAFS
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Quote:
Originally Posted by canuckster19 View Post
The Yankees get 431 million dollars?
There are actually valid reasons to want to clean that area up and get upper-middle class people to move in (and therefore increase local tax base).

Also, taxpayer subsidies are more than just giving the teams cash to build. It can include building new infrastructure (such as subways or roads) and giving the team land to build on.


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06-14-2017, 01:39 AM
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mouser
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Overflowing irony that some senators in Washington want to dictate to the states how they can or can't choose to waste their own money.

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06-14-2017, 06:31 AM
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Quote:
Originally Posted by LeHab View Post
http://www.espn.com/espn/story/_/id/...-fund-stadiums

On one hand I support but also realize other businesses are getting tax payer fundings and breaks. Will be interesting to see how far this gets and details.
Only reason I can "support" taxpayer funded venues. You can't hand over money to other businesses. Picking and choosing winners has gone so well.

But short of a complete clean up of an area, the benefits are few and far between. Substitution is a forgotten item in this. Yeah you may increase the tax base there, but if all you are doing to is pulling people from another area of your jurisdiction, what have you really accomplished? And is a stadium/arena really the best way to do it?

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06-14-2017, 08:37 AM
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I;ll say the same thing I always say but when it comes to subsidy amount-to-enterprise value, sport teams get way too big of a share for what they are actually worth. I especially believe so because of poor their spinoff effect is.Other industries do a better job of importing money into a city, you just dont see it as sports-fan-wearing-away-jersye is more visible than Boeing/GM/etc doing business in a office somewhere.

The thing is though, for a politician, things like stadiums/arenas are easy ways to get cred as the structures are so visible, and can usually trick the less-educated part of your city into thinking the fundamentals of your city are healthy.

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06-14-2017, 08:40 AM
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Originally Posted by mouser View Post
Overflowing irony that some senators in Washington want to dictate to the states how they can or can't choose to waste their own money.
It's not their money. The municipal bond interest credit is a federal tax program. The federal congress is completely within its right to make rules on it.

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06-14-2017, 09:09 AM
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Originally Posted by 93LEAFS View Post
There are actually valid reasons to want to clean that area up and get upper-middle class people to move in (and therefore increase local tax base).

Also, taxpayer subsidies are more than just giving the teams cash to build. It can include building new infrastructure (such as subways or roads) and giving the team land to build on.
My city built a Single-A baseball stadium downtown (not all pro sports team subsidies are for the majors) and it's acted as the renovation hub for downtown. (I've been told the city chose the baseball stadium over a new Honda factory, not sure if true or not as it was before I moved here, but if so, displaced priorities and all that.) It has in hindsight been a net positive but I've yet to hear why the redevelopment would not have taken place without the baseball stadium. Some politicians state this, but never actually back it up. Now they want a new arena downtown that our D-League team will play at (currently share with the ECHL Komets at the county-owned arena that just had a major renovation in the past decade, this proposed arena will be city-owned and there's the unstated rub, city vs. county politics), still in planning stages but proposed costs already went up to above $100 million.

Sponsors are Booker of N.J. (Democrat) and Lankford of Oklahoma (Republican) so it's bipartisan. Surprised Booker is a sponsor, although rumors are he is considering a 2020 presidential run.


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06-14-2017, 09:18 AM
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My city built a Single-A baseball stadium downtown (not all pro sports team subsidies are for the majors) and it's acted as the renovation hub for downtown. (I've been told the city chose the baseball stadium over a new Honda factory, not sure if true or not as it was before I moved here, but if so, displaced priorities and all that.) It has in hindsight been a net positive but I've yet to hear why the redevelopment would not have taken place without the baseball stadium. Some politicians state this, but never actually back it up. Now they want a new arena downtown that our D-League team will play at (currently share with the ECHL Komets at the county-owned arena, this proposed arena will be city-owned and there's the unstated rub, city vs. county politics), still in planning stages but proposed costs already went up to above $100 million.
I don't think it is always the right decision and can be a disaster. But, NYC is one of the wealthiest cities in the world and trying to revitalize its arguably most downtrodden area which was destroyed by terrible development plans (building freeways right through the city with no regard). Allocating infrastructure and encouraging development in arguably NYC's poorest area is probably a net positive.

The real issue is situations like Glendale, where an up and coming suburb tries to lure big entertainment business to a relatively secluded area that is depending on future growth and a continued boom.

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06-14-2017, 09:29 AM
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Originally Posted by 93LEAFS View Post
I don't think it is always the right decision and can be a disaster. But, NYC is one of the wealthiest cities in the world and trying to revitalize its arguably most downtrodden area which was destroyed by terrible development plans (building freeways right through the city with no regard). Allocating infrastructure and encouraging development in arguably NYC's poorest area is probably a net positive.

The real issue is situations like Glendale, where an up and coming suburb tries to lure big entertainment business to a relatively secluded area that is depending on future growth and a continued boom.
Re New York City, agree with all that. But it has nothing to deal with people catching a ball.

Former London mayor Ken Livingstone when they got the Olympics effectively said publicly "we're only doing this for infrastructure improvements".

And commercial real estate is going to collapse in value in the coming decade anyway if you're of the opinion that online retail is only going to grow and cannibalize from brick-and-mortar retail, which is going to destroy cities' tax bases as they'll have all this empty concrete jungle space. So if commercial real estate goes down, how is the Glendale-style business plan viable, even outside of Glendale?

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06-14-2017, 10:09 AM
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KINGS17
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Let the owners pay for their own stadiums.

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06-14-2017, 12:31 PM
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Fugu
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I was wondering why Melnyk would put this fight up!

Okay, with the corrected title, and reading the article, I wanted to copy this over:

Quote:
A report in September by the Brookings Institution revealed that $3.2 billion in federal taxpayer money, through municipal bonds, has been used to fund 36 newly built or renovated sports stadiums since 2000. The largest federal subsidies, according to the report, include the New York Yankees ($431 million), the Chicago Bears ($205 million), the New York Mets ($185 million), the Cincinnati Bengals ($164 million) and the Indianapolis Colts ($163 million).

This does border on the ridiculous.

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06-14-2017, 03:58 PM
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madhi19
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Originally Posted by Fugu View Post
I was wondering why Melnyk would put this fight up!

Okay, with the corrected title, and reading the article, I wanted to copy this over:
Quote:
A report in September by the Brookings Institution revealed that $3.2 billion in federal taxpayer money, through municipal bonds, has been used to fund 36 newly built or renovated sports stadiums since 2000. The largest federal subsidies, according to the report, include the New York Yankees ($431 million), the Chicago Bears ($205 million), the New York Mets ($185 million), the Cincinnati Bengals ($164 million) and the Indianapolis Colts ($163 million).


This does border on the ridiculous.
I said it before, and I will say it again. The biggest welfare queen are not on welfare.

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06-14-2017, 04:24 PM
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Llama19
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New Senate Bill to End Federal Stadium Subsidies Wont End Stadium Welfare

To quote:

"That said, there's one thing Congress could do to kill sports stadium welfare once and for all: impose a 100 percent federal tax, paid for by sports teams, on all state and local spending designed to benefit them. In fact, I [Patrick Hruby] wrote about this idea last week, and you can read all the details here. The only issue with this proposal? In the late 1990s, former Representative David Minge (D-MN) introduced a bill in the House that essentially would have made it law for all corporate welfare. It died in committee, and no one in the Senate even bothered to propose a concurrent measure."

Source: https://sports.vice.com/en_us/articl...tadium-welfare

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06-14-2017, 06:29 PM
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Preds Partisan
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Sports facilities are usually just one part of a larger adjacent development footprint (parking garages, retail, infrastructure, etc) so I guess that part is ok? Yeah, this is stupid.

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06-14-2017, 08:07 PM
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canuckster19
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Quote:
Originally Posted by 93LEAFS View Post
There are actually valid reasons to want to clean that area up and get upper-middle class people to move in (and therefore increase local tax base).

Also, taxpayer subsidies are more than just giving the teams cash to build. It can include building new infrastructure (such as subways or roads) and giving the team land to build on.
Why though? Cause the Yankees were going to pack up and move to Montreal?

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06-14-2017, 08:59 PM
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LeHab
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Originally Posted by canuckster19 View Post
Why though? Cause the Yankees were going to pack up and move to Montreal?
Quote:
WASHINGTON -- New York City officials told a congressional
panel Friday that they didn't do anything improper in shepherding
through $1.3 billion in financing for a new Yankee Stadium, but the
assurances did little to mollify the congressman who is
investigating the deal.

At issue was a six-fold increase in the city's assessed value of
the land, to around $200 million. Rep. Dennis Kucinich, an Ohio
Democrat, suggested the reason was to make it easier to get
tax-exempt bonds to pay for the construction of the ballpark in the
South Bronx.

Meanwhile, Yankees president Randy Levine told the lawmakers
bluntly that the new stadium would have never been built, and the
Yankees would have left the Bronx, without the financing.
http://www.espn.com/mlb/news/story?id=3662987

I'm sure he would

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06-14-2017, 09:02 PM
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Quote:
Originally Posted by Fugu View Post
I was wondering why Melnyk would put this fight up!

Okay, with the corrected title, and reading the article, I wanted to copy this over:

Quote:
A report in September by the Brookings Institution revealed that $3.2 billion in federal taxpayer money, through municipal bonds, has been used to fund 36 newly built or renovated sports stadiums since 2000. The largest federal subsidies, according to the report, include the New York Yankees ($431 million), the Chicago Bears ($205 million), the New York Mets ($185 million), the Cincinnati Bengals ($164 million) and the Indianapolis Colts ($163 million).

This does border on the ridiculous.
$3.2 billion over 20+ years of the stadium building boom isn't a lot when you consider that the Federal Budget is over $3 trillion a year.

This is the 3rd time I have seen a proposal like this. Here is the problem. There are over 100 major league teams in the US. Almost all of them are owned by a billionaire who wouldn't want this to happen. So what are the odds that something 100 billionaires are against gets done?

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06-15-2017, 12:07 AM
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Sports teams can be great for local economies if they have a supportive following. Whenever I head to Winnipeg to watch Jets games which I plan on doing much more often now. I spend a fair bit of cash on local hotels, cuisine and post-game entertainment. I always see it as a win-win-win situation for the tax payers, the local economy and the team. Of course the local tax payers have to be supportive of the team or it's pointless.

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06-15-2017, 01:12 AM
  #23
mouser
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Quote:
I was wondering why Melnyk would put this fight up!

Okay, with the corrected title, and reading the article, I wanted to copy this over:

Quote:
A report in September by the Brookings Institution revealed that $3.2 billion in federal taxpayer money, through municipal bonds, has been used to fund 36 newly built or renovated sports stadiums since 2000. The largest federal subsidies, according to the report, include the New York Yankees ($431 million), the Chicago Bears ($205 million), the New York Mets ($185 million), the Cincinnati Bengals ($164 million) and the Indianapolis Colts ($163 million).

This does border on the ridiculous.
It does highlight the complexities of the discussion.

The federal taxpayers didn't spend $3.2B of their money on the municipal bonds. The argument is that the federal government forewent $3.2B it might have hypothetically collected if all the facilities were built and financed for the same amounts without municipal bonds.

Maybe I'm oversimplifying things, but I don't consider a dollar actually spent by a government entity as being equivalent to a dollar never collected by that government entity.

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06-15-2017, 06:46 AM
  #24
rj
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Quote:
Originally Posted by Llama19 View Post
New Senate Bill to End Federal Stadium Subsidies Won’t End Stadium Welfare

To quote:

"That said, there's one thing Congress could do to kill sports stadium welfare once and for all: impose a 100 percent federal tax, paid for by sports teams, on all state and local spending designed to benefit them. In fact, I [Patrick Hruby] wrote about this idea last week, and you can read all the details here. The only issue with this proposal? In the late 1990s, former Representative David Minge (D-MN) introduced a bill in the House that essentially would have made it law for all corporate welfare. It died in committee, and no one in the Senate even bothered to propose a concurrent measure."

Source: https://sports.vice.com/en_us/articl...tadium-welfare
The bill is not to stop sports stadium welfare once and for all. It's to stop giving tax advantages for doing it. The federal government cannot ban cities and states from doing certain funding. If the city of Glendale, Arizona, wants to enter municipal bankruptcy overspending on shiny sports stadiums, that's on them.

Quote:
Originally Posted by mouser View Post
Maybe I'm oversimplifying things, but I don't consider a dollar actually spent by a government entity as being equivalent to a dollar never collected by that government entity.
That's $3.2 billion not spent by the government on _____ or increase in the national debt based on how you look at it. If you say that doesn't matter or is irrelevant, great, why do any of us pay taxes at all? Because the amount of taxes I'm going to pay over my life will be less than $3.2 billion.

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06-15-2017, 12:27 PM
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mouser
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Quote:
Originally Posted by rj View Post
That's $3.2 billion not spent by the government on _____ or increase in the national debt based on how you look at it. If you say that doesn't matter or is irrelevant, great, why do any of us pay taxes at all? Because the amount of taxes I'm going to pay over my life will be less than $3.2 billion.
Let's say they're successful and make the change. Do you think that would result in the federal government collecting $3.2B in additional taxes going forward?

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