Bipartisan Pushback on Kansas City Stadium Deal
A subsidy "war between the states" illustrates the profound difference between the interests of politicians and those of the people.
The Kansas City Chiefs NFL pro football team and Major League Baseball’s Kansas City Royals have been haggling with the state of Missouri over a hoped-for stadium deal—meaning, a big taxpayer subsidy for the two organizations. Both political parties are balking, Front Office Sports reports:
Even in a sharply divided political climate, opposing stadium funding has become a bipartisan issue, at least in Missouri.
Soon after Gov. Mike Kehoe called a June 2 special legislative session, in part to review a potential stadium bond measure for the NFL’s Chiefs and MLB’s Royals, opposition has mounted from both the political right and left to the effort and potentially could derail it.
Conservative Republican state legislators are taking a populist, taxpayer-fairness position:
The state’s conservative Freedom Caucus has said it is a “hard no” on what it considers a billionaire bailout. The bill under consideration would allow the teams to bond up to the annual amount they generate in state tax revenue over 30 years, in turn funding up to half of new or upgraded stadiums. The caucus, however, is seeking broad-based tax relief and has threatened to tie up the bill in procedural blocks.
“If Gov. Kehoe and legislative leaders insist on using taxpayers’ hard-earned dollars for a half billion-dollar (or more) handout to billionaire sports team owners in a standalone bill, the Missouri Freedom Caucus will vote against such a proposal and will consider utilizing any tools at its disposal to stop it,” the organization said.
Missouri Democrats are engaging in explicit logrolling, conditioning their support on more taxpayer money to be sent directly to their interest groups:
Democrats, meanwhile, have a separate objection that Kehoe’s bills for the special session include just $25 million in emergency disaster recovery funds for a St. Louis area that was recently battered by tornadoes—an amount far less than what’s contemplated for the stadiums.
“The [stadium] conversation can’t even begin until serious disaster relief is considered,” state Sen. Stephen Webber told the Missouri Independent. “Why do I care about a billionaire’s stadium when people have lost their homes? There’s absolutely no way we’re going to serve a billionaire a feast and leave crumbs for people who just lost their homes. That’s not happening.”
Missouri had set up a bond program for a potential deal, which expires at the end of this month. That adds to the state government’s urgency in completing a subsidy deal, on top of the fact that neighboring Kansas, just across the river, “has already made competing pitches to bring the Chiefs and Royals across the state border,” Front Office Sports reports.
The contiguity of the two jurisdictions competing for these two franchises emphasizes the dynamic in these negotiations. The team owners can pit one state against the other, and the competition brings them a much higher subsidy than they could hope to get without the threat of moving across the border.
The same is true, however, everywhere a stadium deal nears the end of its term or a team’s owners decide that their facility is no longer new and fancy enough to impress the owners’ friends and acquaintances, live up to their self-image (however grandiose), and show other owners around the league just who is the best of the best.
The city and state governments, meanwhile have ego problems of their own. No city or state chief executive wants to be the big idiot who let a beloved sports team get away. Seldom does a government stand firm and let the team move without an intense effort to keep it. The Oklahoma City Thunder, now in the NBA finals, were the Seattle Supersonics until 2008, when they relocated to the Sooner State because Seattle and the state of Washington refused to give the team’s owner, Starbucks CEO Howard Schultz, money for a stadium renovation.
Of course, Seattle and Washington wanted to keep the Supersonics; they just flubbed it, apparently hoping that the courts would force the team to stay. Governments generally conduct cost-benefit analyses of these proposals and find that, lo and behold, the deal will create jobs and bring in much more tax revenue through new business than is lost through the subsidy. That has led to the current mania in which these stadium deals have ballooned to include “entertainment districts” that ditto the jobs-and-revenue myth and cost even more.
The public, the press, the local business community, and the local and state governments largely pretend to believe these dreams, because they all really want the team for the sake of civic pride. It is true that once-woebegone cities such as Oklahoma City and Indianapolis have experienced dynamic growth after using taxpayer subsidies to lure pro sports teams. People do get excited about success, and when a city wins a sports team, the people are happy with that, even though they are probably getting a bad deal.
I won’t argue that those cities would have had the same growth without the sports expansions; there is no way to prove that. Indianapolis grew from a sleepy backwater into a, well, major league city once the Colts (NFL) and Pacers (ABA, then NBA) came to town. The population of the Indianapolis metro area grew from 838,000 in 1980 to more than 1.9 million today. Oklahoma City has consciously followed Indianapolis’s blueprint, expanding from one downtown hotel to 30 since 1993.
In the case of Indianapolis, the population growth occurred in the suburbs, as did much of the economic growth, and the same is likely to happen in Oklahoma City, where 709,000 of the metro area’s one million people live within the city limits. The residents of these cities may be happy with their sports team deals, but the suburbanites have much more to be happy about.
Chances are, then, that the Chiefs and Royals will get what they want, western Missouri and eastern Kansas pro sports fans will get what they want, the politicians will get what they want, and the public will get to pay for it. That is politics in its very essence.