Wednesday, November 7, 2007

The D.C. City Council Gets What They Bargained For

There is a some first class righteous indignation coming out of the D.C. City Council over the Nationals' decision to host a black tie charity gala and their FanFest in the Maryland suburbs rather than the District:

"I guess we're like Charlie Brown or Rodney Dangerfield. We can't get respect," council Chairman Vincent C. Gray (D) said yesterday. "This is just an outrage" . . ."We gave them a $611 million free stadium. I think that entitles us to have their gala at our businesses," council member Carol Schwartz (R-At Large) said.

No, it doesn't, Ms. Schwartz. If you wanted such an entitlement, you would have made it a condition of the funding, which you didn't. As for you Mr. Gray, you forfeited the right to respect when you willingly gave hundreds of millions of dollars to a baseball team with scant few strings attached and only the hope that, out of the goodness of its heart, it would go above and beyond its formal obligations and try to do nice things for the city. That was the deal. You made it, and you did so with eyes wide open and the entire metro area watching, so stop your stinkin' crying.

None of this is to say that the Nats are evil for hosting their events in Maryland. Sure, prudence and political savvy may have counseled that they try and do more things in D.C., especially so recently after being given so much money by the city, but (a) they were never required to; and (b) Kasten and company spell out some decent business reasons why they didn't in the case of these particular events, the best of which was that they were given free space for their gala by the Maryland hotel, and that means more net money goes to the charity.

That aside, this is what happens when governments get in the business of subsidizing multi-billion dollar businesses without asking for much of anything in return. You were suckers for paying for a building that will make the Lerners and their brethren in baseball ownership millions, but you were never misled.

Stop the phony outrage, City Council, and take the political medicine you have coming to you.

Update: Chris Needham (he of the excellent Capitol Punishment blog) makes an excellent point in comment #1 below.

(photo from the Onion. I'll take it down if you are the Onion and you complain)


Chris Needham said...

What bugs me about the whole thing is what's left unsaid by everyone involved.

This boils down to a squabble over a few thousand dollars of tax revenue.

It's clearly about the money, but nobody wants to say as much!

Anonymous said...

I recently met with a senior exec at a real estate / sports holding company. He said that the sports teams they own (several) are loss leaders for the real estate development that happens around the magnet of the stadium/team, and that the profit potential of development far outstrips sports. The fact that major American cities are oblivious to the realities of this type corporate gamesmanship, nearly 20 years after W and co. started its modern era with the Ballpark at Arlington, and associated land development, boggles my mind. Take my home-town team, for instance. Do a search on "Jacobs Cleveland Owner" - the third link that pops up is "David H. Jacobs, a developer and owner of the Cleveland Indians..." Hmmm.

Pete Toms said...

Anonymous you are bang on.

Lewis Woolf's desire for a new stadium in Fremont is really about developing 200 acres. St Louis is going the ballpark village route as well.

I agree that publicly financed construction of stadiums ( stadia ? ) and related infrastructure is really bad government, it seems pretty much unanimous. I think the reasons that it still happens is that it is REALLY, REALLY popular with the constituents who are most in favor - fans & the construction industry. Politicians are also easily blackmailed by franchise owners because it is embarrassing for them to have the home team leave during their tenure.

I hear a lot today from stadium proponents about the urban renewal / rejuvenation associated with their developments. DC was an example as is Newark. The recently opened Prudential Centre will evidently be key in transforming downtown ( is there a downtown? I've only been to the airport ) Newark. Evidently the word didn't filter down to ESPN talking hockey head Barry Melrose who while commenting about the new arena also made some "negative" remarks about the city. I read recently that the NFL stadium in Baltimore ( I don't remember the name ) has done little in improving the surrounding area where it is situated, contrary to claims by it's supporters that it would.

As well as real estate, fortunes are being made by teams starting their own RSN's. A Rod was valuable for Tom Hicks in this area, YES is worth triple what the Yankees are, Angelos is doing great with MASN...

And still the media and Web will be chock full of disbelief at he money that Carlos Silva will get this offseason. I could care less that he'll get $40 - $50 million. Anonymous is right, it's not about the franchises' balance sheets.

Shyster said...

Great points, Pete and Anonymous. Baseball is wonderful, but we all should remember that, in and of itself, it is tiny compared to the real estate and entertainment industries at large.