COMMONWEALTH COMMENTARY

Comments on important state issues of interest to Pennsylvanians from

The Commonwealth Foundation

FOR PUBLICATION

August 2, 2001

 

Private Investors—Not Taxpayers—

Should Fund Lancaster Baseball Stadium

Grant Gulibon, Senior Policy Analyst

The Commonwealth Foundation

 

 

The siren song of professional baseball is seducing yet another Pennsylvania community. This time the object of affection is Lancaster, and taxpayers had better hope this love affair hits the rocks, or else they could be buying an expensive wedding gift—a new taxpayer-funded stadium.

 

Representatives of the independent Atlantic League, an eight-team minor league circuit with clubs in Maryland, Pennsylvania, New Jersey, New York, New Hampshire and Connecticut, have been in contact with the Bring Baseball Back to Lancaster County Committee (BBBLCC). The league is looking for a home for a dormant franchise, and the committee is in the midst of a 12-year effort to find a site for a minor league stadium. After a recent meeting with Lancaster County political and civic leaders, the Atlantic League decided to begin a feasibility study to determine whether or not the Lancaster market is a worthy location—and if the answer is yes, state taxpayers will have to step up to the plate and pay at least half the cost of a new, $16-20 million stadium, while local taxpayers could be tapped for millions more.

 

It is presently envisioned that the Pennsylvania Department of Community and Economic Development (DCED) would provide a grant to cover half of the cost of the proposed facility, and the Lancaster County municipality in which it is located would be responsible for the other half and then own the stadium. At this point, it is not clear whether or not local tax dollars would be needed to fund the municipal share of the project cost, but stadium rents and revenues are reportedly under consideration as sources for the initial funding and future maintenance of the facility. Such revenues should be considered public dollars, because they would not be possible without the participation of state taxpayers and would also be coming from a publicly owned facility.

 

Regardless of how many taxpayer dollars they are ultimately asked to contribute to a stadium project, Lancaster County residents can count on hearing about the substantial economic impact it will generate—in spite of the reams of evidence about other, similar projects around the United States that put the lie to those claims. Already, supporters of the proposed stadium project are already saying that it would be a great community asset that would host not just professional baseball, but a number of other public events. If this is the case, then it should be private investors, not state and local taxpayers, who pay to build it. A plan to privately finance such a

stadium was apparently developed two years ago, but it never came to fruition. So if the Atlantic League decides to put a team in Lancaster, state and probably local taxpayers will be asked to finance—and assume the risk for—a project that private investors, for whatever reason, chose not to pursue just a short time ago.

 

With that being said, it is certainly possible that a Lancaster Atlantic League franchise could be an attractive target for private stadium investors. The league can point to a number of former major leaguers among its players, managers and executives. According to league CEO Frank Boulton, total league attendance will approach 2 million fans this year, and one of its teams, the Long Island Ducks, has averaged 102 percent of capacity. But not every Atlantic League franchise has been a success. The demise of the Aberdeen Arsenal illustrates the pitfalls that can confront even the most savvy, well-connected private investors, as well as the perils taxpayers might face if forced to participate.

 

The Arsenal began play a year earlier than originally planned and folded after just one Atlantic League season, during which it averaged 552 fans per game. This occurred despite the fact that at the same time, construction plans were in place for a new stadium, to be developed in conjunction with Baltimore Orioles star Cal Ripken Jr.’s Tufton Sports & Management as part of a larger baseball complex. The financing for the $38 million project included $14 million in public funds. At present, it is still not guaranteed that the stadium will have a tenant by the time of its scheduled April 2002 opening, which would be a year later than originally scheduled. According to the July 27, 2001 print edition of the Baltimore Business Journal, the Orioles and Tufton Sports have a "handshake agreement" to put a Class A New York-Penn (NY-P) League team in Aberdeen, but Tufton and the NY-P League have not yet decided which existing team to move there. The Aberdeen project may ultimately be successful, but the uncertainty surrounding it illustrates why taxpayers should not be involved in funding such projects.

 

If private investors believe that minor league baseball is viable in Lancaster, then they should be eager to fund a stadium. If not, then taxpayers should not be forced to become venture capitalists for a project rejected by the market. Other Pennsylvania communities have already discovered that giving in to the temptation to subsidize professional sports creates a number of difficult problems that outweigh any benefits they receive—no matter how much they love their teams. In deciding whether or not to draw on state and/or local tax dollars for such a risk-filled project as a minor league baseball stadium, Lancaster baseball boosters need to think with their heads, not their hearts—and use private funding to pay the entire cost of any new facility.

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(Grant Gulibon is Senior Policy Analyst at The Commonwealth Foundation, a non-partisan, non-profit public policy research organization based in Harrisburg, Pa. For further information or for additional comments, please call 717-671-1901 or visit www.commonwealthfoundation.org.)