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An Open Letter to Governor George Pataki, Mayor Michael Bloomberg, and the New York City Council from 106 Economists* on the Likely Impact of a Taxpayer-Financed Football Stadium in New York City
May 23, 2005
A vast body of economic research on the impact of sports stadiums suggests that the proposed Jets Stadium on Manhattan?s West Side, now estimated to cost $1.925 billion ? more than three times the cost of any other NFL stadium ? will not generate significant net economic or fiscal benefits. Most studies find that new sports stadiums do not increase employment or incomes, and sometimes have a modest negative effect on local economies. The reason appears to be that sports stadiums do not increase overall entertainment spending but merely shift it from other entertainment venues to the stadium.
Rather than providing economic revitalization for an underutilized area, the proposed football stadium would occupy four blocks of prime waterfront land along the Hudson River. Three of these blocks are owned by the Metropolitan Transportation Authority (MTA). An appraisal commissioned by the MTA estimates its property alone is worth $923 million. Yet, under political pressure, the MTA has accepted the Jets? bid of $250 million and turned down a competing bid of over $400 million. The MTA?s below-market sale is a public subsidy of at least $150 million. The MTA itself already receives hundreds of millions of dollars in annual taxpayer subsidies, which makes it an even more inappropriate vehicle for funneling subsidies to millionaire Jets stakeholders.
In addition, the State and City each plan on providing direct subsidies of $300 million. Payments in lieu of real property taxes and sales taxes on construction materials that are normally collected by the City and State will be used to service an additional $450 million of tax-exempt bonds for the stadium. The stadium will also be exempt from mortgage recording taxes. Lastly, the City and the State will pay for improvements: $30 million for a pedestrian tunnel connecting the stadium to the Jacob K. Javits Convention Center and $66 million for a lobby, game porch, and other spaces physically connected to and servicing the stadium.
These massive subsidies are both unnecessary for economic development and very inappropriate given that New York City and State already place heavy tax burdens upon their citizens. Economically speaking, these subsidies, along with the additional tax burdens and/or opportunity costs they would place upon taxpayers, are unwise.* Institutions are listed for informational purposes only.