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Letter


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.

Sincerely,

Donald L. Alexander
Western Michigan University
Charles W. Baird
California State University - East Bay
Doug Bandow
American Legislative Exchange Council
John H. Beck
Gonzaga University
James T. Bennett
George Mason University
John E. Berthoud
George Washington University
Elizabeth C. Bogan
Princeton University
Michele Boldrin
University of Minnesota
Samuel Bostaph
University of Dallas
Donald J. Boudreaux
George Mason University
Scott Bradford
Brigham Young University
Wayne Brough
FreedomWorks
David P. Brown
University of Wisconsin - Madison
John Bryant
Rice University
Steven Call
Metropolitan State College of Denver
John S. Chipman
University of Minnesota
Barry R. Chiswick
University of Illinois - Chicago
Gregory Chow
Princeton University
Lawrence R. Cima
John Carroll University
Dennis Coates
University of Maryland - Baltimore
R. Morris Coats
Nicholls State University
John P. Cochran
Metropolitan State College of Denver
Lloyd Cohen
George Mason University
Susan Dadres
Southern Methodist University
Donald R. Davis
Columbia University
Gregory J. Delemeester
Marietta College
Jeffrey Dorfman
University of Georgia
Dennis Ellis
The University of Michigan - Flint
Bert Ely
Ely & Company, Inc.
Paul Evans
The Ohio State University
Arthur A. Fleisher III
Metropolitan State College of Denver
Fred Foldvary
Santa Clara University
Micah Frankel
California State University - East Bay
Kenneth R. French
Dartmouth College
Dave Garthoff
The University of Akron
David E.R. Gay
University of Arkansas
Otis W. Gilley
Louisiana Tech University
Peter Gordon
University of Southern California
Richard L. Gordon
Pennsylvania State University
Kenneth V. Greene
Binghamton University
James Gwartney
Florida State University
David D. Haddock
Northwestern University
Dennis Halcoussis
California State University - Northridge
David R. Henderson
Hoover Institution
Robert Stanley Herren
North Dakota State University
Bill Huneke
Professional Economist
Member, American Economic Association
Steven J. Jordan
Virginia Polytechnic Institute and State University
Raymond J. Keating
Small Business & Entrepreneurship Council
William Kern
Western Michigan University
Daniel Klein
George Mason University
Richard N. Langlois
The University of Connecticut
Robert A. Lawson
Capital University
Stan Liebowitz
University of Texas - Dallas
Yuri N. Maltsev
Carthage College
Deryl W. Martin
Tennessee Technological University
John Merrifield
The University of Texas at San Antonio
Harry Messenheimer
Rio Grande Foundation
Matt Metzgar
Mount Union College
Roy Miller
Fire Privatization Consultants
Tracy Miller
Grove City College
James Mintert
Kansas State University
Jeffrey Miron
Harvard University
Dan Mitchell
The Heritage Foundation
John C. Moorhouse
Wake Forest University
Michael C. Munger
Duke University
Richard F. Muth
Emory University
Lee E. Ohanian
University of California - Los Angeles
David J. O'Hara
Metropolitan State University
James B. O'Neill
University of Delaware
Alexandre Padilla
Metropolitan State College of Denver
Judd W. Patton
Bellevue University
Mattias Polborn
University of Illinois at Urbana - Champaign
Joe Pomykala
Towson University
Barry Poulson
University of Colorado
W. Robert Reed
University of Oklahoma
Timothy Roth
University of Texas - El Paso
Charles K. Rowley
George Mason University
Mark Rush
University of Florida
Michael Saliba
Loyola University - New Orleans
Raymond D. Sauer
Clemson University
Roger A. Sedjo
Resources for the Future
Carlos Seiglie
Rutgers University
John Semmens
Laissez Faire Institute
Rich Shields
The Keller Graduate School of Management
Stephen Shmanske
California State University - East Bay
William F. Shughart II
The University of Mississippi
Neil T. Skaggs
Illinois State University
James F. Smith
University of North Carolina
Vernon L. Smith
George Mason University
2002 Nobel Laureate in Economics
Stan Spurlock
Mississippi State University
Mark Steckbeck
Hillsdale College
Frank Stephenson
Berry College
Courtenay C. Stone
Ball State University
Ren? M. Stulz
The Ohio State University
Leo Troy
Rutgers University
John T. Warner
Clemson University
John T. Wenders
University of Idaho
Robert Whaples
Wake Forest University
James B. Whisker
West Virginia University
John Wicks
University of Montana
Larry T. Wimmer
Brigham Young University
Wayne Winegarden
Marymount University
Gary Wolfram
Hillsdale College
Tom Wyrick
Southwest Missouri State University
Andrew Zimbalist
Smith College
Benjamin Zycher
Pacific Research Institute for Public Policy