The Missouri Development Finance Board has approved its "share" (according to reports, $5 million) in bond purchases to help fund the first phase of construction of Ballpark Village, the development project located next to Busch Stadium in St. Louis. That aid might be good news for the Cardinals, but it is bad news for taxpayers. The subsidies to Ballpark Village are just the latest example of the use of public money to help some of our wealthiest citizens -- sports team owners -- with little or no economic benefit for the city, region, or state
Since the early 1990s, St. Louis City, St. Louis County, and the state of Missouri have joined together in paying a total of $24 million a year ($12 million from the state and $6 million each from the city and county) to retire the debt incurred from building the Edward Jones Dome in downtown St. Louis. Incredibly, the owners of the dome obtained private financing for only a tiny portion of the stadium's cost (less than 10 percent) and even now are getting ready to seek a whole new set of subsidies to finance a major renovation of the dome that could cost as much as $700 million.
A large body of academic literature supports the conclusion that local and state subsidies to sports stadiums provide no new net economic benefit to the state or region. According to a study by John Siegfried and Andrew Zimbalist, "Few fields of empirical economic research offer virtual unanimity of finding. Yet independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development."
One reason such projects deliver little or no economic bang for the buck is the so-called "substitution effect." New stadiums may attract a lot of customers, but they also take customers from other local businesses: If you spend $150 to attend a football game, that is $150 you likely will not spend going out to dinner and a movie.
Even so, the state has moved beyond financing the construction of stadiums to assisting owners with building projects that are near the stadium. The area surrounding Busch Stadium is now handling more than 3 million visitors every year. This should make that property extremely valuable. If the Cardinals' plan is a good one, they should be able to obtain private financing for the accoutrements surrounding Busch Stadium just as they did when they privately financed almost all of the construction of the new Busch Stadium.
Having a fancy new development such as Ballpark Village might increase the prestige and glamour of downtown St. Louis, but having the rest of the state help foot the bill hardly seems fair. Stop to think about it: Why should the people in Cape Girardeau, Hannibal, Springfield and other places across Missouri be asked to pick up part of the bill for another city's shops and restaurants? If the people of St. Louis really want a Ballpark Village, then they should pay for it themselves.
It should not take the entire state to raise this village.
Michael Rathbone is a policy researcher at the Show-Me Institute, which promotes market solutions for Missouri public policy.