Miami Dolphins’ Stadium Proposal Kicks Off a Debate in South Florida
Two Sundays ago, the Baltimore Ravens hoisted the Lombardi Trophy as champions of the National Football League. According to the NFL, however, the true victor in this year’s Super Bowl was the city of New Orleans.
The NFL has for some time valued the annual game’s economic stimulus to the host city at around $500 million. The allure of hosting a Super Bowl is obvious, yet some of the steps that cities must take to be granted the privilege have proven to be controversial. Recently, for instance, the NFL’s selection process has favored cities that invest heavily in their local sports facilities.
That’s a problem for the Miami Dolphins. They have a long-storied history in the NFL, but there is no denying that the team needs work to be competitive – and so does their home field, the 25-year-old Sun Life Stadium.
Team officials recently unveiled a plan for a major overhaul of the facility. They argue that this proposed $400 million upgrade goes well beyond a mere renovation but would nonetheless be much cheaper than building a completely new facility.
In touting the project, team owner Stephen Ross emphasizes the importance of modernizing the facility in order to remain competitive in efforts to host large sporting events – chief among them the 2016 Super Bowl, which will be the league’s 50th.
Of the projected $400 million cost to upgrade the stadium, Ross had pledged that he is “…willing to make the initial and most substantial investment…” by putting up a majority of the costs – 51 percent, to be exact.
Many Dolphins fans now hope that Miami-Dade County will agree to offset the remaining costs with state and local tax revenue – providing a direct subsidy of $3 million a year and raising hotel tax rates by 1 percent.
Supporters argue that this would be a good deal because the area stands to recoup those costs by continuing to host elite sporting events, including college football’s national championship game, which currently rotates among four cities.
Critics of the deal urge residents to remember the one-sided public-funding deal reached during the construction of Marlins Park, the area’s Major League Baseball stadium. That deal even prompted investigation by the U.S. Securities & Exchange Commission. The Marlins’ owner has taken flak for placing the burden of hidden long-term costs on the public and enticing elected officials to play ball through campaign contributions.
Having received both support and backlash for the idea, Miami-Dade County Mayor Carlos A. Gimenez, who has backed the deal, now supports holding a referendum to decide whether public funds will be used, and the team has come around to letting voters have a say. He has also announced that negotiations on details of the deal will take place within the realm of public scrutiny, thereby easing fears of repeating what happened with the Marlins.
Terms of the deal aside, economists have long argued about the monetary implications of hosting sporting events. Their findings vary, but never are they as optimistic as the NFL’s. For example, Victor A. Matheson, Associate Professor at the College of the Holy Cross, questions the traditional measures of the economic impact that the Super Bowl has on host communities.
Matheson notes that the benefits are often overstated because of the tendency to overlook the socalled “leakage” effect. That is, even though such events do spur monetary exchanges, once the event is over, only a fraction of this money remains in the local economy.
Matheson illustrates this by citing the example of national hotel chains. Their operators benefit from the increased demand – often by raising their rates – but they don’t necessarily invest their newfound capital in local operations.
Matheson adds, “…you have lots of dollars changing hands, but it’s really money being sucked out of people’s hands and disappearing, rather than money that goes to build the local economy or repay a big stadium subsidy.”
Therefore, if Matheson is correct, taxpayers and local businesses in South Florida could find themselves getting fewer of the concentrated economic benefits promised to them by the NFL and the Dolphins.
Granted, backers of the deal have also cited intangible benefits ranging from regional pride to publicity. They note that for snowbound fans up north watching the game on TV, the sight of Super Bowl spectators enjoying balmy mid-winter weather amounts to free tourism advertising.
Moreover, even during the days leading up to the game, much of the national TV coverage emanates from glamorous regional venues – Bourbon Street when the game is in New Orleans, SouthBeach’s Ocean Drive when the game is in South Florida.
Supporters of allowing public funds to be spent on these kinds of facilities also argue that the stadium’s construction project and the games that it will eventually attract can help to create jobs, as can the tourism stimulated by game-related publicity.
Yet there is a legitimate disagreement among the experts concerning the durability of these economic benefits. The construction jobs, for instance, would last only as long as it takes to complete the project, and some of the intangible benefits are contingent on teams performing well on the field – for which modern playing facilities are not a prerequisite.
The Heartland Institute’s Joseph Bast is critical of the tendency to use intangible benefits as justification for public subsidies. “Those ‘intangible’ benefits must be weighed against similar benefits that would have been created if the money were spent on something else. New schools, better police protection, or a thriving downtown business district all would have a positive effect on the community’s image and its residents’ self-esteem.”
If and when the referendum occurs, Miami-Dade residents who turn out to vote will need to weigh all of these factors, pro and con, then answer a basic question that often crops up in connection with major policy decisions: Are the benefits worth the cost?