I recently came across this article about Minneapolis and St. Paul using public money to build major sports facilities. According to the article, the two cities have spent hundreds of millions of taxpayer dollars on sports facilities since 1990. Sounds a bit outrageous, doesn’t it? If you wonder why public dollars are ever spent on sports infrastructure, the theory behind it is that sport stadiums spur local economic growth.
Supporters of public financing of sports stadiums say that these facilities will host lots of games that will attract hordes of fans eager to spend money at local businesses. But according to many sports economists, this isn’t true. Major stadiums are usually underutilized and the financial benefits aren’t enough to cover their development costs. In fact, large shopping malls tend to have a bigger impact in terms of job creation and spending.
For Bostonians, it may be nice to know that Boston’s major sports arenas have been funded without taxpayers’ money. Fenway Park, for example, has been renovating for years, adding a new pavilion and increasing seating, but they managed to do it without a single dollar of public money!