The Good, The Bad, and Public Financing of Private Stadia
In Franklin, as in many communities across the country, they are grappling with the issue of a publicly funding a privately-owned stadium. In every publicly-funded stadia debate, it ultimately comes down to this one question: Does the public good warrant the public investment?
“Public good,” in the great stadia debate, is twofold: (1) the community pride associated in the retention or attraction of a sports team, and (2) the improvement to the immediate area near the stadium.
Public investment comes in many forms including infrastructure improvements, zoning changes, tax breaks, to outright cash gifts (in the form of government-issued bonds).
Locally, both Miller Park and the new Bucks arena were subject to the same question. It was determined that the public good warranted a public investment. The construction of the facilities helped retain a major league sports team, as well as improve an existing urban area. In short, Milwaukee is a better city as a result of the teams being here, and the Menomonee River valley, and the northwest side of downtown Milwaukee, are better off with new sports facilities. The public good warranted the public investment.
Franklin’s stadium would presumably host the equivalent of a lower-level minor league baseball team. A request for public investment in the project beyond zoning and infrastructure improvements has been tendered.
Is there demand for a baseball team?
As there is not an existing team in the area, a stadium would be built to attract a team. This begs the question: is there interest in a minor league team? Major League Baseball’s Miller Park is 12 miles away. A non-Major League Baseball team already exists in the area. The Lakeshore Chinooks, of the Northwoods League, play at Kapco Park in Mequon.
To further bolster the demand for a stadium, the University of Wisconsin-Milwaukee (UWM) has agreed to play home games at the proposed Franklin stadium. Unlike the former Milwaukee Braves, the University of Wisconsin-Milwaukee Panthers are not going to move to Atlanta if a stadium is not built in Franklin. In fact, UWM also plays home games at Kapco Park. When not playing in Mequon, they play at Henry Aaron Field located near the UWM campus. UWM has proven they can find a place to play in the metro area.
The largest Chinooks crowd ever was 2,500. The average attendance in their inaugural season of 2014 was 1,300. College baseball in Wisconsin, of which I am personally a big fan, do not draw crowds larger than area high school teams, which is to say about 75-100 spectators when the weather is nice and admission is free. Absent any other information, there would not appear to be much demand for an additional baseball team, let alone another stadium that would seat 4,000, in this market.
Does the area (76th & Rawson) need improvement?
Assuming the community-pride associated with attracting a baseball team is worthwhile, it must next be decided that the landscape of the immediate area needs to be changed on a substantial and permanent basis to accomplish this goal.
The proposed stadium and ancillary development is on undeveloped land. The immediate vicinity near the proposal is largely open expanses where farms once stood. It’s likely that many of the folks living in that area chose to live there for those reasons. The project includes commercial and residential development on the site further changing, fundamentally, the nature of landscape.
As we recall, Miller Park was built on existing developed land in an existing developed urban industrial area. Likewise, the Bucks arena is being built on vacant, urban space. Should a stadium be built in Franklin, it will change the entire landscape of the area forever.
Governmental involvement in private development is not inherently a bad thing. In fact, the Cities of Oak Creek (former Delco site) and Greenfield (84th & Layton), as well as the Village of Greendale (Southridge) have recently been involved in the assisting private developers. The significant difference, however, is that those communities had existing, aging commercial properties that were obsolete and blighted in the previous form. Short of the local government getting involved, the properties weren’t going to improve.
What is the public investment?
If it is concluded that (1) attracting a privately-owned minor league baseball team is worthwhile, and (2) improving the area near S. 76th Street and Rawson Avenue is essential, then the question turns to public financing.
States and counties have a number of tools available to raise revenue, such as sales and income tax. Municipalities, like Franklin, do not. Their primary source of revenue is the Franklin property taxpayers.
Outside of raising property taxes, local governments have the ability to issue bonds to raise revenue. Local governments may issue bonds and raise revenue for the purpose of improving a specific region (often referred to as “TIF” districts). With the revenue generated from the bonds, the city can provide the private developer with cash to start a project. If the property values increase within the TIF district, the taxes are diverted back to pay off the bondholders. In crudely simple terms, this would appear to be the direction headed for the Franklin stadium proposal.
Public financing of any project is not without risk, however.
It is possible that the property values in and around the Franklin stadium project would increase as a result of the proposed project. There are no guarantees, however. As we’ve also seen with other stadia projects, when the repayment is contingent on other projects, the timeline for repayment is subject to market forces. Further complicating the equation is that portions of the development are on Milwaukee County land exempt from local property taxes. It’s also possible that the quality of life of private landowners, particularly residential, may decrease as a result of the development and traffic.
The good people of the City of Franklin, by and through its’ Common Council, will decide if the public good (i.e., attracting a baseball team and 76th & Rawson improvements) warrants the substantial risk of public investment.
While the answer seems rather obvious to me, and any other fan of “The Simpsons” (see Lyle Lanley’s “Monorail”), there will be those who will noisily engage in name-calling of those charged with the responsibility of making a decision (or even raising questions about the proposal). For those of us who’s wallets are out of reach, it will be interesting to watch as the Great National Stadia Debate plays out in our own backyard.