October 22, 2004

Four out of five economists agree

Ninety economists from across the country have signed on to an open letter to the D.C. council criticizing Mayor Anthony Williams' $440 million Expos stadium plan as economically unjustified. They write:

A vast body of economic research on the impact of baseball stadiums suggests that the proposed $440 million baseball stadium in the District of Columbia will not generate notable economic or fiscal benefits for the city. 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.

Research also suggests that a baseball stadium alone will not revitalize the Anacostia waterfront. Because sports stadiums are not used most of the year, they do not stimulate much development outside the stadium.ÝMost modern stadiums include restaurant and other entertainment offerings, limiting the money that goes to neighboring businesses.

A new stadium cannot be expected to generate a net increase in economic activity in the Washington metropolitan area, but it may shift some entertainment spending from the Maryland and Virginia suburbs into the District. Nevertheless, the economic benefits to the District are not likely to outweigh the large stadium subsidy proposed by the District. At least 80 percent of the costs of the $440 million stadium are expected to be supported with public funds.

In short, it is dubious to justify the use of public funds to subsidize construction of a DC baseball stadium on economic development grounds.