Subsidy Sheet: Tackling Attempted End Runs Around Public Scrutiny of Sports Subsidy Deals 

The Illinois legislature is in the middle of debates over whether to subsidize a new Chicago Bears stadium with what could be more than a billion dollars in tax breaks and infrastructure spending, and one state house rep has a simple request: Rep. Kambium Buckner, a Democrat from Chicago, has introduced the Stadium Transparency and Responsible Spending (STARS) Act, which would require any spending on sports venues to be transparent about its public costs:

• Any subsidy agreement must be posted online for at least 30 days before it can be enacted.
• The state Commission on Government Forecasting and Accountability must conduct a “neutral cost-benefit analysis of the agreement,” with the sports franchise covering the cost of preparing the study.
• At least two public hearings in the affected community must be held.
• The sports franchise must reimburse in full public schools, public libraries, or public fire, police, or emergency service for any loss of property taxes as a result of the deal.
• A clawback provision where the sports franchise must repay all subsidies, plus 5% annual compounded interest, if it relocates or fails to meet any stated community or economic commitments.
• Any franchise receiving stadium or arena subsidies must post on its website annual reports on the number of jobs created, tax revenue generated, and community benefits delivered.

While transparency provisions have been proposed for corporate subsidy deals before — see Good Jobs First’s recommendations for data center incentives — this would be the first time a state has placed such requirements on sports spending, which has consumed a staggering $33 billion in public funds in the United States over the last half-century. New York could badly use such a law, given its history of sports projects rushed through without public oversight:

New York Sports Subsidies Rushed Through With Minimal Public Review

• $850 million for Yankee Stadium
  State spending and parkland alienation for the new Yankee Stadium was approved by the legislature in 2005 with no public discussion, as state legislators had the bills literally dropped on their desks for signing the last day of the session. Though Yanks exec Steve Swindal vowed at the time that “there will be no public subsidies,” the project ended up costing the city and state an estimated $850 million to replace parkland, build garages, and provide tax breaks.
  
• $1 billion for Bills Stadium
  The Buffalo Bills stadium received over a billion dollars from New York State and Erie County after Hochul waited until 11 days before the end of the 2022 legislative session to send the bill to the legislature — which approved it despite conducting no economic studies and holding no public hearings.
  
• $516 million for Queens soccer stadium
  The New York City Council signed off on a new Queens soccer stadium for NYC F.C. while the city Independent Budget Office was still analyzing whether its included 49-year tax exemption would cost the city nothing, as the city Economic Development Corporation insisted, or $516 million, as an initial IBO estimate suggested.

On Deck, Hundreds of Millions More: Albany soccer, Niagara Falls hockey, Buffalo hockey
And New York’s sports team owners aren’t done: A well-connected developer is seeking state “revitalization” money to help build a minor-league soccer stadium in Albany, while Niagara Falls is discussing whether to build a $200 million hockey arena for a minor-league team that doesn’t yet exist. Want to know how these projects would affect school and police funding in those cities? Want to get time to ask questions about the deals in a public forum? New York may have to get its own Buckner-style bill before New Yorkers are guaranteed the right to look under the hood of stadium deals before the state rubber stamps them.

–

More NY corporate giveaway news from this week:

• The tumult over Gov. Hochul’s plan to boost power generation continues, as the Citizens Budget Commission has called for New York State to rethink its plan, saying it doesn’t properly calculate costs, account for the impact of federal policy changes, or identify what incentives would be provided. Meanwhile, the governor’s push for more nuclear power plants to meet the needs of the state (and its planned slew of data centers) is prompting environmental protests as well.
  
• As if New York State handing out $800 million a year in TV and film production tax credits isn’t enough, the New York City Economic Development Corporation is tacking on $90 million in tax breaks for new production studios in Brooklyn. EDC promises that the new studios will create 2,400 jobs, though numerous studies have shown that TV and film subsidies are money losers for taxpayers.

–

If you got this from a friend, sign up here. Please send questions and tips to communications [at] reinventalbany [dot] org. We look forward to hearing from you!