Another Troubled City, Another Subsidized Stadium to the Rescue

Can a taxpayer-subsidized ballpark spark enough economic development not only to pay for itself but to revive an urban dead zone in one of America’s poorest cities?

That’s the big bet the city of Hartford, Connecticut has decided to make.

Currently under construction, the 6,000-seat Dunkin’ Donuts Park will be home to the Yard Goats, a double-A affiliate of the Colorado Rockies. A study commissioned by the city council estimates the ballpark could generate over $350 million in economic growth—turning a stretch of parking lots and vacant buildings into a vibrant residential neighborhood. Hartford hasn’t seen that kind of development in decades.

So if development will come, why not have the city and taxpayers build it? For starters, the stadium is already $10 million over budget and almost two months behind schedule. Homeless on opening day, the Yard Goats will have to play on the road until May 31st.

For most other cities, these delays and cost overruns would be more of an embarrassment than a crisis. But Hartford is running out of cash. Last year, the city endured a debt downgrade and cuts in municipal services. Mayor Luke Bronin has already announced hiring and spending freezes in the wake of longstanding municipal deficits.

Add to the mix Hartford’s longstanding struggles with deep poverty and crime, and many are left wondering why the city is spending money on a ballpark in the first place.

Critics fear the development won’t materialize, leaving taxpayers on the hook for the debt-financed $66-million stadium. As Hartford Courant columnist Kevin Rennie asked, “Why should the people of Hartford—many of whom are very, very poor—why should this burden be placed on them?”

The ballpark’s boosters see a calculated bet, not a burden. Economic projections for the development include over a thousand permanent jobs, a brewery, new retail, and over a hundred new residential units. Already, Hard Rock International has committed to building a hotel opposite the ballpark.

"I see the stadium as a catalyst for economic development in a neighborhood that has not had any investment in years, and believe the state should participate," State Senator John Fonfara told the Hartford Courant in March.

“This is what’s going to help turn Hartford around,” University of Connecticut economist Fred Carstensen told Reason TV, “and it’s clearly the kind of big bet that we make.”

Carstensen, who was commissioned by the Hartford city council to study the effects of a ballpark, acknowledges that the ballpark by itself is a money loser. His analysis, "Economic Impacts on Hartford of Developing Downtown North," shows how the stadium will generate new development and more than pay for itself—but just barely, under the best of circumstances.

“When you’ve got all the pieces in place, then they come out ahead,” he says. “Not by a lot. I mean, this is not some kind of a big win. But the question was: How do you protect the city from the point of view of being able to cover the cost of the stadium over the 20-year time horizon to cover the cost of the bonds?”

Several national studies cast doubt on Carstensen’s analysis. Sports economists Brad Humphreys and Dennis Coates found that the presence of a professional sports team rarely boosts in the local economy, and often ends up as a burden or a boondoggle. Similar conclusions have been echoed by studies at the Brookings Institution, Stanford University, and others.

To his credit, Carstensen has been willing to engage some of his toughest critics. His discussion with Field of Schemes author (and stadium subsidies über-skeptic) Neil deMause was a revealing, if wonkish, debate about the ups and downs of stadium economics. (DeMause ended up softening his views about Dunkin' Donuts Park, though he maintains the ballpark is a big risk for the city).

The entire Downtown North development is shrouded in piles of concrete and rebar right now. The full impact of the project won't be known until at least 2020, when construction is scheduled for completion, and Hartford's big bet either starts to pay off—or becomes another burden for taxpayers to bear.

UPDATE: Neil deMause contacted me a day after the video was published to clarify his perspective. He wrote:

"I didn't "soften my views about Dunkin' Donuts Park" — I softened my views about Carstensen's study, once he pointed out to me that it acknowledged the stadium was a terrible deal, and just had hopes for the surrounding development. (Which is still arguable, but less crazy than the stadium deal.)"

Runs about 9:40 minutes.

Produced, shot, and edited by Todd Krainin.

Music: "Counting Sundays", "Thankful (outro)" by Pyrn and "Bad Scene" by Poddington Bear.

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