Stadiums Built On Debt

The NFL’s Giants and Jets’ New Meadowlands Stadium in East Rutherford, N.J., may have been financed entirely by private funds but taxpayers in the area aren’t off the hook just yet.

Giants Stadium, the former home to teams at the Meadowlands Sports Complex, was razed this year to make way for the New Meadowlands’ parking lot, but the ghost of the facility reportedly still carries a huge debt load – $110 million.

A recent New York Times report chronicled the history of publicly financed venues, finding that many municipalities around the country that chased the dream of owning successful stadiums and drawing pro teams have found themselves mired in debt years after the life of the venue.

Cities like Seattle, Indianapolis and Philadelphia continue to pay millions for venues that were demolished years ago.

And other cities including Houston, Pittsburgh and Memphis struggle to find new ways to utilize (and pay for) venues that once housed pro sports teams but left for greener pastures.

Economists interviewed by the Times were nearly unanimous in their views that financing stadiums with public money rarely pays off. The few success stories have included large injections of private cash or dedicated taxes, they said.

“Stadiums are sold as enormous draws for events, but the economics are clear that they aren’t helping,” Andrew Moylan of the National Taxpayer’s Union said. “It’s another way to add insult to injury for taxpayers.”

So what exactly went wrong in New Jersey, where taxpayers reportedly still owe $266 million total on remaining bonds for the Meadowlands Sports Complex?

“The Meadowlands wasn’t a bad idea, but rather than pay it off, they let it ride,” Manhattan Institute fellow Steven Malanga said. “Politicians essentially turned a good thing into a money loser for taxpayers at exactly the wrong time.”

The complex was initially profitable, generating $60 million for the state its first six years through its racetrack and the Stadium, the paper reported.

But N.J. officials kept building, adding the costly Izod Center and other facilities. In recent years, funding issues have wreaked havoc on the $2 billion Meadowlands Xanadu mall and entertainment complex, which has faced numerous construction delays.

To stop some of the bleeding, Gov. Chris Christie has backed proposals to lease the Izod Center and the Meadowlands racetrack to outside operators, the paper said.

He was less certain how the state will find a way to pay for the parking lot that once was Giants Stadium.

“Believe me, I’m not unaware of the debt situation that was left here in my lap by decisions made by previous administrations,” he told the Times. “But we’re just going to have to deal with it.”