New report questions publicly funding arenas

MILWAUKEE (AP) — A new report says publicly financed sports arenas don't provide an economic benefit to communities, a conclusion that would blunt an argument commonly used to justify construction of new stadiums at taxpayer expense.

The study released Friday by Milwaukee's Legislative Reference Bureau cites studies showing that publicly financed sports venues haven't paid off economically for the cities, counties or state governments financing them, the Milwaukee Journal Sentinel reported (http://bit.ly/14Nag2u ).

The study was requested by Milwaukee Alderman Michael Murphy. It comes as talks evolve on whether the community wants or needs a new arena to replace the BMO Harris Bradley Center in Milwaukee.

"Before we go too far down the road of how to pay for such an arena, it warrants analyzing other similar cases to determine the realistic economic impact the city of Milwaukee could expect as a return on its significant investment," Murphy said.

The report cites the work of Andrew Zimbalist, a sports economist who has questioned the economic impact of new sports arenas.

"One should not anticipate that a team or a facility by itself will either increase employment or raise per capita income in a metropolitan area," Zimbalist said in 2009.

The Legislative Reference Bureau's report says supporters of new arenas often argue that building a new facility will create jobs, stimulate local spending and attract businesses and tourists.

But studies by Zimbalist, sports economist Dennis Coates and others say that's not the case.

"Economists have found no evidence of positive economic impact of professional sports teams and facilities on urban economies." Coates said in a 2003 study.

The reference bureau report also cites a study in which Zimbalist says cities or counties can receive some level of economic benefit in publicly financed stadium deals if the sports franchise agrees to invest in development projects around the stadiums or arenas. But Zimbalist adds that, "professional sports have been historically unreliable when it comes to promises to make such local development investments."

Murphy said the 29-page report should play a role in discussions over any stadium construction in Milwaukee.

"This report raises serious doubts about the type of return Milwaukee could expect on its investment, and I hope it tempers some of the enthusiasm the business community has for public financing of such a project," he said.

Milwaukee Mayor Tom Barrett has said he wants to keep the Milwaukee Bucks in town, but a regional solution needs to be found to decide whether a new arena is warranted.

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