This was going to be just a quick item. Via BTF's Newsstand, I saw this fine piece about Houston's Astrodome. Basically, there's a giant building surrounded by parking lots and nobody knows what the hell to do with any of it. Sure, there are plenty of pie-in-the-sky proposals, all of them expensive and none of them anywhere near a good bet for economic or artistic success. Me? I love the building. But rather than see it slowly rot away, I would prefer they razed the thing, ripped out the parking lots, and constructed a lovely nature preserve in the midst of that suburban wasteland.
I'm funny that way, though.
It's a good article, worth reading all the way through. Here's the little bit that I wanted to share with you:
Nonetheless, the Astros began looking for greener pastures in the 1990s. Astros owner Drayton McLane used a textbook maneuver to win a publicly financed stadium, threatening to sell the team to investors who would move the Astros to Northern Virginia if he didn't get a new facility. The timing of the vote worked out well for McLane: Just a year earlier, Houston Oilers owner Bud Adams had announced he was moving the team to Tennessee after he had failed to get a new stadium for his football team. Voters, having learned firsthand that relocation threats weren't empty, narrowly approved the new baseball stadium for McLane with 51 percent of the vote. (McLane has since reached an agreement to sell the team for $610 million, after buying the team 20 years ago for $103 million. Forbes magazine pegs a quarter of the value of McLane's franchise to the stadium that taxpayers built him.)
Now, $603 million doesn't buy what it used to. After adjusting for inflation, the difference between what McLane paid for the Astros and what he sold them for is only about $440 million. If you believe Forbes, something north of $100 million of that was essentially a gift from the good citizens of Harris County.
Nice work, if you can get it.
Of course, that is the way these things have traditionally worked. From the same article: "Zimbalist, in a paper with Harvard’s Judith Grant Long, estimates that stadiums built from 2000 to 2006 had an average public cost of $319 million, when maintenance and foregone tax revenue is included."
Those dollars create value in the franchise, much of which is then removed from play when the owner gets bored with his toy -- or the tax breaks aren't as brilliantly favorable -- and he sells the franchise. Welcome to America. Land of the free, home of the Braves, and a perfectly lovely place to be a billionaire.
See, guys who own baseball teams want to have it both ways. They portray themselves as keepers of some sacrosanct public trust; they don't want the public handouts for themselves. No, no ... It's just that the team can't be competitive without the handout, and of course we can't expect the owner to lose money on the deal. So if we just build them their ballparks, they'll do us a favor by keeping the team around and maybe someday winning some baseball games, too.
I don't know if Drayton McLane really cleared $440 million (in 2011 dollars) on this deal. He might have been losing some money in particular years; that does happen. Of course, he might also have been paying himself and/or various family members hefty annual salaries; that does happen, too.
No matter how you do the math, it's really hard to avoid the conclusion that the citizens gave Drayton McLane a lot of money. If they hadn't given it to him, he could have kicked in (say) $100 million more of his own money to get the ballpark built, and still come out okay in the end without getting his hair mussed, even a little.
Of course, that's not the way Drayton McLane played it. He's only 75, so at least now he doesn't have worry about getting stuck in one of those low-rent retirement communities. Well played, sir.
Really, when I saw that story about the Astrodome, I wasn't inspired to pen some screed. I just thought it was interesting.
No, what inspired this screed was a story that broke Friday night ...
Federal authorities have opened a wide-ranging investigation into the Miami Marlins' controversial ballpark deal with Miami-Dade County and the city of Miami, demanding financial information underpinning nearly $500 million in bond sales as well as records of campaign contributions from the Marlins to local and state elected leaders.
In a pair of lengthy letters delivered to government attorneys Thursday, the U.S. Securities & Exchange Commission gave the city and county until Jan. 6 to deliver everything from minutes of meetings between government leaders and Marlins owner Jeffrey Loria and Major League Baseball Commissioner Bud Selig, to records of Marlins finances dating back to 2007.
In the almost-identical subpoenas, the SEC also requested documents concerning stadium parking garages built by Miami. The Miami Herald reported Nov. 22 that city leaders are now complaining they were hoodwinked into likely having to pay an annual $2 million tax bill on the garages.
Essentially, the SEC is investigating the possibility that the Florida Marlins made campaign contributions to local politicians, fully expecting those contributions to be rewarded by favorable treatment when decisions regarding the new ballpark were made. Pay to play. Or as they used to say in Rome, quid pro quo.
Yes, yes, I know ...
We shouldn't be shocked to discover that the Marlins paid off a bunch of local politicians. We should be shocked that someone might actually do something about it. Because I can promise you, with metaphysical certitude, that there's not been a ballpark built in this country in the last 100 years that didn't include some secret and crooked dealings between the moneyed class and the elected class.
Winston Churchill once said that "democracy is the worst form of government except all those other forms that have been tried from time to time."
He was probably right.
I've got a friend, fairly well-off, who is utterly befuddled by the Occupy movement. He just can't figure out what they want.
What they want -- what people realize they want, every few decades, even in a society as open as ours -- is to feel like they matter. Like everything isn't run, secretly or not so secretly, by millionaires and billionaires who know exactly which politicians to pay off, when they want something done. The mere peasants be damned.
Like I said, Churchill was probably right. When people say "our government is broken," my response is simple: "Compared to what?"
Our government has never worked perfectly, and never will. No government has, or ever will. What we can do is look at individual cases, and estimate degrees of brokenness.
Houston? Hard to say without doing some research. I suspect that Drayton McLane made some targeted political contributions (i.e. payoffs) that didn't hurt his case, and I suspect he seriously outspent his opponents on the way to that slim margin of victory in the ballpark referendum. My personal opinion is that elections shouldn't hinge on who's got more money to spend. A slim majority of the United States Supreme Court disagrees with me. Que sera, sera.
The Washington Nationals' new ballpark was built over the objections of nearly everyone, to the point that the politicians who finally made it happen were voted out of office as quickly as possible. But once you've spent the $686 million, it's gone. Where has it gone to? Well, someday the current owners of the franchise will make a tidy little profit, financed largely by the District of Columbia.
How broken was that process? Again, it's hard to say.
But let me be the first to say, Praise the SEC and pass the ammunition. We know the process that resulted in a $634 million project for the Marlins, financed almost completely by the citizens, was broken. They all are. But this time there's actually a chance that we'll find out how broken. And that someone -- and my, wouldn't this be delicious -- might actually go to jail.
No, we shouldn't get our hopes up. There will be powerful forces trying to protect the millionaires and the billionaires, just as there always are. But usually the SEC doesn't get involved unless they've got a pretty good reason.
Friends, that $634 million is gone. But we might at least hope that if someone goes to jail, or pays a fine that actually hurts a little, there might be some small chilling effect on the perfidy that leads to these deals. Maybe the system would be just a little less broken, for a while.
Oh, except it really won't matter for a while. Because nearly all of the ballparks that anyone wanted have already been built. Thanks a lot, Securities & Exchange Commission. Your timing, as always, is impeccable.