The Continuing Stadium Mess: More Effects of Using Other People’s Money
I’m shocked, shocked I say that this would happen in a case with a publicly-subsidized sports stadium.
Eight years ago, as the St. Louis Cardinals aimed to build a new baseball stadium, team owners signed an agreement with the city worth millions of dollars a year in tax breaks.
In exchange, the team agreed to a series of annual perks for the region’s residents — 100,000 free tickets, 486,000 seats for under $12 and $100,000 in donations to recreation for disadvantaged youths.
The Cardinals also agreed to give the city a cut of profits made if any portion of the team was sold.
Then, last year, owners sold a sizeable chunk of the Cardinals — more than 13 percent. Now, a group of anti-public-stadium advocates is alleging that the team owes the city hundreds of thousands of dollars.
And, despite another multimillion-dollar budget gap anticipated for the coming year, the city isn’t checking into it. City officials acknowledge that they have never really kept tabs on the agreement.
…Several city officials, including Barb Geisman, the former deputy mayor for development, said there was no reason to double-check. They trust the Cardinals.
Here is the story by David Hunn of the St. Louis Post-Dispatch (thanks to Craig Depken). This is consistent with Milton Friedman’s hypothesis that using other people’s money on ourselves leads to waste. We care about the benefits but not so much about the costs.
Cross-posted at Market Power