Economists’ Doubts Over San Antonio’s New Baseball Stadium Financing
In San Antonio, the public debate regarding the financing of a new ballpark for the city’s minor-league baseball team, the San Antonio Missions, dominates local news. Supporters of the scheme assert that the financing won’t negatively impact taxpayers. However, experts familiar with public stadium financing express skepticism about this claim, and highlight the potential risks related to the proposed funding mechanism for the project.
The team’s owners and city hall advocates insist that a tax increment reinvestment zones (TIRZ), which includes the area surrounding the anticipated stadium, will generate considerable tax revenue. Officials project this income will cover a large part of the $160 million cost of the project, set to be constructed at the site of Fox Tech’s old baseball field.
This strategy is not without its critics. Notably, Andrew Zimbalist, a leading authority in the realm of publicly funded projects such as this, warns that the funding plan could cause economic hardship for the city. As an economics professor at Massachusetts’s Smith College, Zimbalist’s opinions carry weight. His concern is that by channeling existing tax revenues into the special district to finance the ballpark, the city effectively compromises its income from other areas, negatively affecting its overall budget.
Doubts Over Economic Impact
Jake Wegmann, an associate professor of community and regional planning at the University of Texas at Austin, questions claims of financial windfall expected to arise from the 7,500-capacity ballpark around the San Pedro Creek Culture Park. Typical assertions made by stadium supporters regarding economic stimulation and growth are dismissed by Wegmann as “dubious.”
A common method of funding projects such as stadiums involves the use of a TIRZ to issue bonds which finance the facility. These bonds are repaid over time using the property tax revenues collected from the special district.
In light of this plan, San Antonio-based developer Weston Urban, which owns a significant portion of land around the proposed ballpark location, plans to construct new retail and entertainment venues, along with a residential tower. Predicted property taxes from these developments, it is hoped, would allow the city to pay off its bonds.
Concerns Over Wealth Redistribution
Both Zimbalist and Wegmann express their worries about the effect of TIRZ funding on local development. They caution that, instead of stimulating economic growth, these zones often merely redistribute existing wealth from one area to another.
In essence, the approach could trigger existing businesses to relocate within the new district, generating property tax revenue that would be used to pay off the stadium costs. This, in turn, would deprive public services such as schools and roads of valuable sources of funding that had been previously available.
Uncertain Economic Factors
Also, the use of TIRZ funding comes with its own risks. It relies on the zone’s investments gathering momentum, which economic fluctuations make hard to anticipate or forecast. Additionally, in the face of an increased likelihood of an economic recession and a consistent surge in commercial foreclosures in Texas, the financial health of the project seems to be under a cloud of uncertainty.
Against the backdrop of these doubts, city leaders and the team’s owners remain confident. Despite the risks posed by the proposed funding strategy and potential economic headwinds, the vision of a new sports venue and revitalized district remains a strong and enticing one for San Antonio.
