Just a few years ago, Detroit declared bankruptcy and many wondered if the city would ever recover. Today, downtown Detroit is once again buzzing with new restaurants and entertainment options. Perhaps the surest sign that a city is undergoing a revitalization: Young professionals are flocking back to the city to live and work. The Motor City is roaring back.
And just when you thought things could not get any better, the NBA Detroit Pistons recently announced plans to return to downtown Detroit after leaving the city in 1978 — well before many of the city’s youngest residents were even born. Unfortunately, enthusiasm over the move has been tempered since the Pistons’ return will only come at the expense of Detroit taxpayers.
According to reports, the Detroit City Council agreed to provide $20 million in generous taxpayer subsidies for the estimated $83 million cost to build the Pistons’ new facilities in the New Center area.
As if that weren’t bad enough, the City Council is scheduled to vote later this month on an additional $34.5 million in taxpayer subsidies to modify Little Caesars Arena, which will be home to the Pistons and the city’s beloved Red Wings.
To help sell this expensive arena to the public, team owners have been talking up the new arena’s state-of-the-art technology and fan amenities. And to ease concerns about the price tag, arena supporters are promising that increased revenue will flow to Detroit’s small businesses and the local community once the venue opens.
A win-win situation, right? It’s not that simple. In fact, after studying dozens and dozens of examples, the scholars concluded: “there is still little evidence that building stadiums or arenas for professional sports franchises leads to significant economic benefits.”
Even in the face of all the evidence, however, politicians somehow cannot resist these kinds of corporate handouts. And professional sports teams know it.
Take the Minnesota Vikings, which received $678 million in taxpayer money to pay for the team’s $1.1 billion new stadium. Part of the reason the Vikings got away with this is that they threatened to move the team to California if their demands weren’t met — a tactic that has worked so well for so many other sports franchises that it has become something of a running joke.
Unfortunately, sacking taxpayers with millions upon millions is no laughing matter. This is a problem for all, but especially the younger generations, who will foot the bill years to come.
Let’s remember also that it is these young working professionals who took a big risk on revitalizing downtown Detroit. Their reward should not be having to subsidize a new arena. Indeed, you could argue that the young professionals should get $20 million from the Pistons for luring them back downtown.
Ask yourself, with all the work still left to do in Detroit, is this the best use of taxpayer dollars? Seeing the Pistons return to Detroit would be great, but it should only happen if the team can finance the project without generous government subsidies and sweetheart loans.
A free and fair economy starts when government stops picking winners and losers. After decades of mismanagement, you would hope that’s a lesson Detroit has learned. We’ll soon find out.
David Barnes is policy director for Generation Opportunity, a project of Americans for Prosperity.