After 30 years of raising red flags over this scheme and that boondoggle, we at the Allegheny Institute feel our nostrils flare every time some private business concern – whether retail, entertainment or sport – touts some “great” project that, supposedly, will pump oodles and boodles of money into the economy.
But, oh, by the way, it will require a “public-private partnership.” That is, a private business wants to reduce its exposure and offload its own risk in this and/or that endeavor that it says will be a slam-dunk success by turning taxpayers into venture capitalists to cover an untold part of the price tag.
The latest project to come down the Taxpayers-Are-Suckers Pike comes from the Pittsburgh Riverhounds soccer team. It has plan – ranging from $125 million to $150 million (at least) — to nearly triple the seating capacity of its Highmark Stadium at Station Square from 5,500 to 15,000 people.
Do remember, it began life as $75 million project when it was generally revealed last year.
Per the Post-Gazette:
“Tuffy Shallenberger, owner of the Pittsburgh Riverhounds and Riveters — a women’s soccer team that debuted this year and shares the stadium — on Tuesday said he was increasing [the stadium’s] capacity … to qualify the Riverhounds for the United Soccer League’s new Division One, which will launch in 2028.”
The Riverhounds have been around since 1999 and now play in the United Soccer League’s second-tier league, the P-G notes.
The team, in a news release, touts all its rising successes and the supposed manifest benefits that will be showered on the public kitty with the expanded facility.
Goodness gracious, in addition to more than 12,500 general admission seats and several thousand more premium, club and field-level seats, there will be banquet space and 14 tony suites.
And, golly-gee, the expanded stadium might even be able to host more college and high school competitions and accommodate up to 20,000 spectators for concerts.
Again, per the P-G, the Riverhounds say the renovated stadium would bring about additional events “that will help the entire Pittsburgh community,” draw an estimated 477,000 people a year for those events and $10 million in annual tax revenue, with 33 percent of attendees from out of the area and 4 percent staying overnight.
This, it appears, is the Riverhounds’ rationale for seeking public money in pursuit of private profit.
A year ago, the Riverhounds sought a $10 million state Redevelopment Assistance Capital Program (RACP) grant for the project that was whittled to $3 million.
Actually, “The RACP page shows two authorized amounts for the stadium expansion, one for $1 million, one for $3 million, neither of which have been paid,” says Eric Montarti, research director at the Allegheny Institute. “The 2017 capital budget bill shows an amount of over $22 million, but it’s not clear how much will actually go to the project,” he says.
The Riverhounds say it will be a “public-private partnership” that will fund the expansion.
But, again, the major question is “Why?”
If this stadium expansion is such an economic generator that, of course, will profit the franchises’ owner handsomely, why in the world should John and Jane Q. Public have their pockets turned out for it?
The only investment the public should make is through the tickets it buys to attend the facility’s events.
Perhaps the argument will be proffered that the “public” infrastructure must be upgraded – an improved West Carson Street corridor and more parking, to name two things.
But if this expanded stadium is going to create such an increased demand on the public infrastructure, shouldn’t it be the Riverhounds that pay for that, too?
As we have noted on many occasions in the past, and to paraphrase more than a few of the great economists in history, the public has been despoiled of a great deal of its wealth by the sophistry of not only those seeking to dive ever deeper into the taxpayers’ pockets for what they alone should pay but also by those all too willing to throw their hands up, declaring such highwaymannery a fait accompli.
The sheer ridiculousness of even thinking about giving the Riverhounds any public money for its stadium expansion comes from State Sen. Wayne Fontana, D-Brookline, who just happens to be chairman of Pittsburgh-Allegheny County Sports & Exhibition Authority.
He told the media that Riverhounds’ stadium upgrades would lead to “tremendous” economic growth for the city and region, as well as an increase in local construction jobs.
The former did not happen with the publicly subsidized Penguins’, Pirates and Steelers’ playgrounds. The economic data confirm that. And it won’t happen with the Riverhounds. To claim otherwise is wishful thinking at best and intellectual vapidity at its worst.
But, indeed, it will benefit union construction jobs, jobs whose remuneration will be oversized and project costs unnecessarily inflated by faulty prevailing wage mandates. Maybe that’s what this all about.
The bottom line is that the millions of dollars that the Riverhounds already have been pledged is millions of dollars too much. As a matter of fundamental economics and sound public policy, there should be no public money in this endeavor.
And who do the Riverhounds think they are anyway? The Penguins? The Pirates? The Steelers? Cue the macabre laugh track here.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstiture.org).
