Stadium financing has been an issue across the ages

Stadium-FinalHow are sports stadiums financed? In America and throughout the world, public monies are almost invariably involved.

That’s not a modern invention. The Roman Colosseum, an elliptical amphitheater seating as many as 60,000 people, was completed in 80 AD. It was financed with treasure looted by Roman legions from the Second Temple in Jerusalem 10 years earlier.

Contemporary accounts confirm the amphitheater’s popularity among ordinary Romans. It was easily accessible in the heart of Rome, configured to present many different events and symbolic of the city’s power and glory.

Modern stadium-builders employ far gentler means of extracting money from their citizens. But extract they do, and the model created by the Colosseum endures after two millennia.

According to Harvard professor Judith Long, taxpayers have ponied up 70 percent of the cost of National Football League stadiums. That’s not because the owners couldn’t afford to build their own stadiums — of the 32 team owners, 19 are billionaires.

About 75 percent of the cost of Sports Authority Field in Denver was paid by taxpayers in the six-county area surrounding the Denver Broncos’ stadium, which opened in 2001. The team put up 25 percent of the cost, much quickly recovered through sales of luxury boxes, stadium naming rights and other new or increased revenue streams.

Taxpayers, local governments and even charitable foundations invest in stadiums and arenas because such facilities are believed to bring not only economic benefits, but also a tangible sense of place to cities large and small. Like parks, zoos or museums, stadiums and arenas are seen as public goods eligible for public funding.

The local landscape

Colorado Springs has one large stadium and four substantial public arena/performance venues. One was completely financed from public sources, one was privately funded, and three benefited from ingeniously structured public/private partnerships.

Falcon Stadium, finished in 1962, can accommodate 46,000 spectators. It cost a mere $3.5 million, all raised privately. While no public funds were directly expended, builders benefited from the tax-exempt status of the fundraising foundation, a free site and existing infrastructure.

After frequent minor upgrades, it now needs major renovations, according to AFA officials. The projected cost: $50 million, all from private sources.

Colorado Springs City Auditorium, which recently celebrated its 90th anniversary, was entirely publicly funded by a $390,000 bond issue approved by voters in 1921 and completed in April 1923. According to the city website, “The auditorium’s maximum seating capacity of 2,655 represented more than 10 percent of the city’s population. The final cost, $424,910, included all the furniture, fixtures and stage equipment.”

The “Aud” has had few upgrades and little maintenance. The “social and cultural needs” it supports have changed with the times, and now include events such as cage fights, Derby Dames and psychic fairs.

Six decades later, the Pikes Peak Center for the Performing Arts opened its doors. Principally funded by a county bond issue and support from El Pomar Foundation and private donors, the building’s lead tenant was the Colorado Springs Symphony Orchestra, now the Philharmonic.

Security Service Field is the home of the Colorado Springs Sky Sox. Built for $3.7 million and upgraded in 2005 for an additional $6.5 million, the facility is privately owned, privately maintained and apparently profitable. Funding came from team owner Dave Elmore, who put up $2.5 million, and the Loo family, who loaned the Sky Sox $1.2 million. The city provided the site, land designated for park use in Stetson Hills. Elmore subsequently repaid the loan and has paid for subsequent improvements. The once-remote site is now surrounded by residential and commercial development.

A tax-funded downtown multi-use arena was rejected by voters in 1989. Arena backers didn’t give up, and the 7,500-seat World Arena opened in 1998, funded largely by El Pomar and local donors, with seven-figure contributions in cash or in kind from the city, county, Colorado Springs Utilities, the Parking Enterprise and Colorado College.

What comes next?

If the city is successful in its quest for state funding to help build a downtown baseball stadium, no private funds will be used. Plans call for the $60.5 million stadium to be entirely funded by state and local public sources. The stadium and adjacent Olympic museum would benefit from $51 million in public-financed infrastructure improvements. The city’s application for state funding is silent on the source and destination of any revenues that may be derived from the stadium.

Such revenues could be considerable, although nowhere close to major pro-sport levels. The lessee would likely retain all revenue from naming rights, concessions, ticket sales, parking and event rentals. Persuading the Sky Sox to move from their present facility might require the city to sweeten the pot further.

“Dave Elmore has a great deal there,” said Fred Whitacre, the team’s first general manager in 1988-90. “He owns the stadium, he gets all of the revenue, and he has great attendance — he’s very, very comfortable.”

Even without public subsidies.