Saturday, January 26, 2013

When Does 'Government Assistance' Go Over The Goal Line?

Bank of America Panthers Stadium
There are just some things government has to do for the rest of the nation. Defend us against foreign invasion and terrorist attack at the federal level for one thing. We don't want 50 state governors sending state troops all over the globe, now do we?

Maybe now that we have rung up the debt bill to over $16 trillion on its way to $22 trillion, now is the time to maybe get serious about establishing some very hard barriers beyond which government assistance should not be given nor even considered.

'If not now, when?' Ronald Reagan challenged us as a nation in his second inaugural address in during the only inauguration held in the Rotunda due to the Siberian snowfall that hit Washington on January 20, 1985.

'If not us, who?' Indeed. It is the same truth today as it was in 1985.

A pertinent question about the role of government has to do with the recent decision by the Charlotte City Council to give the Carolina Panthers $125 million to refurbish and update the Bank of America Stadium.

Here's the question:
'What is the difference between 'corporate welfare' and 'general welfare' when it comes to spending taxpayers' hard-earned taxpayer dollars?'
Whenever taxpayers' dollars are spent for any collective purpose, they become 'different', don't they? Whenever a dollar is appropriated for whatever purpose by any government entity, it becomes some form of 'welfare' whether you like it being called that or not, right?

Many conservatives see government money being spent on housing and food programs for the poor and labled some recipients 'welfare queens'.

Many liberals view taxpayer bailout of Wall Street as 'corporate welfare for the greedy fat cats'.

Many people see excessive payments for million-dollar hammers and toilets in the Pentagon budget as being 'welfare for the military/industrial complex' as coined by President Eisenhower.

Let's face it: The truth of the matter is that if you support government funding for anything; Wall Street, stadiums, food assistance, you consider it to be 'a worthy investment in our future, or our people or our children'. If you don't support the use of taxpayer funds, it is 'welfare', plain and simple.

Is taxpayer support of a privately-owned, held and operated venture such as the Carolina Panthers and Panthers Stadium which is fully owned by the Richardsons an 'appropropriate use of taxpayer dollars'?

We are not convinced.

True, the Carolina Panthers bring lots of joy to the community when they win, just like any other NFL franchise around the nation. Is that worth $125 million in taxpayer 'welfare' support?

There are some studies that would argue that NFL franchises spur economic activity in the cities in which they operate. They certainly spur jobs and economic growth when the stadium is being built, as long as local contractors and suppliers are used to build the stadium with local employees.

But other studies conclude that the economic activity caused by 8 home games out of 365 days per year is a mere piddling return on any public investment or infusion of taxpayer capital. Aside from 'goodwill' and 'putting a city on the map!', what else can a NFL football team do to offer elevated returns on such a massive public investment into a football team?

Jack Kent Cooke built Redskins Stadium in Landover, Maryland with his own private funds. Abe Pollin did the same thing with his own money to build MCI Center in Chinatown in a downtown area of Washington, DC that needed massive urban renewal and got it with this privately-funded stadium.

Both men were wealthy before they bought both franchises and before they built both stadiums. They built their wealth without massive use of taxpayer subsidies most likely. Why should they all of a sudden turn to the siren call of taxpayer largesse to fund an increase to their own wealth even further?

Panthers Stadium was built  in 1995-96 with taxpayer-supported bonds but they were retired with a very unique thing for the very first time in major league sports in America: PSLs. The Personal Seat License that people paid close to $2000 for the privilege to buy one season ticket seat to watch the Panthers. Above and beyond what it cost to pay for the tickets each season as well.

Put a checkmark in the column of Jerry Richardson for retiring public debt before the taxpayers of Charlotte had to pay too much in interest since the bonds were paid off and retired within a 5-year time frame from time of construction.

Today, he and his family own the stadium and the franchise scot-free. 100% along with some minority partners most likely. The taxpayers own nothing except the joy and pride of having a NFL team in Charlotte, North Carolina.

What will the taxpayers get when their $125 million taxpayer investment is used by the Panthers to put in expensive suites available only to the well-heeled and well-to do and some new scoreboards and video equipment?

Nothing tangible. They will have been able to secure the presence of the Panthers in Charlotte for perhaps the next 10 years. A Los Angeles businessman has an offer on the table for $2 billion to buy the franchise, but not the stadium, from the Richardson family.

Why not the stadium?  Because he can't dig it up and move it to Los Angeles, now can he? If the Panthers leave after 10 years, Charlotte taxpayers will have improved BoA Stadium in 2013 to the tune of $125 million with the finest skyboxes and scoreboards and video equipment the world has ever seen...and it then will be as empty as the Colisseum is in Rome today crumbling all about if the new owners decide to uproot the team in 2023.

Since the Richardsons were trailblazers in the use of PSLs that helped reduce taxpayer exposure through the issuance of bonds, we have another idea for them to consider which might set a whole new trail for taxpayer-supported NFL, MLB or NBA stadiums for that matter nationwide:

'Make the taxpayers of Charlotte a participating partner in the continued success of the Carolina Panthers'
  1. In return for the $125 million in taxpayer funds to upgrade the stadium, the Taxpayers of Charlotte will receive a 12.5% share of any appreciation in the value of the asset from now until the franchise is sold.
  2. The value of the Panthers is now estimated to be $1 billion including the stadium. 12.5% represents the $125 million to be invested by the Taxpayers of Charlotte
  3. If the asset value of the Panthers does not go up, the Taxpayers of Charlotte will get no return on their investment.
  4. If the team is sold for $2 billion, the Taxpayers of Charlotte will get a $125 million lump-sum payment that the City Council can then decide to rebate to the taxpayer; use to improve schools or retire existing debt at the time.
Why not?

We would like to add a codicil that every taxpayer gets to participate in a lottery to attend at least 1 home game out of the 80 to be played in the next decade. After all, they are already helping to pay for it through their tax dollars. There are 73,000 seats in the stadium.  Everyone who helps pay for the improvements through their property and other local taxes should at least have the chance to go to one NFL football game in their lifetime to cheer 'their' team on to victory. Shouldn't they?

Otherwise, we think that Bank of America would be more than willing to loan $125 million to refurbish the stadium with their own name on it, wouldn't you? The Richardsons are more than credit-worthy and BofA, well, this might be one of the safest loans they could possibly make after the trials and tribulations they have experienced over the past few years with the mortgage markets. Especially when Cam Newton takes the Panthers to their first Super Bowl trophy in a couple of years.

We think private enterprise should be 'private enterprise'.  Our government money should be used for the basic necessities of protecting our freedom and safety and providing for the infrastructure that makes our country the envy of world history. We would include public education in that 'infrastructure' since Thomas Jefferson believed that 'an uneducated populace is a danger to the existence of a democratic republic' in so many words over thousands of letters during his lifetime.

We think Mr. Richardson and the Panthers management are honorable people. We think they know what the right thing to do is..they have already done it before with the invention of the PSL back in 1995.

Hopefully they will see that the 'right thing' is not to stick it to the Charlotte taxpayers just because 'everyone else does it'. If they want to be like 'everyone else', then that is indeed a sad day for Charlotte and free enterprise.

Even if the NFL is not really 'free enterprise' given its many monopolistic and oligopolisitic advantages given them over the years from various Congresses. Which is further reason not to further saddle taxpayers with the burden of paying for their operations and upkeep.

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