Last week as crowds celebrated the arrival of one of the world’s high profile teams - an eleventh hour deal promised a new stadium for Real Salt Lake. This week on Utah NOW we’ll explore the deal and what it means to spend public money on private venture.
[Doug Fabrizio, Host]:
Last week as Utah fans celebrated the arrival of one of the world's best soccer teams, Salt Lake City and County leaders were engaged in intense negotiations over the funding for a professional soccer stadium. This week the county council signed off on the deal that would funnel public money into a private sports venture. Today—how did the process play out, and what's in it for taxpayers?
Hello, and welcome to Utah now. I'm Doug Fabrizio. The most memorable quote to come from the soccer frenzy of the last few weeks in Salt Lake County was uttered on Tuesday by Sandy Mayor Tom Dolan. "Call me Lazarus,” he said after the county council approved the deal 5‑4 to help fund a 100-million dollar soccer stadium in his city.
And to be sure, just a few weeks ago the idea of getting county voters to help pay for a private sports complex seemed dead. Officials had rejected proposals before.
But beginning last week things began to converge in favor of a Utah soccer stadium.
There was a good big of give and take, threats and incentives during a late‑night gathering at the governor's mansion where the political process was in full swing.
The final incentive may have been a little glitz. As leaders worked towards a deadline, giddy fans welcomed one of the top clubs in global soccer, Real Madrid, to Salt Lake .
But if you put aside of the politics, put aside the euphoria of this one exhibition game, or even the sky rocketing interest in the sport, there's a critical question at the heart of the Sandy Soccer Stadium. Why should the public help pay for a private financial venture?
Essentially, what's in it for taxpayers?
In Focus: Raising the Roof
[Dave Checketts, Owner, Real Salt Lake ]:
I just want to utter a pioneer phrase‑‑ladies and gentlemen, this is the place.
Saturday's ground breaking for a new soccer stadium in Sandy was mostly ceremonial but the event was important for real Salt Lake owner Dave Checketts.
Checketts had imposed a deadline on Salt Lake County officials to come up with public money to help fund the $100 million project.
While it was still unclear whether the county council would approve the deal, after months of uncertainty Checketts' vision for a Utah soccer franchise was alive again.
I made the decision that the same investment, the emotional and financial investment that I made in the 80's to try to keep the Jazz here, I was going to make to try to keep soccer a part of the Salt Lake and Utah community.
RSL is in its second year of a three‑year-lease with the University of Utah 's football stadium. A facility that by most accounts doesn't accommodate the sport of soccer. Checketts wants his own stadium and this week's county council vote was one of his last obstacles. Even Peter Corroon who rejected the first funding model believed this latest deal could work.
[Mayor Peter Corroon, Salt Lake County ]:
“I will not deviate on four major principles…one, is that we own what we buy; two, is that no money will go into the building of the stadium; three, is that the citizens of the county receive a return on their investment; and four, we do not deviate from our county's fiscal conservative financing methods.”
The new plan that county council members debated on Tuesday called for less of a financial commitment from taxpayers, and it provided development in other parts of the county.
Still, the council was divided, and throughout the evening disputed the benefits of the project and the political process that brought them there.
[Randy Horiuchi, Salt Lake County Council]:
Has this been an informed decision? Has this been a decision that we've had process, discussion, crunching of numbers, looking at deals, working with one another? It's been this one. So we're making informed a decision today. Whatever decision we make it's going to be a dang good one.
[ Jenny Wilson, Salt Lake County Council]:
My vote today in favor of this is not statement of support for the process, but an acknowledgement that this is a very good deal for Salt Lake County . There is no risk to the county, it produces revenue, there are community benefits through soccer filled expansion and programs.
[Joe Hatch, Salt Lake County Council]:
So I see this process as being incredible. It was mean, it was tough they say…but it shouldn't have been otherwise and in the end it was a bipartisan venture.
[David Wilde, Salt Lake County Council]:
First, in my heart, I do not believe in public financing for stadiums. And second, I do not feel good about the political process that has led us to where we are tonight. And I think the political process that has led us to where we are tonight is one of the reasons the public has jaded opinions of politicians and politics in general.
Motion passes, 5-4.
While the vote seemed final and Real officials say construction of the stadium could begin by year's end the council's actions didn't stifle enduring questions about the deal.
This debate seems far from over.
Well joining us now to talk about the process that led to Tuesday's vote are two members of the Salt Lake County council, David Wilde is here representing District 3, Councilman Wilde voted against the plan, Randy Horiuchi is with us, a member at large holding one of the three at‑large council seats he voted for the proposal. Thanks for being with us.
I want to start where we left off in that last piece with you talking about the process.
You have said that you have never seen such a nakedly political issue during your time on the council. How are you reacting to that process? A little more about that if you would.
Well I will say I'm not nearly as experienced a politician as Randy or Joe Hatch or some of the other people on the council, but it was a little discouraging to me to feel like this was a deal that wasn't so much, are we talking about what's on the merits? Is Sandy the best place? Is Salt Lake City the best place? Murray that I represent was at one time on the table. Are they the best place? It was more, we want it in Sandy from the legislature, and this is how you're going to do it, and there were some unsavory things done to make that come to pass, I felt.
Councilman I wanted to ask you to respond to that question. Some of the arm twisting, including state leaders who said they would take away millions of dollars in hotel tax money if the county didn't funnel some of that to the stadium. How are you reacting to that?
That's partly all true. But there is not an issue in the 15 years I've served that's been vetted more, that we know personally about, more public input, we've had more public hearings on this particular issue, more dialogue, more e‑mails, more stuff, in the grocery store stuff, than any time in the history. We've spent one tenth of the amount of time on a one and a half billion dollar budget that we pass versus this issue. So I mean anybody who says they didn't think the process was good has erred. And let me say I love David Wilde.
But the fact is guys that lose in a public process decision always think the process was flawed. And I've been on the losing end and I always think oh my gosh the process was bad.
But the mayor thought the process was bad.
Only at the very end he was dragged kicking and screaming although he was an outstanding participant as was Dave and all the people against it. It's exactly what government's all about. I mean anybody who complains about us yelling at each other and getting after it and delving deep into stuff and then making a decision whether it goes one way or the other, that's the process. If it isn't then we ought to get rid of it.
What do you make about that, that this is the process? One of the proposals you made in the Tuesday meetings and we'll talk about this, was we should put this to voters. And some of the criticism has been there were back room deals that everyone didn't know exactly the arm twisting that was going on. React to that.
Well, as far as putting it to the voters I absolutely believe that. This is a very big issue. I doubt that there's been many issues that I've been in the five and a half years I've been on the council that were more polarizing to not just the nine of us on the council and the mayor, but to the public in general. I think public opinion polls have showed clearly that the public would like to vote on this. And I think this is an issue, if we're going to go forward with it we ought to give the public a chance to have some input. And by the way, we've got part of the deal requires the council in 2011 and 2015 to go forward with a couple of votes for bonding. I think if you put it to the voters, and the voters approve it then that council in those years says the voters have already approved this. I don't know it has quite that substantial a backing if we don't.
What do you make of the council man saying that‑ ‑
Doug, Doug. Let me just say this. First if you're going put this particular issue to a vote we ought to get rid of all politicians.
You're saying this is my job?
That's why you let people serve in public office. The idea is this this particular money we're spending is so targeted; it can only be spent for a couple of little things, which are like soccer stadiums and other tourism, culture‑related issues. If we vote on that why have us? On the billion dollar, $895 million TRAX general obligation bond in which the voters are compelled by law to vote for? Absolutely put that on the ballot. But good heck, then we ought to put everything on the ballot, and get rid of elected officials. I have no problem with that but let's do it.
Should taxpayers be funding private financial ventures? What is the test for you, council man? What point should public money be spent?
It's got to make sense. Financial sense, got to make economic sense and it's got to make sort of cultural sense to a community. An example, we basically paid for the Delta Center , I mean a lot of the Delta Center , $27 million in public funding from the city, and we had to close down the Salt Palace arena which was probably a 50 or $60 million deal in order to get the Delta center done. So big investment. The Franklin‑Covey field, it was $20 million spent of city and county money to build that totally publicly financed as well as the E‑Center. Have we done it before? Yes. But it's got to be on a case by case basis, and make sense for the community and economically.
How do you see it?
If things serve a general public purpose, and for example I serve on the planetarium board. Planetarium to me clearly educational type facility serves a great public purpose that's worthy of public funding. This on the other hand is clearly something that is going to benefit basically people in the private sector. And I think people in the private sector are coming to the public saying, help us get a better deal so we can have a better bottom line in our accounting. And I think that ought to be left to private investors.
You said there should be a cultural component here. Is this more than sort of just a financial equation?
I think soccer radiates the community, and radiates the world in its multicultural fashion. I'm a big baseball, football, basketball guy, bring me that I'm voting for it because I love that stuff. Soccer, I ain't into it. But I understand the multicultural value of this incredible world wide sport in this community. And we needed to do it, we've done it for everybody else, whether you say yes or no. This made sense, and what we need to really one day talk about and we ought to have another show on it. When we do the Broadway style theater, Japan town, $20 million of baseball fields on the west side, Magna and Kearns people will see the real value of voting yes for the soccer complex.
How do you think about the more sort of abstract way of looking at it? That this could help a community? There's a cultural component, here.
Well it's one of the things that actually turned me off. We kind of had a carrot and a stick. Either vote for this in Sandy and get TRT funds to do it or don't and we take away all these TRT funds. That's the only reason Joe Hatch supported this.
I suspect it's why Jenny Wilson supported it. It's why Rocky Anderson got on board with this because there was what I would call a bribe. Support Sandy Soccer Stadium we'll let you use money to build a great cultural facility in downtown Salt Lake City . And I thought again that's part of the dirty political process that's been here.
If you were to take all of these deals the question you raised, the question of incentive from state leaders, talking about hotel taxes they may take away if you don't use some of it for this. How would the public react if you were to put everything on the table? Do you think they'd go for it?
Bottom line hundreds of people asked me and said why are you doing this?
As I explained it, 93 percent of the hotel taxes are paid for by people outside of Salt Lake County . The legislature was going wrest that away from us just send it back to whatever fund they do. Other counties are using that money to compete against us. It would have short changed our taxpayers in the future, our taxpayers would have said to us, why did you do it?
Councilman, final word?
Well, I think the answer really to me is very simple. If this is truly such a great deal for the public, then put it on the ballot and let the public vote on it. Randy, Dave Checketts, Rocky Anderson all the proponents go out in the next two and a half months, educate the public. If it's such a great deal the public ought to vote for it overwhelmingly and that's the way it should be.
Gentlemen, thanks for joining us.
We gathered this week's Vox Populi at last Saturday's exhibition game between Real Madrid and Real Salt Lake . We asked fans to explain their affection for the sport.
Real Madrid is the New York Yankees of professional soccer, and so to have those guys come into our back yard to be seen by all of us here, and Salt Lake's actually getting probably the second best coverage since we've gotten since the Olympics.
It's great to sort of show the rest of the world that we have soccer here, and that there's a lot of soccer fans that you wouldn't actually expect have sort of come out of the corners, and it's great to see people from all over the world.
We have been playing soccer for our life time from our childhood and it is a game of discipline and strength.
I'm a new comer to soccer, but I love to see all the running and it's just exciting to me, they're not always stopping and waiting for the referee.
It's the game of my life. I love it.
I just love playing it and it's just a lot of fun because everybody enjoys it.
Soccer is here it's gonna stay, it's gonna flourish, and with the way Checketts has got stuff set up initially, I think that it's going to, it's going to be a big, it's going to be a very big thing.
It's gonna bring a lot of revenue, but I think soccer will go ahead and continue to grow as far as the enthusiasm of the American public.
Look at the fans, we've got the best fans in the MSL, are you kidding? You can't say enough about Salt Lake right now so I'm pretty proud.
Let's go Real. Yeah
Well as you can tell soccer attracts its share of enthusiasm but will that excitement pay off? Joining us to talk about the culture and economics of soccer is Luke Garrott, a self‑described soccer fanatic. When he's not blogging about soccer he has his day job as a political science professor at the University of Utah, also with us is James Wood from the David Eccles School of Business at the University of Utah, he recently co‑conducted a study on the economic impact of sports. Welcome to you both. Thanks for being with us. Luke I want to start with you. How do you explain all of this enthusiasm over soccer, and whether, whether or not you think it's significant, different in some way from all the enthusiasm of American sports?
[Luke Garrott, Political Science Department, University of Utah ]:
Well, Americans are spectators, largely. We like to sit down during our games, right?
We cheer once in a while when there's a first down, a home run, that sort of thing.
There are a lot of commercials and breaks. Soccer's different. Soccer, the clock runs continuously, it has a certain ebb and flow to it that if you go and get a hot dog you may miss something. And it's hard to score goals in soccer. So when someone scores it's really exciting and it's a matter of persistence as well. You try, try, try, oh, you just missed. We got a corner kick, you try, you try. I think it stirs a different kind of passion in people than the typical American sports that we're used to.
Is there a bit of sort of a cultural transformation going on?
This is interesting. America 's a large place. We're diverse. So many different types of people here. So soccer will have its niche. Will it conquer the U.S. sports scene? Of course not. We're too big, we're too large. So worries of that are premature. Think the other sports are safe in their niches, but soccer's niche is growing for sure. For Salt Lake as we know how widespread participation is, right, and for people to see the top level of professional soccer in this country, and occasionally have top‑level teams like Real Madrid come in, I think really feeds into people's every day got to take the kids to soccer practice of reality. It's something else that they can, I think, plug into. Kids grow up dreaming to be gymnasts and football players, baseball players, and for us to have that level of soccer in Salt Lake , I think, is quite a boon to the culture here
How do we take, before we talk about the economics of this. How much of this cultural component should we take into account? I mean seems like these discussions over public funding of stadiums, for example, are always colored by this kind of emotional intensity, do you think?
[James Wood, Director, BEBR, David Eccles School of Business University of Utah ]:
Well they are, particularly, I think, sports stadiums. When there is a private developer involved. Which isn't always the case. You look at the E‑Center didn't have a private developer involved, it's owned by West Valley City . But when you get wealthy, private developers involved, some principles come out, people don't want subsidies to individuals. So there's been a number of stadiums built, arenas throughout the country over the last 20 years, and many of them are very controversial for this very reason.
Was this a good deal for Salt Lake County , do you think?
For Salt Lake County ? I don't think it's a bad deal. In terms of economics you're talking about. You look at this, I look at it with my heart and with my head. With my head, as an economist, it's hard to justify sports teams economically in terms of increased employment, increased wages, increased taxes. It's at the margin, it's fairly small. And I think these sort of decisions and investments really, things that politicians decide, and you look at, I think, public and private partnerships are very important, and we would have a very different‑looking downtown, for example, if we didn't have those sort of partnerships which we have the Delta Center, Gateway, both of which private developers received substantial assistance. And it did change things, but in terms of the development pattern. So‑ ‑ But it is controversial when you've got a private developer involved.
How are you thinking about? The head part and the heart part?
The public‑private distinction here is a bit, I think, not‑ ‑ It's not entirely accurate. We have a private owner of the team, he paid $10 million to get his franchise. He will reap, all the benefits, he takes all the risk. But sports teams we know, are inside the hearts of so many people. And we know that he wants, you know, he wants large participation from the fans, he's always thinking of fans. He wanted large participation from our politicians and our public subsidies. And so the public‑private distinction I think is a bit inaccurate, here. I was, my heart was torn out when the legislature did their end run around Salt Lake City 's attempt to bring the stadium downtown. Dave Checketts early on, very clearly expressed his desire to have it downtown and to reflect and to bring back and invigorate the downtown he knew as a child. And boy that stuck with me. I'd love to have seen a stadium downtown. The legislature enabled it to happen in the suburbs in Sandy . And I was absolutely incensed at that. But I think my mentality and that of many people on the county council was, it might go away, and so this is better than nothing.
What have we learned, do you think? First you, James Wood, from the experience of other communities, about whether public funding of a sports complex actually is a good investment? Forget the heart for a while and the abstract part of it. Are there returns on that investment for the public?
Well, let's just take the Delta Center and the Utah jazz. And I think if you look, there's an investment there of about $27 million that the RDA put in in the early 1990's. And that bond is paid back by what's called tax increment financing. Increases in property tax surrounding the Delta Center , or pay that bond. And over time, we've seen the development downtown around the Delta Center , and I think the Delta Center was instrumental to that. Would we have the Gateway without the Delta Center ? I'm not quite sure that we would. Think it was an important public investment. You can look at the E‑Center. Now, that, as I said before, no private investor, but that's the city stepped up and bonded for a lot of, about $50 million, well, $35 million in tax revenue bonds, or lease revenue bonds, and then cobbled together a bunch of other sources, built the E‑Center, which now, I think their main tenant the Grizzlies are struggling but you see the development that's occurred around the E‑Center. I don't think that would have occurred without the E‑Center.
I do want to get, I guess it's a mixed bag. Sometimes it works, sometimes it doesn't?
Yes, you look at Franklin‑Covey in terms of economic development around Franklin‑Covey, not much. But in the end, the economic impacts are really difficult, to measure, because mainly what you're doing in these cases is just redistributing, or changing patterns of development within the county or the city.
We're about out of time, final word from you. What happens next? What are your hopes I guess?
RSL has a game tomorrow night. This is a historic game, because it's Post Real Madrid , the team is here to stay. I'm very interested to see how many people are going to come out and support the team at Rice‑Eccles.
That's the clincher, how many show up?
It's all about attendance, isn't it?
Okay. Gentlemen, thanks for joining us.
Speak Out Utah
In our Speak Out Utah segment John Florez points out the value in saying no.
Parents and politicians alike should take note.
When I was a kid, NO meant NO!
My immigrant mother said it was a federal offense to tear a stamp off an envelope. And if I did, the police would come after me. No meant no! That was one of many daily lessons I learned about living by the rules, according to my mother and "reinforced" by my father when necessary --- which is more than I want to remember.
That was then. Now, we see a breakdown in personal responsibility and an increasing disrespect for the law. Today, many show no respect for teachers, law enforcement or the law — be it driving, school bullying or taxes.
We have created industries to teach parents how to let the children express themselves so as not to hurt their self-esteem and have "quality time" with them. Though the past generation of parents got tired of saying "no" and reinforcing rules, they knew that was "quality time.” It was time needed in order to raise a "quality kid" -- one who would live by the rules without being told (except by that constant mom in the head).
To try to teach what was never taught like the "old-fashioned moms," we now have a booming therapeutic industry and ethics graduate courses in colleges and corporate offices. We have therapy, interventions and – and the latest fad -- anger management for spouse abusers and bullying students.
We like to blame athletes as role models for the problems of our children. Yet youths keep telling us the most important role models they ever have are their parents. We just need more parents secure enough to say no!
Well that's Utah now for this evening. We appreciate you joining us. Remember, you can join the conversation with an e‑mail to UtahNOW@kued.org . In the meantime we'll be back next Friday with another edition of Utah now. Until then, I'm Doug Fabrizio.
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