Wednesday, February 15, 2017

To Score an MLS Team, Bexar County Taxpayers Might Need to – Wait for It – Pony Up More Taxes

Posted By on Wed, Feb 15, 2017 at 6:50 AM

click to enlarge Major League Soccer isn't coming unless Toyota Field expands. Who's going to pay for that? - COURTESY SAN ANTONIO SCORPIONS
  • Courtesy San Antonio Scorpions
  • Major League Soccer isn't coming unless Toyota Field expands. Who's going to pay for that?

The Spurs are pumped. City of San Antonio officials are stoked. Even a local judge can’t tamp his excitement.

That's because San Antonio is in the running for a Major League Soccer expansion franchise. Eleven other cities, including San Diego, Phoenix, St. Louis, Nashville, and Charlotte, are vying for four spots. MLS officials could announce the winning bids as soon as the summer.

The entry cost, somewhere between $150 and $200 million, isn’t cheap. But Spurs Sports and Entertainment, which owns the Spurs franchise, would pick up a majority of the associated costs — but only if they can successfully lure the MLS to town.

All that’s left for Bexar County residents is to cross all fingers and toes. And maybe even fork over some tax money.

That's because Toyota Field, home of the brand new-ish San Antonio Fútbol Club of the United Soccer League, is inadequate to house a MLS team, even though the stadium was built just four years ago. Toyota Field would need to more than double its capacity, which means Bexar County voters could be asked to pay up. Bexar County judge Nelson Wolff told KSAT that the estimated upgrade could land around $100 million, and that voters might be asked to approve a tax subsidy on the November ballot.

Even if the required 10,000 seats are added to the 8,300-seat Toyota Field, there’s no guarantee that MLS will choose San Antonio. Looking at it from the opposite direction, the bid would be a lot less sexy without a dolled up stadium and would probably knock S.A. out of the running.

The downstream benefits of professional sports to everyday citizens, who are often asked to bankroll stadiums and arenas, are shaky at best. Despite cheerleading from public officials, new sports palaces are often seen as bad public investments that fatten the pockets of corporate interests instead of generating significant tax revenue for city and county operations.

“I don’t think the economic benefit is there for taxpayers,” says Bob Martin, president of the Homeowner Taxpayer Association of Bexar County. “My recommendation is that if the Spurs need a stadium upgrade for MLS, they should pay for it.”

According to a 2016 Brookings Institute study, pro sports franchises use a tax loophole to procure even more public dollars. Even though the Spurs received $41 million in federal subsidies to build the AT&T Center in 2002, the San Antonio area lost $44 million in tax revenue, due to tax-exempt municipal bonds as well as bond holders who scored extra tax breaks on municipal bonds.

“These bonds, like the [2017 San Antonio City Council-approved $830 million bond program], are now marketed to taxpayers as a tax-less or no-tax-increase bond, which is ridiculous because these bonds are actually loans,” says Martin. “The taxpayers are the guarantors. In the bond language, they’re required to have something in there that says that they’ll raise taxes if they run short of money. It puts the taxpayers on the hook.”

“I imagine there are a lot of businesses in San Antonio that would love to expand if the taxpayers picked up the tab for their new facility,” adds a tongue-in-cheek Martin.

An expansion and reconstruction of Toyota Field didn’t come as a surprise to city and county officials. It has been the plan all along.

In December 2015, San Antonio City Council unanimously approved the joint purchase of Toyota Field, which had been developed by Gordon Hartman, owner of the now defunct San Antonio Scorpions of the North American Soccer League. The city and Bexar County bought the stadium for $18 million from Hartman. The maneuver was seen by the MLS as an “OK, these dudes are serious” power play.

For just $3 million, Spurs Sports and Entertainment bought in and committed to a 20-year stadium lease. Spurs Sports and Entertainment now has a total of 10 years to bring a MLS team to town.

If they flub the big opportunity, they’ll pay $5 million to the city and county, which would put the governmental bodies in an approximate $13 million hole. And there wouldn’t be an MLS team anywhere near San Antonio (unless y’all consider Dallas and Houston “nearby” cities).

“The only reason we did this deal was to get to MLS,” Bexar County judge Wolff told mlssoccer.com in an April 2016 story. “There was no other reason.”

As the other municipalities – which also include Sacramento, Tampa/St. Petersburg, Detroit, Indianapolis, Cincinnati, and Raleigh/Durham – tidy up their MLS pitches, Bexar County voters might soon be facing a ballot initiative.

Major-league dreams, major-league problems. Maybe AAA minor-league baseball isn’t such a bad idea after all.

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