A Financial Home Run for Developers, a Strikeout for Taxpayers: The Real Arena Math
- Rowen Fraser
- 1 minute ago
- 6 min read
Holy cow Burlington, I was not expecting this level of detachment from reality. Alongside the 1200 King Road development is a new plan for a $300M sports arena. I cannot begin to describe what a foolish and absolutely tone-deaf move this would constitute. Any person in office seriously considering subsidizing this project is a fool, and has no business representing the city. If the developer wants to foot the bill for this facility by all means. But they have requested funding from the city, and apparently we are seriously considering it as an option. There are some very important pieces of information that every Burlington resident should know about these types of projects.
While team owners and politicians often promise that a new stadium will bring a massive economic boom, decades of independent research by economists show that sports stadiums are notoriously bad investments for cities. The economics break down into a few clear reasons why the math rarely works out in the city's favor.
The biggest argument for a stadium is that fans will spend millions of dollars on tickets, jerseys, dining, and drinks. However, economists point out that local residents have a fixed entertainment budget. If a family spends $300 going to a football or hockey game, that is usually $300 they are not spending at their local movie theater, bowling alley, or neighborhood restaurant. The stadium doesn't magically create new spending; it just moves existing dollars from local neighborhoods into a single, centralized corporate venue.
For a local economy to grow, money needs to recirculate within the community. Stadium revenues don't do this efficiently. The majority of the money spent on tickets, concessions, and broadcasting goes directly to team owners and corporate sponsors. Professional athletes and executives make millions, but they generally invest their money globally or live in different cities during the off-season. While construction creates temporary work, the permanent stadium jobs (ushers, concession workers, ticket takers) are largely low-wage, part-time, and seasonal only operating for 10 to 80 days a year, depending on the sport or venue events.
When a city agrees to fund a stadium, the price tag extends far beyond the building itself. Cities often issue long-term municipal bonds to cover construction, which means taxpayers are on the hook for millions in interest payments for 20 to 30 years. Furthermore, cities usually foot the bill for major infrastructure upgrades like expanding roads, extending transit lines, updating sewer systems and providing long-term property tax exemptions. When the stadium sits on tax-exempt land, the city loses out on the property tax revenues it would have collected if a standard commercial or residential development had been built there instead.
Every dollar a city spends subsidizing a massive stadium is a dollar that cannot be spent on core public services like repairing roads, upgrading public transit, funding schools, or improving emergency services.
If the math is so bad, why do local governments keep signing up? Having a major league team gives a city "big league" status, media exposure, and a shared cultural identity. Opening a glittering new arena is a highly visible project that politicians can use as a centerpiece for downtown revitalization efforts, even if the net financial return isn't there. While stadiums can successfully anchor a neighborhood redevelopment or provide intangible cultural value, they should be viewed as a luxury amenity paid for by the public rather than an economic engine that turns a profit.
Here are some stadium projects and the costs they had in their associated communities
Project & City | Public Funds Committed | Long-Term Taxpayer Cost (with Interest/Upgrades) | True Economic Return | Net Financial Outcome for the City |
Olympic Stadium (Montreal) | $134M CAD | $1.61B CAD | Negligible (Team left in 2004) | ~$1.5B CAD Net Loss |
Truist Park (Cobb County) | $300M | $400M+ | Sub-baseline tax growth | $12M to $15M Annual Deficit |
Paycor Stadium (Cincinnati) | $549M | $1B+ | Replaced existing local spending | $30M+ Annual General Fund Drain |
Gila River Arena (Glendale) | $180M | $300M+ | Negative cash flow; Team evicted | $200M+ Estimated Cumulative Loss |
In fact there was a study done specifically on the Cobb County stadium:
This county has a population four times the size of Burlington, Ontario. They spent $400M. The cost to the tax payers for the initial investment was $500 from every resident. In Ontario the cost to individual tax payers for the proposed $300M arena would be closer to $1500. The personal impact of this financial decision will be three times what Cobb county experienced. Considering the debt for this stadium alone is the equivalent to Burlington's entire cost of debt services on our existing debt we have to ask: Are we ready to DOUBLE the cost of servicing our city's debt? The $300M pricetag is more than a whole year's operating budget for the city. Would you spend a whole year of income on an investment with no return? Considering most candidates are running for the 2026 municipals on a platform of financial responsibility this seems like a fools errand. The results from the study indicated that there was no major impact the stadium had on the wealth of the county. The author took painstaking steps to ensure the data wasn't just applicable in the Cobb county scenario.
Despite claims from political leaders that the stadium would be an economic "home run" that would expand the local tax intake, the study found that Cobb County property assessment values did not increase relative to other metro-Atlanta counties following either the stadium's announcement or its official opening. The growth tracked in Cobb County after the build simply mirrored broader, existing regional economic trends.
Because simple before-and-after timelines cannot account for separate regional growth, the author used an objective matching algorithm to build a Synthetic Cobb counterfactual. By weighting data from socioeconomically similar donor counties, primarily DeKalb and Gwinnett counties, that did not build a stadium, the author simulated how Cobb County’s property values would have evolved naturally without the Braves' relocation. The real-world data and the synthetic model tracked almost identically, proving the stadium caused no unique deviation or financial windfall.
Proponents often argue that even if a stadium doesn't generate direct commercial profit, it creates non-pecuniary existence value benefits such as civic pride and a higher quality of life. Economists expect these benefits to be capitalized into a community's housing market, driving up property values. Because property assessments failed to outpace the control group, the document concludes that the stadium failed to generate substantial tangible or intangible social benefits for resident taxpayers.
The author emphasizes that Truist Park was uniquely positioned to succeed compared to traditional stadium builds: It was directly integrated into The Battery Atlanta a highly touted $400 million mixed-use commercial and residential entertainment district designed to capture year-round revenue. It was strategically placed at a major highway junction on the county border to seamlessly siphon cross-border spending from non-Cobb residents. The document concludes that because this project failed to yield a positive fiscal impact despite its severe competitive advantages, most standard stadium projects are highly unlikely to generate a positive return on investment that justifies standard levels of public subsidies.
The study notes that while the stadium failed to prove its economic worth, it became a major political lightning rod. The local Board of Commissioners Chairman who spearheaded the heavily subsidized non-referendum deal was soundly defeated in his 2016 primary reelection bid by a grassroots opponent who ran his campaign as a delayed referendum on the stadium. Ultimately, that challenger was unseated in 2020 by the lone dissenting commissioner who had originally voted against the stadium deal in 2013.
If the data collected in this study is any indication a capitol project of this size in a city of only 200,000 residents at a time when tax burdens are raising at two to three times the rate of inflation, while the nation is in a recession, is a massively stupid endeavor. Even if private investment covers 2/3 of the entire cost this project will still cost each resident a whopping $500. This is with the initial ballpark price of $300M. We cannot rely on this council to estimate the cost of construction accurately. A safe bet would be to expect the cost, like all other projects in the city under the current council, to double.
If you want to stop foolish, out-of-touch projects like this from draining your bank account for years to come remember that we all vote in October. There is currently only a handful of candidates that have fiscally responsible ideas. I would advise you to seek them out and make your displeasure about this project known.
Lastly there is the possibility that this stadium construction is entirely privately funded. This is certainly a more welcome project in my estimation, but we cannot forget that facilities like this will most likely have additional costs that aren't immediately apparent in the early planning phases. Road infrastructure, sewage management, power provision, other infrastucture concerns could end up costing the city tens of millions of dollars even with the construction being 100% privately funded. The likelyhood of a project like this being privately funded, however, is negligible by precedent.