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Abstract a Political Economic Analysis of Cincinnati's ABSTRACT A POLITICAL ECONOMIC ANALYSIS OF CINCINNATI’S DOWNTOWN REDEVELOPMENT SCHEME CENTERED AROUND THE CONSTRUCTION OF PROFESSIONAL SPORTS STADIA James Anthony Brown The purpose of this analytical case study is to explore the political economy of stadium construction and the urban growth strategy and redevelopment scheme that occurred in Cincinnati covering the years from 1993 to 2003. This case study was developed to provide an integrated view of the historical, social, economic, and political forces that defined the conditions in which this strategy was embedded within the class factions of the dominant. Information gathered to develop this study included mainstream newspaper accounts (including those from the newspaper’s website), and miscellaneous articles and texts. The city’s professional sports franchise’s (i.e., the Cincinnati Bengals’) complaints of economic downturn were blamed on, and due to, Riverfront Stadium’s inadequate number of revenue producers (e.g., lack of sufficient number of skyboxes, club seats, and a restaurant) compared with league (NFL) averages. The franchise’s relocation threats garnered certain city and county leaders’ support in providing a new stadium to prevent their departure and paved the way for a new image and re-birth of downtown Cincinnati—economically, physically, and socially. Such support was not monolithic evidence of a lack of consensus in what might have been presumed to be a hegemonic elite. While most of the information gathered for this thesis stemmed from mainstream sources that are often the vehicles from the perspectives of the dominant, my use of the “official” media is selective and primarily empirical. A critical analysis is provided. A POLITICAL ECONOMIC ANALYSIS OF CINCINNATI’S DOWNTOWN REDEVELOPMENT SCHEME CENTERED AROUND THE CONSTRUCTION OF PROFESSIONAL SPORTS STADIA A Thesis Submitted to the Faculty of Miami University in partial fulfillment of the requirements for the degree of Master of Science Department of Physical Education, Health, and Sport Studies by James Anthony Brown Miami University Oxford, Ohio 2003 Advisor_______________________ Dr. Alan G. Ingham Reader_______________________ Dr. Thelma Horn Reader_______________________ Dr. Mary G. McDonald TABLE OF CONTENTS INTRODUCTION. 1 I. FRANCHISE-HOST COMMUNITY RELATIONS. 10 Symbolic Relationship. 10 Norms of Reciprocity. 12 Economic Arrangements of Sports Leagues. 14 Cartels & Monopolies. 14 Artificial Scarcity. 17 New Economic Environment. 18 Free Agency. 19 Revenue-Sharing. 22 Non-Shared Revenue. 28 A Case in Point: The Bengals’ Relationship with Cincinnati. 29 The Bengals’ Relationship with the Reds. 31 The Mike Brown Intervention. 33 Economically Obsolete Stadium. 38 Franchise Relocation. 39 Logic of Capital Accumulation. 40 II. URBAN REDEVELOPMENT. 46 The Downfall of Downtown Cincinnati. 48 Riverfront Stadium Tried to Revive Downtown. 49 Cincinnati Must Invest in its Downtown . 51 Downtown Cincinnati is Too Business-Oriented. 56 Families-First Concept Envisioned for Downtown. 58 Visions to Revitalize Downtown. 60 Visions Narrowed by the State. 61 Riverfront West. 64 Rebuild Riverfront Stadium. 72 Broadway Commons. 75 Empowerment Zone. 80 Gentrification. 85 Riots or Rebellions—Sites of Resistance. 89 The Politics of Redistribution. 92 Growth Coalitions & The Stadia Tax. 95 Interests of the Governing Coalitions. 96 Job Creation is Low-Paying. 99 Lack of Minority Inclusion in Construction Projects. 101 CPS not to Receive Adequate Funding. 102 Exclusion from Property Tax Relief. 103 Regressive Nature of Sales Tax. 104 ii III. FRANCHISE RELOCATION & STADIUM POLITICS . 106 The Fight for State Funding. 120 Transfer Stadium Management to County. 121 Stadia Sales Tax Increase Proposal. 125 Why a Sales Tax. 133 Cincinnati Public Schools. 135 Property Tax Relief. .. 137 “Sunset” Clause. 137 Financing Alternatives. .. 138 Team & Businesses Contribute to Stadia Funding. 143 Financial & Social Consequences of Losing Teams. 145 Economic Impact of Stadia. 149 Job Creation. 153 Relocation of Companies & Employees. 156 Citizens for a Major League Future. 158 Post-Referendum Negotiations. 160 Obstacles Preceding the New Lease Agreement. 161 Obstacles Following the New Lease Agreement. 164 Parking Problems . 167 Land Acquisition & Transfer. 168 City-County Agreement. 170 Stadium/Stadia Cost. 176 SUMMARY & CONCLUSIONS. 181 REFERENCES. 196 iii ACKNOWLEDGMENTS I want to thank Dr. Thelma Horn and Dr. Mary McDonald for all of their efforts in taking the time to read through the manuscript and give their constructive criticisms, shaping it to an even more enhanced multi-dimensional form that otherwise would not have emerged. Most of all, I want to thank Dr. Alan Ingham for allowing me the opportunity to take on such a complex project that I held with great interest, and for showing confidence in me that I could take on such a project. Thank-you Alan. iv INTRODUCTION In November 1993, the general manager and owner of the Cincinnati Bengals’ professional football franchise, Mike Brown, informed the Cincinnati community of his intention to relocate his team if his demands were not met. He threatened to relocate to another city if a new football-only facility was not built. Brown was seeking a public handout. His rationale for blackmailing taxpayers into providing a form of welfare assistance was due to the recent changes in the economic environment of the NFL. The economics of this environment have been shaped by a boon in the construction of new stadia with abundant luxury suites, the assessment of personal seat license fees, and by the new era of unrestricted free agency. Because the downtown Cincinnati region had been suffering economically at the hands of disinvesting capital, taxpayers (with heavy prodding from public officials) ultimately approved funding to grant Brown his wish. Passage of a 0.5% county sales tax increase to fund the construction of two new stadia (one for the Bengals and one for the Cincinnati Reds’ professional baseball franchise) was contrived to avoid the loss of their professional sports teams and to utilize the stadia as centerpieces of a massive urban redevelopment scheme designed to incite economic development. Cincinnati’s disinvestment problem of the 1990’s actually commenced in the early 1980’s when the pro-growth campaign unveiled by political leaders called for a “bricks-and-mortar” central business district. Dubbed the “Year 2000 Plan,” it mapped out the future of downtown Cincinnati to the year 2000. The city had accomplished its goal. But successful investment of capital into the downtown business district 1 paradoxically led to its downfall. By the early 1990’s, the city noticed a steady decline of residents and businesses in the region along with no signs to indicate that the trend would shift. To reverse this trend, Cincinnati sought to restore the downtown district by embarking on a project that followed recommendations set forth by urban consultants. The consultants alluded to the lack of family-type entertainment venues in the central city as the reason for its economic, physical, and social descent. To implement a course of action and curtail the incessant disinvestment of capital, Cincinnati‘s government officials bought into the idea that sports teams, along with the stadia they play in, have the ability to spur economic development as well as other non-economic benefits. To facilitate rejuvenation, cities often engage in “urban politics.” They compete with other cities—within and outside of their region—for capital investment to obtain or maintain an economically, physically, and socially healthy environment (Schimmel, 1987, p. iii). Intra- and inter-city competition is a consequence stemming from capital’s ability to disinvest (i.e., migrate to other regions) whereas cities are permanent fixtures fabricated into the metropolitan landscape. Because of this, cities must provide incentives to obtain or retain a National Football League (NFL) firm (Ingham, Howell & Schilperoort, 1987, p. 444). The funding source for providing these incentives comes from taxpaying citizens, or the public sector. City and county (or sub-state) governments operate under the model that to accumulate capital from the private sector, they must initiate investment from the public sector. With this logic in mind, officials see the practice of collecting taxes from the public for private endeavors (such as multi-million dollar sports stadia for professional sports franchise owners) as an ethical standard of conduct in the inter-urban contest for capital investment. Professional sport franchise 2 owners, cognizant of this political approach to a city’s revitalization efforts, often exploit the system. The policy decisions sub-state governments make with regard to providing many types of welfare assistance to owners of professional sport franchises, come in response to threats by team owners demanding that their respective host community build a new stadium to increase their profits. If their request is not met, the owner relocates the team to a location that will provide the largess. In the work that follows, I will discuss the problematic of professional sport franchise relocation, relocation threats, and the relation of relocation threats to urban politics with specific reference to the case of Cincinnati. My contention concerning the decisions of professional sport franchise owners to threaten their municipal host with relocation is in direct correlation with the micro-economic situation of the sport industry and the specific sport league to which they pertain. These relocation threats are also in direct correlation with the policies of public officials to construct stadia to catalyze the local economy in the face of inter-urban competition for capital investment. As Fainstein and Fainstein (cited.
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