The use of taxpayer money to help fund stadiums for billionaires is already one of the biggest rackets in sports, but it’s going even further in Texas. The Plano Independent School District (PISD) voted on Monday to give $250M of its own funding to the Dallas Stars to fund construction of a new hockey arena in town. This comes after the city of Plano already voted to earmark $700M in taxpayer funds to help construct the $1B arena project.
What was once pitched to the public as a partnership of public and private funds, now means that $950M of taxpayer money will be used for the arena, with the Stars only chipping in a small portion of that on the back-end. This is happening despite the fact that Stars owner Tom Gaglardi has a reported net worth of $5.5B.
The PISD is justifying the investment twofold: first, it notes that it has an agreement as part of the funding for the school district to be able to host graduations and other events at the arena, while also claiming the construction project will net them $438M in revenue over the next 25 years. It’s unclear how the school district arrived at this figure, or why officials have deemed $250M a sound investment for a school district already facing a budget deficit.
The district projects a $44.8 million deficit in the next fiscal year’s budget, according to Johnny Hill, a deputy superintendent. But PISD stands to gain “substantial financial benefit” as a result of the arena deal, Hill said at a work session in June,
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There’s an immense amount of dishonesty coming from both the Plano City Council and the PISD. While it’s true that local schools will be able to host events like graduations at the new arena, this is something that should have already been baked into the $700M agreement with the city itself. City council justified their massive investment in the project by telling the public that “the arena would also host concerts, cultural programming, and other sports and community events.” Instead of graduations being included as part of those “community events,” lawmakers are basically double-paying the Stars, now saying that this additional $250M in funding would ensure high schools can use the arena.
Further justification for the arena project has come by pointing out the increased property and sales tax revenue; however, this is smoke and mirrors. Plano plans to establish a “Tax Increment Reinvestment Zone” (TIRZ), as part of the agreement with the Stars, which is a Texas program that allows for captured property and sales tax within a designated area to be reinvested in the area it was taken from. In this case it means the Stars’ arena itself and the surrounding businesses that will be part of the construction. A feasibility study for the investment notes that Plano itself is functionally getting nothing out of this deal.
[N]ew development (which would not have occurred but for the Zone) will generate approximately $1,377,499,464 in total new real property tax revenue, and the City will retain $0. Based on the Feasibility Study, during the term of the Zone, new development (which would not have occurred but for the Zone) will generate approximately $245,598,628 in total new sales tax revenue, and the City will retain $0.
Questions linger about who is going to foot the bill for additional infrastructure improvements to overhaul the site. City officials have not yet given answers on who is funding necessary expansions to roads, sewage, and electricity — with critics noting that the lack of a concrete plan indicates that the city is trying to pass on these costs to taxpayers as well.
In short: Plano is paying $700M. Plano schools are paying $250M. In return they will generate zero direct income, but will pay close to $1B in total to ensure graduations can be held in an arena, and other unspecified “community events” take place.
Plano voters in November will be asked to approve “Proposition A,” which would establish a new “venue tax,” to help fund the arena. The Stars would pay nothing, with the money being made off car rentals, hotels, and event tickets. This means that Stars’ fans in Plano would be hit with an additional tax on their tickets to help fund the arena they’re already paying for.
In the pantheon of crooked stadium financing deals this might be the worst that has ever been pitched.