Neighborhood Blight: the New Stadium Scam

Posted on by

We all know the new stadium scam playbook in-and-out: teams commit to a long-term lease, promise to create jobs, and show off some hired gun economic impact study. Local communities then throw subsidies, free land, and tax breaks at them to the tune of hundreds of millions. In reality, the stadium creates only a few part-time and low-wage jobs, the surrounding neighborhood gentrifies only a bit (based on, duh, external factors like location), and the team tries to weasel out of the lease in later years (or extract renovation concessions).

Yet, in both Detroit and Liverpool, England, a new and far more sinister stadium plan has emerged: strategic blight.

In an excellent article on the Pizza Magnates (aka Illitch family) and the Detroit Red Wings’ new stadium, Stephen Henderson vary tactfully questions why they bought so much land in anticipation of a new stadium and sat on it for a few years. Of course, the owners claim that the economy sucked and it was not a good moment to invest heavily in, say, making sure the properties were not shitholes. However, when large investment groups buy up swaths of land in a neighborhood and don’t invest heavily in upgrades, that creates a ripple effect for neighbors. For example, say said “Investment Group LLC” bought some houses and warehouses. Not having these places inhabited attracts street crime such as drug-dealers and squatters and other undesirables. This in turn decreases the quality of life (and property values).

If I was a cynic, I’d say that Investment Group LLC actually wanted to turn a neighborhood into a shithole to then buy the remaining land more cheaply. I’m not that cynical, but my criticism is related: what about the opportunity cost? If Investment Group LLC buys land to sit on it and let it go into disrepair, what if that land had been bought by a proper real estate developer with more immediate gentrification plans that would have benefited at least some residents in the near future? Of course, Detroit, like all cities, has a building code that requires a building to be structurally sound or it can’t be certified as habitable. But that’s the problem: these vulture real estate groups don’t want a habitable building (they plan on demolishing it anyway). They want to inflict short-term suffering on other residents and eventually force a sale with sweet terms.

Don’t believe me? Take a look at what happened with Liverpool FC. The club bought 150 homes around Anfield and left them vacant. Nope, not even renters. Things got so bad that thieves broke into the homes and stole everything, stripping lead off of roofs. Some of the houses were even set on fire. The plan was named “Dereliction by Design” as Liverpool used shell smaller companies to buy the houses and let neighborhoods go to hell. They had to use shell companies because if residents got win that Liverpool was the buyer and had stadium plans, they would have presumably held out for more money.

And that leads to the fundamental imbalance: a single homeowner can’t afford to buy a home and leave it vacant. Liverpool and the Detroit Red Wings can. Yet the municipalities deserve blame as well for letting these major businesses inflict short-term suffering on other residents. They could have been fined for building and housing code violations. Also, at the height of the recession, some cities debated as “Occupancy Law” that would require individuals to physically occupy structures on land a portion of the year or risking losing it to the public domain.

Of course, those laws and ideas went nowhere. The folks who cut checks to political campaigns are the same ones who strategically blight the neighborhoods of future neighborhoods. But as long as folks pay to see games live and look the other way on dealings, we’ll see more Scamfields than not.

2 thoughts on “Neighborhood Blight: the New Stadium Scam

  1. Ah, come on man…not you too! That Vice article is so full of holes it’s a miracle any words stayed on it! I was impressed at the length one author’s postulation could run based on a couple comments from one resident written in one Guardian article a couple years back. The Dereliction of Design wasn’t LFC’s ‘plan’…just what one resident called it. The ‘shell companies’ used to purchase the properties were almost exclusively purchased under Liverpool City Council…that’s not a strong attempt to hide much. The biggest problem though is the inference that the decay in Anfield is mostly attributable to LFC and NOT the deregulation in the 80s. As someone who visited a few years back and walked around parts of the neighborhood, that ain’t no Liverpool’s doing. Those houses have been empty for YEARS. Blame Thatcher…not FSG.

    None of this takes away from the fact that new stadiums as ‘boons to the neighborhood’ is a complete farce though. I believe the system runs something like this:

    A. Politician is in office.
    B. Politician wants to stay in office.
    C. Politician sells soul to franchise that constituents love.
    D. Constituents, despite themselves, vote for Politician to stay in office.

    • Your formula makes sense to me, but can’t we equally hate the companies who exploit deregulation as the politicians who deregulate? Hate the Thatcher AND the American owners!

      The VICE article also cited more than a single Guardian article or resident – regardless, abandoned homes and buildings are a serious pain in the buns for any neighborhood, and 150 “still life” structures would piss me off if they were owned by a business with millions in annual revenue and they were not helping my neighborhood.

      As the Hayes article on Detroit (and a similar situation) pointed out, you can’t really criticize the ownership groups because they are, in fact, “investing” in the communities and paying property taxes. However, how positive (to the community) an investment is that doesn’t tear down the structures or renovate them or rent them is seriously debatable.