May 2000 Boston Baseball: part 2 of series on new stadia

New Stadia: Baltimore

Less than a year after the White Sox dedicated their hideous new Comiskey Park with a 16-0 loss to Detroit, Baltimore's Oriole Park at Camden Yards rewrote the book on stadium design. For once in baseball history, even the purists embraced the change.

The Orioles had occupied Memorial Stadium since moving from St. Louis in 1954. Originally constructed for football, Memorial was located in a residential neighborhood on the north side of Baltimore. With only 5,000 parking spaces in the neighborhood and the nearest freeway several miles away, big crowds meant even bigger traffic jams at the end of the game.

Although the Orioles periodically talked about the need for a new stadium, their pleas fell on deaf ears until March 29, 1984 -- the day when a caravan of moving trucks hauled Baltimore's beloved Colts out of town in the middle of the night. With forty years of football history en route to Indianapolis, Baltimore Mayor William Donald Schaefer wouldn't risk the Orioles following suit.

Not that Indianapolis had any chance of attracting the Orioles, whose likeliest destination was just forty miles away. Washington, D.C. had a stadium, a growing suburban population, and a strong constituency: Congress, which occasionally threatened to investigate why its members had no local team to watch.

Indeed, Baltimore feared that Washington might even have an owner in place. After decades of local ownership, the Orioles had been sold in 1979 to Washington superlawyer Edward Bennett Williams. Although Williams disavowed any interest in moving the team, Schaefer had to be worried. After all, Robert Irsay moved the Colts without warning -- how far could Baltimore trust a slick D.C. lawyer?

Schaefer sought advice from Hellmuth Obata Kassabaum (HOK), the nation's leading sports architecture firm. In August 1986, HOK recommended construction of a huge new multipurpose stadium, surrounded by parking lots, at Camden Yards.

That November Mayor Schaefer was elected Governor of Maryland. Soon after he took office, the state legislature established a new instant lottery and dedicated its proceeds to construction of new sports stadia. The Maryland Sports Authority would first build a new, baseball-only park at Camden Yards, then seek to lure a replacement NFL franchise with promises of a new football stadium.

Many legislators who had opposed the stadium were even angrier about the financing. The lottery drew most of its money from the poor, making it a spectacularly inappropriate vehicle for subsidizing a new stadium. Moreover, before earmarking lottery money for the stadium, Maryland had rejected other attempts to dedicate proceeds from the lottery for education or other public purposes.

At least the legislature had chosen the right location. Camden Yards was a short walk south of downtown Baltimore, close to both highways and mass transit. The site had been the center of the B & O Railroad's local operations for more than a century. It was even intimately tied to Baltimore's baseball tradition: Babe Ruth was born a few blocks away, and his father ran a saloon in what would become center field. Now all the Orioles needed was a ballpark worthy site.

Since 1960, two basic stadium designs had evolved: isolated islands in an ocean of parking (Anaheim, Kansas City, Philadelphia, San Francisco), and downtown domes which overwhelmed the game (Minnesota, Seattle, Toronto, Houston). The Orioles demanded something different -- a design as harmonious with its urban setting as the modern need for skyboxes and premium seats would allow. To be sure its wishes would be respected, the club shrewdly added a clause to its lease for the new park which gave the Orioles the right to approve all aspects of its design.

The Orioles wasted no time putting this power to use. Backed by new owner Eli Jacobs, who bought the Orioles after Edward Bennett Williams' death in 1988, club president Larry Lucchino and consultant Janet Marie Smith, with help from ballpark design consultant John Pastier, began redrafting HOK's stadium plans.

Some of Camden Yards' distinctive features are immediately apparent. The former B & O Railroad warehouse behind the right-field wall -- the longest building on the East Coast -- was preserved and converted into office space, a gift shop and restaurants. Every aisle seat is adorned with a replica of the logo used by the 1890s Orioles. The playing field lies 16 feet below street level, allowing the Orioles to reduce the apparent height of the park so it doesn't dominate the neighborhood. The skyline of downtown Baltimore is framed behind the center-field fence. When the Orioles are playing, a pedestrian walkway between the right-field stands and the warehouse serves as a combination food court and souvenir stand.

But Camden Yards' distinctiveness runs much deeper -- all the way to its frame. Overruling their architects, the Orioles demanded a structural steel frame, not the precast concrete which had become standard. The bricks -- thirty different kinds -- were laid in place, not prefabricated for on-site assembly. Such attention to detail, and the stark contrast with the likes of New Comiskey, helped Camden Yards become the only ballpark ever to win a major design award from the American Institute of Architects.

Camden Yards is an esthetic success -- but is it also a financial success? That depends on your perspective.

For the State of Maryland, which built and paid for the facility, Camden Yards was a relative bargain. $99 million of its $205 million cost went to acquire the land and prepare the site. The stadium itself, originally budgeted for $78.4 million, cost $106.5 million after cost overruns and the Orioles' design changes. Camden Yards cost barely 1/3 as much as SkyDome, and just $38 million more than New Comiskey, which had been built at a much cheaper location with no apparent concern for esthetics.

For the Orioles, of course, the new park was a license to print money. Camden Yards immediately became one of Baltimore's biggest tourist attractions. Since moving to Camden Yards, the Orioles have never finished lower than second in AL attendance, leading the league for five years in a row from 1994 through 1998. Their 72 luxury boxes command premium prices.

A 1997study found that the move from Memorial Stadium to Camden Yards brought the Orioles $25.5 million/year in added revenues, while rent and related expenses rose only $2.4 million. (The Maryland Stadium Authority deliberately charged the Orioles a sub-market rent to give the club more money to spend on players, and allowed the club to keep nearly all the revenue generated by premium seats, luxury boxes and in-stadium advertising.) Without investing a dime of their own to build Camden Yards, the Orioles received an annual windfall of more than $23 million.

Teams in other cities took notice. In 1995, Bud Selig declared that Camden Yards "changed stadium financing. Those clubs have revenue sources that people didn't have before. There are a million of them. Luxury boxes, concessions, a whole series of things, club seating. There are stores within the park, restaurants within it. It started with Camden Yards and went to Cleveland, Texas, Colorado. If you want your club to be competitive, you have to have it.''

Unsurprisingly, Selig made this comment at a time when he was lobbying the government of Wisconsin to build him a new stadium. "We'll build another Camden Yards" became the rallying cry of stadium advocates across the country as they promised that their new park would "revitalize our downtown and pay for itself by attracting out-of-towners."

But even Camden Yards hasn't generated such economic benefits. In 1997, Johns Hopkins economists Bruce W. Hamilton and Peter Kahn assessed the economic impact of Camden Yards in Chapter 8 of Sports, Jobs & Taxes (see sidebar). Their conclusion:

"Taking account of all of the measurable benefits of the Camden Yards investment (that is, job creation and tax imports), we estimate that baseball at Camden Yards generates approximately $3 million in annual economic benefits to the Maryland economy, at an annual cost to the taxpayers of Maryland of approximately $14 million."

Even Camden Yards doesn't come close to "paying for itself."

Hamilton and Kahn spend 20 pages elaborating on this conclusion. On the expense side, they calculate that depreciation and interest cost the Maryland Stadium Authority about $14 million per year. The other major expense, maintaining Camden Yards, is covered by the Orioles' rent.

On the revenue side, the economists accept Oriole estimates that more than 70% of the increased attendance has come from out of state. However, they note that hotel occupancy rates did not rise after Camden Yards opened, which suggests that most of these out-of-towners went straight home without spending much more in Maryland.

Hamilton and Kahn conclude that more than half of the $3 million in extra revenue comes from admission and concession taxes at Camden Yards itself. Most of the remainder is attributable to additional spending in the surrounding area, with less than $500,000 derived from the creation of new jobs. All told, each dollar of extra revenue from the ballpark costs Maryland taxpayers almost $5 -- making Camden Yards one of the few investments worse than the lottery which financed it.

Baltimore's experience shows that regardless of what owners and city officials say, investing $200 million of public funds in even the best-designed ballpark is virtually impossible to justify on economic grounds.

Of course, that doesn't end the debate. Camden Yards' $11 million annual subsidy costs each household in Greater Baltimore less than $15. For hard-core Oriole fans, that's a small price to pay for turning the Orioles from a medium-revenue to a high-revenue team. (Most would probably pay even more to keep the Angelos family from wasting their money on aging mediocrities.) But there aren't enough hard-core fans to persuade a legislature to appropriate the funds or to win a referendum, so stadium proponents need the support of casual fans and civic leaders.

These people don't live and die with the local team, but they recognize that on one level, the presence of the Orioles confers "major league" status on Baltimore. From this perspective a baseball club is a community asset, like a zoo or library, which even those who don't go to ballgames can support.

To win their support, ballpark backers need to convince them that the team will move unless a new stadium is built.

That's why in city after city, the new-stadium dance has begun with the owner of the local club solemnly announcing that the team simply cannot survive without a new park. It's also why MLB keeps the number of franchises slightly below the number of interested cities: no one will listen to the owner's laments unless he can credibly threaten that if his hometown won't meet his demands, Washington or Charlotte will.

The Orioles could make such a threat. Can the Red Sox?

SIDEBAR: The Economists' Take on Stadium Finance

Team owners and others promoting new stadia often commission studies which purport to show how much the entire community will benefit from a new ballpark. Independent economists are rarely convinced.

If you want to learn how to analyze the claims of stadium proponents, these books are invaluable:

Mark S. Rosentraub, Major League Losers: The Real Cost of Sports and Who's Paying for It (Basic Books, revised paperback ed. 1999, ISBN 0465071430)

Roger G. Noll and Andrew Zimbalist, eds., Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums (Brookings Institution Press, 1997, ISBN 0815761112).

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