Following up on this post from a couple of months ago on Dallas’ proposal to Dallas Cowboys owner Jerry Jones to build a new stadium in Fair Park for the Cowboys, Professor Sauer posts this analysis of Jones’ counter-offer to Dallas officials — i.e., the cost of the stadium would be $650 million, with the Cowboys paying roughly a third and getting $425 million in public subsidies from Dallas County. The public financing would be paid in part by a 3% increase in the hotel occupancy tax, which would raise that tax to the nation’s highest of 18%. Jones argues that the stadium and surrounding commercial and residential complex (which would include hotels) would “drive business to the metroplex.”
With pragmatic clarity, Professor Sauer observes: “If I were a hotel owner and Jerry Jones was asking for a subsidy to compete with me, financed by a tax on my business, I’d be hopping mad.”
Stay tuned on this one. Although Professor Sauer’s skepticism is undoubtedly correct from an economic standpoint, my sense is that Jones will be able to play on Dallas public officials’ concern over falling behind Houston in the “stadium arms race” to get a deal done that involves a boat load of public financing.