In economic circles, Connecticut is known not only for its oppressive taxes and dreadful permitting regime, but also as a great place to receive corporate welfare. Our current governor likes to bribe companies to either move here or stay here. A former governor once tried to incent the New England Patriots to relocate to Hartford, only to be left standing at the altar.
Last week, the administration of Gov. Dannel P. Malloy agreed to pay $618,000 for the rights to the New Haven Open At Yale tennis tournament, and invest a total of $1.4 million a year, including operating subsidies of $400,000. The deal has to be approved by the Capital Region Development Authority, but that’s widely assumed to be a fait accompli.
So this is what the economy of the state of Connecticut has to come to? The state buying the rights to a money-losing tennis tournament that few people want to watch? Even free-spending wide-eyed big-government optimists would have to question this move.
Office of Policy and Management chief Ben Barnes conceded during a conference call last Thursday that the women-only tournament drew 45,000 spectators in 2013, down from more than 100,000 at its peak. This year’s final drew only 4,000, resulting in a mostly empty stadium that seats 15,000. In its heyday in 2008, the tournament had a $25 million economic impact, according to a study conducted when the attendance was nearly double what it is now.
The New Haven Open, formerly the Pilot Pen, lost money this year on revenues of about $4 million, and the state will contribute $400,000 this year and next to subsidize the tournament, Barnes said. So why exactly did the state want to buy a distressed tennis tournament and commit to spending millions in taxpayers funds to keep it going?
Calling the sinking Open “a bargain in the world of owning tennis tournaments,” Barnes said, “We felt that between the quantifiable economic impact and the harder-to-quantify impacts of identity were beyond value.”
Forgive me for being presumptuous, but did a top Malloy administration official just say that an annual nine-day tennis tournament that loses hundreds of thousands of dollars a year is priceless? If so, the quote itself is priceless for Republicans looking to brand Malloy as a big spender as he prepares for a re-election bid next year. To wit, House Minority Leader Larry Cafero seems to be catching on.
“Tennis, anyone?” Cafero asked The Courant. “That’s what’s going to be our new motto as a state.”
Citing the XL Center, owned by the city of Hartford, Cafero questioned the wisdom of the state getting into the sports business. Since the departure of the Whalers in 1997, the XL Center has been underused and, though built in 1975, is already considered by many to be a dinosaur in need of a $100-million renovation or outright replacement.
But Cafero also floated an idea that political observers have been whispering since this story broke. Malloy has clearly been trying to repair his relations with organized labor and shore up his base in the urban areas that provided his slim margin of victory over Republican Tom Foley in 2010. He endorsed the union-backed state Sen. Toni Harp in the Democratic primary for mayor of New Haven.
“It’s good for the governor, who gives largesse to the particular town or city. This one is pretty blatant,” Cafero said. “It seems like a pretty blatant political move to garner favor from New Haven voters in the statewide election.”
And a staffer at Foley’s own think tank, the Connecticut Policy Institute, also took the bait. “Running tennis tournaments is not the job of state government for the same reason managing restaurants is not government’s job — taxpayers should not be subsidizing entertainment services for which there is no demand,” wrote CPI executive director Ben Zimmer.
There is some precedent for the state owning sporting facilities. The state owns Rentschler Field and Gampel Pavillion. But both are the homes of Division I University of Connecticut teams, so the state clearly has a compelling case to make for ownership. The New Haven tennis stadium itself was built with state funds during the Weicker administration on land owned by Yale.
Some are suggesting that since the state built the stadium, assuming the operational costs of the distressed tournament is a natural move. I’d say it underscores the folly of the state’s involvement in the first place. It’s one thing for state and municipal governments to offer incentives and even float bonds for sports franchises to relocate; it’s quite another to own and run a failed enterprise whose risk properly belongs in the private sector.