Pro Sports, Corporate Welfare And Iowa’s Deal With Apple

Osteen's church

Joel Osteen’s church in Houston, Texas – A monument to corporate welfare.

Dave Zirin is a sports writer of a different breed. While other sports writers are in the mold of hero worshipers who seem to feel that sports exists on an other worldly plain, Zirin is the one guy who looks at the often very corrosive effects that professional sports have on society. Zirin also looks at the owners who exploit their position with a very jaundiced eye.

Prior to Labor Day Houston, Texas was inundated by Hurricane Harvey. One of the strangest and perhaps most enlightening stories to come out of Harvey was the story of Christian Evangelist Joel Osteen refusing to open his palatial church to help save refugees from the floods. Eventually he opened his church, but not before being embarrassed into doing so by social media.

Because of the spotlight being shone on Osteen and his mega-church, questions were asked about how Osteen acquired this property. This is where Dave Zirin comes in with the backstory: 

“Less discussed—and Osteen must be relieved that this is the case—is how this televangelist got his hands on his megachurch arena in the first place. It’s a story that speaks to how our cities are unprepared for disasters like Harvey in part because of the way spending has been diverted into publicly funded stadiums—stadiums that become rotting carcasses or “white elephants” as soon as a billionaire wants a new one.

Taxpayer-subsidized stadiums have long become a substitute for anything resembling urban policy in the 21st century. And now as roads, bridges, and humanitarian shelters decay, they stand exposed as neoliberal Trojan horses that take public dollars and magically transform them into private profit for billionaire sports owners. They are a scam, a con, and, not surprisingly, a grifter like Osteen has long had his hand in this honey pot.

Osteen’s church was once a hoops hallowed ground called The Summit, home of the Houston Rockets and the site of the magic made by Hakeem Olajuwon and his 1994 and 1995 teams that won back-to-back NBA titles. In 1995, flush with this success, Rockets owner Les Alexander demanded a new sports arena from the city. These negotiations eventually resulted in the Toyota Center, which opened in 2003, even though the city voted down this plan in a 1999 referendum. In the end, the people of Houston paid $182 million of the $235 million in construction costs. Toyota paid $100 million in naming rights, all of which went to Les Alexander.

That was just the beginning. Texas taxpayers have continuously paid for upgrades in the subsequent years. In 2013, the public even paid for a new $8 million scoreboard to help prepare Houston for the NBA All-Star Game. (Imagine what that $8 million could be used for right now.) Then–State Senator Dan Patrick, who today is Texas’s vile lieutenant governor, was correct when he said at the time, “I love sports. But sports owners and the leagues are some of the greediest people you will find, and they will take and take and take and take.

But it’s not just sports owners who took and took and took. Osteen, who leads the largest congregation in the country and lives in a mansion that Donald Trump would find gaudy, moved his church to the publicly owned Summit in 2005 for a bargain-basement lease and then purchased it outright in 2010. How much did Osteen pay for this historic, usable but now useless arena? $7.5 million dollars. For the cost of a backup power forward, Osteen had himself a megachurch. The Summit, no longer the house that Hakeem built, would now be home to a Sunday television program and a preacher who gets paid in souls by the pound.

So here we have a situation where sports owning billionaires exploit states and cities and politicians to build arenas for their sports teams at no cost to them despite having desperate social needs. Then as an added insult we have a vulture who comes to pick the bones of the exploited city. Then said vulture, in this case Joel Osteen, turns his back on the very people who initially paid for his palatial church.

So how does that translate to Iowa? We only need to look back to about the time of Hurricane Harvey to see the state of Iowa handing over huge amounts of tax incentives and various other monetary rewards to help a multi-billion company build a place of business. Apple is a company which is sitting on hundreds of billions of dollars of cash, yet exploited the situation to extract millions of dollars from Iowa governments that could have been used for infrastructure and education.

In Thursday’s iowastartingline.com Rick Smith asks a very perceptive question – So Why the Handout , Governor?

Why would Governor Reynolds and the Iowa GOP think they need to bribe Apple to come to Iowa? Apple was likely coming to Iowa anyway because of Iowa’s combination of cheap and green energy. Iowa is one of the few states that offers these two essential resources Apple demands. Iowa leads the nation in developing the cheap, renewable wind energy that Apple and most of the major high tech companies require. Iowa is not only the current leader in providing clean wind energy, it is on track to be the national leader for years to come. Apple’s CEO Tim Cook announced why they chose Iowa; it’s Iowa’s “world-class power grid!”

{snip}

Experts suggest Iowa and Reynolds got taken simply because they don’t understand the needs of these companies. Anyone making these deals should have a basic understanding of what these companies require. Reynolds and her predecessor Branstad gave away huge amounts of future tax revenue simply because they didn’t do their homework.

The LA Times called Reynolds’ deal corporate welfare folly: “These incentives often are an unnecessary bonus to companies that already have made a site location decision based on more important factors. Yet states and localities have persuaded themselves that the incentive packages are an indispensable lure to employers and that without them their economies will collapse.”

Reynolds was following the lead of Gov. Branstad whose administration lavished as much as $110 million in state subsidies for a fertilizer plant in Lee county that just opened in April. This is just to add to the mix that has gotten Iowa into fiscal difficulty by giving more and more breaks to businesses. An analysis by Peter Fisher and Mike Owen at iowafiscal.org points out that:

Spending on business tax credits has grown 267 percent since 2007. Caps on individual credits and groups of credits have done little to slow growth. The cost of credits has far outstripped growth in general fund spending overall.

Recent measures have added greatly to the problem. The massive commercial and industrial property tax bill passed in 2013 was responsible for a $268 million cut in funds that otherwise would have been available to adequately fund education, natural resource programs, and other priorities in FY16. The impact in the current year was projected at $304 million.[1] The property tax breaks are larger than the sum of all business tax credits.”

So while not as ostentatious and hard to swallow as the corporate welfare for sports owners, Iowa’s version of corporate welfare is a habit the state must break. Heck I am old enough to remember when businesses chose locations based on things like infrastructure soundness, an educated workforce with strong work ethic and transportation soundness and a customer base

Somehow this culture of corporate welfare must end. Who will lead the way?

About Dave Bradley

retired in West Liberty
This entry was posted in Blog for Iowa, Branstad, Kim Reynolds and tagged , , , , , . Bookmark the permalink.

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