Chicago officials want to put more than $100 million in public tax money toward a new arena near the city’s McCormick Place convention center that would become the primary home of DePaul University’s men’s basketball team. And to sell the project that was widely panned by Chicagoans upon its release, the city has produced an economic benefit study touting the benefits the arena will bring.

According to the study, the arena will generate $251 million each year in gross economic activity and $108 million in “net recurring annual impact.” But those numbers are unlikely to materialize, because they are based on wildly inflated ticket sales projections that DePaul’s basketball team will almost surely fail to reach. The study assumes that DePaul will average 9,500 fans per game for 16 home games each year, which isn’t a huge increase from the 7,938 the school says it drew on average last season. The number of fans who actually attended games, though, would have to more than triple to meet that projection, as Crain’s Chicago Business reports:

Attendance at Blue Demons home games in suburban Rosemont has averaged around 2,900 over the past three years, according to Allstate Arena ticket records obtained by Crain’s. That’s about 35 percent of the school’s reported numbers and 30 percent of what McPier officials are projecting for the new arena. [...]

This past season, the official average number of fans that went to DePaul home games at Allstate Arena was even lower: 2,610 based on the Ticketmaster scan system, which tracks exactly how many people come inside.

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Chicago Mayor Rahm Emanuel will lay out a proposal Thursday for a $195 million basketball arena for DePaul University, a private Chicago university that spent $20 million in 2004 to make its current home, Allstate Arena, “a state-of-the-art facility.” The plan, according to reports from CBS Chicago, will require $125 million from taxpayers, with $70 million coming from a tax on hotel rooms and an additional $55 million coming from a common arena scheme known as tax-incremented financing (TIF).

Emanuel hasn’t talked openly about the plan, but an alderman on the city’s board told CBS that the plan, which includes hotels attached to the city’s convention center at McCormick Place, was about fostering economic growth. “Sometimes you have to make an investment in city resources to be able to generate tax dollars,” Ald. Pat Dowell said. But local arena expert Marc Ganis told the Chicago Sun-Times yesterday that it was “lunacy” to expect the plan to help the economy:

‘‘It’s lunacy,’’ he said straight off. ‘‘Sheer folly. It makes no economic sense whatsoever.’’ [...]

As someone who has worked on projects like these for decades, I can tell you there is absolutely no way for this to make any sense in any way. It is not in the realm of possibility.’’

DePaul has long wanted to abandon the Allstate Center, located about 17 miles away in Rosemont, for a facility closer to its Lincoln Park campus. The new arena, situated next to the McCormick Place convention center on Lake Shore Drive, would still be about seven miles from DePaul. The arena plan also includes proposals for new hotel, restaurant, and retail space around the convention center and arena. But why an arena, and one that DePaul will use just 18 times a year, needs to be a part of the redevelopment of that part of the city is unclear, especially since any plans to fill arena dates with concerts and other events would have to compete with the United Center, an arena just a few miles a way that is twice the size.

No matter what aldermen like Dowell say, the arena certainly isn’t included for economic benefits: studies have shown that arenas don’t actually have any. Instead, publicly-financed arenas and stadiums are far more likely to leave taxpayers saddled with debt they didn’t expect and without any of the economic benefits politicians and arena supporters promised.

TIF plans like Chicago wants to use rarely work out. A TIF plan creates a district around the new arena in which a portion of sales tax revenues will go toward paying off future arena debts. But actual revenues spurred by arena traffic almost always fall short of projections, as they have in Louisville, where the TIF district has failed to live up to its promise and left the city scrambling to make up the revenue gap. Louisville’s arena bonds are now at junk status, propped up only by the city’s willingness to pay them off with other sources of funding.

Chicago, though, need not look to Louisville to see why the arena isn’t a good idea. Chicago often uses TIF districts to promote redevelopment, and their failure has typically resulted in the city “raiding property-tax revenues that would otherwise be used for school funding,” as Field of Schemes’ Neil deMause noted today. That’s bad news for a city that is dealing with a $1 billion school funding gap, which it is trying to solve by closing dozens of schools across the city. So not only is the new arena plan likely to fall short of projections in a way that hurts the city’s general finances, it may hit it in a way that only exacerbates the school-funding problem Emanuel is desperately trying to solve.

The Miami Dolphins have canceled plans to upgrade Sun Life Stadium after the Florida state House of Representatives ended its 2013 legislative session Friday without voting on legislation that would have put the franchise one step closer to securing $380 million in public funding for the renovation project. Had the legislation passed, it would have triggered a May 14 referendum election in which Miami voters would have decided whether to hand their tax dollars to the Dolphins.

The stadium upgrade has been a priority for Dolphins owner Stephen Ross, the billionaire who bought the team in 2008 and wants the renovation to attract future Super Bowls to Miami. But Speaker Will Weatherford (R) ended the session without a vote (it had already passed the state Senate) because, he said, the legislation didn’t have the requisite support for passage. Lawmakers on both sides of the aisle and particularly those from the Miami-Dade area, Weatherford said, weren’t in favor of it. Dolphins CEO Mike Dee, unsurprisingly, didn’t make it through the weekend without issuing veiled threats to leave South Florida if they didn’t end up with public financing to renovate the stadium, the Palm Beach Post reported:

“We cannot do this without a public-private partnership,” Dee said.

Dee also said the lack of a deal could increase the chances of the Dolphins eventually leaving South Florida. Dee said Ross, who paid an NFL-record $1.1 billion for the Dolphins in 2009, isn’t threatening to move the team, but sources close to Ross, 73, believe he has no intention of passing the team on to his heirs and will sell it within 10 years.

“The Dolphins are one of the only franchises in the NFL that don’t have a long-term lease with their community,” Dee said. “At some point somebody’s going to buy the franchise from Steve, and clearly the stadium is the first thing they would need to address.”

It’s worth noting that Sun Life Stadium (née Joe Robbie Stadium) was built entirely with private funds in 1987, and it has served as a more than capable home of Dolphins, five Super Bowls, and four college football national championship games since. But in this era of publicly-financed stadiums (that almost always hurt taxpayers) and an NFL that requires teams to secure public money before giving owners access to low-interest stadium loans, private financing is unconscionable to owners like Ross.

Dee sent that signal more clearly than any recent owner has: it doesn’t matter that the Dolphins have called Miami home since 1966, longer than 17 of the NFL’s 32 teams have played in their current city. Without public financing, the team doesn’t care — not about taxpayers, particularly not about those who just forked $400 million to the city’s Major League Baseball team two years ago only to see that deal blow up in their faces to the tune of $2.4 billion over the same type of “long-term lease” the Dolphins are now seeking.

“I want this to be my legacy for Miami-Dade County,” Ross said after the legislation failed, according to the Miami Herald. If that’s the legacy Ross wants, he has enough money in his own wallet to ensure it’s the legacy he gets.

Considering the playoffs just started, there has been an awful lot of off-the-court news in the National Basketball Association this week. Buried beneath stories that Jason Collins came out as gay — the first man in the four major team sports to do so publicly while still playing — was the news that the Sacramento Kings won’t be moving to Seattle, which had seemed like a done deal just a month ago.

But the Kings are now almost assuredly staying put, thanks to a last-minute plan secured by Mayor Kevin Johnson that will put $250 million in taxpayer financing toward a new arena that helped the NBA’s Relocation Committee decide to reject a potential sale to a group of Seattle investors. The arena is the key piece of a deal that played everyone, as Deadspin’s Barry Petchesky summed up nicely:

Arenas are the endgame. They multiply the value of a franchise, provide outside revenue streams, and send the potential future sale price of a team through the roof. It’s not cynical to assume that these past three years of pitting city vs. city, with heartbreak the consolation prize, was done solely to pressure Sacramento into propping up the value of the Kings with a new arena.

So what of Seattle, where a new arena—with $200 million from bonds—is almost a done deal? The league may have decided that the threat of relocation is, in the short-term, more useful than following through. Much like the NFL with Los Angeles, Seattle can serve as the NBA’s bogeyman, to be trotted out any time a city needs a scare to keep its NBA owner happy.

That’s pretty much it. The Kings wanted a new arena and it didn’t really matter whether it was financed by taxpayers in Sacramento, Seattle, or Virginia Beach. Not only did they get that new arena, they got it in a way that will only make it easier for other teams to wrangle new arenas out of taxpayers in the future, since Seattle will remain a point of leverage for any owner who wants taxpayers to foot the bill for new digs that will only enhance the value of the team he owns. Give the owner a new arena, or he’ll pick up and move to a city that will.

The NBA wants to go back to Seattle, but what it wants more is to use the city as a bargaining chip in future arena negotiations. Seattle remains its most viable market opportunity, and since it’s running out of attractive markets owners can pit against their current cities, it doesn’t want to add another franchise to get there or anywhere else. But when a team does end up in the Emerald City, another city — Louisville, Virginia Beach, Kansas City, or somewhere else — with a shiny new arena or plans to build one will become the destination du jour of every owner who needs a little leverage. And until owners run out of cities to pit against each other (they won’t any time soon precisely because they refuse to expand), or until taxpayers and elected officials realize that they’re only getting played by handing over huge sums of money to subsidize and enrich a handful of wealthy people, this endless game of arena chicken will continue on. Taxpayers are guaranteed losers every time.

Oklahoma Sen. Tom Coburn (R) today introduced an amendment to the Marketplace Fairness Act that would end the practice of allowing professional sports leagues to qualify as tax-exempt organizations, a move that would hit leagues like the National Football League, the Professional Golfers Association (PGA) Tour, and the National Hockey League, among others.

Since 1966, the tax code has allowed leagues to classify as 501(c)(6) charitable organizations — a classification used by trade and industry organizations — under the assumption that the leagues were promoting the general value of their sports. But Coburn’s amendment asserts that the leagues are not non-profits engaged in the promotion of their sports but instead are businesses interested solely in the promotion of their business; that is, the NFL isn’t so much concerned about promoting the general sport of football as it is concerned with promoting NFL football, because it is the NFL brand and the NFL teams and logos and products that make it a profitable business. The NFL, for instance, didn’t seem interested in promoting the general spread of football when a competitor league, the United States Football League, was formed in 1983. Likewise, the PGA Tour, NHL, and other sports leagues serve to promote their brand of their sports, not the sport as a whole.

Further, the leagues hardly pay their executives as if they are non-profits. The NFL paid $51.5 million to just eight executives in 2010, according to Coburn, and other leagues are similar — PGA commissioner Tim Finchem made $5.2 million that year, while NHL commissioner Gary Bettman took home $4.3 million.

In his 2012 Waste Book that chronicled government waste, Coburn said that taxpayers were losing as much as $91 million a year subsidizing professional sports leagues because of their non-profit status:

The National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits. Taxpayers should not be asked to subsidize sports organizations already benefiting widely from willing fans and turning a profit, while claiming to be non-profit organizations.

The 501(c)(6) provision, specifically amended in 1966 to add “professional football leagues,” states that “[n]o part of a business league’s net earnings may inure to the benefit of any private shareholder or individual and it may not be organized for profit to engage in an activity ordinarily carried on for profit.” That would seem a hard standard for most professional leagues to meet, given the amount of revenue they make and the benefits they provide to the people involved. Individual team owners, in fact, benefit substantially from the league’s structure and even its classification as a non-profit organization.

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Miami voters will go to the polls on May 14 to decide if they want to hand over hundreds of millions in public money to renovate SunLife Stadium, the home of the Miami Dolphins. Approval is far from assured, and though Dolphins owner Stephen Ross has insisted that he won’t sell the team if the proposal is voted down. But today, ProFootballTalk’s Mike Florio reported that Ross may sell the team to new owners less willing to keep the Dolphins in Miami if the proposal fails, and because of that, Florio says Miami voters should get over their “philosophical concerns” about handing over tax dollars to Ross because “billionaires always have options” that may leave the city without a football team if they don’t:

The other alternative would be for Ross to simply fund the renovations without public money. By blinking, however, Ross and the NFL would be setting a horrible precedent for any future efforts by other teams to finagle public money.

The easiest long-term solution would be for folks in Miami-Dade County to support the referendum. The small increase in hotel taxes would result in a stadium that would attract Super Bowls and other events that would drive plenty of money into the region.

Despite any philosophical concerns about the use of taxpayer money to subsidize billionaires, billionaires always have options. For Stephen Ross, one or more of those options could lead to the Dolphins leaving town.

If Florio’s screed appears lifted from the talking points of franchise owners across the country, that’s because it essentially is. Owners consistently use the threat of relocation to appeal to fans and extort hundreds of millions of dollars from taxpayers to fund new or improved stadiums. Ross, to his credit, hasn’t done that — Florio is instead doing it for him. And owners often argue that the public should pay for stadiums because the benefits — in this case, the Super Bowl — will repay them for it.

Research shows that Super Bowls and other mega events don’t boost economies by the sizable figures event promoters claim; other research shows that stadiums and arenas are hardly investments that eventually pay for themselves. Taxpayers are paying more than $4 billion a year to fund stadiums across the country at costs $10 billion more expensive than originally estimated. And those investments are hardly paying for themselves. At almost every turn, the deals fail to live up to revenue and economic growth projections used to sell them, forcing taxpayers to pick up the tab through higher taxes or huge budget gaps that lead to cuts to valuable public services.

That’s the case in Minnesota, where a new NFL stadium has turned sour even before ground was broken. It’s also the case in Cincinnati, where the city handed over $500 million to the Bengals then had to sell off a public hospital to cover a budget shortfall. It’s even the case in Miami, where deception over a new baseball stadium led to the recall of city lawmakers and a $2.4 billion tab for taxpayers. That “billionaires always have options” doesn’t mean taxpayers should ignore the economic concerns that come with funding a stadium, and in almost every instance, the economics are bad for everyone but the billionaire owner who profits.