New Proposal Could Consider Stadium Financing as Aid to Poor
Planned changes to the Community Reinvestment Act could benefit sports teams
New sports stadiums are frequently the subject of heated discussions, especially if they involve public funding for structures that don’t necessarily provide a boost to their local economy. And yet the way stadiums have become political footballs, sometimes used to lure teams from one city to another, endures. The case of the Raiders and Las Vegas is among the highest-profile ones at present, but it’s far from the only example of a team getting a sweetheart deal to move into a new facility in a new place.
Now, that issue might be getting even more politically-changed. How, you may ask? It has to do with a plan from the Trump administration to revise the Community Reinvestment Act.
The Community Reinvestment Act dates back to 1977, and was originally written to combat lending discimination. A 2018 article at CityLab notes that, when it was passed, “the new law required [banks] to demonstrate that they serve low-income households wherever they are located.”
As the banking landscape has changed since then, there’s been some discussion of revamping the Community Reinvestment Act to address certain entities that didn’t exist in the late 1970s: internet-only banks, for instance.
Last week, the regulators working on updating the law announced a number of proposed changes to it. At Bloomberg, Noah Buhayar and Jesse Hamilton took note of one change in particular, which might have the effect of benefiting the owners of sports teams in the name of aiding the poor.
“Now, under proposed rule changes, banks may finance upgrades to sports stadiums, call it helping the poor — and potentially even get a generous tax break,” Buhayar and Hamilton write.
Now, given that sports team owners are a pretty wealthy bunch, this doesn’t seem to make much sense. Turns out that the proposed changes for the Community Reinvestment Act involves the following suggestion by which banks could fulfill their requirements under it: “Investment in a qualified opportunity fund, established to finance improvements to an athletic stadium in an opportunity zone that is also an LMI census tract.” For those wondering, LMI means low- or moderate-income.
The Bloomberg article notes that “over a dozen” NFL stadiums are found within LMI census tracts at present, along with numerous facilities used by other professional sports teams around the country. The fate of this proposal is currently under debate, as the proposed changes are now in the public comment phase. Whether this idea ends up vanishing from the final version or becomes law is in the hands of citizens and lawmakers alike.
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