Evaluating Parking Monetization as a Strategy for Subsidizing Major League Sports Facilities

The public sector traditionally subsidizes construction of major league sports facilities with bonds. In 2012, the city of Sacramento, California, approved a parking monetization agreement to raise cash for a new arena, thereby potentially avoiding the risks of bond financing altogether. Though the subsidy proposal ultimately fell through, the increasing popularity of parking monetization suggests that it is only a matter of time before other local governments consider the approach. This paper evaluates the use of parking monetization as a financing strategy to construct major league sports facilities. While professional stadia are the primary focus, many of the criticisms apply to large public capital projects more generally. We conclude that parking monetization is a risky facility subsidization strategy and a poor alternative to traditional bond financing.