Who Paid For The Refurbished And Upgraded Louisiana Superdome?

While watching Monday Night Football telecast of the home opener for the New Orleans Saints last night, I couldn't help but notice how much better the Superdome looked.

Not just better than after Katrina hit – I mean better than it ever was. The field was brand new FieldTurf, and the interior of the bowl was illuminated with new color video boards and LED “ribbon” boards. Fresh paint and a new roof, along with color-cycling strobe lights outside, gave the building an appearance of almost complete newness.

In between the gushing over how the event was a victory for the city and a catalyst of regional rebirth, and the deluge of emotional sideline interviews with every celebrity who ever spent five minutes in New Orleans, there was a mention of the price tag. Something in the ballpark of $180 million. Most of it paid by FEMA.

And that set me off.

The majority of the population of the gulf coast region is still living in Houston or Baton Rouge or Atlanta or wherever, largely because FEMA hasn't gotten around to replacing or repairing anything but a handful of the homes and buildings and other critical infrastructure destroyed by Katrina... but the federal government is paying for stadium upgrades?

Less that 2% of the population of the United States lives within the New Orleans region. But we're all paying for the shiny new ballpark we saw on TV on Monday evening, well before any other substantial recovery has been made in the region. A building that seemingly serves to enrich a select few has been completely repaired and even upgraded, while the common man is still displaced (or lives in a FEMA trailer, if he's lucky).

Rather than listen to the opinion of a handful of sports commentators on the subject, I decided to to some research on the matter, and share my findings. Not surprisingly, very little of the media coverage surrounding this game did anything to expose the truth behind the stadium project, and I won't pretend to have all the answers here. Hopefully a more substantial media outlet will tackle this project (and if you find a story that does, please share a link).

The first questions that came to mind were pretty simple: What was the price tag? Who paid how much? What upgrades were included, and why? And my wife raised the best point: Shouldn't this have been covered by the building's insurance?

I found most of the answers to these questions (and you'll find links to my sources at the end of this article). Let's start with the ownership issue.

The Louisiana Superdome is owned by the State of Louisiana, and is privately managed by a group called SMG – a corporation based in Philadelphia that manages scores of sports venues worldwide. It falls under the authority of the Louisiana Stadium & Expedition District (LSED), which also controls the New Orleans Arena. The primary tenants of the Superdome are the New Orleans Saints, and Tulane University (a private institution). The dome is occupied 45-50 weekends out of the year, presumably by assorted conventions, concerts, and other varieties of entertainment.

The Superdome is covered under an insurance policy that the State of Louisiana has for all of its facilities. The problem is, the policy isn't large enough to cover the extent of the damage. The following sums it up pretty well:

The $2.3 billion Louisiana estimate includes damages to state government buildings, universities, courthouses and other facilities. Of that, $500 million is covered by insurance, after a $25 million state deductible.

Blanco is seeking 100 percent FEMA reimbursement for the uninsured amount. But that is negotiable. The law requires that FEMA pay 75 percent, but the agency reimbursed 90 percent of California's costs after the Northridge quake, and covered 100 percent of New York's costs after Sept. 11, according to congressional reports.

The law says FEMA must only restore facilities to their previous quality...

Source: http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702046.html

So, basically, insurance is going to cover half a billion dollars worth of the total estimated 2.3 billion dollars in damage to state and government buildings. That answers the insurance question – the state simply didn't have a big enough policy. But what about the point that states “The law says FEMA must only restore facilities to their previous quality...”

Well, here's who footed the bill for the new and improved Superdome:

FEMA: $115 Million
State of Louisiana: $13 Million
NFL: $15 Million
LSED Bond: $41 Million

Total: $184 Million

So that works out to 62.5% being paid for by the federal government – less than the 75% required by law, but almost certainly more than just “previous quality.” The Superdome improvements include:

Eye-catching technology updates are in place. New scoreboards, video boards and an LED ribbon board system have been installed. The end zones sport new 27-by-48-foot (8.2-by-15-meter) scoreboards. There will be four high-tech 8-by-44-foot (2.4-by-13-meter) scoreboards in the corners of each end zone, and four new 183-foot-long (56-meter-long) LED halo boards along the facade of the second level.

Fan comfort is emphasized. Club-level seats have been replaced with new leatherette seats. Fans will buy their beer and hot dogs from renovated concession stands. All 137 box suites were stripped down to the metal studs in the mold-removal process, then refurbished, although carpets, cabinets and countertops will not be installed until after the season. Plasma televisions have been installed in each.

Source: TaiwanNews.com

All this, in addition to the new and improved FieldTurf (which is a substantial upgrade over the old AstroTurf playing surface).

Nothing was done to improve the Superdome's capability as a storm shelter. It is estimated that those upgrades would cost an additional $30-$40 million.

What is unique to the Superdome (as opposed to most NFL stadiums), is that it is profitable to the state of Louisiana even without the presence of an NFL team – at least it was prior to the hurricane. In fact, the state is paying the Saints $180 million to stay where they're at, as team owner Tom Benson has repeatedly complained about the building, and has threatened to move. Benson can buy his way out of his lease for $81 million. Arguably, it might be more profitable for the state to let them go.

So what's happened here? Is the Superdome really that important to the NOLA region, or did the American taxpayer just get ripped off? In my opinion, it's a little of both, but more of the latter. The Saints have been unhappy tenants in the aging Superdome for years. The kind of improvements that they sought weren't going to fly with the taxpayers in Louisiana, because people generally hate subsidizing wealthy private business owners.

In fact, hurricane Katrina was the best thing that could have happened to the Saints. They were a pathetic team last season anyway, and the displacement caused by the natural disaster gave them a free pass. But more importantly, the consortium of government agencies and private corporations with an interest in the Saints and the Superdome were able to exploit the disaster to their own profit. By selling the dome recovery as a critical catalyst for economic recovery, and playing on the guilt of a federal government that simply could not do enough to relieve the disaster, they procured an enormous sum of money to pay for the upgraded stadium that they wanted all along.

We've all paid for it. I suppose that makes the Saints “America's Team” now.

(originally posted at: http://www.digitalstadium.org/smf/index.php?topic=365.0)