Should We Use Interstate Compacts to Build Sports Stadiums?

Regions with problems that cross state borders have long relied on interstate compacts. Could expensive sports facilities be a candidate in regions that span state borders? I think so.

Two cities on state borders have recently faced challenges in relocating aging stadiums. In Chicago, the Bears have chased tax breaks to Hammond, Indiana where Indiana hopes to lure the team with tax breaks. The Kansas City Chiefs, which play in Missouri, have recently sealed a deal in Kansas for a new domed stadium with tax breaks.

A rendering of the proposed Chicago Bears stadium in Hammond, Indiana.

These interstate battles for economic development and civic pride that center around private sports corporations—the Bears and the Chiefs—are an age-old problem in economic development. These battles tend to play out in a winner-take-all approach where one state wins, and it is usually the one that races to the bottom to help fund the stadium and offers lots of tax breaks. But what if the two states worked together to create a good site—regardless of the state where it is located—and also split the management obligation and thee economic rewards? There is a tool for that: it’s the interstate compact, and it could make these stadium battles much more cooperative and fiscally prudent.

Interstate compacts have been used for a host of issues. The most urban among these tools is the Port Authority of New York and New York, which was established in 1921, and governs regional transit in the New York and New Jersey metropolitan region. Other interstate compacts have addressed environmental issues, such as the Tahoe Regional Planning Agency’s efforts to address runoff in the Lake Tahoe Basin along the California and Nevada border. Interstate compacts could easily be purposed for a sports stadium.

Yes, interstate compacts are a little clunky upfront. The U.S. Constitution’s Compact Clause (U.S. Const., art. 1, § 10, cl. 3) provides that "No State shall, without the Consent of Congress, ... enter into Any Agreement or Compact with another State, or with a foreign Power." That means Congress has to sign off, as do both of the states. But once that happens, thee compact creates a separate agency to manage the resources, and usually there is also an agreement to share in the management of and wealth of the project.

Instead of competing for sports teams, maybe we should instead be creating regional interstate compacts to govern their stadiums. Imagine this: the Bears move to Hammond instead of staying at the lakefront in Chicago or going to Arlington Heights (in Illinois). But an interstate compact for the Hammond site is created that is managed by both Illinois and Indiana. The expenses of the stadium infrastructure and the economic rewards of the stadium are shared by the two states. Sure, I would still hate the drive (or train) to Hammond from where I live, but we would think of the Bears as a civic institution embodying the whole Chicagoland region, which of course includes northern Indiana. Instead, we have bickering and brinksmanship as the team tries to play the states against each other. (And though I’ve focused on Chicago here, the same goes for Kansas City, Kansas, and the Chiefs.)

We all know there has got to be a better way. Maybe the interstate compact is the tool to make a deal both states can live with, and be proud of.