The President’s latest proposal to erect a colossal, Eiffel Tower-inspired mixed martial arts arena in Washington D.C. has sent shockwaves across the Atlantic.
For those of us who have spent decades watching the ebb and flow of capital, this is not architecture. This is a monument to fiscal incontinence. The plan, reportedly floated in a private meeting with UFC executives, envisions a 1,000-foot steel lattice structure capable of hosting 30,000 screaming fight fans.
The cost? An estimated $2 billion, none of which the private sector has volunteered to fund. British architecture critics, still smarting from the Grenfell Tower tragedy and the ever-ballooning HS2 budget, have reacted with a mixture of horror and dark humour.
‘It’s a giant’s child’s toy,’ remarked one Royal Institute of British Architects fellow. ‘A structural engineer’s fever dream paid for by the taxpayer.’ The implied threat of federal land use, perhaps in the National Mall’s vicinity, has sparked a debate about the efficient allocation of public space.
Myopic, to say the least. In the City, we call this a ‘deadweight loss’ of epic proportions. The funds could have been deployed in productive infrastructure, shoring up crumbling bridges or upgrading the power grid.
Instead, we have a proposal that smells of crony capitalism and political spectacle. The gilt market, ever the sober judge, has already priced in a slight uptick in long-term yields. Bond vigilantes, take note.
The dollar may feel the heat if investors start worrying about the US’s long-term fiscal trajectory. The Eiffel Tower, for all its romance, was built as a temporary exhibit for the 1889 World’s Fair. It cost 7.
8 million francs, roughly 1.5 per cent of France’s GDP at the time. Today, that would be equivalent to $200 billion.
Trump’s arena is a bargain by comparison, but the principle remains: vanity projects rarely yield positive returns. The UFC structure, if built, will no doubt draw tourists and generate some ancillary revenue. But the opportunity cost is staggering.
The market abhors a vacuum, and this proposal fills it with noise. I’d rather see a tax cut or a reduction in the federal deficit. Alas, the show must go on.
