To break the logjam, here's a hybrid solution that does not require tax gimmicks or out-sized estimates of the public benefits of having a sports franchise: Let taxpayers be investors with a chance to gain, rather than be donors with a guaranteed financial loss. Offer them the opportunity to earn the same rate of return on their tax dollars as the private investors earn on their investment as the value of the franchise rises over time. Their share of the gains could easily be remitted back to the taxing authority and used for needed public purposes and/or tax cuts.
The current NBA business model separates the franchise investment from the arena investment. The franchise is an appreciating asset, as demonstrated by the recent huge increases in franchise sale prices. In contrast, the arena is a depreciating fixed asset, as demonstrated by the claimed worthlessness of the BMO Harris Bradley Center after only 26 years. Under the taxpayer-as-investor proposal, the taxpayers would share in any future capital gains in proportion to their investment in the total value of the enterprise.