I'm not questioning the rest of your points, but disagree with the way you are describing this as taxpayers money. It is not taken from income, sales or property tax. If you view money that comes from someone that is a taxpayer as taxpayer money, then if I but a big gulp at the local 7 Eleven and the owner ultimately spends it, he is spending taxpayer money. Looking at it that way the only money that isn't tax payer money is money coming from someone that doesn't pay taxes.
This is a local tax on discretionary spending, mostly applied to out of town visitors. I agree it could be an issue from an unfair competitive advantage standpoint. I would compare this more to a state paying a celebrity to do a commercial to promote a state lottery.
There are real issues here, but not because of where the money comes from., rather because of the potentially unfair competitive advantage, which is a broad issue pertaining to many things. The league obviously had a problem with chartered flights if wealthy team owners gave their team a competitive advantage over others that couldn't afford it. The same is true but not mentioned as often regarding training facilities.
The Aces built a state of the art training facility, and many teams don't even have a dedicated practice facility. Seattle has done the same this year. I presume the unfair competitive advantage argument could come up there as well. Some teams have the advantage of owners who can indirectly compensate players with advantages others teams can't. It will be interesting how this all plays out.