Sports Topic Wave 1 Patriot Brief 2014

*** Pro

Subsidies GOOD --- Economy

CSU stadium brings surrounding areas funding

May cited a recent economic impact study prepared by Icon Venue Group, which was selected by CSU as the project manager for the proposed $254 million stadium, that estimated construction of the stadium would have a $72 million impact on the local economy. The report said continued use of the facility would generate "at least $40 million to the local economy above and beyond what is generated by events at Hughes Stadium.

Prospect, College Avenue, the Campus West area along West Elizabeth. Those areas will all benefit.

Subsidies increases housing values

(Spencer, Do sports stadiums increase value of nearby homes?, 07-13-09, http://www.examiner.com/article/do-sports-stadiums-increase-value-of-nearby-homes, AM)

The Midsummer Classic is finally upon us. This year, St. Louis will host the 2009 Major League Baseball All-Star game on Tuesday, July 14, showcasing the new Busch Stadium (above) that opened in 2006 (watch this interesting time-lapse photography of the new Busch Stadium being built adjacent to the old one). The $346 million stadium was, remarkably, built without any government-funding assistance (today, virtually all parks are subsidized by local governments). The last stadium that was not government-assisted was Turner Field in Atlanta, which opened in 1999. Before that, we have to go all the way back to 1962 when Dodger Stadium was completed. Fenway Park and Wrigley Field round out the list of parks that were not government-assisted.
A common argument made for government funding is that ball parks increase the vitality of the neighborhood. I did a bit of research and found that there have been six ballparks built since 1996 that were built in a neighborhood that did not previously have a stadium. St. Louis is not included in the list since the new ballpark was built in the same place as Busch Memorial Stadium. For the purposes of the study I used the ZIP code of the ballpark rather than neighborhood to get a more meaningful sample size.
They are:
The San Francisco Giants’ AT&T Park

The Arizona Diamondbacks’ Chase Field

The Detroit Tigers’ Comerica Park

The Washington Nationals’ Nationals Park

The Houston Astros’ Minute Maid Park

The San Diego Padres’ PETCO Park

I wanted to see the effect of a new ballpark on the values of surrounding homes. So I compared the relative rate of growth home values using the Zillow Home Value Index (ZHVI) of the city, and then of the ZIP code that’s home to the shiny new ballpark. This let me see if home values performed better in the specific ZIP code than in the city as a whole.
I started from the year before the stadium was built. So if it was opened in 2000, my first comparison was the change from 1999 to 2000. This “first” year, as may be expected, showed almost zero difference between the two rates of growth — 0.04% to be exact.
However, when looking at the three years since the park’s completion, the area surrounding the new ballpark outpaced the ZHVI in the city as a whole by an average of 1.1% per year. This may not sound like a lot, but it has the effect of increasing the average ZHVI by almost $6,700 more than it would have presumably increased without the addition of a new stadium. Or, as I prefer to think of it, thanks to that new stadium, your house increased in value just a bit less than the cost of a single premium Yankees’ ticket per year! The average ZIP code in this study had about 8,000 households in it, so that increases the total worth of the local region by about $54 million over three years.
The growth seems to slow down after this point, though still outpacing the “neutral” city slightly. It projects out that after about eight years, the average ZHVI has outpaced the rest of the city by $7,900, or $63 million total dollars in the value of the local real estate market. Looks like in years 4-8 you’ll be in the bleacher seats!
This seems to make intuitive sense. In the first few years after completion there is likely a significant amount of investment in the local area from both businesses and in new real estate which raises the desirability and thus pricing of the neighborhood. Over time, this business remains, but the area reaches a saturation point beyond which significant future growth is limited. However, the area remains an improved and more desirable place to live than previously was the case, and thus holds this increased value as well as or better than the surrounding area.
Over the last decade the average stadium has cost $470M with local governments funding an average of $230 million (49%) for the project. Based on property tax revenue increases alone, I wouldn’t say the investment by governments is a home run, but it does seem that the theory of “If you build it, the slightly richer will come” is a hit.

Minneapolis Vikings stadium funding is rising, and so is the economy

Minneapolis' contribution to a new Vikings stadium could become millions more than city officials have publicly revealed if local sales tax revenue increases faster than expected.

Mayor R.T. Rybak's administration has said the city's contribution of local sales taxes to a new stadium on the Metrodome site will amount to approximately $338 million for capital and operations over 30 years, or $675 million when including interest costs. But a provision in the stadium bill raises that figure if the local economy booms.

The city's contribution could reach $890 million if tax revenue grows by 5 percent each year for 30 years, based on a Star Tribune analysis of figures provided by the city's chief financial officer, Kevin Carpenter. In that scenario, the city would also be left with more money to spend on the convention center and economic development.

Public subsidies bring positive emotions and positive tourist influx

AHLFELDT, BA, 2010 (Gabriel, Stadium Architecture and Urban Development from the Perspective of Urban Economics, 7-8-2014, http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2427.2010.00908.x/full, YAC)

Sports administrators and politicians frequently claim that stadia and the sports events associated with them have beneficial effects on the economy. Surveys compiled before the construction or installation regularly demonstrate this. A case in point is the 2006 Soccer World Cup in Germany, for which various banks, organizations and universities tendered their expertise. Positive effects such as a long-term increase in the number of visitors, the establishment of new industries and so on are claimed for the period following the event, but in most cases the claims do not have the back-up of appropriate data. The event itself took place in the favorable context of a good party atmosphere throughout the country engendered by the unexpected success of the German national team — but there has been disillusionment over its economic effects. Econometric studies investigating the effects of the construction of sports facilities or events on the basis of statistical time series, paint a typical picture of the ‘paradoxical’ effect of sport on revenue and employment for the 2006 World Cup.1 In only a few cases has it been possible to demonstrate positive surges in statistical terms.2

Public Subsidies have a positive effect on architecture and Urban Design

AHLFELDT, BA, 2010 (Gabriel, Stadium Architecture and Urban Development from the Perspective of Urban Economics, 7-8-2014, http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2427.2010.00908.x/full, YAC)

The long-term effects, often only slightly positive ones, may be related to an aspect that has frequently been ignored: architectural quality and urban design. While the German World Cup venues are full of technical innovations and meet stringent requirements for comfort and safety, their design generally remains conventional and ‘functional’. In contrast, international examples show how unconventional, sometimes iconic, stadium architecture can be used to create new landmarks and boost successful municipal development policies. The first empirical evidence in this regard shows that architecture contributes to more than the business economy. When a structure generates positive spillovers for the local community or neighborhood, the use of public funds to cover the additional costs that arise through adopting an unconventional stadium architecture may be justifiable in economic terms. This dimension is of high actuality, particularly with regard to the ambitious plans for the forthcoming sporting events in South Africa (World Cup 2010) and London (Olympics 2012).

The recent urban design literature suggests that architecture and urban design are experiencing a rise in significance in a globalizing economy as cities increasingly compete for tourists, firms and qualified workforce (Gospodini, 2002; Sklair, 2005). We approach this phenomenon from the perspective of urban economics in that we are searching for empirical evidence that allows the impact of the built environment to be quantified by means of economic indicators. We focus on the current transition in international stadium architecture, demonstrating important trends such as the use of iconic elements, since the typically large public subsidies for stadium construction call for a maximization of public benefits.

Public Investments Create Jobs

Stephens, writer for the Atlanta Journal-Constitution, 2012

(Ron, Public Funding For New Sports Stadium?, accessed 07-07-14, http://blogs.ajc.com/atlanta-forward/2012/11/21/public-funding-for-new-sports-stadium/, dsk)

“People have asked me why the public should invest approximately $300 million in a stadium for the [Georgia] Falcons. I tell them that they are looking at it backward: The Falcons are going to invest about $700 million in a stadium for Georgia. That stadium will be an asset of the state and will generate economic benefits long after the public investment is recouped.A $300 million public investment, even though it will only be levied on visitors to Atlanta, seems like a lot of money, but consider the return. This stadium will add more than 4,500 jobs to our state’s economy and generate more than $400 million in economic impact to the state during construction. NCAA President Mark Emmert recently noted that a new stadium in Atlanta “clearly … would be advantageous” in luring future marquee events. He also said that we are facing increased competition for these types of events.”

Logical Reasoning/ Logos: Indirect Employment due to New Stadiums (Pro)

Geraint, Michigan University Researcher, 00 (John, “Stadium Subsidies,” 07-07-14, http://www.umich.edu/~econdev/stadium_subsidy/ AW)

New sports stadiums usually create jobs. Though many stadiums simply replace older facilities in another part of town, employment is usually increased at new facilities since new elaborate stadiums tend to require more staff, and prove to be more successful at increasing net expenditures originating from outside the immediate geographic area. These new expenditures minimally increase direct employment, such as stadium and franchise staff, but can significantly boost indirect employment serving neighboring shops, hotels, restaurants, and transportation. The specific local and regional job multipliers related to new stadium are highly contested, though it is clear that new stadiums tend to successfully attract spending from those outside of the region and create some new local employment. Proponents argue that as long as no better job-creation strategy is in place, these new jobs are well worth subsidizing.

M&T Stadium Effects on Local Economy was positive

Asti, Towson University affiliate and Maryland Stadium Authority employee, 06 (Alison, “The Impact of M&T Bank Stadium on Maryland Economy, 2006,” 7-8-14, http://www.mdstad.com/images/stories/ravens407.pdf, AW)

Highlights of the M&T Bank Stadium study show the facility generated in excess of $216 million in gross state product (business sales) in 2006 and supported a total of 3,088 jobs in 2006 and roughly $100 million in Maryland personal income. In addition, there were an additional 6,000 temporary jobs for events at the stadium that brought in. This far outweighs the initial 177 million and the 1,394 jobs it had aimed to create, showing that sport stadiums truly do bring in jobs. Not only directly, however areas should experience higher growth of jobs in surrounding businesses such as restaurants and hotels as visitors come in.

Logical Reasoning: Downton Areas Experience Job Growth (Pro)

Coates and Humphreys, Econ Journal Watch writers, 08 (Dennis and Brad “Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?” 7-8-14, PDF saved on computer, AW)

Some subsidies advocated have implicitly justified them as enhancing redistribution. This justification exists both in the promotional “economic impact” literature and in the academic literature, with most examples of the latter appearing recently. The justification is that building stadiums or arenas downton, in the central city of metropolitan areas, will bring economic activity to those neighborhoods and aid in their revitalization. Downtown areas, especially in older cities, have become stagnant and decayed over time as people and businesses moved to the suburbs. Those older areas are, so the argument goes, deserving of assistance, even at the expense of the outlying areas. This justification rests on the downtown stadium or arena bringing new jobs and businesses into downtown areas.

The Construction of Vikings New Stadium Effects on Local Economy (Pro)

N/A, Conventions Sports Leisure, 09 (N/A, “Economic and Jobs Impact of Metrodome Next Multipurpose Facility, 7-8-14, http://prod.static.vikings.clubs.nfl.com/assets/docs/csl-full-021511.pdf, AW)

The construction of a new stadium will support approximately 13,000 jobs, including 7,500 construction and trades workers who will be employed during the three-year building process. Nearly 4.3 million work hours with almost $300 million in wages for construction workers will be required for this project. In addition, the fabrication of project materials will create a separate substantial number of jobs and wages. Upon completion of the stadium, 3,400 full and part-time jobs will be supported by the economic activity generated by a new stadium. Over 90% of the total materials and labor subcontract value will go to Minnesotans. The Building & Construction Trades Council is experiencing nearly 20% unemployment this project will have a significant impact on putting these construction workers back to work. According to CSL, the economic activity from a new stadium will generate over $26 million per year in tax revenue and over $145 million in direct spending by Vikings fans inside the State of Minnesota.

New Atlanta Stadium Supports Many Jobs

Seaman, Ph.D. at Georgia State University, 12 (Bruce, “New Stadium Project: Construction Economic Impact,” 7-8-14, http://www.atlantaga.gov/modules/showdocument.aspx?documentid=6836, AW)

The new stadium project in Atlanta is projected to increase local gross domestic project by $155,062,063 and generate $71,737,504 in personal income as it will support 1,468 full-time equivalent jobs in Atlanta as a result of the project. The count does not include half-time or one-day jobs that occur from events that will come as well. In addition, the Atlanta Stadium will generate from 99.7-133 million dollars annuals just from small events that occur annually.

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