One Down, Three to Go
Regular readers of Urban Review will note that I am not a big sports fan. In fact, I have complained about the large crowds of people on game days — they rush in to the venue (Busch Stadium, Jones Dome, Scottrade Center) before the game and then rush out afterwards. Sure, some hang out before and after and spend money but the bulk do not. I was also not so happy about the process we went through with the Cardinals over funding of the new stadium. I was, however, reasonably pleased with the final stadium (read my review).
So here we are with the Cardinals holding out their hands, asking the city for more money to build out their vision of Ballpark Village (I’ll address the RFT’s version of Ballpark Village in a separate post). Last night the Cardinals handily won the first game of the 2006 World Series. Game two, played in Detroit just like last night’s game, just started. As much as I hate to admit it, I too am getting caught up in the excitement of the World Series. There, I said it.
Games three & four will be played here in St. Louis at the new Busch Stadium (Tuesday & Wednesday, 8pm). Game five, if necessary, will also be in St. Louis (Thursday). Should they be required, games six and seven will be back in Detroit. While some would like the Cardinals to shut out the Detroit Tigers by winning the first four games I’d rather see a fifth game be played. Why? Money:
St. Louis Regional Chamber & Growth Association (RCGA) Chief Economist Bryan Bezold estimates that the total economic impact of each home World Series game will be approximately $4.5 million; $2.4 million of this total will be direct spending in and around Busch Stadium, and $2.1 million of it will be in indirect spending, as those dollars circulate throughout the region.
This additional World Series economic impact comes on top of the $241 million impact of the Cardinals inaugural regular season and the $3.1 million per game economic impact from the previous rounds of playoffs, at the new Busch Stadium.
So yes, I’d gladly trade off the Tigers winning a single game so that we can have three games played in St. Louis rather than just two, we need the extra $4.5 million in the economy from game five. Of course, I’d rather the St. Louis Cardinals win the World Series, it would be a perfect conclusion to the first season in the new stadium. The added attention will only help the local economy.
I also think a World Series win for the Cardinals would go a long way toward getting the wealthy team owners the public welfare they are seeking for the new Ballpark Village development on the site of the old stadium. But we shouldn’t get too carried away. The World Series will bring in less than $14 million total, much of that direct spending going to the Cardinals, yet they are seeking hundreds of millions in subsidies.
However, If they win the World Series this year I say we give them the $600 million or so they are seeking. Sure, why not. But, for each year they do not go to the World Series we reduce the subsidy by $100 million. So, if they were to keep winning the World Series it would be our pleasure to help out. If they start losing games and not winning the World Series we simply start taking back the money. This, of course, could be modified with adjustments for overall regular season record, advancement in the playoffs and making it to the World Series. So, making it to the World Series would help them keep more of the subsidy than not evening advancing to the playoffs. Incentives should be tied to performance.
Play ball.
UPDATE 10/23/06 8am — Looks like we”ll be having a game five in St. Louis. The fun starts Tuesday at 8pm.
Steve, paying attention to sports? Surely this is a sign of the Apocalypse.
Okay sports is part of society. If you would compare the competition of sports to the competition of war, then most people would choose the competition of sports. The glory of war would be traded for the glory of sports. Death would become homeruns and touchdowns, the great achievement! Although is death an achievement or simply the end?
That brings up a side question, is death an achievement? Of course no one knows right off the top of their head; it is a question even the savvy politicians in Washington have not been able to answer
We should return to the main subject of city planning and capitalist money. If the city was properly designed it would mean more money for everyone. The trick for success is to target capitalism
The design of the city has to do with capitalism in a major way. Markets, Squares, Piazzas, all can figure into the creation of capitalism. The city can support vendors and is an important area of concern. Vendors and their related flea markets, farmer markets, antique markets, book markets and other forms contribute to the formation of capital. It is the minor leagues of capitalism. Yet this advocate of capitalism has been slain in the corporate world which only supports the narrow concerns of their owners. This is usually foremost money. Money should be the last concern of the city.
Cities should be built upon understanding. Zoning should follow to open up the city. Commercial zoning anywhere in the city should follow. There are restrictions, but if economics is important, free commercial zoning will occur. Thus organically new economic forms will grow and arise. Under the best circumstances this initiative works along with mass transit.
Corporate zoning and major box stores, with their massive parking lots is another question entirely. Where is the ballpark village in this city plan?
The democrats and republicans are the crooks running everything, so maybe a third party or two is in order.
In war, death is part of your daily life. You know death like other people know pizzas.
^ Huh???
I wonder how the RCGA comes up with their numbers. Academic data overwhelmingly shows that Stadiums really do not benefit downtown areas since people have a limit to what they will spend. The 2.4 Million of spending inside and around Bush Stadium is interesting. Where around Busch will people be spending their money? I fail to see how people spending money inside the Stadium benefits
Downtown. The money spent outside at Al’s or Shannon’s really does not make or break the City. Any real gains could be made in Hotels, yet I wonder if a lot of people from out of town would actually be seeing the World Series. I remain speculative but I would say that Hotels will benefit the most.
Oh yeah, those parking garages really make a killing!
How does the Cardinals have a 241 Million Economic Impact? That sounds like justification for the Regions 138 Million Dollar Fee which the City and County are currently paying.
We will be paying for this Stadium for about 30 years.
It was and still is a mistake. We destroyed our own Roman Coliseum for a newer Stadium which academic research shows has no economic impact for Downtown Cities.
People may feel joy when they can afford to see a Cardinals game at Busch, yet we all need to realize that the Stadium does not benefit us economically.
Here is some data:
Journal of Sports Economics, Vol. 3, No. 3, 291-299 (2002)
An empirical examination of the determinants of real per capita income in cities with professional sports teams from 1969 to 1997 shows that postseason appearances are not associated with any change in the level of real per capita income in these cities
http://www.holycross.edu/departments/economics/vmatheso/research/superbowl1.pdfh
The National Football League (NFL) has encouraged league host cities to construct new stadiums. As an inducement, the NFL has offered some reluctant cities an opportunity to host the
Super Bowl, the league championship game.
Part of the NFLÂ’s apparatus of persuasion involves
commissioned studies which assert a significant boost to metropolitan and regional economies from the Super Bowl. The latest NFL Super Bowl impact study estimates that taxable sales in South Florida increased by more than $670 million dollars from the Game. Are the economic impact estimates published by the NFL credible?
Our study indicates that the NFL has exaggerated the impact of the Super Bowl by a factor that in some instances could approximate ten. The economic hyperbole is explained by several factors.
First, the studies in general fail to recognize that some of the spending that occurs in conjunction with the Game simply substitutes for spending that would occur in its absence.
Second, the studies generally do not consider the leakages that are particularly acute for events provided by suppliers who are not residents of the metropolis in which the event is held.
Third, the studies generally ignore how the Game affects the spending of the residents of the host community and contiguous communities.
Our study concludes that cities that currently host a NFL team should be wary of claims made
by the league about the economic impact of the Super Bowl. The evidence does not suggest that the
Super Bowl increases economic activity by an amount that would justify the hundreds of millions of dollars that stadiums typically cost.
Journal of Sports Economics, Vol. 2, No. 4, 307-327 (2001)
Major League Baseball has rewarded cities that build new baseball stadiums with the chance to host the All-Star Game. Although the league asserts a significant boost to metropolitan economies due to the game, are these economic impact estimates published by the league credible? In two separate economic impact models, the authors find that All-Star Games since 1973 are actually associated with worse than expected economic performance in host cities.
The Annals of Regional Science
Volume 22, Number 2 / July, 1988
Abstract Proposals to provide public subsidy to sports stadiums are being debated in many locales. This paper examines a number of types of benefits asserted by proponents of subsidies: direct municipal revenues from stadium events; multiplier benefits increasing income and sales in the area; the attraction of unrelated business activity; and, intangible benefits. The business attraction argument is subjected to empirical test with regression analysis. In only a small fraction of the cases examined does manufacturing activity in an SMSA correlate significantly with the presence of a new or renovated stadium. We conclude that measurable economic benefits to area residents are not large enough to justify stadium subsidies and that the debate must turn to immeasurable intangible benefits like fan identification and civic pride.
Here is a Boston Globe News Article:
WHEN A TEAM WANTS money, and it’s usually money for a new stadium, it commissions an economic impact study. The predicted economic impact tends to be dramatic. The study the accounting firm Ernst & Young did for the proposed New York Jets stadium in Manhattan predicted that it would bring in $72.5 million in additional annual tax revenue. A similar study by the consulting firm Economics Research Associates, ERA, calculated that the new Dallas Cowboys stadium in Arlington, Texas, due to open in 2009, will add between $12.48 billion and $27.65 billion to the county economy over an estimated 30-year lifespan.
Independent economists dismiss these numbers. Much of the envisioned economic impact, they argue, comes from the money spent by fans, either on tickets or concessions or in nearby restaurants, hotels, souvenir shops, and the like. The problem with this argument, economists say, is that most families, whether they keep a budget or not, spend a finite amount of money on entertainment. As Vanderbilt University economist John Siegfried puts it, ”What are people going to with their money if they don’t spend it on the Red Sox, flush it down the toilet? No, they’ll spend it on something else: books, maybe, or bowling, things that Boston would benefit just as much from.”
University of Chicago economist Allen Sanderson puts it another way. ”Cities would be better off,” he says, ”if the mayor were to go up in a helicopter and dump out $100,000.”
http://www.boston.com/news/globe/ideas/articles/2006/03/19/ballpark_figures/
Doug-
Would you have been happier with the Cardinals in Illinois and an empty Busch Stadium downtown?
I really do not care.
The taxpaying citizens of the region shouldn’t have to pay to keep a Stadium when many of then cannot afford to attend the game, or when the tickets are bought by corporate customers, and they don’t even have the opportunity.
Baseball is not a sport in which one can bring your kids to and enjoy a night on the town. This game is a luxury which many cannot afford. This is not a game which the public has access so why should the public pay?
True, some people visiting from out of the City do stay in Hotels, yet is their a net gain for the City?
Does the hotel tax outweigh the money spent on the Stadium?
Also, couldn’t this money be directed at housing and infrastructural improvements for the City, which would bring permanent residents thus constant economic benefit?
The numbers put forth are problematic as they are probably skewed to justify the high expenditure. This economic impact probably occurs mostly inside the Stadium and at the parking garages, especially during the regular season!
^
Lighten up, Francis.
To clarify–The point I’m trying to make is that sports is not a life or death situation. Public money should not be spent on sports stadiums or ballpark villages.
1. The small businessman never benefits from this largese. The concessions at Busch Stadium and the commercial space at BallPark Village are directed to a few major corporate sponsors. The money generated is concentrated into a few hands. There is little direct economic benefit except to these people.
2. Small scale vendors are heavily controlled around the stadium, there is no opening for a new small scale vendor to pull themselves up in business.
3. There are many ways to experiment and encourage economic revitilization. Open zoning that allows commercial enterprises in many, if not most locations in the city is one. Suddenly the whole city becomes a laboratory for economic enterprise. Commercial land which is now carefully manipulated through road building and current zoning laws has been made scarce for the benefit of a few. Open zoning will suddenly allow the common person access to the free enterprise system. What is now the domain of the insider becomes an open system. The old city of St. Louis was run this way.
4. There are many, many ways to generate new money. If the giveaways to the wealthy were stopped and that money was used to help the whole city, with trams, proper urban zoning and the like, the city then would be attractive to visitors without a world series. A Paris on the Mississippi should be the goal, not corporate welfare for the rich. If this happens the general populace benefits and not just a few corporate chains and their wealthly benefactors.
Fianlly–Sports are a good subsitute for war. The channeling of aggression and competition into something positive is good. But they should not be taken as the central aspect of life.
Priorites are skewed primarily because of the one party system that is in St Louis and in the country. New ideas are not discussed, instead it is business as usual. The monolitilic news media controls the discussion, the Post Dispatch, the TV stations do not recognize the many alternatives, for whatever reason. The internet and the blogs represent a way around this to create a new democracy.
The money should not have been given for the stadium in the first place. Nor should it go for the Ballpark Village either. If there is a desire for true success, then the city should be rebuilt, complete with transit lines.
If you don’t think ballparks add to the local economy, just ask the merchants in “Wrigleyville”.
The more we get going downtown, the more the ballpark will be part of it.
The neighborhoods surrounding Grand and Dodier and Wrigleyville are totally different demographically, so it’s hard to compare the closing of Sportsman’s Park to the success of Wrigley Field.
When Busch Stadium opened downtown, it was part of a large scale plan for the revitalization of downtown, which included the Arch and many of the major skyscrapers we see today.
That plan was successful, as are the continuing works of progress leveraging our previous successes.
Had the Cardinals and the other major corporations, all of whom invested hundreds of million of dollars into our downtown over the past forty years or so had not done so, it’s doubtful we’d be seeing any of the exciting things happening downtown we see today.
Sorry to burst the all the tiny bubbles out there, but the revitalization of downtown St. Louis didn’t start in the 90s…
Doug D. said…
“I fail to see how people spending money inside the Stadium benefits
Downtown.”
How is that any different than saying…
“I fail to see how people spending money inside City Grocers or UMA benefits Downtown.”
They are all downtown businesses, please explain to me the difference.
If it is true that it’s a zero sum game than City Grocers and UMA (just like every other downtown business) are just taking money from some other business in the city or county, and they don’t benefit the regional economy. So, why bother opening new stores or building new stadiums in downtown?
Coincidentally, I just got this in an email from the RCGA…
Cardinal Ownership Singled Out For “Doing It Right” By National Publication:
Sports Business Journal columnist and sports economist Andrew Zimbalist penned some interesting observations in his October 16th national piece, entitled, “Cardinals Owners Deserve Praise For Success On And Off The Field.” Zimbalist makes several key points, a sampling of which include:
Between 2000 and 2006, 29 sports facilities for major league professional teams opened. The average capital cost for these facilities was $386 million, of which the average public contribution was 65%. The Cardinals, however, are covering nearly 90% of the capital costs with private funds.
The team itself has not only posted a first-class performance record on the field, it has generally had a payroll among the Top 10 teams in baseball, despite St. Louis being the nation’s 21st-largest media market and 18th largest in population, and contributing more than $10 million annually in recent years to Major League Baseball’s revenue-sharing program.
Zimbalist further notes that the Cardinals are the envy of any fan base, winning their division in 5 of the 7 years since 2000, tying for the division once and finishing just 3 games out once. The team went to the post-season 6 out of 7 years.
“It seems that the record on the Cardinals’ ownership is a clear one,” Zimbalist concludes. “Bill DeWitt, Jr. and his partners have far exceeded the standard for private investment in a professional sports facility. In my book, they are worthy of hearty praise for their spirit of partnership with and commitment to their host community.”
On a related note, an analysis conducted this past summer by the Marquette Law School Sports Law Institute concluded that the Cardinals’ ballpark construction project had one of the lowest percentages in the nation of construction costs paid for with public funds. The team’s 12% in public contribution is only 7 percentage points higher than the San Francisco Giant’s ballpark construction project back in 2000. By contrast, the Detroit Tigers’ facility had 45% in public contributions. At the top of the list is the Atlanta Brave’s 1996 ballpark construction, which was 100% publicly-funded. In recent debates in the media on Ballpark Village, these data appear to have been lost.
http://stlcin.missouri.org/devprojects/projinfo.cfm?DevProjectID=54
The Region is paying about 208 million in public funds for the Stadium.
$346 (Cost) – 138 (Cardinals Pay) = 208 (Region Pays)
90 Percent of the project was not financed with private funds.
http://www.pubdef.net/2006/05/busch-stadium-taxes.html
How is that a good deal?
OK. Our hotels are being taxed… as if that justifies the cost.
I would love to see an independent study but there will not be one, because the RCGA is spin.
OH BY THE WAY, this stadium is only under contract for 35 years. The argument that the old one couldn’t be repaired is BS.
The Roman Coliseum was in use for 500 years and lasted through Earthquakes. 35 Years is a complete ripoff.
Please, you cannot possibly compare Roman times to today. Completely apples and oranges…everything moves exponentially faster today.
The new stadium comes at the right time for downtown. Instead of turning its back on the city like the previous, enclosed structure, the new stadium is much better in terms of scale and opening to the city. It also presents an opportunity for further development south of downtown – whether that happens or not remains to be seen, but with Shannon’s, Cupples Station, etc, signs are fairly positive. Like it or not, the old stadium, while serviceable, didn’t have the revenue generating ability that modern baseball economics demand.
You can argue about the economics of who is paying for the stadium, but net/net, it’s a plus for downtown. More and more people who come to games are realizing that there is more to downtown that just the stadium. For downtown to remain the “heart” of the region, the stadium had to remain downtown.
Doug, you are using bad info, and you should know better than that. The city website is mistakenly using the original aggreement with the city, county, and state that never went anywhere.
The county granted a $45 million loan that the Cards have to pay back. (You could say this is a net loss because of inflation). The state granted tax credits for infrastructure work roughly around $30 million and is paying to build a new ramp to I-64. The city exempted the ticket tax which was previously mentioned. The city makes no direct payment. Sure, this is a loss for the city, but if the Cardinals had in fact gone ahead with their threat to leave (I have been told authoritatively that this was never truly an option, but everyone uses it) the tax would be completely gone anyway. Frankly, we got a gem of a deal. If West County mall can get a TIF, surely Busch stadium, which I would consider blighted, should get some money as well.
Overall, this new stadium is definitely a better situation for downtown than Busch II, even if it is not producing any new taxes itself.
And on the Colliseum, I agree that it is truly an apples and oranges comparison.
And because I forgot to put it in, there is no 35 year contract either. With the financing plan that went through, the Cards now own the stadium, not whatever district would have been set up to own it. There is no lease, the cards will be in the stadium they own for as long as they feel like it. 500 years if they want.
Prime example of remembering to fact check. We all need to hold back our emotions once in a while and not be so jumpy.
Doug you didn’t answer my original question…
Why is money spent inside City Grocers or UMA better for Downtown then money spent inside Busch Stadium?
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