Profit or puffery?

An economic consultant’s report that a $650 million Dallas Cowboys stadium in Arlington would generate benefits for the city has Mayor Robert Cluck enthused about the project, but other economists are skeptical. Smith College economist Andy Zimbalist told the Dallas Morning News that the report “gives every appearance of being the standard puffery that you get in these types of economic impact reports. They use an inappropriate methodology, faulty assumptions and come up with projections that are meaningless.”

The report by Economics Research Associates projects that a stadium would create $238 million a year in “economic impact,” a figure that includes all money spent at or around a facility, whether or not it benefits the public. (If a team doubles its ticket prices, for example, that counts as double the economic activity, even if the money just goes into the owner’s pocket.) As for more direct public benefits, ERA predicts a mere $2.9 million a year in increased tax revenues – at a public cost of about $325 million – and the creation of 807 long-term jobs, which would come to more than $400,000 in expense per job created, one of the worst ratios in economic-development history.

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