CT prof replies on Hartford project: Yes, stadiums suck, it’s the rest of it that’s worthwhile

In the wake of my post on Friday critical of the excited media reception of University of Connecticut economist Fred Carstensen’s report on Hartford’s proposed minor-league-ballpark-plus-lots-of-other-stuff development, Carstensen weighed in with some long responses of his own, and then I responded to his response, and soon enough a whole bunch of us were having fun playing with the pencils on the bench there.

You can go read the whole comment thread now, but for those who are pressed for time, here are some of the highlights:

  • Carstensen’s analysis, he stresses, was of the combined stadium/retail/commercial/housing development, not just the stadium. The stadium itself, he notes, would likely be a bad deal for the city, as will the retail piece; however, adding office space that could bring in new jobs and apartment buildings that could bring in new residents could make it a net positive.
  • The REMI model that he used does account for displacement of other spending, though it wasn’t spelled out in the Hartford paper; I’m still reading through REMI’s FAQ to figure out how exactly it handles it.
  • It might well be more beneficial for Hartford to seek a development on the same site that doesn’t require a $60 million stadium subsidy, but that’s not what’s on the table here. So at least the city would be getting something positive back for its money, even if there’s no way of knowing whether it’s the best deal possible without putting the site back out for bids.

My concern remains not just that last bullet point, but the question of what happens if the stadium subsidy gets approved, then the office and residential space — all the good stuff, in city fiscal terms — never gets built. Carstensen writes via email that this is in fact something he pointed out in his testimony (but which didn’t make it into the papers that I could tell): Any deal would need to include some kind of provisions to cover the city’s costs if the rest of the development doesn’t happen, or else Hartford could be left holding the bag.

Anyway, my apologies for giving short shrift to Carstensen’s study of the project, which looks like was actually more comprehensive (and more mixed in findings) than what made it through into the next day’s reportage. This still looks like a risky project for Hartford, but he’s not the one trying to paper over the risk.

9 comments on “CT prof replies on Hartford project: Yes, stadiums suck, it’s the rest of it that’s worthwhile

  1. The real problem is that if there is enough demand for office and residential areas a new stadium is besides the point. No one is planning on building a new residential unit in a town unless they are pretty sure it is going to be filled, and no one is changing residential demand projections for a town based on whether some minor league team has a new ballpark.

    Saint Paul just did this with a huge redevelopment project for the Saint Paul Saints. Certainly that end of town will be much better off now that $100 million in redevelopment happened. But you could have done $100 million in hospital, or school, or subsidized office space, or fancy park, and you would have the exact same, or likely better, impact.

  2. This sounds like a situation where demand exists for the rest of the development, in which case the stadium subsidy is not necessary, or the demand doesn’t and the subsidy is not necessary. Why do cities always get caught in that trap?

    If your city is growing, it will grow and doesn’t need some magical stadium catalyst. If your city is not growing, a stadium will not save it and will be money wasted.

  3. Further to the above points, I am unclear on why there appears to be an assumption that new office buildings and apartment complexes will “bring” new jobs?

    It is unlikely that the only thing preventing people from moving to Hartford to take up one of these apparently unfilled jobs is a lack of housing or office space. If there were demand for additional office space, that demand would eventually push up commercial real estate prices to the point where building new offices (or apartments) becomes a viable business plan. And it likely wouldn’t take very long for that to happen.

    Perhaps the paper addresses this somehow (as in: Are there presently a significant number of vacancies going unfilled in the Hartford labour market?). However, it is dangerous for anyone to assume that more offices equals more office jobs, just as it is dangerous to assume that if the Big 3 automakers go under, people will have to stop driving cars and all the suppliers will go out of business (this ignores the obvious follow on effect – that other, less incompetent automakers will ramp up production to fill the gap thus created).

    What drives any market is demand, obviously. Supply should respond to demand, not attempt to drive it.

  4. John: I wouldn’t say that it’s 100% true that new development can’t generate demand. There is a degree to which redevelopment can become a self-fulfilling prophecy: You announce a project, people hear about the project, want to move there because it must be a hot new place because, after all, they’re building things there, etc.

    That said, 1) you can’t generate demand completely out of thin air if people aren’t already inclined to move to your city, and 2) even if you can give people a push toward downtown Hartford, say, it’s likely mostly going to redirect people who otherwise would have been considering somewhere else in the metro area. I really doubt anyone is going to move their business from, say, North Carolina to Hartford just because there are some new buildings there.

    This is where I still need further explanation of REMI and how it handles substitution effects. Saying you “account for displaced spending” isn’t enough, after all — there’s a big difference between projecting economic activity that would be new to Hartford and new to the state, for example.

  5. I live and work in downtown Hartford, so I feel I can speak with some authority to the issues raised above. By the way, I’m active in a grass roots group called “Hartford Coalition to Stop the Stadium”, which started up shortly after Mayor Segarra made his “done deal” announcement, but don’t let that stop you from believing me.

    Yup, those parcels of land ($13 million worth) that the city wants to hand over to the developer for a $1/year lease are pretty ugly and empty now, and have been for about 25-30 years. They are at the beginning of the north end of the city, which some refer to as “the ghetto”. Not so much because it is almost 100% populated by black and Latino residents, but because it’s been ignored–some say purposely–by the city for that same number of years. The adjacent center of the city (“downtown”) has been in the process of being gentrified for a while now. The new residents who’ve been moving in are mostly young professionals and empty-nester urban homesteaders with plenty of disposable income. They’ve settled in the high-rise high-end apartments, and the historic brownstones gone condo, which are mostly priced in the $1300-$2200/month range. These are the folks that the developer is looking to attract more of Recently, expensive lofts have been constructed in the area. A 24-story bank building and a high end former hotel, as well as some other empty commercial buildings in the area, are being renovated into more upscale apartments. In addition, “Cityplace” an empty office tower has recently been sold, and the vacant Phoenix Mutual “boat building” is on the market. The 600+ apartment units the developer proposes to build are also geared to this posh group. There is no housing construction on the drawing board that can even remotely be considered “affordable”.

    Hartford is a very poor (median income $29K), very broke city; the budget deficit is huge. Jobs are scarce, and living wage jobs even more scarce. Affordable housing for the working class and working poor is almost non-existent. There are major problems with homelessness, hunger, crumbling, outdated schools, and road infrastructure. We do need development in that area, but a speculative stadium deal is not the answer to the city’s myriad woes. The mayor has cornered the Kool-Aid concession, and the rah-rah stadium cheerleaders are drinking it by the gallon.

  6. They have to do what they did when the Philadelphia Art Museum was built, They designer was in charge of building it, so h had the 2 wings built 1st before the main center piece was built. So what I say to do is build all the other stuff first, then the ball park

  7. Generally, in order to support even one sports franchise, a city/country/metro area needs one of two types of populations:
    1) Lots of really rich people (DC, SF, NYC, Denver)
    2) A passionate fanbase (Cleveland, Detroit, San Antonio, Green Bay)

    Does Hartford have either of these. Nothwithstanding what Ms. Goshdigian mentions about the millienial yuppies moving in, are they the type of people who will attend minor-league baseball games?
    The Hartford Whalers moved out in 1997. Since then there’s been UConn women’s basketball (passionate fanbase, winning tradition) and the Wolf Pack of the AHL. (???? I have no idea how well they do) So is there really a thirst or a hunger for the Rock Cats?

  8. The Rock Cats only play ten minutes away from Hartford now. I have no doubt that they’ll continue to draw 5,000 fans a game wherever they go.

  9. Jason: The Wolf Pack usually plays to a quite small crowd in a fairly large arena. Would the millenials attend minor league games? Probably they’d check it out when it first opens, but I don’t think it’d hold most people’s interest once the novelty wore off.

    Neil: The people of New Britain are still pissed off as hell at being seduced and abandoned by the Rock Cats. You hear a lot of them publicly swearing that they’ll never attend a game if the team moves to Hartford. I wonder what fan reaction will be like when the Rock Cats play the 2016 season–their last in New Britain? By the way, I’m reading “Field of Schemes” now; lots of good, engaging detail in there.