Boston paper asks an economist about stadium economics, risks enlightening readers

I am quick to attack sports journalists who do a lousy job explaining stadium economics, so let me just say that the Boston papers are doing a bang-up job so far this year: First they tore through the city’s rhetoric about a “no public money” Olympic bid to reveal all the likely hidden costs, and now the Herald has responded to Pawtucket Red Sox owner James Skeffington’s claims that a new stadium in downtown Providence would be an economic boon by asking an actual economist. Who says exactly what you’d expect him to say, because it’s what damn near every economist who’s looked into the matter has concluded:

When we look at cities that have built new stadiums, we’re just not seeing that bump in economic activity,” [Holy Cross economics professor Victor] Matheson said. “In most cases, you’re just shifting around an entertainment dollar. You’re not seeing new dollars, and that’s especially true with minor league sports.”

Okay, citing one local economist (and a study by the Cato Institute) isn’t the most exhaustive report the Herald could have done, but cut them some slack, they’re a tabloid. At least they have reporters who call around for second opinions rather than just reprinting whatever the local stadium advocate says, like some people I could mention.

Red Sox investors buy Pawtucket team, say it’s really more of a Providence idea

A bunch of minority owners of the Boston Red Sox are buying the team’s top farm club, the Pawtucket Red Sox, and their first order of business is moving them out of Pawtucket and into a new stadium in Providence:

Pawtucket’s McCoy Stadium will be home to the Triple A franchise for only a couple of more years, [Providence lawyer James] Skeffington said during an exclusive interview with The Journal.

“Pawtucket doesn’t have the infrastructure,” Skeffington said. “We can’t recreate what Providence has.”

The “target” for a new stadium, said Skeffington, is a piece of freed-up I-195 land he can see from his law firm’s office atop One Financial Plaza downtown.

Beyond saying that his group has a $60 million price tag in mind for the stadium, Skeffington didn’t say how it would be paid for, whether he’d be seeking public subsidies, or whether he’d pay rent on the public land that it would use, if the I-195 site is approved. This is kind of a big deal, given that the state of Rhode Island and the federal government just spent $610 million to move I-195 and free up 39 acres of land downtown, 20 acres of which was supposed to be sold for redevelopment — a baseball stadium could take up close to half of that acreage, so if the PawSox want access to the property without paying for it, that could amount to a huge opportunity cost.

It would also mean the likely end for McCoy Stadium, the team’s current 73-year-old home, which is not only one of the few surviving ballparks from the first half of the 20th century, but has a long and storied history, including being the site of the longest pro baseball game ever. Not that that in itself is a reason to retain it, and not that it’s necessarily going anywhere soon, given that all the team’s new owners have going so far are vague plans for a new stadium. Still, I’m going to try to swing by there this summer, just in case. If nothing else, maybe I’ll find out what “infrastructure” Skeffington thinks is missing from a stadium that drew a respectable 515,000 fans last year.

Hartford council okays $56m in Double-A stadium subsidies, state-of-the-art clause could add more

I’m in superbrief mode this morning, but in, um, superbrief: The Hartford city council voted as expected last night to approve about $56 million in subsidies (give or take a mess of free land) for a stadium for the double-A baseball New Britain Rock Cats.

“It is exactly a road map to how we move forward as a city,” council President Shawn Wooden said at the meeting Tuesday. “There is no reward, there is no benefit, without some level of risk. … It’s appropriately risky for the return.”

Risky it certainly is: The initial plan contains no provisions for what happens if the private part of the $350 million project doesn’t get built, which is kind of important given that that’s where all the economic benefits are supposed to come from. Also, there’s apparently a state-of-the-art clause included, of sorts: The city of Hartford needs to pay for any future stadium improvements to keep the building on par with new Double-A venues in Birmingham and Tulsa. That’s better than the El Paso state-of-the-art clause that it looks like Hartford lifted the language from — El Paso just says it must be kept on par with other “first-class” facilities, which opens things up to all kinds of shenanigans — but still means Hartford’s costs here will only go up.

And now, over to you, city planning and zoning commission. I’ll skip the obvious joke.

Hartford council votes tonight on $56m for stadium in exchange for promised new buildings, because that always works

Tonight is the Hartford city council vote on the New Britain Rock Cats stadium-and-other-crap project, which means it’s time for frequently asked questions!

How much will this cost Hartford taxpayers? Starting with a hard one, eh? The Rock Cats owners would actually be building the stadium, but then paying for it by leasing it to the city for $4.67 million a year, and then paying the city back $500,000 a year in rent. Plus the developers would be getting a bunch of land for free. Public estimates have generally put this at $60 million in cash value, though without attempting to factor in how much the free land is worth.

Is that definitely it? Yes, now that the council has decided to establish a hard cap on construction costs of $56 million. Except that the council has also ruled that the stadium will have to be built with union labor, which the developer insists will add 10% to the cost. That seems high (stadiums are pretty materials-intensive, not labor-intensive), but regardless, it does raise the question of who will pay for cost overruns if they can’t be made up for by using cheaper bathroom tile, which honest to god is what the developer suggested for saving money.

What does Hartford get in return?More than 1,000 jobs“! Not from the stadium, of course, but from the other crap, including a brewery, office towers, residential buildings, and a space elevator. (Possibly not the space elevator.) If all of that gets built, which will totally definitely happen, because development around a sports venue never just stalls completely without warning. Everyone involved seems to agree that the council needs to put in some kind of contractual requirement that all the bits that the city wants will actually get built — ideally, by cutting off public stadium payments if they’re not — but the council doesn’t seem to be planning on actually doing that, not tonight, anyway.

If the council approves this, is it definitely happening? The city planning and zoning commission, which already voted against this project once for going against the city’s downtown development plans, has to sign off on a special zoning permit for it, and could still say no. What they’ll do is anyone’s guess — anyone’s, I guess, aside from the developers’ lobbyists who are no doubt following the commission members around Hartford even as I type this.

Hartford council to vote Tuesday on $60m Rock Cats stadium subsidy

The Hartford city council will vote on Tuesday night on the downtown development project that includes a $60 million subsidy for a New Britain Rock Cats minor-league baseball stadium, and council president Shawn Wooden has indicated that he has the votes for it to pass. (CAUTION: Don’t click on that link if you are sensitive to terrible, terrible web design.) The council is looking to add a few more amendments to the proposal, one of which is a bit worrisome:

The revisions would also include requiring a commitment from Minor League Baseball that it would not allow the Rock Cats to be transferred during the term of the lease, and that it assures the presence of a Double A minor league team at the Hartford stadium for at least 25 years.

So does this mean that the Rock Cats’ 25-year lease doesn’t require the team itself to commit to staying put? Or just that this would guard against MiLB up and pulling the franchise out from under Hartford? A “commitment” seems awfully not legally binding, but maybe the Hartford Courant’s choice of language is just as terrible as its web design.

If this project does get approved on Tuesday, it will still have to go back before the city planning and zoning commission for a special permit, the same planning and zoning commission that voted against the project last month. Either way, though, it’s an indication that local officials can still be swayed by everything-but-the-kitchen-sink projects: The stadium part of the plan, and the subsidies for it, are pretty much identical to the previous proposal that was withdrawn in the face of massive opposition, but tack on a bunch of private development next door, and suddenly everyone is focused on the special toy surprise and not on the stadium. We’ve seen it plenty before — and not just in stadiums — and if this goes ahead, we’re only likely to see more of it.

Hartford residents speak on stadium plan, press marvels that they don’t all say exact same thing

There was a public hearing in Hartford yesterday about the proposed New Britain Rock Cats stadium project (which is supposed to include lots of other development, but it’s the stadium that would require city subsidies), and not everyone agreed!Some people believe history will blame Hartford if it fails to seize this opportunity:

“Are we going to be the city that cannot get a $350 million development deal together?” [Mayor Pedro] Segarra asked. “If we don’t allow this to happen, picture us a year form now wondering what went wrong. If we can’t work this out, why would any other private investor come to Hartford?”

And some believe history will blame Hartford if it does seize this opportunity:

Resident Bernadine Silvers asked it this way: what will they think of us if we do build it? “I want you to know that when you’re gone, and your grandkids know who you are, and everybody else that looks in the history books knows who you are,” she said, “and there’s a big, empty building sitting there in the middle of our downtown, they will know that you had something to do with it. That’s the reason I’m scared about that stadium… I just want you to know that I’m concerned, and I want all of you to please look at the things in this city that were supposed to be good ideas, but they were follies.”

And some people, according to WNPR, “stood out” for not believing anything at all:

“I see [councilmember] Ken Kennedy nodding his head, as always,” [Carmen Rodriguez] said. “I know you love Hartford, and I know each and every one of you love Hartford, and these people here, whatever moved them, love Hartford. That’s all I’m going to say. I ask that you look for the best plan.”

Also, a certain book is reported to have attended the proceedings. WNPR did not report on whether it testified, and it never tells me anything:


Hartford lawyer fundraising for anti-stadium lawsuit or lobbying or maybe a really cool party

Hartford attorney Ken Krayeske has announced he’s raising money for a political action committee to fight the New Britain Rock Cats proposal by … doing something as yet to be determined:

He said money raised by the committee could be put to a number of uses, including to support political candidates, hire an economist to study the numbers or file a lawsuit once the Hartford City Council approves the project.

“We want to have the option should we need to,” Krayeske explained. “Should City Council not come to its senses and reject the stadium as bad public policy, then we’re going to have to have to ability to take other measures.”

That’s not all that specific, but okay! Hartford, consider yourself warned.

Krayeske’s Twitter bio notes that he “has run his own law firm for a year, and tries not to take himself too seriously.” Here’s hoping he uses any funds raised to buy Mayor Pedro Segarra the world’s biggest clown nose.

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.

Hartford stadium study shows dollar bills to pour out of butts of flying monkeys

A University of Connecticut economic consultant hired by the Hartford city council to evaluate the proposed New Britain Rock Cats stadium project has come out with his draft report, and it says … you know, how long am I going to have to keep doing this, really? Some guy (a finance and economics professor, though his doctorate is actually in economic history, if you want to get technical) gets paid a bunch of money ($7,500 in this case) to write a report showing the positive benefits of a new stadium project (between 1,000 and 1,300 permanent full-time equivalent jobs created! personal incomes after taxes raised by $120 million!), and the local paper dutifully reprints what he says about it, and then I have to be the one to actually read the thing? I mean, I know it’s my superpower and all, but every time?

Okay, fine: Fred Carstensen’s report looks to be pretty basic, not actually evaluating the specific pros and cons of the Hartford stadium project, but rather just taking the projected economic activity at the stadium, brewery, retail, and other stuff that the project developer wants to build, plugging it into the REMI economic impact software, and hitting “Calculate.” This shows us that if there are lots of new stores and housing and things in Hartford where people will be spending money, a lot more money will be spent in Hartford. It’s math!

What it doesn’t show — unless Carstensen did these calculations and then neglected to mention it in his paper — is what the negative impacts of funding this project would be. If there are new retail outlets, would that prevent people from spending the same money at other stores elsewhere in the city or state? What else could the land that would be devoted to the project be used for, and what would be the economic activity that would occur then? What else could the $4 million a year that Hartford would be chipping in for the project be used for, and would giving up that city spending cause economic losses elsewhere? Sorry, you only paid for the $7,500 report, you must have wanted the deluxe model.

Now, I don’t expect news reporters or city council members to be economists — but then, I’m not an economist either, and it’s really not that hard to learn to read these things and figure out what questions to ask, at least. Or, if you’re really on deadline and crunched for time, at least do a one-minute Google search to find that Carstensen has predicted huge benefits from every sports project he’s studied previously — even citing the “impressive impact” of a UConn football stadium after a study that he later admitted showed the stadium wouldn’t even pay back the state’s investment. [UPDATE: Carstensen says this misrepresents his (and his economic analysis center’s) previous work, which only found a positive impact from stadium-plus-other-stuff projects, not stadiums themselves; see comments for more.]

Anyway, if our nation’s journalists aren’t going to do the job, it’s up to you, the nation’s readers. Next time you see a headline about the jobs and economic activity that are going to result from a new sports project, click through to the actual study and see if it’s examined all of the deeper consequences mentioned here. And then, why not make a phone call or drop an email to your favorite local news source asking them why they didn’t bother to ask the obvious questions? (If you want to really get their attention, cc Jim Romenesko or CJR or FAIR.) Friends, they’ll call it a movement.

Hartford planning commission gives thumbs-down to Rock Cats stadium

Hartford’s planning and zoning commission held a hearing last night on the city’s plan for a $350 million project that would include a $60 million stadium for the Double-A New Britain Rock Cats, and emerged with a vote to recommend that the city council reject the project.

The commission raised a bunch of issues with the plan, but mostly wondered why it violates both the site’s existing zoning and the city’s own downtown development plan, which calls for a mixed-use district with small-scale entertainment venues, not a sports stadium:

“Nowhere in [the plan] does it say we need additional sports venues,” [commission chair Sara Bronin] said. “It envisions small-scale entertainment … It doesn’t envision another XL Center.”

Bronin pointed out that the city, during its 18 months of negotiations with the New Britain Rock Cats, the minor league team looking to relocate to Hartford, could have updated the plans for downtown north, but didn’t. She also said she was “quite disturbed” that the redevelopment agency had not weighed in on the project.

The council doesn’t have to follow the commission’s recommendation, but if nothing else, this will give more weight to those who want to slow down the project. (Councilmember Larry Deutsch also criticized the plan for not including any affordable housing.) Given all the remaining unanswered questions about the financing, among other things, slowing things down doesn’t sound like a bad idea at all.