Minneapolis All-Star Game impact overstated by 27-72%, says state revenue department

It is very, very rare for a public agency to take a look at the actual impacts of a major sporting event after the fact, as opposed to just throwing around crazy numbers beforehand. So props to the Minnesota Department of Revenue, which followed up on projections that the 2014 All-Star Game would bring $75 million in new economic activity to the state by actually counting up sales tax data, and finding that the actual figure was likely a whole lot less:

The state Department of Revenue, reviewing sales tax data for Minneapolis, added that the true figure could be as high as $55 million, or as low as $21 million…

“At the time, it seemed believable to me,” [Meet Minneapolis director of market research Kevin] Hanstad said of his original projection. Hanstad said he based his forecast in part on the estimated $60 million that the All-Star Game brought to Kansas City and St. Louis, though he added that those estimates were “loosey-goosey.”

He said the actual number for Minneapolis is likely closer to $50 million, and added that even that number remains uncertain. Hanstad said he has the most confidence in just one statistic — that the game itself, played on a Tuesday night, generated $26.9 million in economic benefit.

“It looks like there’s something there, right? But what is it?” said state Revenue Commissioner Myron Frans, who said it is difficult to separate any boost from the All-Star Game from the general upswing that Minneapolis’ economy has seen since 2010. “You don’t want to overstate the case.”

The numbers from the city tourism board Meet Minneapolis, including that $26.9 million figure, are actually more suspect, because they just add up spending at the game and related events, without accounting for what gamegoers didn’t spend on that week. (Data point: When the All-Star Game was in New York in 2013, I dropped several hundred dollars to take my son to the Futures Game, FanFest, Home Run Derby, and the All-Star Game itself. Suffice to say we otherwise didn’t leave the house much that month.) The state revenue figures, on the other hand, at least try to empirically measure the All-Star bump, by comparing tax receipts this July to overall trends.

Their answer — $21 million to $55 million — seems completely reasonable, given that economists have estimated that the Super Bowl’s total impact is around $100 million in new spending, and that’s, you know, the Super Bowl. Remember, though, that this is just economic activity: total money changing hands within the state’s borders. Minnesota’s sales tax rate is 6.875%, which would put the state’s actual take from the All-Star Game at a total of around $2-4 million — maybe a million or two more if you add in any extra state income taxes paid by Minnesotans who made a smidge more money this summer. That’s not nothing, but given that the All-Star Game cost the public about $600,000 in rent breaks, traffic costs, and police expenses — not to mention $387 million for the Twins stadium that earned Minneapolis the right to host the game — it’s pretty unimpressive as windfalls go. I hope the Firestone bunt-at-a-tire game was fun, anyway.

Minneapolis to set up “clean zones” during All-Star Game to ensure wrong kinds of people don’t benefit

This year’s All-Star Game will be held at the home of the Minnesota Twins, and the Minneapolis city council is already hard at work ensuring that local residents will be able to profit from the event:

A resolution making its way through the Minneapolis City Council would give the league veto power over any temporary businesses licenses in three designated “clean zones” from July 5-20. The All-Star Game is July 15.

The city has also agreed to assign police and licensing inspectors to ensure that the clean zones are free from any unauthorized commercial activity, including:

(i) transient vending or other sales by any individual or entity;
(ii) sampling of consumable items…

If you’re wondering why Minneapolis is agreeing to do all this after it’s already been assigned the event, apparently it was part of the deal that the previous city manager agreed to back in 2011 to get MLB to grant them the 2014 All-Star Game, and this would just make it “official.” Though it does raise the question of what MLB would do if the council changed its mind now. Move the game to Vancouver?

MN sports teams hate idea of taxing sports gear to pay for stadium, duh

Predictably, the Minnesota Vikings aren’t too happy with state representative Ann Lenczewski’s proposal to pay for the shortfall in stadium funds by taxing sports memorabilia sales, since that would mean they’d be paying the bills, not taxpayers. And that’s not what they agreed to at all:

“This legislation fundamentally changes the agreement the Vikings negotiated with the state of Minnesota,” said Lester Bagley, the Vikings vice president of public affairs and stadium development, after a hearing on the bill in the House Taxes Committee.

The team put in an additional $50 million in the final stages of negotiation on the bill for the National Football League stadium, Bagley said, and “that commitment was in exchange for an assurance that there would be no further impacts on stadium revenues, including taxes on stadium revenues.”

And other Minnesota sports teams are even less happy with the plan, if possible:

Representatives of the Timberwolves, the Wild and the Twins testified against the bill, which one said essentially would require the teams to subsidize a competitor. A spokeswoman for state retailers spoke against the bill as well.

Still, it seems at least possible that some kind of memorabilia tax will be seriously considered by the legislature — the head of the Minnesota Sports Facilities Authority says it’s a good idea, and really, the state doesn’t have a lot of other options. And even if the Vikings are upset, would they really walk away from $1.1 billion worth of subsidies just for fear of losing a bit of money on memorabilia taxes?

Which is both the strength and the weakness of the proposal, by the way: It’s not actually expected to raise much money. Estimates are that the memorabilia tax would generate $6.8 million in its first year, while the funding gap from e-pulltabs is more like $50 million a year. So while this could help, it wouldn’t be a solution by any means. But at least it’s nice to see the legislature considering trying to make this deal better for the public, rather than just promoting compulsive gambling.

Did I forget to mention MLB teams shake down cities for spring training money? Oh, do they ever

Nice piece last night by Deadspin wunderkind Jack Dickey on the never-ending shakedown of Florida and Arizona cities for baseball spring training facilities. Key section:

About the Nationals’ current home: It’s Space Coast Stadium in Viera, Fla., which was built in 1994 to keep the Marlins’ spring games in-state. It remained the Marlins’ home until Jeffrey Loria swapped the Expos for the Marlins in 2002, when Loria decided he’d keep Montreal’s newer spring digs at Jupiter’s Roger Dean Stadium, which opened in 1998. Loria happily forced the older stadium on Montreal’s new owners, MLB. Love that guy. In any event, the Nationals’ home isn’t yet 20 years old. But they’re still itching for a new one. For spring freaking training.

So why is it that Lee County won’t give in to the Nats? Have they finally gotten some sense about the economic ineffectiveness of publicly subsidized stadiums? Are they going to invest in infrastructure? Or schools?

Lee County, however, can’t afford anything close to that amount after taking on about $234 million in baseball-related debt over the past several years—borrowing $143 million to build a new stadium for the Red Sox and agreeing to take on another $91 million loan for improvements the Minnesota Twins want.

Oh, great.

This is nothing new, of course — though I don’t write about it here that often because I’m kept busy enough with major-league stadium news, spring-training subsidies have been a thriving business for years, if only because there’s effectively an unlimited number of Florida and Arizona towns who are able to host spring training, so the hosting merry-go-round is an endless bidding war. But it’s nice to see it all in one place. And by “nice” I mean of course teeth-gnashingly enraging.

Today’s Vikings stadium news, in 13 words or less

I was about to sum up the last 24 hours of reaction to the hot-off-the-presses Minnesota Vikings stadium bill, but really, the headlines alone tell the story just fine:

Steep hills for Vikings stadium

Vikings’ new stadium bid could need a Hail Mary

Vikings stadium bill is introduced at legislature and is headed to back burner

Viking Quest: Stadium Debacle 2011

No hearings scheduled for Vikings stadium bill

You can read the articles for yourself, but in a nutshell: There’s limited time to pass a bill this session, and the legislature is busy with the state’s $5.1 billion budget deficit and is showing no interest in moving on a Vikings bill. Not mentioned but also relevant: Um, there’s an NFL lockout, people? This is sounding more and more like running stuff up the flagpole in anticipation of a real stadium push in 2012 — conveniently just in time for the Vikes’ Metrodome lease to expire, as well as for the league to resume playing football, maybe.

Forbes: Twins earned extra $70m at Target Field

The first guesstimates are in on how much additional money the Minnesota Twins raked in from Target Field, and they’re pretty substantial: Sports economist Andy Zimbalist ballparks it at $50 million, while Forbes magazine — which has a pretty good track record in these matters — says it’s more like $70 million.

Where’s the money coming from? Team Marketing Report estimates that the average expense per ticket at Target Field, including concessions purchases, is about $51.75, vs about $41.40 at the Metrodome last year. (TMR’s estimates are pretty fudgy — does every family of four really buy two team caps? — but are close enough for this kind of comparison.) The Twins drew 3,223,640 fans this year, vs. 2,416,237 last year. That’d be enough to bring in about $64 million in new spending, and that’s before accounting for things like increased ad signage and not having to share money with its state landlords, like it had to do under its old lease.

Now, at this point your first thought might be: If the Twins are raking in so much money, couldn’t they have built the damn thing themselves, instead of sticking local shoppers with a sales tax hike? Maybe, but keep in mind that stadium honeymoons typically don’t last that long these days — 5-7 years at best, two or three if your team is lousy — and most of that new money (almost two-thirds, by my reckoning) comes from increased attendance, not increased ticket prices, so the bottom line might look very different a decade from now. Also, it’s not clear whether the Forbes and Zimbalist numbers include the extra cash the Twins will have to kick into the league’s revenue-sharing plan, which could knock down their windfall by about a third.

To really establish whether Target Field could have paid for itself, we’d need to see the Twins’ books. Anybody have any friends at the Twins’ insurance company?

First Target Field reviews: “Incredible,” “mall-like”

The Minnesota Twins‘ new Target Field held a baseball game on Saturday — albeit with college teams, since the Twins are still at spring training — which means lots of people chiming in with their first impressions:

  • Jay Weiner of MinnPost says that it’s easy to get there by public transit, the concession stands feel like you’re in a mall, and it’s not too cold to play baseball outside in Minnesota. And it could be good for the Vikings’ stadium push if fans get new-stadium fever, but bad if they notice how much more money the Vikes’ stadium would cost.
  • The Downtown Journal, which actually snuck in a couple of weeks ago, notes the myriad sculpture (including 1.25:1 scale statues of Rod Carew, Harmon Killebrew, and Kirby Puckett), the five full-service restaurants, and a roof deck by the top of the left-field foul pole with a “10-foot-long gas fire pit.”
  • Sid Hartman, predictably, called it “unbelievable” and “fantastic.”
  • The Associated Press reports that a Twins spokesman says fans are describing it as “incredible.” And he’d know, right?