April 05, 2007
Journalists do their job - film at 11
I spend a fair bit of time bashing bad journalism on this site, so it's a nice change of pace to give credit to those who do their jobs well. Two teams, the San Francisco 49ers and Seattle Sonics, came out with economic impact projections for their proposed new buildings yesterday - and instead of merely reporting what was handed to them in a clear plastic binder, the local papers actually examined these documents as claims that can be (gasp!) independently verified.
The 49ers, who are seeking $180 million in public funds from the city of Santa Clara toward what's now a proposed $950 million stadium ("the most expensive open-air NFL stadium ever built," according to the San Jose Mercury News, though actually the new Jets/Giants stadium in New Jersey is far pricier), released a study by the Minneapolis-based consulting firm Conventions, Sports & Leisure that claimed the stadium would: create 2,230 permanent jobs, generate $249 million in annual economic activity (i.e., money spent within the county limits), and create $12.3 million in new annual county tax revenue. Mercury News reporters Mike Swift and Julie Patel then dug behind the numbers, noting:
The report's authors ... said they were unable to provide any information on what portion of the jobs created would be part-time or seasonal jobs. So there's no way to know how many of the 920 new annual jobs forecast for the city of Santa Clara, for example, would be full-time.
The report also did not include an estimate of the local costs of the stadium - everything from road wear, car accidents, vandalism and environmental impacts of stadium crowds. Some economists say such costs are frequently omitted from stadium economic studies, but should be included to provide a full economic picture. ...
The economic impact is based on the premise that new jobs would be filled by residents of Santa Clara County or the city of Santa Clara - in effect that construction workers and stadium employees would not take their paychecks home to Oakland or Los Banos or somewhere else outside Santa Clara County.
All excellent points. One other that they might have noted: $12.3 million a year is barely enough to pay off an investment of $180 million (plus interest), so even by the Niners' own figures, the stadium is at best a break-even proposition for the county. (And for the city, which would get a mere $800,000 a year in new tax revenue but would be stuck with all the public costs, it would be a disaster.)
Up in the Seattle suburb of Renton, meanwhile, it was the city itself that commissioned a report, by local consultants Berk & Associates, into the tax revenue potential of a new $500 million Sonics arena. While the city touted the report as showing an arena "has significant economic potential," the Seattle Times' Jim Brunner and Ralph Thomas reported the findings differently: The arena "probably would not turn a profit for the state or King County," generating between between $78 million and $152 million worth of new taxes over 25 years while costing taxpayers $300 million; for the city, it would generate $20.5 million worth of taxes against $100 million in construction costs. (Sonics spokesperson Jim Kneeland's classic reply: "It's not a profit-making venture, and the county shouldn't look at it as a profit-making venture.") The Seattle Post-Intelligencer went for a marginally more optimistic spin, reporting that "under the most optimistic of circumstances, a new arena for the Sonics would help support 5,799 jobs and generate $340 million in taxes," before revealing that this would require that the arena:
hosts 223 events and becomes home to a National Hockey League team, two major conventions and five corporate meetings. That projection also assumes the Sonics and Storm will make the playoffs at least every other year and the arena attracts a significant NCAA event every other year.
The P-I didn't say whether it would also require crows to fly upside-down.
In possibly related news, the Sonics arena bill now might not even get voted on by the state legislature, since it looks to have zero chance of passing the state house, where speaker Frank Chopp is a diehard opponent. The state legislative session ends April 22.
Welcome to your 2007-2008 Oklahoma City Sonics!!!
I agree that they don't need to build an arena, let the Sonics pay for it.
Posted by LeftWingCracker on April 5, 2007 06:34 PM
Thanks for this fine review! We residents of Santa Clara, CA, are now having to wade through the muck made by the stadium boosters. There are a lot of us who *greatly* appreciate the coverage by Field of Schemes.
Just for info, as far as we know, the proposal to raid our City Utility Reserve fund still isn't dead. If the Niners dupe us into wasting that fund, that means increased electric bills - and leaving ourselves at the mercy of PG&E's pricing if we see any more blackouts this summer.
All in all: The proposed Niners' stadium for our city is a billion-dollar stupid idea which creates crummy jobs and which wastes our public services. And for a team that went 7-9 last year?
Backers of this boondoggle need to get real...
Posted by Will on April 9, 2007 08:08 PM
