Sign in / Join

Subsidies for minor league hockey?

Jay Lacke, a marketing professor who "love(s) AHL hockey" argues in favor of subsidizing a new arena in Allentown.

The city's main asset is still its ability to provide agglomeration advantages. But those benefits are now on the consumption side of the economy. Quality of life issues are increasingly important, especially for the high-skill workers who are experiencing significantly rising real incomes. The Philadelphia Federal Reserve Bank has demonstrated that growth in real income increases demand for a greater variety of goods and services, including theaters, restaurant cuisine, parks and recreation, good schools ... and professional sports teams. This, says the Philly Fed, implies that larger cities with more choices will attract high-income households. These folks also tend to be the high-skill individuals whose presence supports the new economic function of cities — incubators of new ideas and innovation.

Nexus derives from "to bind (things or persons)." The new theory of the American city is that high population and employment concentrations promote the exchange of ideas between people, something that economists dub "knowledge spillovers." Especially among the high-skill individuals, these ideas are generated, transmitted, and percolated very rapidly if the people are linked, connected, bound together.

That binding doesn't just happen. It depends on infrastructure. Yale professor Douglas W. Rae argues that viable cities must "nurture the unplanned civic engagements that make mixed-use city life so appealing and so civilized." Cities do not even need to expand their populations and employment, or look like the thriving suburbs, to be places where the creation of ideas creates sustained economic growth. They need what sociologist Richard Sennett calls "useful disorder," the challenging yet socially productive complexity that results from the interactions of diverse people and ideas.

A new arena and a new minor league hockey team is a great consumptive asset that helps make the city a better nexus.

Steve Dittmore, a professor in sports management, responds citing evidence and economic reasoning which are inconsistent with Lacke's claim that a hockey arena "would be a good economic development vehicle."

I think this is where the argument has been pushed. The economic spillovers are either not there or can't be measured. So proponents now base their case on hard to refute claims - arenas as a "consumptive asset," a nexus for "unplanned civic engagements," and so on. And on these terms, they win. Libraries could and do serve a city in the way described by Lacke. But the librarians are always telling people to "keep it down" whereas the arenas feature cheerleaders and piped in music to "jack up" the crowd. For better or worse, the arenas have the winning formula in today's society - even in the minor leagues.