Twins Officials Acknowledge Lack of Economic Boost from Stadiums

The main players in the Minnesota Twins’ bid to get public funding for a new stadium have dropped the economic impact argument. They acknowledge what economists have said for years: stadiums and sports teams are not catalysts for economic growth.

Jerry Bell, lead man in the Minnesota Twins’ bid for a new stadium, has given up on one of the arguments that the team used to make in pressing its case.

A publicly subsidized $478 million stadium could be great for the club, but Bell isn’t saying it would also spur business activity in Minneapolis or Hennepin County.

“I don’t think the economic argument turns it one way or another, so why go there?” said Bell, president of Twins Sports Inc. “If there are side benefits, great. If not, so what?

“You get into an economic argument, and the bottom line is, ‘Do you want to build it or not?’ ” he said.

In dropping the stadiums-as-economy-boosters argument, the Twins are acknowledging what economists long have argued: Stadiums built for pro sports fail to deliver measurable financial returns for their communities.

“At some global level, they’re obviously correct,” Bell said.

The global level, in many cases, is not much greater than the immediate neighborhood, if that much. In saying this, the Twins have sort-of acknowledged what economists have been saying for years. Meanwhile, Sid Hartman, long-time Minneapolis Star-Tribue columnust, continues to play the economic development card:

Twins officials say a new ballpark in back of Target Center could result in some big revenue for the city of Minneapolis, with a conservative estimate of $90 million, or $3 million a year, in sales taxes during the length of the 30-year lease.

In addition, there would be a tremendous amount of income from parking ramps owned by the city and more sales tax on purchases made by fans attending the games and the various restaurants in the loop, including the Warehouse District.

And if you don’t believe that sporting and other events downtown don’t result in spending, check with the various bars in the Warehouse District. And go to St. Paul and ask the operators of various bars and restaurants and parking lots and ramps how much business they have lost because of no Wild games. Don’t believe reports otherwise.

In Minneapolis there would be new real estate taxes on the many developments planned by investors in the ballpark area.

So what happened when other sporting venues were built in the Twin Cities? Is there a history of development around ballparks and arenas in the Cities? From the first article linked to above:

Consider the Metrodome: Opened in 1982 at a total cost of $68 million, its boosters predicted that the stadium would be a magnet for new construction in a part of downtown that hadn’t seen new private investment for years. Instead, the building boom of the 1980s and 1990s in downtown Minneapolis bypassed the Metrodome neighborhood.

“We put a stadium in the middle of nowhere and nothing developed around it,” economist Art Rolnick said of the Metrodome. “If these things are magnets for economic development, what happened?”

Last week I wrote this post on why Cubs games are more popular than White Sox games. Several commenters point to the neighborhood around Wrigley Field as a primary reason for the current popularity of a Cubs ticket. Wrigleyville and Wrigley Field complement one another. But for this sort of thing to happen, things have to fall in the right place, and in my humble opinion, it’s very difficult if not virtually impossible for government officials to get things to “fall in the right place.” From the first article:

The Target Center, acquired by the city of Minneapolis from private developers at a cost of $74 million in 1990, now sits next to the Block E entertainment center, but Block E was built only through $40 million in public subsidies.

The Target Center (home of the NBA’s Timberwolves), by itself, didn’t boost development. So the Minneapolis city government gave development a boost by subsidizing the construction of Block E and 12 years after the Target Center opened, the first phase of Block E opened. But there’s no guarantee that Block E will be a magnet for new spending either.

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Author: Phil Miller

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