Monday, August 20, 2018

"Unfortunately, neither of them works"

MLB catcher and hitting coach Charley Lau on the two theories on hitting the knuckleball. 

...nor do the theories on minor league stadiums bringing in tax revenue.

For example:
A large body of academic research has found that despite optimistic projections of the economic impact of stadium subsidies, subsequent analysis indicates that they have little to no effect on the local economy and the economic well-being of nearby residents. 
"A Case Study on Stadium Benefits"

And:
...any economic benefit a city sees in shelling out for a minor league stadium is largely imagined. Examining 283 minor league cities from 1985 to 2006, she noted that even Triple-A towns that saw modest increases in per-capita income didn’t see enough of a bump to cover stadium expenses. Also, while those towns sometimes see small increases in rent as a result, the combination of all the added residual income still isn’t enough to warrant the public outlay.
"How Minor League Baseball Struck Out with Taxpayers"

And:
 Cities keep trying, but the economic stimulus provided by pro sports teams—the parking lots full of out-of-state license plates, the overflowing restaurants—is more anecdotal than real. 
"The Braves Play the Taxpayers Better Than They Play Baseball"

And:
Professional sports can have some impact on the economy. Looking at all the sports variables, including presence of franchises, arrival and departure of clubs in a metropolitan area, and stadium and arena construction, the study finds that the presence of a franchise is a statistically significant factor in explaining personal income per capita, wage and salary disbursements, and wages per job. But this impact tends to be negative. Individual coefficients, such as stadium or arena construction, sometimes have no impact, but frequently indicate harmful effects of sports on per capita income, wage and salary disbursements, and wages per job.  
  "Stadium Boondoggles Spread to the Minor Leagues" 

And (UPDATE, as this looks specifically at the Worcester deal):
After the announcement by the city and the team Friday of their signing a letter of intent to build a stadium in the Canal District, WBJ sent copies of the financing details to 10 economists and stadium experts around the nation to gauge whether Worcester's claims over the stadium development paying for itself – without the need for current tax dollars – would come true.
Of those experts, the only one who spoke positively about the deal was the Smith College professor who was hired by the city to judge the economic viability of the offer to the PawSox. The rest doubted the stadium-pays-for-itself claims would come to fruition.
"There's just mountains now of economic evidence that the payoff that's promised and what actually happens is far different," said Joel Maxcy, an economist at Drexel University in Philadelphia.
"Sports economists: $101M WooSox Stadium Deal Unlikely to Beat the Odds"

All of the above have extensive links to further research to the same ends; I haven't cherrypicked these. 

Note in the above, by the way, that parallel to the claims being made in Worcester, the tax revenue increase coming from offshoots of the stadium does not pan out. Let's agree, therefore, that, claims aside:
Worcester officials promise no existing city tax revenue will be used to fund the ballpark project. Instead, the city will create a District Improvement Financing District around the park and ancillary development. According to a fact sheet on the new park, new taxes and other revenue from within the district will pay for financing.
In 2022, the first full fiscal year of operation, Worcester official project they will owe $2.9 million on an overall $100.8 million loan. But they’re anticipating $3.7 in revenue from the development, operating at a surplus of $741,000.
On the revenue side, state tax gains are projected at about $2 million annually from income tax, and food, beverage and hotel taxes.

...Worcester, and its taxpayers, are on the hook for this stadium. The $100M in bonds have to be paid regardless if the projected funds come in.

However, the $100M loan for this stadium is not all that the city has planned.

This is on top of the $194.6M that the City Council authorized for the new South High back at the end of March. Remember, in contrast to earlier projects in Worcester, the state through MSBA is only reimbursing 55% of the costs of the new South, due to increases in the per foot cost of building. Thus over $100M of the cost of the new South will be covered by the city.

This is in addition to a Doherty High project that has yet to find a site and has yet to receive state approval as to its plan, but will be at least as expensive as South (more, if the City has to fund land for the project). It will similarly be a lower reimbursement rate--it isn't as though costs to build have any prospects of coming down over the next several years--and thus a similar amount=--$100M--covered by the city.

The acquisition of this debt in concert with the federal administration's decisions around imports led to a discussion at Worcester City Council the first week of March.
Mr. Petty said maintaining the city’s infrastructure is equally important, but there is a limit to the amount of money the city can borrow.
“Hard choices will have to be made,” he said. “Where do we put the money? Do we put it into the school or do we put it in somewhere else? Infrastructure is important, too. The finances of this city are the most important thing we do; everything goes from there. A balanced approached will be needed when it comes to paying for these big items. Some tough decisions are going to have to be made.”  
And Worcester has a third high school not mentioned above that has yet to even be accepted into the MSBA pipeline: Burncoat, which is (as the state has acknowledged) in worse shape that Doherty and would need to be a middle/high project, given both the proximity and condition of the middle school. While Burncoat could follow the North and South building staging (building a new building on the athletic fields while the old building remains in use; taking down the old building and reconstructing the athletic fields), it is the arts magnet and a 7-12 building has different requirements.
Figure at least another $100M.

Finally--and most disturbingly to me--no one is making any plans at all regarding the $70M in "urgent" (having to do with life or safety needs) repairs the spring Facilities Master plan reported out. While the report was made at a joint subcommittee meeting with City Council, it's not clear that the report has been taken up either by the city administration or by the school administration in discussions with the city. Those are basic systems repairs at schools that, come a week from today, we'll once again be sending 27,000 kids to.

I realize that it is much more fun to smile at press conferences where everyone is clapping than to ask how we're going to meet basic functions of municipal government like providing schools in decent repair. It is the job of an informed polis, however, to ask how we continue to run our municipality for the benefit of our actual residents.
It is for the latter that we elect City Councilors.
And School Committee members, for that matter.

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