How stadiums, sports can affect life for us in KC - Topic Powered by Eve Community

Read the entire article here on the KC Star website

How stadiums, sports can affect life for us in KC

By JEFFREY SPIVAK
The Kansas City Star

Bet you didn't know having the Royals and Chiefs in fixed-up stadiums may put extra money in your pockets.
Or that the stadiums' operations may actually sap jobs out of the local economy.

That may not make sense, but those are some of the ways Kansas City's major-league sports and their stadiums affect your life, whether you are a sports fan or not. At least that is what the experts say.

Economic impacts of pro sports are a highly controversial subject. All across the country, city consulting studies claim that teams and their newer stadiums generate lots of income and jobs. Yet most economists who have studied the issue are just as adamant that they don't "” and may not even outweigh the costs to taxpayers.

Next month, Jackson County residents will get to decide, in two ballot measures, whether a total of $777 million should be invested in the Truman Sports Complex. One measure calls for renovating Kauffman and Arrowhead stadiums to make them state of the art. The other measure proposes adding a rolling roof over those stadiums to help attract big-time events like a Super Bowl.

Is that investment worth the economic returns to the community?

Stadium work poses risks for rewards

Do votes for stadium renovations and a rolling roof on April 4 make sense economically for the metropolitan area? The Kansas City Star breaks down that question into four pieces.

– Do the stadiums and the teams playing there make you richer?

Maybe, but it might be hard to notice.

A new study done for the Greater Kansas City Chamber of Commerce predicts the stadium renovations, once completed, will trigger $412 million in economic activity for Jackson County every year. That is not all new activity, because the teams are already there, but it represents the loss if the teams leave, which would concern the chamber if voters don't approve the stadium renovations.

So the economic figure adds up everything from team payrolls to team memorabilia sales, from business at sports bars to business at grocery stores related to game-watching parties.

As part of that impact, the study by consulting firm Development Strategies Inc. of St. Louis suggests total personal income of county residents would be $73 million higher because of the stadiums' operations and fans' spending. That figure means having the teams play in fixed-up stadiums would put, on average, $111 in the pocket of every county resident.

To better understand how this would happen, consider Chiefs season ticket-holder Phil Pulley.

He is from Arkansas, and so for every Chiefs home game, he and his family and friends fly to Kansas City in a private jet, rent a car, stay at a hotel, go out to eat, buy groceries for tailgating and, of course, go to the game. All told, Pulley estimates he spends more than $3,700 every Chiefs weekend.

That helps pay the salaries at those businesses, then those workers have money to buy things, and there is a continued trickle-down through the economy.

"If you live in Jackson County, it's hard to see this, but on the outside looking in, it's easy to see," said Pulley, chief executive of a lawn-mower manufacturing company.

However, many economists say that is just one side of the story.

A growing legion of academic and financial researchers have asserted that such impact studies measure only the positive benefits of stadium-related spending. In fact, there are costs associated with that spending and even economic losses that result.

For example, the additional 3/8 -cent sales tax to fund the stadium renovations would end up costing the typical Jackson County consumer about $25 a year, based on federal data on spending in the metropolitan area. That would reduce the county income projection. In addition, when residents spend money on sports, they are choosing not to go to the theater, gambling boats or fancy restaurants.

"The more people spend at restaurants and nightclubs located near a stadium, the less they may spend at restaurants and nightclubs located elsewhere," economists Jordan Rappaport and Chad Wilkerson wrote in a report for the Federal Reserve Bank of Kansas City.

In effect, the economists believe, sports facilities result in little overall net income growth in a community. Even the author of the Kansas City chamber study acknowledges this.

But a consultant for Kansas City's new arena, Bob Herrfeldt of Horrow Sports Ventures, noted: "At the end of the day, there's not an economic benefit of a library, either, but that doesn't stop communities from doing them."

– Do the businesses of baseball and football at the sports complex expand the local economy's job base?
Short term, yes. Long term, probably not so much.

On the one hand, the study for the Kansas City chamber claims the stadium renovations would result in 2,420 new jobs in construction and related positions. And once that was done, the stadiums and teams would generate 3,260 jobs in Jackson County, ranging from ones that already exist like ballplayers and hotel workers across the street, to possible new ones like restaurant waitresses.

"The number of jobs is comparable to the creation of Embarq, the spin-off company from Sprint Nextel, and that translates to the presence of a major employer in Kansas City," said Pete Levi, the chamber's president.

Miguel Meneses, president of the Hispanic Chamber of Commerce of Greater Kansas City, said he believed his members would feel that impact.

"They (the teams and stadiums) open opportunities for employment, both on the construction side and outside that, from the maintenance crews to catering," he said.

However, Brad Furnish, an opponent of the stadiums referendum, claims the job projections are inflated.

Furnish, who has a master's degree in economics and has taught economics classes at local colleges, takes issue with the way the study uses an economic multiplier, a way of estimating how many jobs are created throughout the economy. He says a multiplier should not be applied when an economy is humming along as it is in Kansas City with very little unemployment, a condition that slows job creation.

"If someone submitted this study in an undergraduate economics class, it should get an ˜F'," Furnish said.
Academic economists have studied this issue even further.

Dennis Coates from the University of Maryland, Baltimore, and Brad Humphreys at the University of Illinois tried to estimate the effect of pro sports on the retail and services sectors of local economies. They found in most metropolitan areas, having sports teams resulted in fewer retail and service jobs. The impact was particularly negative in Kansas City, where they estimated thousands of jobs were sapped from the economy because of spending on sports.

In an interview with The Star, Coates speculated that Kansas City may be so hard-hit because there is not a lot of entertainment alternatives besides sports, so residents devote a larger proportion of leisure dollars to the sports teams. If spent elsewhere, that money would create more jobs because it would stay more in the local economy.

Certainly the history of the stadiums so far shows they have not spawned much direct development around them.

– Are there other benefits to having the teams and stadiums in Kansas City?

Certainly, in many unrecognized ways.

While the economic benefits of sports teams and stadiums are debatable, another benefit is not: How sports teams add to a community's quality of life. Even academic economists recognize this.

The quality-of-life benefits take many forms "” residents attending games, listening to games on radio, hosting parties to watch games on television, talking about games with co-workers, even second-guessing games on talk radio.

A Florida court case over Tampa Bay's football stadium funding led that state's Supreme Court to describe these intangible benefits: "The court finds that the Buccaneers instill civic pride and camaraderie into the community and that Buccaneer games and other stadium events also serve a commendable public purpose by enhancing the community image on a nationwide basis."

Lee's Summit entrepreneur Jo Anne Gabbert appreciates this.

"We don't have mountains for skiing, not the ocean or beach for recreational activity. But we do have major-league sports," said Gabbert, who runs a management consulting business. "We need to be a major-league city or we stand to lose jobs and companies to other cities that do have major-league sports and other cultural benefits."

Bob Marcusse, the metropolitan area's chief business recruiter, can attest to that, too. Business site selectors he works with look at a metropolitan area's population, growth, cost-of-living, plus whether its quality of life can help recruit talented workers.

"Kansas City is often given an opportunity to compete because it is perceived as a major-league city," said Marcusse, president of the Kansas City Area Development Council.

However, the benefit of being major-league has been difficult to quantify, in dollar terms. Among the researchers who have tried are economist Jerry Carlino of the Federal Reserve Bank of Philadelphia and economics professor Ed Coulson of Penn State University.

In their study of NFL cities that gained or lost a franchise in the 1990s, they found the presence of a team raised housing rents by 8 percent, after controlling for other economic changes.

In an interview with The Star, though, Carlino noted that such an effect would not occur for a city like Kansas City because it already had teams and was not gaining one. But he observed: "If you were going to lose a team, you'd definitely have a loss."

Nevertheless, to opponents of the stadium taxes, the referendum is not about keeping Kansas City major-league. Rather, it is about whether the burden of paying for sports teams' palaces should fall primarily on the public.

– What would a Super Bowl or other national events be worth to a community?

A lot, but probably not as much as they are touted.

Jackson County proposes adding a rolling roof over Arrowhead, in part, to be able to possibly play host to a Super Bowl or a college basketball Final Four. But projections of local economic gains from such big-time national events are, again, a matter of great debate.

For instance, studies for cities that had Super Bowls in the past decade predicted total consumer spending ranging from $290 million to $390 million, based on tens of thousands of visitors paying for hotels, restaurants, tickets and the like. Yet, in a review of such studies, Lake Forest College's Robert Baade and Williams College's Victor Matheson determined that Super Bowls delivered a fraction of the promised impacts, or an average of about $92 million, because local residents tended to stay away from the tourist hubbub.

Now Kansas City has ventured into this muddle of money.

Another study done for the Kansas City chamber by Development Strategies estimates a Super Bowl would deliver $142 million for Jackson County. And the same study estimates a Final Four would generate $270 million in economic activity "” far more than the $60 million that a different consultant found for the Kansas City Convention & Visitors Association.

"I've been involved in Final Fours, and that $60 million figure is much closer to reality," said Rick Hughes, association president.

Hughes said he believed the $202 million roof would be an incredible investment because of all the different events Kansas City could potentially hold. But even he agrees with something that economists like Michael Davis of the University of Missouri-Rolla assert: "The economic benefit of bringing a Super Bowl to the city is not anywhere near the cost of building the roof."

To reach Jeffrey Spivak, civic affairs reporter, call (816) 234-4416 or send e-mail to jspivak@kcstar.com.

Business of Sports Network | Biz of Baseball | Biz of Basketball | Baseball Prospectus

Posts: 15761 | Location: Baseball Wonderland | Registered: March 12, 2001

twosomeca

MVP Member

Posted

	View $GS_USERNAME's Public Profile
	Add $GS_USERNAME to my Buddies
	Add $GS_USERNAME to my Ignore ListRemove $GS_USERNAME from my Ignore List
	Invite $GS_USERNAME to a Private Topic
	View Recent Posts by $GS_USERNAME
	Notify me of New Posts by $GS_USERNAME

Quick Reply to: How stadiums, sports can affect life for us in KC
Guest Name

Close \| Use Full Posting Form \| Quick Quote