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July 19, 2012
Seattle arena hearing tonight; economists and councilmembers still have qualms
Big Seattle and King County joint council hearing on Chris Hansen's $500 million arena project today, and there's lots of last-minute analysis and jockeying:
- The Seattle Times talks to several sports economists, who note that sports arenas don't do much for your local economy: "The economic impact is approximately zero. All you're doing is recycling fans from one game to another," says the University of Chicago's Allen Sanderson. The Times also cites the University of Oregon's Dennis Howard as asserting that public contributions to sports arenas are on the decline — something not borne out by Judith Grant Long's research, which found that hidden tax subsidies to sports facilities are on the rise, though it's always possible that this has turned around while Long has been readying her long-awaited book manuscript.
- Seattle councilmember Richard Conlin says he's worried that the Hansen deal would set a bad precedent: "Every other business that comes to town, they establish an business, they pay those taxes, those taxes go into our general fund to support police and parks and fire and the other things that we do." It's a legitimate concern: Even if Seattle would be roughly breaking even on the deal, it would be giving up about $63 million in revenues that it would get if it told Hansen, "Go build it yourself, what makes you think you're so special, huh?" (Assuming Hansen would still build under those circumstances, which he insists he wouldn't.) Slippery slopes can be a big problem for development subsidies, so it would certainly behoove the council to work out a standard that doesn't require it to rebate sales and property taxes to everyone who comes along and says they want to put up a building — or for today, at least to ask Hansen why he deserves these rebates more than anyone else. (Preferably using the phrase, "What makes you think you're so special, huh?)
- Speaking of Hansen, he responded on his blog to my calculation that Seattle would more or less recoup its expenses on the arena plan by plugging my book. Now I feel dirty...
Tonight's hearing starts at 5:30 pm Pacific — public meetings held at a time the working public can actually attend, what an innovation! — and will be webcast here.
The Hansen post praising you and your book gave me a chuckle. It has to feel good to be held in high esteem by a stadium developer when there's all these academics throwing nonsense against him. :)
Posted by Ben Miller on July 19, 2012 11:04 AM
"Even if Seattle would be roughly breaking even on the deal, it would be giving up about $63 million in revenues that it would get if it told Hansen, "Go build it yourself, what makes you think you're so special, huh?" (Assuming Hansen would still build under those circumstances, which he insists he wouldn't.)"
Really? If the city's participation really is somewhere near the $63 million you calculated in yesterday's post and we assume the life of the arena is somewhere in the neighborhood of 30 years...he's really gonna shelve a project of this size over $63 million over 30 years?
If the city declines the opportunity to invest in the project and he doesn't do it himself, it'll be more out of spite than economics.
(fwiw, If I was you, I'd ask Mr. Hansen to correct the description of your book to "opposing the public financing of pro sports stadiums and arenas". No need to let him perpetuate the "anti-public financing" = "anti-stadium" nonsense.)
Posted by Keith on July 19, 2012 04:29 PM
Re: the recycle fans claim. There is no way this is accurate. I would love to see some data on that topic. The Mariners were down 1.6Million fans (as in attendence) in the last 10 years. There were down 1 Million fans before the Sounders even started playing in Seattle. I am reading Sports, Jobs and Taxes right now, good book to get you to think about some things..The Hansen group isn't really pitching 100s of Millions economic impact/year like some of the other owners/arena advocates have done in the past.
Posted by JB on July 19, 2012 05:36 PM
And one more thing...We can all say we "knew" Neil before he was famous now that even potential Sports Franchise owners are pimping his book.
Someone asked me at lunch (in Seattle) today if I have ever heard of fieldofschemes.com. It is because they saw a post on the Hanson groups facebook page. :-)
Posted by JB on July 19, 2012 06:00 PM
It's $63 million in present value, not over 30 years. So that's real money, though I agree that it'd be odd for Hansen to walk away over that - or certainly if Seattle just told him to, say, split the difference.
Speaking of money, I earned an extra $6 in Google Ad hits yesterday after Hansen linked to me! Clearly sucking up to The Man has its benefits.
Posted by Neil deMause on July 19, 2012 06:42 PM
Still, whatever the annual value works out to is probably 1/10th of what his teams will pay out to failed free agents every year.
Posted by Keith on July 19, 2012 09:00 PM
Here's the live coverage from the Seattle Times:
blogs.seattletimes.com/today/2012/07/updates-from-the-public-hearing-on-the-arena-deal/
It sure seems as though a solid majority like this idea. They could just be the noise-makers; we've all seen that. But this crowd was at least 80% in favor.
I think it's going to happen, and it'll be the Kings. There is absolutely nothing going on in Sac right now.
Posted by MikeM on July 20, 2012 12:41 AM
The Hansen payed for websites, and Hansen payed sportsradio stations promoted the hearing. Hansen's payments bought him a packed hearing.
Posted by jhande on July 21, 2012 06:07 PM
Once again, there is not a big pile of cash just laying around, and we have to choose between schools and basketball........
This cash is NOT there unless the basketball team is there !
Well, that's why the substitution question is so important. Any chunk of the taxes that'd be paid at an arena that would otherwise be paid somewhere else (say, at the current arena, or at a local restaurant) would be cannibalized from the existing budget.
At least some people who'd be going to Sonics games would be spending money that they otherwise would spend in Seattle. It's defining "some" that's the tricky part.
Posted by Neil deMause on July 24, 2012 10:42 AM