TO: 
County Commissioners & City Council & Community Members
FROM: Ann Stringfield, 1005 North Eugene St
SUBJECT:Stadium Economics vs. Downtown Redevelopment (revised 8/29/2003)
Our citizen's questions about physical, social, and economic concerns of this land swap are enormous and we are pleased you are hearing our questions and asking questions yourselves.
Proponents of a new stadium introduce land-swap-stadium presentations with facts about Greensboro's economic woes (reduced average income and lower ranks among metropolitan statistical areas.) Then they make a huge leap of logic to suggest exchanging publicly owned land for a new Social Services building and building a new stadium on North Eugene Street somehow will improve local economic conditions.
Current published economic research indicates that new stadiums provide no positive economic impact for a community, nor employment, nor downtown redevelopment. Excerpts from a few of those studies are compiled below for your easy review. There are a plethora of additional studies if you wish for more evidence. The following quotes from published research give you a taste of economist's and researcher's fndings.
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Roger G. Noll, Senior Fellow in Economic Studies at the Brookings Institute and professor of Economics and Director of the Public Policy Program at Stanford University, indicates "Nearly all spending at the Stadium is simply shifted from other forms of entertainment like restaurants and movies". "Independent studies of sports facilities invariably conclude that they provide no significant economic benefits." "Teams want their own stadiums so they can control and profit from other events in them. The city, of course, gains nothing by letting the teams have their way." (Sports, Jobs & Taxes by Roger G. Noll and Andrew Zimbalist, 1997. The Brookings Institute Press.) [The Brookings Institute is an internationally recognized public policy research organization.]
In the article "Economic Impact of Sports Teams and Facilities" by Roger G. Noll and Andrew Zimbalist in Sports, Jobs & Taxes we read that "An interesting puzzle in this story is why cities claim that stadiums are good investments and use bogus economic impact studies to buttress this pretense. The most plausible explanation for bogus studies is political. They create the illusion of a greater public benefit than, in fact, a team creates."
Noll and Zimbalist reiterate it is "bad economic reasoning that leads to overstatement of the benefits of stadiums. Economic growth takes place when a community's resources - people, capital investments, and natural resources like land - become more productive." "A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment." "Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus [i.e. minimal]." "Sports facilities attract neither tourists nor new industry." "Most spending inside a stadium is a substitute for other local recreational spending, such as movies and restaurants. (The Brookings Review, Summer 1997, Vol. 15 (3) pp. 35-39, The Brookings Institute.)
"When [stadium] promotional studies go beyond estimates of economic impact and attempt an elementary cost-benefit analysis, they frequently introduce even more faulty assumptions. For example, some assume that a site has zero opportunity cost or that a stadium does not impose additional security, infrastructural, or environmental costs on the city. The ubiquitous claims that a professional sports team will convert the metropolitan area into a "big league city" and attract new businesses to the area is more than offset by the heightened possibility of fiscal distress and the resulting challenge to the city's educational system, tax rates, and services in general." Sports, Jobs, and Taxes: The Real Connection by Roger G. Noll and Andrew Zimbalist.
"Sports teams and facilities are not a source of local economic growth and employment" says Kenneth L. Shropshire of the Wharton School of the University of Pennsylvania and author of The Sports Franchise Game: Cities in Pursuit of Sports Franchises, Events, Stadiums, and Arenas.
In "The Sports Swindle Ticker" in Field of Schemes we learn that "New baseball parks continue to be no panacea for ballclubs: attendance at four of the five ballparks that opened in 2000 and 2001 is down from last year's averages." "Other early 90's stadiums appear to have fallen victim to the slump that commonly hits new facilities in about their 8th year after opening".
From his book City Baseball Magic: Plain Talk and Uncommon Sense About Cities and Baseball Parks by Philip Bess, Knothole Press, we understand that "Today's new "retro" baseball stadiums do not provide the intimacy or community of the classic neighborhood ballparks They are a drain on taxpayers and they tend to destroy the physical and special fabric of cities."
Keith Law writes in "The Imbalance Sheet: the New Stadium Fallacy" "We basically wanted to do a careful retrospective study of the determination of income in [37] cities that had professional sports franchises over the past 30 years. Forget about the overblown claims. What actually happened in those cities?" "On average, professional sports reduces inflation-adjusted income per person by a small but statistically significant amount for every person in the metropolitan area, not just people who attended games. So professional sports do not form the basis of a viable local economic development program." "Spending on professional sports is not new spending; it's just a reallocation of local spending on other entertainment like going to a movie or out to dinner." "Politicians and local development types refuse to believe the results and often say, "You are clearly wrong," even when they have not read any of the papers." "How is it that owners and politicians manage to fudge the data so easily? Nobody ever goes back and looks at how many jobs were actually created or how much additional tax revenue was generated. There's just no assessment. Except in the academic literature to which not many people pay attention."
In "The Stadium Gambit and Local Economic Development" in the journal Regulation v.23(2) Dennis Coates and Brad Humphreys note "because of sport-and stadium-related activities, other spending declines as people substitute spending on one for spending on the other." " ... stadiums may be a tool for redistributing income" "... owners of professional sports franchises are getting richer at the public's expense. " "The key is comparing the return on the investment in the stadium with the return on the same dollar investment in any alternative public use, including tax reduction." "In stark contrast to the results claimed by most prospective economic impact studies commissioned by teams or stadium advocates, the consensus in the academic literature has been that the overall sports environment has no measurable effect on the level of real income in metropolitan areas. Our own research suggests that professional sports may be a drain on local economies rather than an engine of economic growth." "The professional sports environment in the 37 metropolitan areas in our sample had no measurable impact on the growth rate of real per capita income in those areas. The professional sports environment has a statistically significant impact on the level of real per capita income in our sample of metropolitan areas, and the overall impact is negative. The presence of professional sports teams, on average, reduces the level of real per capita income in metropolitan areas. This result differs from much of the existing literature, which generally has found no impact at all. However, we used a broader and longer panel of data and a richer set of variables reflecting the sports environment than previous studies." "... sports environment variables are correlated with negative deviation from the average level of per capita income." "The evidence suggests that attracting a professional sports franchise to a city and building a new stadium will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city." "However, regardless of the size of the nonpecuniary benefits, one thing is clear from the evidence; owners are reaping substantial benefits in the value of their teams because they are so skilled at the stadium gambit."
In "Sport and Downtown Development Strategy: If you Build It, Will Jobs Come? Journal of Urban Affairs vol 16, no. 3 (1994) Mark Rosentraub, et al. note "This study analyzes the impact of a sports-driven downtown development strategy in Indianapolis from 1977 to 1992." They found that new sports stadiums downtown "had little impact on downtown or city job growth since sports-related employment makes up a small part of the city's job base. "In fact, downtown jobs as a proportion of the region's total jobs declined during this period." "... on balance it seems fair to conclude there were no significant or substantial shifts in economic development." Rosentraub concludes, "sports is not a prudent vehicle around which a development or redevelopment effort should be organized."
In "Minor League Teams and Communities" by Robert A. Baade and Allen R. Sanderson's chapter of Sports, Jobs & Taxes: The Economic Impact of Sports Teams and Stadiums, the authors note "Scholarly evidence would dispute the claim that professional sports contribute to local economies at the major or minor league levels. In the final analysis, the beneficiaries of stadium subsidies throughout baseball are owners and players."
Baade and Sanderson continue "The retrospective analysis that has been done indicates that professional sports teams and stadiums are not significant contributors to local or regional economies." "Despite growing scholarly evidence that professional sports teams do not contribute significantly to a community's economy, supporters of stadium subventions in both the major and minor leagues persist in using the promise of substantial stadium-induced economic activity as a rationale for them." "... baseball realigns leisure spending rather than increasing spending in the aggregate. To represent the contribution of sports to the local economy by summing all spending that takes place in conjunction with it is to fundamentally exaggerate the impact a sport has on the local economy. Unfortunately, this fundamental error is endemic to studies supporting subventions for minor league baseball." "... the statistically insignificant economic impact imparted by major league sports is, if anything, more likely to occur at the minor league level."
In "Employment Effect of Teams and Sports Facilities", also by Baade and Sanderson, we read "Many of the new stadiums and arenas being built are replacement facilities. Replacing [existing] infrastructure for sports does not lead to an expansion of the local economy, but rather maintains economic activity at or near its former level once the construction phase of the new facility project ends. ... To a large extent, a new stadium or arena simply relocates the workplace while leaving the work force largely unaltered." "Professional sports are not a major catalyst for economic development.
Mark S. Rosentraub notes in Stadiums and Urban Space, "Outcomes in Indianapolis [Indiana], with its pronounced export-oriented sports strategy, can be compared with changes in other cities that focused on building downtown facilities for teams. The residential population in the Central Business Districts declined in all cities that had downtown sports facilities." "When all the cities with downtown sports facilities are examined alongside those without these structures in their Central Business Districts, population loss in the downtown areas was slightly greater in the cities with downtown sports facilities." "... from 1980 to 1995, the population levels in downtown areas in cities with downtown sports facilities declined more than in the other communities."
In "City Baseball Magic: Plain Talk and Uncommon Sense About Cities and Baseball Parks" (1999) Philip Bess informs:
"The frenzy of stadium construction is above all about money. "...when it comes to baseball park architecture, the appearance of age sells. There is "an attitude common among devotees of baseball: a disaffection bordering upon loathing for contemporary baseball stadia." "Contemporary sound systems and video screens have transformed stadiums into giant rumpus rooms." "Most significantly, there is no evidence whatsoever that new stadium construction necessarily generates significant ancillary development. The nine city study by Baade and Dye indicated on average no significant regional change in either aggregate personal income or retail sales subsequent to new stadium construction." Regarding public subsidies, Best notes: "Land acquisition, infrastructure improvements, and residential and/or commercial relocation expenses are the most common direct public expenses; but the potential exists for a variety of indirect expenses as well, such as tax abatements, or provision of land to developers at below market rates. In short, there is no such thing these days as a "privately funded" stadium."
Bess finds from the Office of the Commissioner of baseball, "Ironically, greater seating capacity does not necessarily result in higher attendance figures, at least with respect to baseball. The single greatest generator of attendance is a pennant contending team" And Bess warns, "Moreover, the [new] urban stadiums presume and perpetuate a degrading and short-signted vision of cities as entertainment zones."
In "Sports Stadium Madness: Why it started / How to stop it" (February 23, 1998), Joseph Bast notes "Most of the money spent at a sports stadium or arena would have been spent anyway at some other entertainment venue. ... Because they play so frequently, baseball and basketball teams rarely attract a significant portion of their audience from outside the metropolitan area." "The sense of pride and identify that may come from hosting a professional sports franchise may be only temporary. Today's proud community may experience a deep sense of failure and abandonment when its team repeatedly loses or threatens to move." "No social value is produced when facilities that are still functional are torn down because they are 'economically obsolete'. Expensive investments in infrastructure are similarly being abandoned, only to be built anew across town or in some other city. This is make-work; no different in principle from digging and re-filling ditches."
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Thank you for reading a small fraction of published research confirming that a new baseball stadium provides no economic benefit to our community, historically reduces downtown populations, and acknowledges that a sports facility is not a prudent vehicle to promote downtown redevelopment.
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We invite new stadium promoters to provide the public with research that a new baseball stadium could provide positive economic impact to Greensboro, against all published research noted above. So far, new stadium proponents have not been able to provide such studies. They question if major national studies are relevant here. I have contacted authors of these major national studies and they assure me their studies represent nationwide yet locally relevant information which apply equally to minor league stadiums.
I appreciate that Action Greensboro and Downtown Greensboro Inc. provided a copy of one article from Urban Land Archives, August 2002 in an attempt to support their desire for a new stadium downtown. Yet their submission includes unfortunate examples of insignificant success. The following paragraphs explain why.
________________ Excerpts from Urban Land Archives, August 2002________________
Re: Camden, NJ, the article suggests a new stadium replaces a "former manufacturing center more recently known for street crime and convicted politicians" where the "specter of fear and blight will not stand in the way of paid attendees". Those are not concerns in our Bellemeade district of Greensboro, less than two blocks from the Fisher Park neighborhood.
Re: Newark, NJ, the article suggests of their new stadium "Although the area still lacks restaurants and bars, it is close to a commuter train station". The stadium didn't bring in nearby restaurants and bars in Newark. In Greensboro, the proposed stadium unfortunately is not even near our new transportation Depot.
Re: Louisville, KY, the article suggests success is demonstrated by $28M stadium naming rights. Yes, stadium owners will enjoy stadium naming rights, but our City/County will not. The article also notes this Louisville, KY stadium is "credited with stimulating investment in a substantial nightclub next door." Surely new stadium investors intentions are more substantial and honorable than that minor claim.
Re: Memphis, TN, the article suggests the stadium replaced an adult cinema and renovated a rundown downtown; clearly a social improvement in Memphis. Those are not concerns in our current Bellemeade district of Greensboro, less than two blocks from the Fisher Park neighborhood.
Also in the article, they write "even for Major league teams, the number of baseball games is unlikely to generate any new construction". And "cities that built new arenas as recently as the 1980's have been finding themselves the owners of suddenly obsolete facilities". "Another option is renovation, which can be a cost-effective alternative to investing in a completely new building." Yes, renovation!
The article continues to say a 1977 stadium in Portland, Maine, should have been built with the "key threshold of 10,000 seats required for consideration by many promoters and family show booking agents" rather than only 6,700 seats. So in Portland, they determined it was best to complete a renovation instead of building a new stadium.
In other words, the article shared by AG and DGI does not convince us of public economic benefits. Stadium owners gain economic benefit, but not the public, City nor County.
We all would be impressed by an equal amount of research showing public economic benefit of a new stadium, but have not seen that evidenced.
It seems unreasonable to swap 2 blocks of prime downtown property in the name of downtown redevelopment in the absence of research showing positive economic impact of a stadium on downtown redevelopment and the presence of substantial, repeated, consistent economic research showing just the opposite.
In the absence of positive economic data for new downtown stadiums, we continue to believe gradual private development of the original "Bellemeade Village" plan, with residential, commercial, educational, and governmental mixed-uses will be the most stable and economically advantageous use of the North Eugene, Bellemeade, Lindsay blocks. Mixed-use development by the for-profit community will bring 2 prime square blocks of downtown land onto City and County tax rolls from the time it is developed and on into the future.
All are aware of a significant body of research that excellent schools, stable neighborhoods, and for-profit commercial enterprises consistently provide long-term economic benefit to communities.
Many neighbors and I personally support downtown redevelopment in the most consistent and concrete way possible. We invest in our own downtown neighborhood and spend our recreational money downtown at businesses and restaurants. Fisher Park neighborhood residents have gradually stabilized the entire north-east boundary of downtown Greensboro and wish to continue to do so without the new physical harms (noise, parking, traffic, and lighting) a new stadium would bring to the edge of our neighborhood.
It is important that we investigate alternatives for a new or relocated or renovated Social Services building while investigating the full costs of the current land-swap-stadium plan. If some negotiated compromise can be made good for Greensboro and Guilford County, it will be in the fullness of time, not by arbitrary deadlines or forced measures.
We encourage you to envision many opportunities, not just a new stadium, as we continue earnest economic review of the current proposals effecting the properties bounded by Bellemeade, North Eugene, Lindsay, and Edgeworth streets.
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Ann Stringfield
1005 North Eugene Street
Greensboro, NC 27401-1612
