When public bodies get poor information, they make poor decisions. Mayor Steve Benjamin appears ready to push Columbia City Council to make such a poor decision on Tuesday (1/21/14) when it takes up a resolution to direct the City Manager to negotiate a deal to bring the Savannah Sand Gnats to Columbia.
The City of Columbia hired Brailsford & Dunlavey (B&D), “a program management firm with comprehensive in-house planning capabilities,” to conduct a feasibility study regarding minor baseball in Columbia. Not surprisingly, B&D concludes that a minor league operator can make money in Columbia—so long as the City puts up enough money for a ballpark. You really didn’t need to pay someone $47,000 to answer the question: “If a City the size of Columbia builds a nice enough ballpark for her, can a minor league operator make money on an A level team?” The answer is always “Yes” if the deal is sweet enough.
That study, essentially a slide show since any underlying study had not been completed by the Thursday (1/16/14) evening presentation we attended, lays out a compelling argument for an owner but provides little of value for decision-makers on whether building a publicly-funded ballpark is a good deal for the city and its citizens.
As Jason Thompson of B&D conceded at the meeting, they have presented a “benefits analysis”—exactly what the City contracted to pay them for—and not a “cost-benefit analysis”.
We have previously written on the general consensus among economists that publicly funded ballparks are not good deals for the communities that fund them. The relevant questions Council should ask are: Will the ballpark produce new revenues or simply suck up monies currently being spent in other businesses (substitution)? How much of the economic benefit leaves the community through, for example, out-of-town owner and concessionaire profits and the costs of goods and services produced elsewhere (leakage). What are the opportunity costs of this investment? Would the community get a better return putting the money elsewhere?
B&D does not even pretend that Columbia will be a destination city for out of area fans. That means that dollars spent at the ballpark will be discretionary expenditures that would, in all likelihood, have been spent in another entertainment venue in Columbia: at a restaurant, at a museum, at the Zoo, at Frankie’s Fun Park, at a movie or any of the other myriad opportunities our community already has. But you wouldn’t know that from reading B&D’s slide show and its presentation of benefits.
The B&D report claims 715 jobs from the ballpark, but in responding to questions, the B&D reps said that there were 25-35 full-time jobs and about 250 part-time, hourly service jobs with a club. And their estimates of pay levels at Thursday’s meeting are substantially higher than suggested by industry reporting such as Josh Leventhal, Minor League Jobs Marry Love Of Baseball And Little Pay, Baseball America (March 10, 2010). In effect, you trade existing jobs for a hand-full of “new” jobs.
Likewise, when economists look at the construction spending and jobs, they find it a wash. Sports venue construction simply replaces construction that would otherwise have taken place. But the B&D report simply takes the money spent on a ballpark, applies multipliers and reports the outputs. They don’t look at forgone investments or the impacts of one construction project on the costs and feasibility of others.
Even the most favorable economic research can only find an increase in per capita income, a good measure of effective economic development, in places with AAA or Rookie level teams. No such finding exists for the A ball that Columbia is looking to entice here.
Much of the discussion when a ball club wants to come to town is over “the deal.” How much will the City cover and how much will the owner? Will revenues to the City from lease payments and hospitality taxes compensate for the City’s contributions, including ongoing operations and maintenance costs? Those are far from the most important questions, but even those are not addressed by B&D.
The real question is: Will the economy and well-being of our community be enhanced by constructing a public ballpark with sufficient revenue-enhancing amenities that an operator is willing to come to Columbia to make money despite the very real negative impacts on the businesses currently operating in Columbia when you put 400,000-500,000 consumers at the new ballpark?
That’s a very different question than the City asked B&D to answer. It’s easy to listen to the hucksters … and anybody who makes a living in minor league baseball shares a lot of DNA with P.T. Barnum. And it’s easy to look at a quick and dirty boiler plate “benefits analysis”. You look at the “bottom line” and it always sounds like a great deal. The problem is that it isn’t the bottom line, because no one was asked to tot up the costs not only to the City and its coffers and its taxpayers but also to the business community.
The report the City commissioned is of no real value in informing Council on the wisdom of this significant investment. They asked the wrong questions. If City leaders don’t have the answers to the right questions, how can they reasonably make a good decision for the City?