First there was the downtown mall, attendant convention center and hotel. The mall floundered, the convention center needed expansion almost immediately and the Marriott Hotel wouldn't exist without city subsidy.
Now comes the idea for a baseball stadium. Richmond, as it seems it always does, rides the tail of development trends that have crisscrossed the nation throughout the decades like giant tornadoes. Instead of roofs and trailers, these terrible whirling funnels suck up taxpayer's money.
Throughout the United States between 1987 and 1999, 55 stadiums and arenas were refurbished or built at a cost of more than $8.7 billion, reports Adam M. Zaretsky, an economist for the Federal Reserve Bank of St. Louis in the April 2001 issue of the bank's publication, "The Regional Economist."
Zaretsky notes that the $8.7 billion figure includes only the direct costs involved in the construction and refurbishment of the complexes, not the indirect costs — such as money cities might spend on improving or adding to roads and parking lots needed to support these stadiums. Almost $5 billion of that total $8.7 billion figure was financed through taxpayer money.
Zaretsky writes of the dubious nature of "economic impact studies."
Usually, he says, these studies are conducted by an accounting firm or the local chamber of commerce and "use spurious economic techniques to demonstrate the number of new jobs and additional tax revenues that will be generated by the project...the assumptions that are made in these studies...often cannot be substantiated by economic theory."
Tourists spending their money before, during and after games doesn't add up to much, either. Baltimore's Camden Yards stadium cost $200 million but detailed studies reveal that the net gain to Baltimore's economy in terms of new jobs and incremental tax revenues is only $3 million a year.
The claim that stadiums cause residents to spend more money in town than they would otherwise is difficult to substantiate, he adds. An analysis of that question needs detailed information about the spending patterns of households and how they differentiate their spending in other regions, "which at best, is difficult and may even be impossible."
The other notion that stadiums bring new jobs to community, is only partially correct. Zaretsky says. "For one thing, these jobs most likely just lure workers away from other jobs in town and do not actually lead to a net change in jobs. ... For another, many of the jobs are low-paying, part time and needed only on game days."
If stadiums are economic sinkholes, then why do cities invest their public's money in these projects?
Emotionalism. What causes spectators to rise to their feet and cheer when their city's team gets a home run. "The weight of economic evidence, however," Zaretsky concludes, "shows that taxpayers spend a lot of money and ultimately don't get much back."
Perhaps the answer to the study recently commissioned by City Council is: We already have a stadium.
It's in a good location. Let's just make it work; it'll be less expensive and more sensible in the long run.