It is encouraging that Gov. Mark Dayton has enlisted the Metropolitan Council to help evaluate the site of the former Twin Cities Army Ammunition Plant (TCAAP) as a location for the proposed Vikings football stadium.
Too often in the past, the Met Council has been excluded from decisions involving the siting of major facilities in the region — the Metrodome, Target Field, the World Trade Center, the race track, amateur sports facilities, among others.
Unfortunately, the governor’s charge [PDF] to the council and the Metropolitan Sports Facilities Commission is a bit narrow — to “ascertain the potential risks, if any, of the proposal and suggest ways to mitigate or eliminate any exposure to the public.”
The governor’s list of potential risks includes environmental reviews, remediation needs, transportation needs, costs and cost-overrun exposures, scheduling issues, funding projections and permitting issues.
What the council won’t be doing, according to a council spokesperson, is drawing any conclusions about (a) whether the 430-acre Arden Hills site is the best location for the proposed stadium compared with other possible locations or (b) whether a stadium is the best use of the TCAAP site.
Nor will it be making any kind of cost-benefit analysis about whether the true economic benefits of the stadium equal or exceed the public costs.
Indeed, the 17-member council board may not be saying anything at all. Regional Administrator Patrick Born says the agency may simply forward the results of the staff work requested by Dayton.
Council planners are working with a project team that also includes staff of the sports facilities commission, the Minnesota Department of Transportation and Minnesota Management and Budget.
In addition, the council has a contract for up to $90,000 with Kimley-Horn and Associates Inc., a national engineering and land planning firm based in Cary, N.C. The council hopes to complete its review by Oct. 15.
Plans for the proposed 65,000-seat “people’s stadium” [PDF] were unveiled in May by the Vikings and the Ramsey County, the only local government eager to play ball with the team and help fund a new facility.
In announcing the proposal, Vikings owner Zygi Wilf said, “We believe the Ramsey County site offers the most benefit to our fans, the team and the state and is an ideal site for a new stadium.”
The stadium would have a retractable roof and cost nearly $1.1 billion, with $407 million coming from the Vikings, $300 million from the state and $350 from Ramsey County through a new half-cent sales tax. The site includes 170 acres of land that would be available to the Wilfs for related development.
The 2,400-acre TCAAP site is one of the largest redevelopment opportunities in the metro area and has been the subject of numerous proposals since the 1990s. However, it is the largest Superfund site in the state, presenting major contamination issues.
Ramsey County officials say the 430 acres targeted for the proposed stadium have been cleaned to “industrial standards,” but their agreement with the Vikings includes $30 million for site acquisition and further cleanup. That number will get a closer look in the Met Council review now under way.
Another challenge for the site is that adjacent highways and interchanges would require a major upgrade, with cost estimates ranging as high as $175 million. Lester Bagley, the Vikings vice president for public affairs, says more recent estimates put the number closer to $100 million.
Unfortunately, the site is far removed from existing and proposed transit lines, meaning that transportation options for games would be limited to cars and buses.
That undoubtedly is a plus from the Vikings’ perspective. Their plan includes 21,000 parking spaces, a major source of new revenue for the team. But it would fail to capitalize on the $2 billion investment the Twin Cities has made in improved transit, just as region’s third rail transit line in the Central Corridor is about to be completed.
Beyond the questions about the site, there are broader issues relating to whether the taxpayers of Ramsey County and the state of Minnesota should contribute $650 million or more to a project benefiting one private business.
Arthur Rolnick, longtime director of research for the Federal Reserve Bank of Minneapolis and now a senior fellow at the University of Minnesota’s Humphrey Institute, says no.
Rolnick, who has his doctorate in economics, raises three basic concerns:
Equity
“On equity grounds, why would you favor one private company over another? This is entertainment. If you are going to subsidize one form of entertainment, why not other forms of entertainment? If you are going to subsidize one business, why not others?”
Rolnick has been involved in similar debates since the early 1990s, when he says Northwest Airlines “essentially blackmailed the state” to secure a $761 million public assistance package. The deal, which involved promises of new aircraft maintenance facilities in Duluth and Hibbing, began to sour almost before the ink had dried.
Bagley rejects the idea state and county tax dollars would be “going into a private business. It is public money going into a public building. This is an opportunity to leverage more than $400 million in private investment in a publicly owned facility that will be used by everyone,” as the Metrodome has been.
Economic development
From an economic development standpoint, Rolnick says, it makes no sense for Congress to allow companies to play states and cities off against one another to extract public subsidies. “These companies are going to locate somewhere,” he says, “and the public return is zero.
“When you ask what are the economic benefits of doing something like this — do they create jobs? — look around the Metrodome,” Rolnick adds. “There’s a real-world example. Generally, businesses don’t want to locate around stadiums. They are empty most of the time. You get a few sports paraphernalia shops. You get a few bars and restaurants. It’s not a good form of economic development.”
Ramsey County officials claim that the stadium site, “once fully developed,” will generate $6.6 million a year in property taxes and $145 million in direct annual spending by fans, the Vikings, visiting teams and the NFL.”
“If you want to go get dueling economists and waste everyone’s time, you line them up and half will say there is no benefit. The other half will say there is tremendous benefit,” says Bagley. “The facts are that the Metrodome has generated $340 million in tax revenues since it opened. The Vikings pay $20 million in taxes annually. Without the Vikings, that’s $20 million that we do not have in our coffers.”
Opportunity costs
Then there’s the question of whether the requested $650 million in public stadium subsidies could be invested more prudently.
“Is there a better investment than that? There are all kinds of better investments,” Rolnick says. “Just about any company could beat that — create more jobs, better jobs, a more vibrant economy. But that’s not the role of government. The private sector does fine all by itself.”
Rolnick has long championed research showing the economic benefits of investing in early-childhood development.
“With a half-billion dollars, every impoverished child in the Twin Cities could get a scholarship to attend a high-quality early childhood education program,” he says. “Studies have shown that if you give these kids that kind of help, you can pretty much eliminate the achievement gap. And the odds are, the kids will be successful in life.”
“The site includes 170 acres of land that would be available to the Wilfs for related development.”
What does ‘available’ mean: exclusive development rights, control over who develops the property, ownership?
It has been said that to a hammer, the whole world looks like a nail. And to an economist like Art Rolnick, a man who I like, respect, have door knocked, and who is admittedly a lot smarter than I am, all problems are economic problems.
Let’s consider his three points one by one.
“On equity grounds, why would you favor one private company over another? This is entertainment. If you are going to subsidize one form of entertainment, why not other forms of entertainment?”
Presumably, because we would prefer one company over another, and if some perceive that as unfair, that’s just the way it crumbles, cookie-wise. One thing to understand about NFL football is that it is one of a kind. The Twins and Gophers have their stadiums, if and when the Vikings get a stadium, that will be the last stadium built for a good long while. The fact is, we subsidize private companies all the time, both directly and indirectly. Whether or not we do that should be based on a lot of factors besides fairness.
“From an economic development standpoint, Rolnick says, it makes no sense for Congress to allow companies to play states and cities off against one another to extract public subsidies.”
But here we run up against a paradox. While it, perhaps, makes no sense in terms of national policy for localities to cannibalize each other’s business, it can make a lot of sense for the local communities to engage in such cannibalization, and building things like stadium, or Guthrie Theaters is a local, not national issue. There is a paradox here, a problem of composition, where things that are true on a small scale aren’t true on a larger scale. But paradoxes are for smarter people than me. I just want to go to the Guthrie, and watch football on Sunday afternoons.
“Then there’s the question of whether the requested $650 million in public stadium subsidies could be invested more prudently.
“Is there a better investment than that?”
Like the classic economist he is, Mr. Rolnick doesn’t know quite as much about the practicalities of markets as he thinks he does. Here he glosses over the distinction between a good investment and a prudent one. Vikings football, imo, is a very prudent one. It’s a very predictable business, the number crunching is very reliable. On the other hand, it is true, there are better investments. But there are always better investments. What is often lacking is the will to make such investments, which very often is the case because such investment aren’t prudent. The question for the Vikings stadium isn’t whether it’s the best investment, rather it’s whether it’s a good investment, whatever that might mean.
To squander the Arden Hills site on a stadium would be an enormous mistake, but that’s less absurd than placing a stadium in a new site when infrastructure and business development already exists for this sort of facility elsewhere. Moreover the business that already caters to this sort of development already exists in our area. Existing hotels, restaurants, and parking facilities, for example, can benefit from additional stadium development. It is all there in Minneapolis.
I first thought the Arden Hills proposal was simply a side show, alas, it isn’t. The fact that this proposal is getting serious hearings and might become a reality only shows how recklessly we still plan our metro development.
You would think this would be an issue thinking people of all political stripes could agree to oppose, but fanatacism apparently trumps common sense.
Bagly is mistaken, and he probably knows better when he claims that there is some kind of parity between economist who claim stadium benefits and those who don’t. If Bagly really had an economist who’s argue with Rolnick he’d give you the guys name and number, or he’d produce a published study of some kind. The truth is that the issue of public return on stadium dollars has been settled for a decade now, and Rolnick is representing the consensus amongst economists. This is probably reason that the Met Council’s study is so tightly restricted in the first place. It’s also interesting to note that our government wants to make a billion dollar public policy decision without commissioning a single comprehensive economic study. The Twins eventually abandoned all economic arguments because they knew they couldn’t make em work.
Frankly I think it’s a little goofy to put a Vikings PR man on the same level as an actual economist like Rolnick. The Vikings for instance have no resources with which to estimate the state’s road improvement costs in Arden hills. Their just producing a low ball guess.
This is infuriating. As if building this monstrosity isn’t bad enough, we have to, when climate change is the issue of time and we’re actually starting to think about recreating urban density and using efficient transportation options, be discussing a plan that is straight out of the 1950s: a suburban stadium surrounded by countless acres of parking lots and strip malls. Foul.
Hmmm
$20 million in taxes generated every year vs $650 million in government up-front “investment” (plus any addition on-going expenses).
$650 million invested with a 5% return would yield $32.5 million annually. Seems like a $20 million annual return is way too low.
Tthe Vikings deserve a billion dollar public subsidy because their one of a kind? That’s the weakest argument I’ve heard yet. Turn professional sports into a government entitlement program because they’re unique?
Ya gotta look at the scale of these subsidies, we’re not talking about a million bucks for a statue somewhere, that is also unique. We’re talking about dumping almost $2 billion dollars (including interest on the public debt) into privately owned sports franchises. You reach a point where it’s bad policy to ignore the economics.
Good questions, all.
Mr. Bagley is a PR flack for the team. “Spin,” a polite word for “lie,” is part of his job description, and his responses bear only a limited relationship to “truth.” The idea that a new Vikings stadium will be a “public building” is laughable. Whose name(s) will be on the deed? Minneapolis, or some agency of the city, apparently owns the Metrodome. Nothing I’ve seen in print has suggested that Ramsey County or the State of Minnesota will own this proposed stadium. Should that become the case, and the Vikings only lessees, THEN it might be considered a “public building.”
The sports public isn’t going to be persuaded by Rolnick’s argument in favor of early childhood education, no matter how accurate and ethical it might be. His other arguments, however, ought to carry some weight, though I agree that these are issues that apparently aren’t going to be raised by the people investigating the Arden Hills site.
They should be.
Why should the general public subsidize professional football to this degree, and not other forms of entertainment? Theater is a big deal in the Twin Cities. Are the area’s theater venues being given similar subsidies?
As for the economic development angle, I’d say Rolnick is on-target about business development around sports facilities. His assertions fit what I’ve seen in St. Louis and Denver, as well as in Minneapolis.
A very relevant point that I’d add is that in those other two cities, the sports venues have ready and convenient access to rail transit, which is, far and away, a more efficient means of moving people in and out of a site than the automobile. Target Field demonstrates that. The Arden Hills site would rely exclusively on buses and cars, a traffic engineering nightmare, even if the roads are sufficiently upgraded.
Taxpayers could conceivably be asked to contribute 60 percent of the cost of a billion-dollar project that they will not own, and that will turn around and charge them a parking fee to use after they get there on roads that they’ve paid for. That scenario alone should shoot down this proposal.
“The Vikings pay $20 million in taxes annually. Without the Vikings, that’s $20 million that we do not have in our coffers.”
That’s the top line. What’s the bottom line after you subtract out all the government services rendered (police, traffic infrastructure, utilities, waste disposal, time spent in the courts arguing about leases, sports facilities commissioners, etc)?
Stadium don’t create economic activity, they concentrate it. Minnesotans spend around $100 million a year on pro-sports tickets, that’s $100 million dollars concentrated into a few hundred pockets of athletes, owners, and executives. That money doesn’t disappear with the team, it simply goes elsewhere. When the Wild hockey team was locked out a few years ago entertainment spending in St. Paul actually increased, and was distributed more broadly. If I might here’s an excerpt from my blog:
“Basic economics tells us that we’d better off spreading dollars farther and wider in the community. For instance if you spread $95 million out you could deliver $10,000 to 9,500 hundred people. Another way to look at it would be that while you can only create 100 $950,000 a year jobs with $95 million dollars you could could create 1,900 $50,000 a year median income jobs. Now I hasten to point that this isn’t how economies actually work, we don’t choose whether or not we put $900,000 in 100 pockets or $10,000 in 9,500 pockets, I’m just illustrating a point. The point is that if people weren’t spending $95 million dollars a year on sports they’d be spending it on something else, and that spending would be spread much more broadly across the economy instead of being concentrated in a small number of pockets.
What’s wrong with dumping $95 million a year into 100 pockets? Well again, it’s basic economics. While it’s true that the more dispersed that $95 million is, the more diluted the impact can be, the fact is that 100 millionaires simply won’t spend as much. If you give 100 people $95 million, they will spend less of it in the local economy. The fact is that 100 guys simply can’t buy that much stuff. How many cars, houses, ipods, can 100 guys buy? How much food and gas, and clothing can 100 guys buy? How many restaurants, plays, and movies can they go to? And since many of those guys don’t even live in MN even when they do buy stuff they’re not buying it locally. Unlike median income individuals millionaires don’t actually spend a majority of their yearly income, they tend to invest it and bank most of their income. None of this benefits the local economy, and we’re spending hundreds of millions of public dollars to drive this business towards stadiums and into these millionaire pockets. This is why I think these subsidies are really better understood as welfare programs for millionaires rather than public amenities. In some ways these franchises are basically sucking millions of dollars a year out of our local economy rather than adding to it.
Even if you accept the notion that you’re driving business towards stadiums and it’s benefitting local restaurants etc. As a matter of principle why does the taxpayer have a vested interest in bars and retailers next to stadiums? In Minneapolis and Saint Paul these stadiums and arena’s are all downtown. Well there are other area’s the city. There’s an Uptown, a Lower Town, North East, Frog Town, and Hyland neighborhoods just to name a few. Who decided the businesses next to stadiums are more important than all the businesses in in the rest of the city, not mention the suburbs and other cities in the state? Taxes are not voluntary, when you use tax dollars to move business from side of town to the other you’re making some business owners subsidize other busines’s, or worse their own competition.”
“The Vikings deserve a billion dollar public subsidy because their one of a kind?”
I certainly don’t think they deserve a stadium, and they certainly wouldn’t deserve a stadium simply because they are one of a kind. What I do say, is that building a stadium isn’t setting a precedent. And in fairness, I would also say the fact that we built stadiums for the Gophers and the Twins doesn’t set a precedent for building one for Vikings. Each project stands alone except as it relates to larger issues.
“Mr. Bagley is a PR flack for the team. “Spin,” a polite word for “lie,” is part of his job description, and his responses bear only a limited relationship to “truth.””
Mr. Rolnick, as much as I admire him, has his own agenda too. I would say it’s a good policy to pay just as much attention to what people say, as it does who says it.
“Stadiums don’t create economic activity, they concentrate it.”
People say this a lot, and maybe it’s even true. But I have my questions about it. If our economy was strong, with limited unused capacity, then this concentration argument would make more sense. By building a stadium we would be diverting workers from some other project. But that isn’t the economy we have now. Currently, the construction trades are largely on the bench. There is little economic activity to concentrate. Building a new stadium doesn’t divert or crowd economic activity. In a slow economy, it creates it.
“Basic economics tells us that we’d better off spreading dollars farther and wider in the community.”
Would we better off not spending dollars at all? In keeping them under the mattresses where they are currently located. For me, at least, the question is whether any given policy is better than the status quo, not whether it’s better than any theoretical, and possibly unavailable alternative.
I should clarify, MN’s spend around $100 million an year on Twins and Vikings tickets.
Why doesn’t the state require the same kind of economic analysis and terms that Mr. Wilf would require of anyone who wanted to use his money? Instead, we are offered vague promises of more jobs and other ill-defined economic benefits. Mr. Wilf would never give money to anyone who made this kind of case to him. If he offered Minnesota taxpayers the same kind of business deal that he would demand of anyone who wanted to use his money, I would be happy to consider it. Equity partner with access to a share of the profits? A loan with a set interest rate and payback period? Great! Then we could analyze the deal with the same tools that Mr. Wilf and other business people use for their own investments.
I am always amused by the “we pay taxes” argument. So do I, but it has never occurred to me that my stellar record as a taxpayer would –or should– convince any government official to give me some public money for my private investments.
So the Wilf’s like having 21.000 parking spots at a site that is not easily accessible by public transit. Why should they getting the parking fees?
At a modest $10 per car, 20,000 cars for 10 games a year, that’s $2 million per year. Over 20 years, this would cover the Ramsey County cost (or split between state and county) with much less need for public funds.
If this money goes to Wilf’s, then the stadium costs them nothing. Why are we subsidizing this team and where can I get in on this deal?
@#2
What’s prudent about investing in the stadium. I honestly want to know, since it’s my belief that a “smart” or “good” investment is also a “prudent” investment. Really, the only possible distinction I see between the two in this situation is that one rents fancy seats to rich people.
> But it would fail to capitalize on the $2
> billion investment the Twin Cities has made in
> improved transit
It’s worse than that. It actively draws economic activity away from those investments. We are putting $1 billion into revitalizing University Avenue to bring jobs and wealth to areas that need it the most. Now we’re going to spend another $1 billion to move it away? Make no mistake, there will be major retail developed as part of the stadium deal. It’s Wilf’s bread and butter.
Ask the Brookdale people what they think of Maple Grove’s sprawling strip malls. Ask the Ridgedale people what they think of the Mall of America.
St. Paul and its inner ring suburbs should be very troubled by this proposal and not for the sales tax reasons. The increased sales tax will have minimal effect on their economies compared to what a major Arden Hills retail complex would do.
Disclaimer: I’m 110% against a public subsidy for this stadium.
However, I have several problems with this article.
(1) If the Vikings don’t build a stadium at the TCAAP site, NOTHING WILL EVER BE BUILT THERE. Have you seen it? It’s a giant piece of polluted land that will cost buku bucks to fix. Either the Vikings do it or it sits vacant and polluting forever. This is the one chance to reclaim that land.
(2) Please get over the whining about public transit. It is totally irrelevant in the context of this issue. There are ten Vikings games per year. We aren’t talking about thousands of cars on that particular road every single day. It happens ten times a year. Furthermore, tailgating is an integral part of the sports experience, and it’s something that this city has completely lacked for 30 years. Attend a game in Milwaukee or Green Bay and you’ll understand what I’m talking about.
I’m a big supporter of trains, but really, honestly, ask yourself: how many people riding the Central Line can afford Vikings tickets? Do I have to answer that for you?
The perspective from Rolnick is welcome. Unfortunately, this whole thing is beginning to mirror the climate change “debate.” No matter how many economists weigh in against the issue, the Vikings (and their shills) will always find someone who claims a benefit.
//For me, at least, the question is whether any given policy is better than the status quo,
Stadiums are in fact status quo project for communities, ostensibly they’re about NOT losing a team.
In the end one has to recognize that unlike other public subsidies that maintain public services like mass transit, or even public subsidies for businesses, sports subsidies are not about expanding economic activity. Sports franchises don’t manufacture or produce anything, they don’t use the subsidy to hire more people, or even add capacity. In a very basic way sports subsidies are about preserving the status quo, i.e. “keeping the team”. One shouldn’t expect any real expansion of any kind from sports subsidies. With the Viking stadium for instance, your not add capacity or jobs, your simply moving them from MPLS to Arden Hills, and your doing that with public money, which brings us back to the equity question.
So your left with the question of whether or not the subsidy will generate short term benefits in this economy, Since athletes and team owners aren’t job creators your basically construction jobs.
The Vikings claiming that they’ll create 7,000 construction jobs. What they’re not telling is that almost none of those jobs are full time jobs for three years. Rather they are short duration jobs of month or even weeks. In economics to make sense of job creation you have to convert project to FTEs, or full time employment figures based on hours worked divided by a full time day. When you convert the employment numbers on a stadium like this you end up with around 800-900 full time hours, that works out to about 7 hours per worker. Another way of looking at is that you’re paying almost a million dollars a job. Typically economist recommend spending less than $38,000 per job.
By comparison when the 35W bridge in Minneapolis collapsed in 2007 it delivered a $60 million blow to the local economy. The new bridge took one year to build, cost $234 million, created mostly full time jobs for an entire year (one contractor was primarily responsible for construction) and restored $48 million a year worth of economic benefits to thousands of people. The bridge saves drivers $400,000 a day in travel and gas time, and there is no charge for using it.
In terms of stimulus it’s hard imagine getting less bang for the buck than you get with stadiums.
One of Mr. Dornfeld’s main points is being lost in all of the pro-con about the stadium itself. Mr. Dornfeld notes that the Governor’s charge to the Metropolitan Council is very narrow — what needs to happen to build the stadium at TCAAP.
For all of the talk about doing environmental review, the Governor wants to avoid at all costs one of the main elements of an EIS — an analysis of alternatives to the proposed project including different locations. Instead, the Governor only seems interested in moving forward with the project as proposed and in a way that will make the most dough for the Wilfs.
Under its own existing authority, the Council could have ordered a review of the metropolitan significance of the stadium and considered what would be best for the region. It didn’t. Mr. Dornfeld’s article raises a serious issue of regional governance and the problem of Council members, as gubernatorial appointees, bending to the Governor’s will particularly when he is clueless about what is needed to strengthen the region.
So are we better off not spending the money at all as Hiram asks? Maybe. If the stimulus from the project is dismal enough you just racking up public debt burdens that drain available capital for other more productive projects. Hiram will say “yeah but those projects aren’t on the table and the stadium is”… kind of a shovel ready argument. The problem is Hiram presents us with a false dichotomy as if either we build stadiums or we do nothing at all. There are other job creating projects in the offing, and it would certainly be better to put the money into those.
@#18
You may be right that if the stadium isn’t built on the TCAAP site, nothing ever will. I have my doubts, but I’ll give you that it’s unlikely that it will be developed to any extent in the near future.
However, about public transit… People DO use it to get to games now. They don’t use it necessarily for cost, but for convenience. I used it to get to a Vikings game once because I could park further away and not have to pay for parking or wait in a parking line on the way in or out of a parking lot. And it wasn’t just me. The train was PACKED and train trips before and after I arrived were PACKED.
David,
Never is a long time, that land will be re-purposed eventually. It’s no reason to throw a billion dollars at Wilf to get that land cleaned up. It would a lot cheaper to just clean up the land if that’s your priority… it is a super fund site.
Transportation issues are not irrelevant. Thousands people currently use the Hiawatha line to get to games, it’s cheaper than driving and parking downtown so I don’t what your point is there. Obviously tens of thousands of people who ride the rails can afford Vikings and Twins tickets. Urban planning is simply good idea.
As for tail gaiting, how can something that’s been missing for 30 years be “integral”, that’s a self contradictory statement. Obviously fans can live without it, and at rate, it’s no argument for a billion dollar subsidy. You want us to spend a billion dollars so you can cook a hot dog in parking lot? Really?
//Why doesn’t the state require the same kind of economic analysis and terms that Mr. Wilf would require of anyone who wanted to use his money?
It is funny. Anyone else who wanted a billion dollars would have to provide an analysis, write a bill, and fight for it. With these sports subsidies, owners just kinda let it be known somehow that they want a new stadium and the government flies into action. There’s no better example of crony capitalism. I keep asking myself (and others) when it comes to Mondale, Dayton, and the others… who’s their constituency? Who’s demanding government action on this? Who’s the point man for 70% of citizens who DON’T want to create this subsidy?
“Stadiums are in fact status quo project for communities, ostensibly they’re about NOT losing a team.”
Is that why the Vikings will be playing their next home game in Arden Hills?
“So are we better off not spending the money at all as Hiram asks?”
What I am saying is that there are strong economic arguments for spending money, for trying to get the economy moving again. As it happens, there is a great deal of momentum behind building a stadium. And in my chats with legislators, what I suggest is that just maybe affairs can be managed in such a way that there is a bit left over for those goo goo projects so many of us are so fond of.
“The problem is Hiram presents us with a false dichotomy as if either we build stadiums or we do nothing at all.”
That is more or less it, more or less in a nutshell.
“There are other job creating projects in the offing, and it would certainly be better to put the money into those.”
Not that many, and stadium financing need not crowd out any of them.
Ask Hamilton county (Ohio) what they think of their stadium deal.
Paul Udstrand provides a very rational and logical argument against the proposed Viking stadium. The only problem is that logic will not win the day on this one. We’re talking FOOTBALL here and as soon as this area loses an NFL team the crescendo to get another will begin and it will not be denied: See “Cleveland Browns” and “Baltimore Ravens”.
We took Urdstrand’s arguments to heart when Norm Green wanted a $9,000,0000 skyway to the MegaMall in order to retain the North Stars for another 20 years. Every point he describes today was applied back then and we moved on and so did the hockey team. Who needs the NHL anyway? Apparently we do, because we soon spent 20 times the cost of Norm Green’s skyway to build the X and get our new NHL team.
The Vikings and NFL football are an order of magnitude more significant to who we are and what we do than the hockey team (sorry folks, right or wrong, that is reality)
If we fail to learn the from the North Star experience, we will spend 2 billion dollars to build a 100% tax payer funded stadium to attract Vikings 2.0 back to Minnesota: 100% guaranteed.
A major problem I have with a new stadium for the Vikings, in addition to all the obvious economic reasons already well documented, is that 95% of Vikings ‘fans’ rarely if ever physically attend games anymore. Who needs the aggrivation, expense and time to sit in a seat 60,70 yards from the field. Football is the perfect TV sport, thus the declining attendance numbers for the last few years. Get a nice flat screen TV and the NFL package and if you want to watch the Vikes or any other team around the country, do it in the comfort and convenience of your own homes with friends and refreshments. Where the Vikes are physically playing makes no difference whether they’re on the road or in their new home in L.A. Don’t care, especially if we’re supposed to subsidize this privately held for profit company. Buh-bye.
@Hiram
> Currently, the construction trades are largely
> on the bench. There is little economic activity
> to concentrate. Building a new stadium doesn’t
> divert or crowd economic activity.
This is very short-term thinking, the kind that got us into this mess in the first place. We are talking about 50-100 year investments here. How will they impact our community in the long run. In the long run, an Arden Hills stadium would indeed take economic activity (primarily from the urban core) and more it out into the exurbs. That is very much a not, not, not good thing given the clear trends in energy and environment that will require more density in the future.
@David (#18)
> (2) Please get over the whining about public
> transit. It is totally irrelevant in the context
> of this issue. There are ten Vikings games per
> year. We aren’t talking about thousands of cars
> on that particular road every single day.
Transportation is _always_ relevant when talking about development. That stretch of freeway will be used more than ten times a year for a couple of reasons.
1. Wilf will almost certainly build an entertainment complex there, not just a stadium. That is going to be a year-round draw and will require the kind of freeway upgrades we had to do for the Mall of America, maybe even more. The MoA interchange project was absolutely huge and continues to be an expensive maintenance burden for a resource-strapped DOT.
2. There’s a well-known phenomena called induced demand. When you widen a freeway, people tend to go there. This encourages more development further out until things get to a point where the freeway is again clogged. When we add more lane-miles we don’t relieve congestion. We actually make it worse as more people get drawn into and concentrated in a smaller portion of our freeway network. This is one of the many reasons the proposed Stillwater freeway-style bridge is so completely wrong.
Smart cities are trying to limit sprawl because we are fast approaching the point where people can’t pay for it anymore. Already many metro residents pay more for their transportation than their housing because it is becoming so expensive to drive.
We do not want to continue to go there. We have to do something different and part of that difference is investing heavily in transit. These days if a major development doesn’t have a transit component, it is generally a very bad idea.
> Apparently we do, because we soon spent 20 times
> the cost of Norm Green’s skyway to build the X
> and get our new NHL team.
@Keith
Norm wanted more than just a skyway and was facing a sexual harassment suit but let’s put that aside for the moment.
The X has been a success primarily because of its location. The infrastructure was already there to support it. Various restaurants and bars already existed. None of this existed around the Met Center. A new area on the site of the Met Center would have been a failure.
The X’s success is due not only to the hockey team but also to the high school tournament, the Swarm, etc. The X gets used for more than just pro hockey on a regular basis. The only way that can happen is if it’s in a central, accessible location. None of this will be true for the Vikings stadium.
I’m not completely opposed to a new Vikings stadium. I don’t think it’s the best use of money but I could live with it. What I am absolutely opposed to is its current location which is completely inappropriate given the realities of today and our future.
“This is very short-term thinking, the kind that got us into this mess in the first place.”
I personally think almost exclusively in the short term. With respect to the construction trades, I worry about tonight’s dinner and where it comes from, not the ones six months or six years from now. I don’t believe you can ever reach the long term without getting through the short term first.
Here’s another example where all arguments are not equal. And in the end it may not make a difference. Brut force will win as it does in the game. Oh the irony. The question might be who can apply for legacy money for this theater?
Hiram, you keep talking about these good economic arguments you have, but you’re not presenting them, nor is anyone else. All your saying is this will get construction going again, as if it doesn’t matter what we build or where, or for whom.
Keith, your argument makes a couple bizarre assumptions. First you assume that Minnesota cannot live without pro football and therefore will have to bring it back some day if we lose it. We live without pro football 355 days a year right now, it’s not hard to imagine living without it 365 days a year. The second bizarre assumption is that we brought pro-hockey back to MN because we “needed” it or couldn’t live without it. Pro hockey came back the same way all these stadiums and arenas come back, our democracy was hijacked by yet another sports franchise and a public subsidy was rammed down our throats. We are not required to repeat this experience every time a team moves away.
Now, I’ve seen some people referring to the X as a success, by what definition? The X cost $130 million to build, and was paid for with two public subsidies- one $65 million interest free loan from the state, and another $65 million loan from the city of St. Paul. The team has already gotten $17 million of the state loan forgiven because they’re not making enough money to pay it off, and they want the remaining $30 million forgiven as well. Meanwhile the Arena has cost St. Paul $6 million while they collected $1.7 million in associated sales taxes. There is zero evidence that the Wild are bringing more money into St. Paul beyond a handful of bars with a block or two of the stadium. Again, when the team was locked out St. Paul actually saw an increase in sales tax revenue.
By the way you can read my entire analysis on my blog:
http://pudstrand.fatcow.com/blog/?p=108
It’s a long article, but it covers the discussion here in more detail and there’s also a bunch of links to relevant information.
To a degree, I’m inclined to agree with Hiram Foster (#32), but only to a degree. I, too, tend to think in terms of “Do I have food today?” not “Will I have food 20 years from now?” Arguments about the “long term” can be carried too far, just as the more common short-sighted thinking can be carried too far. I think it’s John Kenneth Galbraith’s line: “In the long run, we’re all dead.”
With that out of the way, is asking the public to spend $600 million on a stadium in which to play professional football the best use of the public’s limited dollars? One of the commentators correctly pointed out that we’re comparing the arguments of an economist and a PR flack for the team. Mr. Rolnick may have his own set of prejudices, but he’s not being paid to misdirect, exercise a selection of facts, and occasionally outright lie, all of which are essentially the job of any PR person, especially in a professional sports environment.
A few thousand constructions jobs – not at all trivial in the current economy, but also not at all permanent, or in most cases, even long-lasting – versus a life-long obligation on the part of taxpayers in Ramsey County and throughout the state to not just build infrastructure, but maintain it over time, so that a real estate developer who already has millions can make more millions at our expense, strikes me as the mother of all bad deals.
If this area is as sports-crazy as the Vikings fans would have us believe, then the primary result of the Vikings moving to L.A., or some other venue, would be to create a golden opportunity for some other group of millionaires who’ve always wanted an NFL team of their very own to start courting R.T. Ryback. There’s an all-weather facility in downtown Minneapolis, with all the infrastructure in place, accessed by both road and mass transit, with a brand-new, $18 million dollar roof, that will be sitting empty. I’m thinking maybe Minneapolis could lease that facility to a fledgling NFL team, since an existing team has been using it for quite a few years, and until quite recently, it was deemed more than adequate.
Do you think anyone in Minnesota would want to come to a game there if the Vikings depart for a more lucrative (for Mr. Wilf) environment? I think they will.
> Arguments about the “long term” can be carried too
> far
Some, perhaps. But in this case, we know that it is a far better long-term investment to put that money into fixing bridges and building the infrastructure we need to compete in the 21st century. Both those projects and a Vikings stadium will employ lots of construction workers for short time periods and both will provide dinners for an immediate short term.
It seems pretty clear-cut which is the overall better use of funds.
James H (#1) Mr. Wilf wants to build a “village” with shopping and entertainment and restaurants on all those acres set aside for him to develop. The problem for Ramsey County, Arden Hills and perhaps the state is that he will no doubt want public infrastructure — roads, water and sewer, electricity, schools and who knows what all — furnished by us, the taxpayers. This could be a huge additional expense.
Hiram F (#2) Art Rolnick isn’t just a numbers economist. His research on the benefits of early childhood education, for instance, reveals the social good to be gained from public investment.
I, for one, see very little social good in an investment of so much money on behalf of a kabillionaire who hasn’t even paid rent at the Dome for the last ten years. Mr. Wilf pleaded “hardship” and was believed by the sports commission.
I was under the impression that only the private sector creates “real” jobs.
Let the job creators finance and build it. ;^)
“you keep talking about these good economic arguments you have, but you’re not presenting them, nor is anyone else. All your saying is this will get construction going again, as if it doesn’t matter what we build or where, or for whom.”
Building a stadium means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years. It’s no panacea for all that ails us, but the impact would be significant. It doesn’t matter much to me whether a job is created in Minneapolis, or Arden Hills. The same construction worker will be able to find his way to either. And a construction worker doesn’t care where his paycheck comes from, just as long as it doesn’t bounce.
#10:
“…we don’t choose whether or not we put $900,000 in 100 pockets or $10,000 in 9,500 pockets…”
Oh, yes we do!!
Not directly, of course – in the kind of chicanery that passes for our republican form of government, our elected representatives do it for us. Give $10 million to a good lobbying group to grease the elected representatives and unelected officials, and if they can’t bring home $100 million – $500 million flowing to your industry, it’s a total failure. You simply hired the wrong lobbyists.
One point that has been virtually ignored is the time and cost associated with remediating the Arden Hills site. 2,400 acres is a lot of real estate to thoroughly clean up and is not something that will be accomplished in six weeks with a battalion of workers hired through a local temp agency.
The summary listing of contaminants includes explosives and “volatile organic compounds.” Depending on what “flavor” and amount of explosives and volatile organic compounds are there, one does not simply start plunging backhoes into the soil. It’s a slow, deliberate process. Moreover, once it is determined that the contaminated soil can be safely removed, then the next question arises of how to neutralize and/or properly dispose of the contaminated soil. Then the question arises of where to safely put this contaminated soil.
Having worked in that business many years ago, the number of companies that are qualified to handle this stuff are few and far between and are not cheap. We aren’t recycling used oil or tires here. This can be nasty, dangerous stuff.
//Building a stadium means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
Hiram, the cost of those jobs is NOT irrelevant. At $1 million per job it would be cheaper to just give a million bucks to 500 construction workers, and it would do more for the economy. The fact that the structure we’re left with will drain revenue from other parts of the metro area, and primarily serve as cash cow for a private franchise is not irrelevant either. The fact that this is public money, and debt is not irrelevant.
Debates like this are one reason I’ve come to see the Vikings and pro-sports as a toxic influence on our society, culture, economy, and political system. Hiram will point out that there are no other billion dollar project on the table, and to some extent that’s true (although we have several billion worth of actual infrastructure repair and updates in the queue right now). One question is: “why don’t we have any other projects on the table”? Well, for one thing we have a governor, a governor appointed “point man”, country commissioners, state senators and representatives, and boat load of lobbyist all working on a stadium plan, and they’ve been doing so for years despite a absence of a constituency. This is huge distraction, and a diversion of public resources. Imagine a MN absent the stadium debate. Imagine a political landscape where all the governor, and his point persons, and all the elected representatives were working on nothing but infrastructure, health care, education, and statewide job creation? Imagine a political landscape where instead of spending years trying to construct welfare programs for billionaires we’d spend that time and money working the actual MN economy?
So you say well yeah but the stadium’s reality… no, no it isn’t. Right now I’d say the stadium subsidy has no better chance of passing than other tax increases, and that won’t change until the current batch of Republicans are voted out. So this is an artificial argument that treats stadiums as if they’re only billion dollar projects that are possible. In fact, it’s not the only project that possible, it’s just the only one we’re debating because our system has been hijacked on behalf of a billionaire sports franchise. I think we would be debating other projects in the absence of a sports subsidy, that why these sports subsidies are so toxic.
“Building a stadium means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.” – Hiram Foster
Building a pyramid means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
Building a moat around St. Cloud means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
OR
Upgrading the deficient bridges in Minnesota means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
Building a rail transit system means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
Renovating our schools and government buildings means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.
Which would you rather spend your tax dollars on?
“At $1 million per job it would be cheaper to just give a million bucks to 500 construction workers, and it would do more for the economy.”
Offhand, I just don’t know what a job is worth. What’s the market value of a job? Is a million bucks a lot or a little for a job? What do jobs go for in the private sector? And who gets the million bucks? And how do they use that million bucks? Do they use it to pay their taxes, to educate their kids, to provide for health care for themselves and their families?
“”why don’t we have any other projects on the table”?”
A very good question. We don’t have other such projects on the table, because we have lost confidence in ourselves, and because we have a paralyzing fear of the future. We don’t believe we can do things, and as a direct consequence of that, things aren’t getting done. The reasons we don’t build stadiums, are the same reasons we don’t build bridges, and schools. They are the same reasons we don’t care for our children, and our elderly. And that’s why this country is failing.
We are failing in this country, because we are no longer trying to succeed.
http://krugman.blogs.nytimes.com/2011/09/30/defeatism/?smid=tw-NytimesKrugman&seid=auto
What makes the discussion of the economics of an NFL team so interesting is that, as a product, it has a substantial private goods component as well as public goods component. Since these goods play out on different economic fields which respond to different rules, the conversation quickly become murky and muddled.
Just to clarify, public welfare is an example of primarily a public good (a good we all agree to provide to anyone in our community). You would never hear the rational that we should increase health and human services spending to create jobs. But rather how can we hold labor expense and provide more efficient services. So the job creation component of the stadium falls in the private sector field of stadium economics.
It seems that the public good’s component of a new stadium cannot be justified by job creation. Where are the dollars and cents that do justify the public investment? The truth is, the public can choose to spend its money without a monetary return. Minnesotans readily approve the purchase of public land that does not generate any revenue.
A sports team, unlike a business, unifies a communtiy. The sharing of a team experience allows citizens of all income levels and backgrounds to relate to each other equally as spectators; to retell the wonderful plays over and over; to track the progress of the players and anticipate the coming season. Did a business ever do so well on Wall Street that we threw them a parade like the one in downtown Minneapolis after the Twins won the World Series?
That’s what we are paying for.
Should we? Can we? And here it the tricky part about public goods: Where do Minnesotans get to see and choose their trade-offs?
“Building a pyramid means the creation of hundreds if not thousands of good paying construction and related jobs lasting for years.”
And thousands of years later, you have a pyramid to wonder at. What’s left of the Egyptian transit system from that era?
#46- //A sports team, unlike a business, unifies a communtiy.
This is brand loyalty masquerading as civic virtue. It’s simply absurd to suggest that sports is a glue of some kind that holds us together. For one thing, if the Vikings glue us together 8 day a year, what’s holding us together the rest of the year, memories of the Vikings? Apparently this is some kind of invisible glue since 70% appose the subsidies and don’t want to pay for stadiums and arenas. And finally, look at these stadium debates, these are nasty divisive civic battles that undermine public confidence in elected officials, pit communities against each other, and create animosities for years. This is not glue, it’s an increasingly powerful toxin that grows in strength as these subsidies increase by the billions. And by the way, public welfare spending actually does create and sustain jobs.
//Offhand, I just don’t know what a job is worth. What’s the market value of a job? Is a million bucks a lot or a little for a job?
Hiram, ya can’t have it both ways. You can’t claim to have to a good economic argument based on job creation and then claim that you don’t know what jobs are worth. This is basically another way of admitting that the economic arguments in favor is stadiums are bankrupt.
“You can’t claim to have to a good economic argument based on job creation and then claim that you don’t know what jobs are worth.”
The point is that you can’t put a price tag on jobs, or rather you can put just about any price tag you want on jobs. I think if a job costs a million bucks and that million bucks goes back into the community to create more jobs, it’s a win win situation.
Paul-I didn’t mean to infer anything about virtue(moral excellence; goodness; righteousness). I said “a team experience allows citizens of all income levels and backgrounds to relate to each other equally as spectators.” Listen to employees after a big game. Despite their role in the office, everyone can contribute to reliving the highlights, or the low-points of the game. This is important because people are more empathic to people they know, more willing to compromise with them and more trusting of them; a favorable ambiance for all types of trade.
And as far as job creation, maybe I can explain what I meant a little better. If a cereal producer would like to grow a brand of breakfast cereal, which would in turn increase the number of people they employ, they will look for more consumers to purchase their product. It doesn’t make sense to say that we are going to look to increase our welfare recipients so we can increase our employ of social workers. Public goods are not driven in the same way as private goods.
Hiram, if you can’t put a price tag on jobs, you can’t make an economic argument based on job creation. Maybe you can’t put a price tag on jobs, but economists do so routinely, and a million dollars for temporary jobs is about $950,000 too much per job. As for the millions going back into the community, that may be an argument for deficit spending, but it’s not a good argument for taxpayer financed stadiums. We do have billions of dollars worth of other genuinely public projects on the drawing board, we get circulate more money in the economy with those.
Victoria, pro-sports is entertainment, people can talk about a lot about stuff. On the 355 days a year we don’t have Vikings games to talk about we still get by just fine. We are a community of human beings, not “fans”. It’s funny you should keep referring to a “team” experience when for some reason years ago, these “teams” started referring to themselves as franchises.
As for you economic arguments, football franchises are private owned businesses. What they do to increase their revenue is their business. For the same reason we don’t build new factories for General Mills, we shouldn’t be building stadiums for sports franchises. Apparently for some reason you think the public is responsible for guaranteeing Ziggy Wilf’s investment. I’m afraid your argument is a little weak, being a “team” of some kind doesn’t make it a sector enterpriss.
By the way Victoria, I said “civic” virtue, not moral virtue, different things.
O.K., just to flesh out the point I’m making about Hiram’s argument. At this point it’s not really an economic argument, it more of an anti-economic argument that claims that cost benefit analysis is irrelevant or impossible. According this theory no matter how much spend on a stadium it can’t be too much. This is a template for irrational public policy.