RT Rybak, Peter McLaughlin, Governor Tim Pawlenty, Steve Kelley, Hennepin County Board and Other Political Stadium Snake Oil Salesmen have Egg on their Faces

Lots of bad news for the Stadium Boondoggle in the strib:

• A nice little profile on the Twins Owners the Pohlads:
  
• Pohlad will laugh all the way to the bank letting Hennepin County Taxpayers hold the bag.
  
• Oped - Jay Wiener: Economics of Stadiums Look Dicey.
  
• Twins are dropping the economic argument for the stadium.
  

From Oped - Jay Wiener: Economics of Stadiums Look Dicey:

As the legislative special session stalls, Minnesota's stadiums process is stuck in the mud once more.

It seemed as if the University of Minnesota's $235 million football stadium, mostly paid for by private donors, was on track for passage.

It looked as if the Twins ballpark, with Hennepin County footing most of its $478 million bill, was a done deal.

Now, it's dicey again. Insiders are saying the "U" on-campus stadium still stands a chance. But if there's no movement on the larger issues at the Capitol this week, the Twins' prospects could run out of time.

Too bad.

But, maybe, not so bad.

Despite 12 years of debate on public funding for sports facilities, two fundamental questions remain unanswered.

Why has the state ducked on participating in Twins (and Vikings) stadium policy when any economic benefits from teams accrue to the state's coffers?

And if we build three stadiums -- the Vikings are on the horizon with new owner Zygi Wilf -- can we support them?

Antitax politics and mantras about billionaire owners and millionaire athletes have shrouded stadium arguments. But when we cross the public-funding Rubicon -- which we have in every case -- we must be rational, not convenient.

Why should Hennepin County taxpayers fund a stadium that's used by the "Minnesota" Twins? How can politicians call local pro teams "statewide assets" and then turn their backs on projects designed to retain the teams? Why do Greater Minnesotans scream about wanting retractable roofs and then say, "But I won't pay for it"?

Good questions all, read the whole thing here.

Surprise, surprise, surprise, the Twins are dropping the economic development argument for the stadium.

"I don't think the economic argument turns it one way or another, so why go there?" said Bell, president of Twins Sports Inc. "If there are side benefits, great. If not, so what?

"You get into an economic argument, and the bottom line is, 'Do you want to build it or not?' " he said.

The Twins obviously want the stadium built, but they want the taxpayers to be the chumps.

The article continues:

In dropping the stadiums-as-economy-boosters argument, the Twins are acknowledging what economists long have argued: Stadiums built for pro sports fail to deliver measurable financial returns for their communities.

"At some global level, they're obviously correct," Bell said.

The histories of the Xcel Center, Target Center and Metrodome -- all acquired chiefly with public money -- show that stadiums usually fall short of promises that they will provide monetary benefits to the public.

Consider the Metrodome: Opened in 1982 at a total cost of $68 million, its boosters predicted that the stadium would be a magnet for new construction in a part of downtown that hadn't seen new private investment for years. Instead, the building boom of the 1980s and 1990s in downtown Minneapolis bypassed the Metrodome neighborhood.

"We put a stadium in the middle of nowhere and nothing developed around it," economist Art Rolnick said of the Metrodome. "If these things are magnets for economic development, what happened?"

The outcome should be no surprise, said Rolnick, director of research at the Federal Reserve Bank of Minneapolis.

"Most of the year, there's nobody in them," he said. "It doesn't pay for most businesses to be near these facilities."

The Target Center, acquired by the city of Minneapolis from private developers at a cost of $74 million in 1990, now sits next to the Block E entertainment center, but Block E was built only through $40 million in public subsidies.

The Xcel Center, opened at a total cost of $130 million in 2000, became something of a laboratory this past winter for measuring whether the presence -- or lack -- of professional team sports hurts a city's economy, when the NHL lost its entire season because of a labor dispute between players and owners.

From November through April, sales tax receipts in St. Paul totaled $7 million, up $181,000, or 2.6 percent, from the same period a year earlier, when fans were regularly filling the Xcel for Minnesota Wild games, according to the St. Paul Office of Financial Services.

"If [fans] don't go to NHL games, they don't stop spending money," said Robert Baade, economist at Lake Forest University near Chicago. "They spend money on other things."

Even ripple effects from marquee events -- a Super Bowl or World Series -- can be hard to discern in the numbers.

I thought the whole point of the public investment in the stadium is that this would create jobs in the local community. I happened to oppose the corporate welfare in the Northwest Airlines bailout years ago - but that at least had a better economic development justification - creation of high wage jobs (which have not been delivered) in a depressed area.

The article continues:

Tom Stinson, Minnesota state economist, made a careful study of sales tax receipts after a Super Bowl game in the Metrodome in the early 1990s. Boosters had predicted that the game would pump tens of millions of dollars into the Twin Cities economy as thousands of out-of-towners descended on the city.

"We had been told that there would be a great deal of economic activity," Stinson said. "We were looking for it in the sales tax receipts data, and we couldn't find it."

Well if Stadiums in Minnesota area haven't generated increased sales tax receipts in the past, then why should they bring this benefit to the state in the future.

The article continues:

Other cities, such as Baltimore or Cleveland, can point to stadiums as having spurred new life for certain areas. But as a group nationwide, stadiums are more an economic drag than a boost on the cities that subsidize them, economists agree.

"There's a lot of research that's been done that suggests that the benefits are not great enough to justify the costs," said Patrick Rishe, economist at Webster University in St. Louis and a longtime student of sports subsidies.

"The general outcome of every objective economic analysis I've seen is that stadiums are consumption, they're not investment," said Paul Anton, chief economist of Wilder Research, a St. Paul nonprofit think tank.

Politicians should listen to these economists. RT Rybak has a hard time justifying his support for increasing the sales taxes on Hennepin County residents to pay for a stadium. Peter McLaughlin and the other county commissioners voting for this boondoggle should also be asked for comment. They can't say that any of this was a surprise to them.

The article continues:

Some politicians concede that stadiums alone don't provide a financial boost to a city or even a neighborhood, in and of themselves.

"When the Metrodome and Xcel were built, there was a false assumption that a ballpark alone would create a huge new urban village," said Minneapolis Mayor R.T. Rybak, who nevertheless favors spending public money on a new Twins stadium.

A Twins stadium in the Warehouse District would add to the customer traffic at nearby bars and restaurants, but it can't lift their prospects all by itself.

"You can't make it in the bar and restaurant business by being jammed on game nights and empty on other nights," Rybak said.

One reason Rybak said he favors a Twins stadium is that crowds of tens of thousands near the end of the light-rail line could add momentum to city plans for a transit hub in the neighborhood, linking buses, light rail and a proposed intrastate North Star rail line.

"I agree that people should go into this with tempered expectations," he said. "It cannot, in and of itself, create a huge boom."

There's plenty to sell this transit hub without a stadium boondoggle. Governor Pawlenty has ignored the advice of his base on the Northstar corridor. Several "we don't want no choo choo trains" legislators lost partly due to their idiological opposition to light rail.

The Minneapolis City Council passed a resolution that sent mixed signals about the stadium. It would have been better if the resolution had explicitly supported a referendum:

On a 10-3 vote, the council said it opposes the Hennepin County-Twins plan to build a park with a 0.15 percent addition to the sales tax in the county unless legislation approving the deal honors 10 principles, mainly protecting city taxpayers from additional costs.

Council park supporters celebrated the passage, considering it a statement of conditional support, while others were left to wonder where the council stood. Council supporters say the resolution protects taxpayers' interests. Detractors, however, contend that the resolution failed to oppose use of taxpayer money for a ballpark.

Rep. Brad Finstad, a ballpark bill sponsor, said legislators definitely want the city's input.

"I respect what they're doing, and I want to reach out and make sure we work with them," he said.

Ultimately, Finstad, R-New Ulm, thinks the council resolution could help passage of a bill. "If anything, it will affect it in a positive way by answering or addressing the concerns they have," he said.

Sen. Steve Kelley, DFL-Hopkins, and another sponsor, said he expects the impact of the resolution to be "slightly positive. It could have been more positive if it had not been framed in the negative."

City Hall isn't a player in the county proposal and the council's support isn't needed for Hennepin County to raise taxes. But legislative approval is required, and some Minneapolis leaders wanted the city to take a position, and the middling approach was all that could win approval -- with the possible exception of outright opposition.

Council President Paul Ostrow, a ballpark supporter, said before Friday's vote: "I believe what we're doing today is what we get elected to do and that is fight for our city."

In a confusing move, Council Member Dean Zimmermann, who has been an opponent of the county-Twins plan, voted for the resolution. "This fulfills all of our concerns and concerns of people who don't want to use public funds for a private ballpark," he said.

Council Member Paul Zerby voted no, along with Council Members Gary Schiff and Natalie Johnson Lee. "I don't think [the resolution] is consistent at all with those opposed to spending city money on a private facility for the owner" of the Twins, Zerby said.

Schiff said that, in his mind, the resolution is silent on the issue of a sales tax for a stadium.

Zerby wanted to pass a separate resolution sponsored by Johnson Lee and Zimmermann that clearly opposed the use of public money. The council resoundingly voted down that proposal in favor of the conditional approach.

The resolution opposes the ballpark unless conditions are met, including:

• Preservation of the city's authority for local taxes, including collection of the city's 3 percent entertainment tax at the ballpark.
  
  
• No negative effect on the city's general fund or the city's capacity to deliver basic services.
  
  
• No imposition of infrastructure costs on the city.
  
  
• The funding of libraries and youth activities in the county as originally proposed.
  

Kelley said there is "arguably some inconsistency between the city continuing to collect the entertainment tax but then not having any responsibility for the infrastructure near the ballpark."

"If they are going to collect an entertainment tax related to a facility, you'd think they'd want to help spruce up the neighborhood," Kelley said.

During debate, Council Member Lisa Goodman said, "Most of us do not like the idea of a publicly funded stadium," but she acknowledged the county had worked out a deal and there was not much the city could do to stop it. "What I am focused on now is what we have the ability to do," Goodman said.

Member Don Samuels said the council members "cannot fold our arms in sullen disagreement when we are being pulled along."

When I talked with Don Samuels about the Stadium at Juneteenth, yesterday, he mentioned that the city was trying to get something for the city rather than having the stadium boondoggle passed by the legislature that ends up hurting the city. Samuels mentioned a concern for how the stadium could negatively impact the area near the stadium. Certainly if you look at the Dome, it's done nothing for the surrounding area.

Governor candidate Steve Kelley seems concerned about the issue of the city continuing to collect the entertainment tax without making an investment in the stadium. That's a bit rich - the State is going to be collecting the sales tax on Twins Tickets - and the tickets will be exempt from the countywide stadium tax, as well as benefiting from the income and corporate taxes from the team - all while socking it to the Hennepin County taxpayers to provide the funding.

Kelley will be at many Minneapolis large crowd events over the summer trying to drum up support for his governor campaign. People should tell him, they don't want Hennepin County taxes raised for this purpose - especially without a referendum. The legislature would have to exempt the stadium from current referendum requirements. So far the Stadium boosters haven't made the case for that.