The economic impacts used in an application for state funding amount to wishful thinking.
Recently, I studied how the city came to the point of breaking ground for a $54 million minor-league ballpark — a plan meant to spur economic benefits for downtown. As someone with 40 years experience in project management and cost-benefit analysis, I view the city’s July 2012 application to the state Department of Employment and Economic Development (DEED) for $27 million in ballpark funding as mostly unsubstantiated examples of “economic impact” wishful thinking.
I also taught university project-management courses. If a student were to submit a similar cost-benefit analysis, he or she would receive a failing grade. I hope, but am not confident, that the new ballpark will be a success.
From early May to September, 66 days of baseball are scheduled at the 6,329-seat Midway Stadium in 2013: Fifty-two Saints games; five university games and nine high-school playoff days. Beyond the new ballpark’s construction jobs, 240 full-time and seasonal jobs are promised. Are these new jobs, existing jobs? How many are full-time or seasonal? Even with other events, is this claim reasonable considering only four months of primary use?
Seventy-five thousand new transit trips per year? How can we assume that 1,500 fans will take transit to a downtown game? The Saints claim that 59 percent of their fans come from within St. Paul, Ramsey County and Minneapolis. What proportion has access to convenient mass transit, and do they use it now? Light-rail travel time from downtown Minneapolis to Union Depot in St. Paul will be 40 minutes one way.
Four hundred thousand visitors annually? Average attendance over the past three years has been 4,993 fans per game, or 79 percent of capacity. Assuming an average of 5,000 fans at 50 games per season in the new ballpark, the number of visitors would be 250,000. The unlikely sustained maximum of 7,000 fans per game would total 350,000. Will concerts and high school and college ballgames lift those figures by 50,000? One hundred thousand?
The most controversial claim is $10 million in direct economic benefit — annually. This claim is based on a 1985 impact analysis of a proposed South Bend, Ind., stadium and John Crompton’s 1995 Journal of Sports Management article. Based upon the estimates by St. Paul and the Saints, outside-the-ballpark spending by fans from outside the local community will be $26.47 per game. If 50 games have 100 percent attendance, economic impact will be $937,055. Crompton estimates $685,650. Both, far less than the $10 million claim. Ballpark concession income in the application is even less impressive at $4.69 per fan per game.
In a September 2012 MinnPost article, Crompton, the Texas A&M professor whose work was cited in the DEED application, was skeptical of St. Paul’s annual benefit claims: “A lot of the money spent in Saint Paul, or any other city, ends up somewhere else. Based on the city’s own report, what would be left in the pockets of St. Paul business owners and their employees, amounts to less than $1 million a year,” he told MinnPost. “I have no idea how they get from the $650,000-$950,000 range to $10 million ... In terms of economic impact, I can’t even guess how they do that.” Joe Campbell of St. Paul Mayor Chris Coleman’s office replied: “Any number that you throw out there is an estimate. I think we’re confident that it will be close to that number.”
St. Paul’s ballpark cost-benefit analysis deserves an F. Objectively, I can see a growing economic gulf between St. Paul and Minneapolis, and even Bloomington. There is still time to remake the Lowertown ballpark project to include alternatives that would create a great ballpark experience, with other substantial and real year-round benefits. Repurposing the Gillette building on the ballpark site is one such alternative. Hopefully there is still time to grade this project with an A.
Robert Grenier, of St. Paul, is a retired university professor of management.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.