In St. Paul, pain of NHL lockout more a pinch than a punch

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: December 19, 2012 - 12:31 PM

Income from sales and lodging taxes, one barometer of a city's economic health, hasn't shown a broad effect.

The National Hockey League lockout doesn't appear to be creating a large economic drag on St. Paul, despite repeated talk of financial pain by some city officials.

Some individual businesses are being hurt by the three-month lockout, but state sales taxes and lodging taxes in St. Paul were up slightly in November compared to November 2011, when the NHL was playing games at downtown's Xcel Energy Center.

State Department of Revenue officials cautioned that the tax figures don't paint a definitive picture, but said November's numbers, and the results from the NHL's 2004-2005 lockout, suggest that neither the city's economy nor the downtown core's are driven by professional hockey.

State sales tax figures increased in St. Paul during much of the 2004-05 lockout.

"If there was a significant impact of the lockout in 2004-05, it cannot be demonstrated using these statistics," said Paul Wilson, the research director at the Minnesota Department of Revenue.

Some city officials and civic leaders, who have said that this year's lockout is causing widespread economic pain, said state sales tax totals likely present a flawed perspective. .

"Tragically, and I say this with a certain amount of humor, sales tax receipts fall into the category of lies, damn lies and statistics," said Matt Kramer, the president of the St. Paul Area Chamber of Commerce. Kramer, a onetime chief of staff to former Gov. Tim Pawlenty, said that anyone analyzing sales taxes needed to be "extraordinarily careful" to compare "apples to apples."

St. Paul Mayor Chris Coleman said this week that while the lockout is having a ripple effect throughout the city, the number of businesses in financial jeopardy because of it "might be a half dozen, it might be a dozen."

Coleman said that, even with the lockout, the city was continuing to rebound from the recession and that "I'm overall very pleased with where St. Paul's at right now" economically.

Benefit not clear

John Wengler, a co-owner of Billy's On Grand, a bar and restaurant two miles from the arena, said he stopped running shuttles to Wild games two years ago because of a lack of interest. "Do you want my honest answer, or do you want me to jump on board with what everyone else" is saying about the situation, he said jokingly.

"That's not driving our economy," he said of the games.

At O'Gara's, another St. Paul bar that still has shuttles to Wild games, co-owner Kris O'Gara said the games provide a "nice boost" but said the bar was more than surviving. "We're still fine," she added.

Even at Cossetta's, the longtime Italian deli a block from Xcel Energy Center, manager Ray Vanyo said the lockout was likely curtailing new customers but that "we're still getting good business" primarily because of a nearly completed expansion.

State officials said that citywide sales tax, use tax and lodging tax figures do not show a consistent overall economic benefit or loss to St. Paul that can be associated with hockey.

Wilson said sales tax figures for the city actually increased 4.2 percent from January through May 2005, during the lockout, over the same five-month period in 2004, before the lockout. For the 2005-06 hockey season, the first year after the lockout, the figure was up again, by 2.1 percent.

In addition, Wilson said that it was also difficult to draw conclusions by examining data for a narrower geographic area that includes the Xcel Energy Center and surrounding businesses.

During the 2004-05 lockout, state sales tax collections in that narrower area dropped by 9 percent in 2004 to $30 million, and again by 3 percent in 2005 to $29.1 million. While the decreases could be blamed on the lockout, state sales taxes for that area dropped by 18 percent in 2007, to $27.5 million, when hockey was being played. Wilson said the 2007 decreases suggested that the presence of hockey was not enough to offset other, unknown, factors.

"Collections in both 2007 and 2008 [combined] were even lower than in the missing season years of 2004 and 2005," Wilson wrote in an analysis of the data.

Wilson added that the narrow geographic area including the Xcel Energy Center represents less than 20 percent of all sales tax collections in the city, meaning any losses or gains might be offset by activity elsewhere in St. Paul.

City officials said the lockout's imprint is noticeable in other ways.

For starters, they said, parking ramp revenue near the Xcel Energy Center fell dramatically from September and October 2011 compared with the same two months this year. For October, revenue from six parking ramps dropped from $364,611 in 2011 to $278,222 this year, a 24 percent decrease. The decrease from September 2011 and the same month this year was 29 percent.

City officials also said that comparing city sales tax figures from October 2004 through April 2005 -- during the lockout -- with the same time the next year showed a $300,000 boost, for a total of nearly $8.7 million.

Not yet at breaking point

At the Eagle Street Grille, across the street from the hockey arena, owners Joe Kasel and Kevin Geisen have received much publicity as they have described the effect of the lockout. In a letter to the NHL's commissioner, Kasel said that Wild games accounted for half of the business' annual gross revenue.

But Geisen said that while the lockout had significantly hurt business, it had not yet brought them to a breaking point.

"At this point, I would say no," he said last week of possibly going out of business. "[But] it wouldn't take too much to push us over."

At Alary's, a longtime downtown bar and restaurant, owner Al Baisi said the lockout has been felt as well. The bar's four shuttle buses that take Wild fans to the arena, eight blocks away, are idle. But he said he is more than surviving. "Overall, we're still doing fine here," he said.

Mike Kaszuba • 651-222-1673

  • related content

  • Video: StribCast: How hard is St. Paul hit by NHL lockout?

    Wednesday December 19, 2012

    Hear about today’s news developments – including Ponder’s wedding and the end of the world – from the Star...

  • By the numbers: Effect of NHL lockout

    Tuesday December 18, 2012

    State revenue officials said overall sales tax figures in St. Paul -- and also for just the city's downtown area -- present a cloudy picture on the effect of the...

  • Setoguchi taking time off from ECHL team; Spurgeon update

    Tuesday December 18, 2012

    The Ontario Reign announced that Devin Setoguchi has been suspended, but the Wild winger clarified Tuesday that he is taking a leave of absence until the NHL lockout is resolved

  • Kevin Geisen, co-owner of the Eagle Street Grille, worked the lunch cr...

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Tennessee 13 FINAL
Jacksonville 21
Philadelphia 12/20/14 3:30 PM
Washington
San Diego 12/20/14 7:25 PM
San Francisco
Minnesota 12/21/14 12:00 PM
Miami
Baltimore 12/21/14 12:00 PM
Houston
Detroit 12/21/14 12:00 PM
Chicago
Cleveland 12/21/14 12:00 PM
Carolina
Atlanta 12/21/14 12:00 PM
New Orleans
Green Bay 12/21/14 12:00 PM
Tampa Bay
Kansas City 12/21/14 12:00 PM
Pittsburgh
New England 12/21/14 12:00 PM
NY Jets
NY Giants 12/21/14 3:05 PM
St. Louis
Buffalo 12/21/14 3:25 PM
Oakland
Indianapolis 12/21/14 3:25 PM
Dallas
Seattle 12/21/14 7:30 PM
Arizona
Denver 12/22/14 7:30 PM
Cincinnati
New York 97 FINAL
Chicago 103
New Orleans 99 FINAL
Houston 90
Milwaukee 108 FINAL
Sacramento 107
Oklahoma City 109 FINAL
Golden State 114
Florida 2 FINAL(SO)
Philadelphia 1
Colorado 0 FINAL(OT)
Pittsburgh 1
Toronto 1 FINAL
Carolina 4
Washington 5 FINAL(OT)
Columbus 4
Anaheim 2 FINAL
Montreal 1
St. Louis 4 FINAL
Los Angeles 6
Edmonton 3 FINAL
San Jose 4
St Thomas (TX) 61 FINAL
Rice 72
Stony Brook 59 FINAL
Canisius 60
Temple 82 FINAL
Delaware 62
FIU 58 FINAL
Long Island 69
Lehigh 65 FINAL
Quinnipiac 80
South Alabama 54 FINAL
Richmond 65
Seton Hall 89 FINAL
South Florida 69
Ga Southern 76 FINAL
Stetson 67
Yale 57 FINAL
Vermont 56
Cleveland State 54 FINAL
Virginia 70
Wright State 69 FINAL
Western Carolina 56
Nicholls 54 FINAL
Louisiana Tech 79
Morgan State 48 FINAL
Rider 62
Idaho State 72 FINAL
South Dakota St 75
Oakland City 52 FINAL
Austin Peay 76
Eureka 38 FINAL
Bradley 80
Appalachian St 65 FINAL
Charlotte 75
Connecticut 56 FINAL
Duke 66
Southern Miss 46 FINAL
Jackson State 66
Coastal Carolina 68 FINAL
Ole Miss 71
Montana State 53 FINAL
South Dakota 55
LSU 79 FINAL
UAB 70
Ohio 69 FINAL
Evansville 81
CS-Dominguez 50 FINAL
Cal State Fullerton 72
Walla Walla 39 FINAL
Idaho 86
DePaul 59 FINAL
Oregon State 90
Nevada 65 FINAL
Pacific 69
Portland State 40 FINAL
San Francisco 77
CS-Bakersfield 56 FINAL
Utah State 57
Nevada 12/20/14 10:00 AM
Louisiana
Utah State 12/20/14 1:20 PM
Texas-El Paso
(23) Utah 12/20/14 2:30 PM
Colorado State
Western Mich 12/20/14 4:45 PM
Air Force
South Alabama 12/20/14 8:15 PM
Bowling Green
BYU 12/22/14 1:00 PM
Memphis
Marshall 12/23/14 5:00 PM
Northern Ill
Navy 12/23/14 8:30 PM
San Diego St
Central Mich 12/24/14 11:00 AM
Western Ky
Fresno State 12/24/14 7:00 PM
Rice
Niagara 76 FINAL
Cleveland State 58
High Point 59 FINAL
VA Commonwealth 81
Towson 64 FINAL
Wake Forest 74
Presbyterian 50 FINAL
Charlotte 66
Chicago State 62 FINAL
Bradley 59
Northwestern Coll 58 FINAL
Drake 102
Vanderbilt 67 FINAL
Marquette 80
Temple 78 FINAL
Howard 48
Southern Miss 66 FINAL
Ole Miss 68
UMBC 55 FINAL
Rider 67
Miami-Florida 74 FINAL
UCLA 67
St Mary-KS 51 FINAL
South Dakota 115
William & Mary 71 FINAL
Wofford 51
Troy 82 FINAL
Evansville 94
Loyola Marymount 54 FINAL
USC 96
St Francis-PA 52 FINAL
Duquesne 92
Indiana-Southeast 45 FINAL
IUPUI 95
Delaware State 52 FINAL
Detroit 74
Tenn Temple 48 FINAL
Gardner-Webb 68
West Virginia St 58 FINAL
Radford 52
Fairfield 47 FINAL
Seton Hall 79
Dartmouth 44 FINAL
New Hampshire 60
Ball State 47 FINAL
Pittsburgh 59
Jacksonville 61 FINAL
Tennessee St 64
Trine 45 FINAL
Western Mich 81
Tenn Tech 53 FINAL
Lipscomb 72
Samford 56 FINAL
Tulane 57
New Orleans 55 FINAL
Tulsa 78
Incarnate Word 61 FINAL
TX-Pan American 65
Ark-Little Rock 42 FINAL
South Dakota St 67
CS-Northridge 77 FINAL
Northern Ariz 71
Santa Clara 88 FINAL
Oregon 92
(19) Oklahoma St 55 FINAL
Weber State 49
Washington 69 FINAL
San Diego State 48
Cal Poly 68 FINAL
New Mexico 84
(10) Louisville 65 FINAL
Grand Canyon 51

ADVERTISEMENT

question of the day

Poll: Will Christian Ponder ever be a full-time starter in the NFL?

Weekly Question

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

 
Close