Economic punch of Target Field tailing off

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: June 25, 2012 - 12:45 PM

Tax revenue is down, but new ballpark is still a good draw to downtown restaurants and bars.

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The downtown area around Target Field is usually hopping on game day. But attendance is down this year.

Photo: Jeff Wheeler, Star Tribune

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The economic impact of Target Field is showing signs of tailing off, and its role in boosting the vitality of downtown Minneapolis remains unclear.

But the $555 million, publicly subsidized Twins stadium and the millions of fans visiting it are producing state and local sales tax money -- one measure of economic activity -- far ahead of what was generated in the Metrodome's final season.

Figures provided by both the Twins and the public ballpark authority show that sales and use taxes collected at the stadium fell last year by $1.5 million from the 2010 inaugural season total of $18.6 million, and will likely drop again this year as the team expects 300,000 fewer people from a year ago. The 2011 total of $17 million, which represents six separate sales taxes collected on nearly everything sold at the ballpark, was still nearly three times the $6 million collected in the team's final year at the Metrodome.

The figures, along with a separate analysis by the state Department of Revenue, represent one of the first statistical looks at the financial impact the ballpark has had since opening amid claims that the new park would give downtown a big boost.

Although the sales tax figures are by themselves relatively small, they provide a glimpse of the overall economic activity at the ballpark. The $11.6 million in state sales taxes -- the largest of the six taxes -- collected in the ballpark's first year reflect at least $169.3 million in activity.

Twins President Dave St. Peter said the figures don't fully measure the on-the-ground impact the stadium has had and ignore the increase in income taxes paid by Twins players because the team has been able to increase its payroll due to the new revenues. State income taxes withheld for the team's 25-man roster rose from $2.7 million in 2009 to $4.8 million in '11.

St. Peter acknowledged the Twins were unlikely to soon match the 3.2 million fans who came to Target Field in its first year and predicted attendance would level off at roughly 2.7 million fans. The team, in its final year at the Metrodome, drew 2.4 million people.

"Certainly, economic impact [studies] are fine ... but the experience of coming to a game here, in and of itself, has demonstrated to people why this was important," he said. "There's a lot of examples of economic impact in and around the ballpark."

One of those is the nearby Loon Cafe, where manager Kaye Stein said year-around business is up even as the newness of Target Field has slightly diminished.

"People are selling their tickets a lot more often. There's scalpers all over the place," she said. "We knew the first two years would be the 'Cinderella years', but you knew it was going to drop off a little bit.

Kieran's, another bar and restaurant close to the stadium, has, for now, stopped having live music on some nights. With the stadium in its third year, business relies more on the weather and how the team is doing on the field, said manager David Lavery.

"Monday, Tuesday night, if the Twins lose, people will probably walk by the bar," Lavery said. "If the Twins win, they'll probably stop in, have a beer or two."

Economist Paul Anton said that, numbers aside, the impact of Target Field is obvious. "An economic impact study -- a real one -- [would] have to say that absent the ballpark that money would not have been spent in a particular area," he said.

A Revenue Department look at downtown sales tax patterns, before and after Target Field opened, offer only minimal evidence of the ballpark's impact. While there were sales tax gains downtown, state officials said, they coincide with the city's overall climb out of the 2008-09 recession.

State analysts said downtown liquor tax proceeds were up a staggering 40 percent during the summers of 2010 and 2011 -- the ballpark's first two years -- but said they had "no clear understanding" why the numbers had risen so much and that other factors suggested the stadium may be just one of several reasons.

Downtown liquor taxes rose from $1.9 million from May through October 2007, the last summer before the recession, to $2.7 million from May through October in 2010, the ballpark's first season. The figure was still up 39 percent when comparing the 2007 summer to the ballpark's second summer in 2011.

State officials added that liquor tax proceeds had also risen significantly at downtown liquor stores suggesting further that the uptick may not have a one-to-one correlation with the opening of a new ballpark.

"There has to be a lot more going on here than just" a new ballpark, said Paul Wilson, who heads the state's tax research division.

State officials likewise said they were hesitant to draw conclusions over sales taxes generated by downtown restaurants, even though those, too, have increased since the ballpark was opened.

In the summer of 2010, downtown restaurant sales taxes climbed 6 percent over the 2007 summer. Last summer, the jump was 11 percent over the 007 summer.

But downtown restaurant sales taxes had been steadily increasing since 2004, long before the ballpark was built, state officials said. For five summers starting in 2004, downtown restaurant taxes increased every year and stood at $5.9 million in 2008. After dropping in 2009 -- again, likely due to the recession -- they rose in the summer of 2010 and again last summer, topping $6.2 million.

There are other signs that Target Field's economic impact must be qualified.

The ballpark's $18.6 million in 2010 sales and use taxes includes $4.8 million collected through an entertainment tax. Another $4.4 million was collected in 2011.

But when the Twins played at the Dome, tickets were exempt from the tax. At Target Field, they are not. The state's analysis concluded that the large increase in entertainment tax money was "an artificial result" that "does not imply increased activity."

Nathan Bolin, manager at Lyon's Pub, said he, too, has noticed a dip in Twins-related business but said it was still a "night and day difference" from the team's days at the Metrodome. But he said when the ballpark opened, he had hoped the spinoff would transcend the team, and create an energy like that found in the "Wrigleyville" neighborhood near the Cubs' ballpark.

That, he said, has not yet happened. "It's still better than if [Target Field] wasn't there," he added.

Mike Kaszuba • 612-673-4388

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