New Edmonton Arena Construction will begin in March 2014

[Resolute 14]

Originally Posted by flamesaresmokin

This has little to do with spending more money on a public program like you're suggesting and all to do with taking money away from them. When you talk about publicly funding a private arena (x2) you're talking about pulling existing dollars directed to public programs, not finding new untouched funds.

If you hand over hundreds of millions to the Flames/Oilers quite obviously funding is going to be cut to programs that are already struggling (like arts and culture, health care, education etc). Programs that don't have billionaire owners to fund them if they felt like it.

False dichotomy. Adding funding in one area does not necessarily mean removing it from another. One hypothetical example, though relevant really to Alberta only, would be a sudden windfall from a rapid escalation in natural gas prices. Under such a scenario, the government could lend funding to such projects without the need to either cut somewhere else or deficit spend.

Of course, I expect your response will be "but they could instead spend that windfall in other areas, such as those that I like, therefore you are still taking money away from those groups." To which I respond, "That money was not allocated, they have no inherent right to it."

Ultimately, the views you are expressing here are actually a parallel of the current CBA dispute. Which is interesting, if nothing else.

[flamesaresmokin]

Originally Posted by Resolute 14

False dichotomy. Adding funding in one area does not necessarily mean removing it from another. One hypothetical example, though relevant really to Alberta only, would be a sudden windfall from a rapid escalation in natural gas prices. Under such a scenario, the government could lend funding to such projects without the need to either cut somewhere else or deficit spend.

Of course, I expect your response will be "but they could instead spend that windfall in other areas, such as those that I like, therefore you are still taking money away from those groups." To which I respond, "That money was not allocated, they have no inherent right to it."

Ultimately, the views you are expressing here are actually a parallel of the current CBA dispute. Which is interesting, if nothing else.

Though I can see the logic in the idea, commodity prices are far to volatile to budget something like this around. If you're planning on funding a project like this on gas revenues alone without cutting any programs it could sink a government if the money didn't come through.

Look no further then the provinces inability to get unions signed long term at fixed amounts or last minute cancellations of numerous infrastructure projects over the last decade when there's suddenly no funding.

Its a slippery slope that tax dollars should not be involved imo. Even if there was a commodity windfall its going to be a short term thing and should be spread to public sector areas of need, not the private sector.

[Resolute 14]

And that is a fair opinion overall. Certainly a project like this should never expect such a windfall to get built, and that was only a hypothetical argument. However, if such a windfall were to occur, I would have no issue with the government directing a portion of such a boon into such arena projects. There are always conditions that can be placed. One of the conditions the Flames agreed to when the province paid to renovate the Dome in 1994 was that the team would significantly increase funding to grass roots organizations. Win-win, really.

[Tinordi]

Originally Posted by Resolute 14

False dichotomy. Adding funding in one area does not necessarily mean removing it from another. One hypothetical example, though relevant really to Alberta only, would be a sudden windfall from a rapid escalation in natural gas prices. Under such a scenario, the government could lend funding to such projects without the need to either cut somewhere else or deficit spend.

False false dichotomy.

Spending government revenue somewhere means you can't spend it anywhere else and that includes new government revenue.

New revenue is not free money no business, government or otherwise sane person would think so.

What could windfall fossil fuel revenues go to? Where do you start? Lets throw some red meat to the right wing and say we could reduce personal income taxes further. That would have significantly higher aggregate benefits than spending that money or arenas.

It could go to lowering costs of tuition.

Upgraded transit infrastructure.

Etc

etc

etc

[Resolute 14]

1. You obviously have no idea what a "false dichotomy" is.

2. you should have read the second paragraph of that post.

3. You also should have read Flamesaresmokin's post that I replied too. Understanding the context of the post would have made you look like less of a fool.

[HotHotHeat]

Could there be anything more Edmontonian than this overly celebrated pipe dream falling flat on it's face?

Honestly, it encompasses everything the rest of the world knows to be true about that city.

[Flash Walken]

There's the resolute we know and love.

[Tinordi]

Originally Posted by Resolute 14

1. You obviously have no idea what a "false dichotomy" is.

2. you should have read the second paragraph of that post.

3. You also should have read Flamesaresmokin's post that I replied too. Understanding the context of the post would have made you look like less of a fool.

1. Yes I do. You don't understand the basics of public finances

2. Your point in paragraph two is nonsensical. A windfall is still income and it still matters what you do with it. Imagine you win the lottery a supposed windfall. You could fritter the money away on bad purchases like something you wouldn't use but other people would our you loaned money to people that would not pay you back or to bad business ideas just because they were your friend.

Or you could invest it wisely day in your own education or personal development, a hockey rink in the backyard for your kids to play on, our productive assets that would generate income for your family and yourself for years.

Under your sense, because the money was unexpected and not already allocated then it wouldn't matter between the two options on how to spend it.

I hope you understand the stupidity of that.

3. I understood the context of the quoted post just fine and suggest you get a better sense of it yourself before you make laughably absurd statements.

[Cleveland Steam Whistle]

Originally Posted by Tinordi

Laugh.

Utterly baseless

The studies I posted are just the tip of the iceberg in the litany of reviews by independent economists concluding that public arena investments are a colossal waste of money.

Their methodology is spot on and the reason they have published these papers is to roundly discredit and attack the baseless methodology used by the sporting industries and related parties who publish "economic impact analysis" reports that are not worth the paper they're printed on.

Unless you're smarter than a canon of economic literature I'd stop throwing out baseless claims.

The article you posted ( I could only access the one) written by Dennis Coates was actually incredibly weak. It was pure academia, with little to no actual concrete examples test cases. It was litterally a book report for lack of a better word that did nothing by say that numerous other people wrote or studied this and said X or Y, with out providing any substantial data to back up the claims. I'm not against higher education (I value degrees and have one) and class room learning, but that piece has 0 actual business use, it was nothing more than saying "a bunch of people said this about this topic". You called the methodology spot on, but I've read that article, what was the methodology used........because it wasn't evident in that article?

For example, it gives the explanation of the "Negative Economic Impact of Sport" into 4 arguments (again none are actually backed up with case studies, just references to other studies):

1. House hold spending on sports - basic claim here is that on a PER household basis people spend the same whether there are sports or not. Meaning if you have a sports team in your town, people won't spend more on the team, they'll simply take money from other spend and put it towards sports, meaning the community doesn't see any increased spend. I wouldn't acutally dispute that point, PER house hold spend makes sense. Some key variables that are missing are the following:
- Do cities with Sports facilities actually attract MORE households to the area? Thus increasing the total pool of money spent in the area (which is good). The PER house hold is only one important variable, the total house holds and total spend are also key.
- What was the time frame on the PER household stats? One year, two years after losing a sports team? The parameters of the study aren't laid out so we don't know if it's citing long term or short term metrics.
- What was the comparison points. Two sepearate communities? One community that lost a team? Methodology isn't clear and it makes a difference.

2. Argument that sports distracts workers and makes them less productive hurting the economy. - Not much needed to say about this. It was simply an incredibly poorly backuped claim. They even used the word MAY RESULT in making the claim, then sited some studies that even the author of this article didn't seem to want to trumpet too hard.

3. Argument that it would take away from funding other areas. Again, simply a weak argument that actually wasn't even backed up with reference to another study, let alone some actual critical data. All it said, again using the word MAY, is that maybe there might be less policeman or something. Rediculously weak argument with no backing.

4. This one was hilarious, and basically irrelevant argument to the story. Making a claim that much of the revenue created by sports franchises goes towards players salaires. Fair. Then goes on to claim that Sports players save more of their money than the average joe, so spend less of it on the local economy???? Really, that's the argument? Then backed up by some loose point about the wealthy saving more? Doesn't mention anything about the wealthy also paying more taxes.

Then the kicker is it goes on to proudly claim that these four examples show that money spent on a sports facility generate less additional income than if spent elsewhere, even though no where in the argument does it remotely show that. It also claims that as long as "all other things are equal" this holds true (which again it still didn't prove that), but it also glosses over the fact that rarely will all things be equal in comparing a city with sports facilities and ones with out, potentially because of what the sports facilities drive into the area.

Regardless, that article was not one of sound methodology. It was exactly what it was meant to be, and academic paper that has little to no business value, and is certainly not a valid businesse case or case study on the topic. It may have been worthy of a B+ in a senior economics class at the UofA, but it's value to making a real business decision is as much as 0. It's a book report, nothing more.

[Resolute 14]

Good grief, Tinordi.

Flamesaresmokin argued that in order to lend funding to arena projects, the government would have to cut funding elsewhere. That, obviously, is a false dichotomy. I merely provided an example where that would not occur. I never said it was likely we would see some "bonus" revenue from rapidly rising resource prices, nor did I say that we must or should spend any such windfall on arenas. I merely offered, in example, a situation where arenas could be subsidized without cutting other services.

Quite obviously you could spend such revenue on any number of projects that some would perceive as having greater public value - and lord knows, Redford certainly would spend it regardless - but that is immaterial to the argument I was offering a rebuttal to.

[Enoch Root]

To add to Cleveland Steam Whistle's post,

re 1) suggesting the household spending remains constant, completely ignores the fact that some people come in from out of town to see the event - spending money, going to restaurants and staying in hotels. Ask any hotellier if sporting events and concerts have an economic impact to them (and that would be entirely from out of town patrons by definition).

2) Only a tenured academic could make those claims with a straight face.

3) This is the big one. One must always ask: who is delivering the message? In a perfect world, an academic could discuss this issue in a fair and unbiased manner. However, this isn't a perfect world. The education system survives almost entirely on public funding. As a result, it is always going to feel underfunded. It is in a constant and perpetual struggle for increased funding. Exactly how would we expect academics to feel about spending public funds on sports?

[Flash Walken]

What do those stupid academics know that anecdotal evidence from a base level service employee can't tell me?

I mean, what has academia ever done for me, anyway?

Nothin', that's what.

Those ivory tower eggheads and their math. Boy, if I ever met one in real life, I'd tell him to stick in his pipe and smoke it!

[valo403]

Originally Posted by Flash Walken

What do those stupid academics know that anecdotal evidence from a base level service employee can't tell me?

I mean, what has academia ever done for me, anyway?

Nothin', that's what.

Those ivory tower eggheads and their math. Boy, if I ever met one in real life, I'd tell him to stick in his pipe and smoke it!

A Ph.D. behind an authors name doesn't mean anything if the argument presented is not supported or well argued. There's nothing wrong with critiquing an academic work based upon something like that, which is exactly what he did.

[Sidney Crosby's Hat]

Blanket statements just don't work. You can't say that no arena or stadium has ever benefitted a community. PETCO Park in San Diego is probably the greatest shining example of an area that got completely revitalized. Gaslamp Quarter is flat out awesome. I've been there 5 times since the park opened in 2004 and it gets better and better every time I go. It's also the reason I visit San Diego so that's at least two people who wouldn't have gone there otherwise.

It's also impressive to see all the condos going up around the park. The area was a wasteland before 2004.

[Enoch Root]

Originally Posted by Sidney Crosby's Hat

Blanket statements just don't work. You can't say that no arena or stadium has ever benefitted a community. PETCO Park in San Diego is probably the greatest shining example of an area that got completely revitalized. Gaslamp Quarter is flat out awesome. I've been there 5 times since the park opened in 2004 and it gets better and better every time I go. It's also the reason I visit San Diego so that's at least two people who wouldn't have gone there otherwise.

It's also impressive to see all the condos going up around the park. The area was a wasteland before 2004.

And how about Winnipeg?

I think most people would agree that the arena helped revitalize the downtown core tremendously.

[Tinordi]

I don't have time to go through Cleveland's "critiques" but they're thoroughly rooted in anecdotal, trivial cases. The article posted that he reviewed is supported by many many many other articles that have come to the same conclusions. This isn't some broad axe to grind, it's using theory and data to come to the same conclusion over and over.

I will address this:

1. House hold spending on sports - basic claim here is that on a PER household basis people spend the same whether there are sports or not. Meaning if you have a sports team in your town, people won't spend more on the team, they'll simply take money from other spend and put it towards sports, meaning the community doesn't see any increased spend. I wouldn't acutally dispute that point, PER house hold spend makes sense. Some key variables that are missing are the following:

Good so you agree that the basic reasoning is sound.

- Do cities with Sports facilities actually attract MORE households to the area? Thus increasing the total pool of money spent in the area (which is good). The PER house hold is only one important variable, the total house holds and total spend are also key.

Very specious to think that a pro sports team attracts more households. Net migration to a city is primarily dependent on economic opportunity and the network effect (for immigrants). Vancouver lost 2000 young families last year all while the Canucks were at the height of their popularity. Why? Economic conditions vastly trumped whether there was adequate pro sport entertainment options.

This point is just not convincing at all. And it stands that pro sports team or not, consumption on entertainment would on the balance be equal with or without pro sports.

- What was the time frame on the PER household stats? One year, two years after losing a sports team? The parameters of the study aren't laid out so we don't know if it's citing long term or short term metrics.

There's a huge canon of economic studies look at household budgets and spending over years of study. The conclusion is sound.

2. Argument that sports distracts workers and makes them less productive hurting the economy. - Not much needed to say about this. It was simply an incredibly poorly backuped claim. They even used the word MAY RESULT in making the claim, then sited some studies that even the author of this article didn't seem to want to trumpet too hard.

Agree this argument is probably the weakest but there still ample reasoning along other lines to not support public financing of pro sports.

Argument that it would take away from funding other areas. Again, simply a weak argument that actually wasn't even backed up with reference to another study, let alone some actual critical data. All it said, again using the word MAY, is that maybe there might be less policeman or something. Rediculously weak argument with no backing.

The fact that you made this point makes me question your ability to evaluate this issue in a reasoned manner. See my posts responding to Resolute on why this is not reasonable. Spending a dollar on something means not spending a dollar somewhere else. You don't need to make a reference to another study the point is so basic.

4. This one was hilarious, and basically irrelevant argument to the story. Making a claim that much of the revenue created by sports franchises goes towards players salaires. Fair. Then goes on to claim that Sports players save more of their money than the average joe, so spend less of it on the local economy???? Really, that's the argument? Then backed up by some loose point about the wealthy saving more? Doesn't mention anything about the wealthy also paying more taxes.

Well here's the argument. Pro sports bring in lots of money and revenue, that revenue will then trickle down to the rest of the economy and rise the tide. But what's been shown is that, in the NHL at least 57% of the revenue goes to players, but those players don't reinject that revenue to the local economy due to the high savings rates. So to say that the new revenue will impact the local economy is not convincing.

On the tax argument, sure millionaires pay more taxes, a pittance compared to the tax revenues that were diverted into paying for the friggin arena in the first place. It's basically a terrible investment of tax dollars out to tax dollars in. Again a very basic point.

Then the kicker is it goes on to proudly claim that these four examples show that money spent on a sports facility generate less additional income than if spent elsewhere, even though no where in the argument does it remotely show that. It also claims that as long as "all other things are equal" this holds true (which again it still didn't prove that), but it also glosses over the fact that rarely will all things be equal in comparing a city with sports facilities and ones with out, potentially because of what the sports facilities drive into the area.

This makes me question whether you read or even understood the article. The address this point directly here:

Siegfried and Zimbalist (2000) recently surveyed the growing
literature on retrospective studies of the economic impact of sports
facilities and franchises on local economies. The literature published
in peer-reviewed academic journals differs strikingly from the
predictions in “economic impact studies.” No retrospective
econometric study found any evidence of positive economic impact
from professional sports facilities or franchises on urban economies.
While evidence exists suggesting that narrowly defined occupational
groups, like workers employed in the sports industry (SIC Code
industry 79 – Recreation and Amusements), benefit from the
construction of new sports facilities, building new sports facilities
and attracting new professional sports teams did not raise income
per capita or total employment in any US city. In fact, some research
has found a negative economic impact of professional sports on urban
economies.

I guess you don't know what econometric studies are, so here's a brief summary. They take observations of factors that affect a dependent variable, in this case economic growth of a municipality and find the correlation between various factors and the dependent variable. The regression analysis will then weight each factor based on how correlated it is the dependent. In order to do this you need observations of cities with both pro sports franchises and those without. By very nature, this analysis baselines between cities or between years. Your criticism is fundamentally invalid and shows that you do not actually understand the points being made.

I honestly appreciate your effort to address this but I think a better approach would have been to come asking questions instead of making more baseless statements.

[Tinordi]

This discussion reminds me of Daniel Kahneman's book Thinking Fast and Slow. In that book Kahneman says that we perceive the world based on a simple fact that what you see is all there is. Going to Ciampa's point that San Diego saw building revitalization around their stadium this effect is in full force. Sure we see those buildings and teh revitalization and then think that that was good because there was a stadium there. What we don't do is ask what would have happened had we not built the stadium and used the tax money say for tax credits for land development in other areas of the city, or for transit improvements along a corridor etc. where we likely have seen the same revitalizing effect only adding to the public good not to private owners of sports franchises.

edit: I highly highly recommend this book

[Sidney Crosby's Hat]

Originally Posted by Enoch Root

And how about Winnipeg?

I think most people would agree that the arena helped revitalize the downtown core tremendously.

No doubt. MTS Centre was an empty old Eaton's building before it was built. At its basest form, the building connected the skywalk so you can walk through downtown without going outside. This helped a lot of businesses in areas like City Place which had a boom simply from the increased foot traffic.

It also resulted in a number of bars, restaurants, hotels and condos being developed. Downtown Winnipeg used to be a place I avoided at all costs. I lived in Winnipeg from 1992 to 1996 and 2002-05. Before MTS Centre, I could count on one hand the number of times I went downtown. Now, if I was to ever move back I would live downtown in one of the new condo developments.

And really, that's what you need to truly revitalize the core. Arena creates activity around it (bars/restaurants) which makes it more of a destination, condos get built, more bars and restaurants and shopping get built as demand for services increase, more condos and office towers get built and the cycle goes on.

[JayP]

Originally Posted by Sidney Crosby's Hat

Blanket statements just don't work. You can't say that no arena or stadium has ever benefitted a community. PETCO Park in San Diego is probably the greatest shining example of an area that got completely revitalized. Gaslamp Quarter is flat out awesome. I've been there 5 times since the park opened in 2004 and it gets better and better every time I go. It's also the reason I visit San Diego so that's at least two people who wouldn't have gone there otherwise.

It's also impressive to see all the condos going up around the park. The area was a wasteland before 2004.

Blanket statements just don't work, but cherry-picking one example does?

Overall, the research shows that there isn't any economic benefit. That is an average of all the sample points - obviously not all are going to be the same for every example. Maybe it works for some stadiums, but there's also cases where it's a disaster. It's folly to place all your eggs in one basket and pray that you turn out on the good end instead of looking at the aggregate result.

And like Tinordi said, too much credit goes towards these stadiums for "revitalizing" an area without considering all the other work that goes into it. San Diego could've very easily done the same thing with the Gas Lamp Quarter without a new stadium. Awesome pedestrian areas exist all over the world without being in the shadows of a new stadium - what is it about San Diego that makes the stadium essential to it's success?

[seattleflamer]

Originally Posted by Enoch Root

And how about Winnipeg?

I think most people would agree that the arena helped revitalize the downtown core tremendously.

Not saying the arena didn't help, I'd just point out the Exchange District was well on its way to revitalization even in the late 90s.

MTS is the cherry on top but there is a lot to do in that area with or without the arena.