Some dispute extent of ballpark's economic benefit claim
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When the city of St. Paul applied for $27 million to build a new ballpark for the Saints, it estimated the economic benefit at $10 million per year.
But an analysis buried in the city's 500-page application to the state says the economic impact of the ballpark would be a fraction of that amount.
Gov. Mark Dayton will announce the winners today in a $47.5 million statewide competition designed to spur job creation. St. Paul's application is widely regarded as a top contender, if not a shoo-in.
The Minnesota Department of Employment and Economic Development gave the project one of the top scores among the 90 applications received, based partly on the ballpark's projected economic benefit.
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The $10 million-a-year estimate appears multiple times throughout St. Paul's application. It refers to the amount of money people are expected to spend outside the ballpark when they attend a game.
But the application provides no documentation on how the city arrived at that number. In fact, elsewhere in the application, St. Paul suggests the economic impact would be much less.
The only part of the application that details the economic impact estimates the fans will spend at most $3.8 million more than they already do in the area. And even that may overstate the case, according to John Crompton, a Texas A&M University professor whose research provides the basis for the city's analysis.
"Really your residents could care less how much stuff is sold. What they care about is how much money ends up in our pockets," Crompton said.
Crompton has conducted dozens of economic impact analyses on sports facilities. St. Paul's application cites Crompton's research.
A lot of the money spent in St. 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, Crompton explains.
"I have no idea how they get from the $650,000 - $950,000 range to $10 million," Crompton said. "Certainly, in terms of economic impact, I can't even guess how they do that."
Mayor Chris Coleman's office offered no documentation to back up the $10 million claim but the city stands by it, said Joe Campbell, communications director for St. Paul.
"Any number that you throw out there is an estimate," Campbell said. "I think we're confident that it will be close to that number."
For their part, the Saints have largely avoided making predictions about their economic impact. In an interview earlier this summer, team owner Mike Veeck said "trickle-down numbers" would never pass his lips.
But the team expects more businesses will benefit from a ballpark next to the city's thriving Farmers Market than from the current location surrounded by industrial property and railroad tracks.
"Right now we help one business, down the street, Gabe's By the Park," Saint's Vice President Annie Huidekoper said. "We all love Gabe's. They're a long-time partner, but there'll be at least 10, probably 20 businesses that will have a noticeable uptick, thanks to having 400,000 [a year] people in Lowertown."
Matt Kramer, former DEED commissioner and Republican Gov. Tim Pawlenty's chief of staff, is one of the ballpark's biggest boosters. Kramer, currently the president of the St. Paul Area Chamber of Commerce, said the trouble with forecasting the economic impact of the project is that the new location offers many more opportunities than the current one.
"And that changes these economic development numbers tremendously and allows for a certain fudge factor that I think is reasonable and appropriate," Kramer said. "You cannot sit here and pretend that we can calculate what a number is going to look like when the variables are so, so different."
Kramer said, if anything, the new ballpark would bring more than $10 million in annual economic impact to St. Paul.
Economist Art Rolnick argues the public should be dubious of claims like that.
"These economic impact studies you could do for any company. So which ones do you invest in? The answer is: you keep taxes as low as you can on all business. You don't want the government to be picking winners and losers," said Rolnick, the former vice president of Federal Reserve Bank of Minneapolis and now a senior fellow at the University of Minnesota's Humphrey School.
But Rolnick made the same point when the Vikings and the Twins sought a great deal more public money for their stadiums. Those subsidies won approval.
