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Wednesday, May 13, 2009

Stanford Economist Refutes Stadium Benefits

Posted by Sarah Mirk on Wed, May 13, 2009 at 5:09 PM

Last night when Commissioner Randy Leonard and Merritt Paulson pitched the plan to use $42 million in Lents Urban Renewal funds to build the AAA Beaver's ballpark in Lents, the discussion hinged on whether the pricey stadium will actually revitalize the Lents neighborhood. Today Stanford economist Roger Noll told me, "The answer to that question is 'No.'"

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Lents' Fantasy Baseball Stadium

A Lents neighbor last night questioned Leonard about what sort of research the city has done into the real economic impact of a stadium in Lents and mentioned a Brookings Institute study (pdf) that found stadiums have "an extremely small (perhaps even negative) effect on overall economic employment and activity" in a city.

Leonard responded that besides the "intuitive" benefits of a stadium (like, for example, the pride of Lents children who get to grow up in "the home of the Beavers"), a Stanford study of the Major League Baseball stadium in San Diego found it was a "tremendous success" both for the city and the team. Leonard and Paulson noted that, yes, the San Diego stadium was major league, not AAA, and in downtown San Diego, not several miles away from the urban core, but say it is still a comparable case.

Well, says Roger Noll, a Stanford econ professor who co-wrote the Brookings Institute study, the study Leonard is leaning on is correct in some ways. But it doesn't mean a AAA baseball stadium will be a good investment for Portland or Lents.

"The way minor league teams make a substantial amount of their income is concessions. The point of a modern stadium is to keep all the money spectators are spending within the stadium, not in the area around it," says Noll. "A baseball stadium is going to bring people just before or just after the games to a bar in the neighborhood. That's all there is."

The key point of the Stanford "tremendous success" study is that the stadium did well because "substantial urban redevelopment was integrated at an early stage into the overall project." Noll says the only stadium he knows of that's benefited its surrounding neighborhood is Fenway Park in Boston, which is too small to have a substantial concessions stand so people head out to neighborhood restaurants. So if you build it, they will come - but HOW you build it determines whether they'll come and spend money in the neighborhood.

But even then, Noll notes, "Stadiums just don't work as an engine of growth. The best they can do is redistribute wealth within an urban area." That means Portlanders will spend their entertainment budget on baseball in Lents rather than, say, a movie downtown. "Some neighborhood's gain is some other neighborhood's loss." The benefit of the San Diego stadium is arguable. According to Noll, many stores in the downtown Gaslight District (itself an urban renewal area) have closed recently because stadium-goers hogged all the parking and the District's former customers went elsewhere.

If Lents's Urban Renewal fund does gives $42 million to the Beavers stadium, it will mean slashing their entire planned budget for affordable housing and small business development in 2010 and 2011. "This is a risk," said Leonard last night. "I know that there are cameras here and that there's a chance that in five years I might be sitting here strapped to a chair, forced to listen over and over to what I've said here today."

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