Minnesota citizens about to get screwed-New stadium

[SkyDekker 1,121]

Quote

what's the concept? That public investment in these types of arrangements pay off? I believe there are more loss events like this than the fantasy of the profitable investment. Given the unequal plane of the negotiations between cities and team owners, this shouldn't be a surprise.

The concept is that public-private partnerships can work well. That the concept shouldn't be just simply dismissed.

By the way, the city had known for quite some time that they had a tenant which was nearing the end of a lease.

[Bolas 5]

Quote

Quote

Quote

BTW, one of these deals cost the County of Alameda 15-20M/year in excess costs for the Raiders deal.

So, they fucked up on the deal. That doesn't invalidate the concept.

what's the concept? That public investment in these types of arrangements pay off? I believe there are more loss events like this than the fantasy of the profitable investment. Given the unequal plane of the negotiations between cities and team owners, this shouldn't be a surprise.

Can we stop calling these investments? Unless if successful, money is directly paid back with interest, they aren't investments.

A city that spends $x million on an item, even if it brings in $x million in new business still is in the red as they only get a portion of that back in taxes.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[SkyDekker 1,121]

Quote

Can we stop calling these investments? Unless if successful, money is directly paid back with interest, they aren't investments.

Why? Return on investment can be non-monetary. When I invest in my child's education, I do not expect to get that money paid back with interest by my child.

When a municipality invests in their community, they similarily do not look at the return as solely a financial matter.

[kelpdiver 2]

Quote

Can we stop calling these investments? Unless if successful, money is directly paid back with interest, they aren't investments.

That would be my point, but I was asking him to clarify his position which is that they are in fact positive investments.

Quote

A city that spends $x million on an item, even if it brings in $x million in new business still is in the red as they only get a portion of that back in taxes.

That would preclude multiplier effects. Nothing says that spending = new business. The amount of business around the game is a pretty number...the problem is in how much of it is NEW business rather than merely dollars displaced from elsewhere.

Which brings us back to basic economics. Having an NFL team doesn't change the disposable income of the residents. If I spend $420 on season tickets for the Cal Bears as I have this season, that's money that won't be spent on the Giants, or on weekend races. It also takes away 10+ Saturdays where I might do a number of things with other vendors.

[Bolas 5]

Quote

Quote

Can we stop calling these investments? Unless if successful, money is directly paid back with interest, they aren't investments.

Why? Return on investment can be non-monetary. When I invest in my child's education, I do not expect to get that money paid back with interest by my child.

When a municipality invests in their community, they similarily do not look at the return as solely a financial matter.

So the government should treat us as children?

The issue is it should be looked at as a solely financial matter. Expected tax revenue increases as well as what monetary value they're getting for their "investment."

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[Bolas 5]

Quote

my objection is principle based in that I consider any true investment worth doing would be taken up by private investors and if there is no private sector competition trying to participate in such a great deal, then likely the public sector is fooling themselves. Especially when it's something so tangible like a stadium used for revenue generating events.

Why would one want private investors who demand ROI and a piece of the profits when they can get "free" government $$$ simply by saying they'll bring in additional money to the area and letting them use the stadium when they aren't using it neither of which costs them anything or very little.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[SkyDekker 1,121]

So, a $1 billion dollar infrastructure investment in the local community is a bad thing?

The stadium is already publicly owned. Letting it sit vacant will reduce income in property taxes and reduce employment and reduce income from stadium usage.

You can't look at this is new money for new business. This is an investment to maintain current employment and revenue over the long term. Plus it allows for a large local investment which will generate employment.

[kallend 1,623]

It's still welfare for the rich.

open.salon.com/blog/laura_wilkerson/2011/10/27/bad_sports_giving_taxpayer_wealth_to_the_already_wealthy

...

The only sure way to survive a canopy collision is not to have one.

[SkyDekker 1,121]

So is air traffic control, the poorest don't fly.
So is building roads, the poorest don't have cars and certainly don't own transportation companies.
So are farm subsidies.
So are subsidies that stimulate business and provide employment.

The armed forces is probably the largets form of welfare for the rich. It isn't only publicly funded, but it uses the blood of the poorest to protect the richest. And makes people incredibly wealthy along the way.

Welfare for the rich is a poor excuse. Every investment made by public money helps a rich person along the way.

[ryoder 1,382]

Quote

So is building roads, the poorest don't have cars and certainly don't own transportation companies.

Humans have built and maintained roads for thousands of years before motor vehicles existed. It is how humans get from point A to point B w/o trespassing on private property. You can walk, jog, ride a bike along roads.

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[SkyDekker 1,121]

Quote

Humans have built and maintained roads for thousands of years before motor vehicles existed. It is how humans get from point A to point B w/o trespassing on private property. You can walk, jog, ride a bike along roads.

Perfect, build sidewalks with public money for recreation and let the transportation companies and automotive companies, who make incredible amounts of money off highways and paved roads, fund the building and maintenance.

Or maybe investments made with public money aren't really made based purely on financial ROI calculations? Maybe we also look at societal benefit? Or maybe we look at jobs created? On a local level, maybe we look at how it affects the liveability of a community?

Or we can be shortsighted and only look at the financial ROI, but then you really should do that with all expenditures of public money.

[Bolas 5]

Quote

So, a $1 billion dollar infrastructure investment in the local community is a bad thing?

The stadium is already publicly owned. Letting it sit vacant will reduce income in property taxes and reduce employment and reduce income from stadium usage.

You can't look at this is new money for new business. This is an investment to maintain current employment and revenue over the long term. Plus it allows for a large local investment which will generate employment.

So they have to spend $x million just to maintain the status quo?

Okay, they should look at it as "How much do we predict to lose?" and see if the predicted losses in direct tax revenue, not business loss, comes anywhere near what they'd have to pay.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[Bolas 5]

Quote

Or maybe investments made with public money aren't really made based purely on financial ROI calculations? Maybe we also look at societal benefit? Or maybe we look at jobs created? On a local level, maybe we look at how it affects the liveability of a community?

Or we can be shortsighted and only look at the financial ROI, but then you really should do that with all expenditures of public money.

Too much of the former and not enough of the latter is why government debt and spending are out of control.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[kelpdiver 2]

Quote

The stadium is already publicly owned. Letting it sit vacant will reduce income in property taxes

again, I ask, what property taxes are you talking about? Publicly owned properties don't pay taxes...what would be the point?

[SkyDekker 1,121]

In this case it is an indirect property tax by the way of fees paid by users of the public facility.

Property tax was probably not the correct wording, but still a loss of revenue.

[kelpdiver 2]

Quote

In this case it is an indirect property tax by the way of fees paid by users of the public facility.

Property tax was probably not the correct wording, but still a loss of revenue.

how much revenue? a few hundred thousand or a million, at a cost of half a billion? That's municipal math there.

Employment, otoh, still falls under the displacement discussion. These people could be selling hot dogs at this stadium, or at a concession at the alternative activities people would be doing instead.

[SkyDekker 1,121]

Quote

how much revenue? a few hundred thousand or a million, at a cost of half a billion? That's municipal math there.

Don't know what the deal calls for. Plus the municipality isn't paying half a billion.

Quote

These people could be selling hot dogs at this stadium, or at a concession at the alternative activities people would be doing instead.

Uhm no. Only if the venues for alternate activities are already running at max capacity. If not, it would be a net loss in employment.

You are also discounting the employment generated by $1 billion investment in "infrastructure". Lots of construction jobs for that area.

[kelpdiver 2]

Quote

Don't know what the deal calls for. Plus the municipality isn't paying half a billion.

The state puts in 348, the city 150. 498M.

Quote

Uhm no. Only if the venues for alternate activities are already running at max capacity. If not, it would be a net loss in employment.

As I wrote, the battle for discretionary income is a zero sum game.

Quote

You are also discounting the employment generated by $1 billion investment in "infrastructure". Lots of construction jobs for that area.

A billion spent in road construction (fix bridges, potholes, traffic) would deliver the same jobs but much more benefit. Just consider the spending on car repairs due to poor roads, or the economic losses due to traffic.

If these benefits exist as you say, they would be measurable and proveable and thus far the opposite has been established.

[SkyDekker 1,121]

Quote

A billion spent in road construction (fix bridges, potholes, traffic) would deliver the same jobs but much more benefit. Just consider the spending on car repairs due to poor roads, or the economic losses due to traffic.

Except now you have to spend a billion. In this case you are spending less than half of that, yet still getting the larger investment in your community.

[marks2065 0]

Quote

Quote

Don't know what the deal calls for. Plus the municipality isn't paying half a billion.

The state puts in 348, the city 150. 498M.

Quote

Uhm no. Only if the venues for alternate activities are already running at max capacity. If not, it would be a net loss in employment.

As I wrote, the battle for discretionary income is a zero sum game.

Quote

You are also discounting the employment generated by $1 billion investment in "infrastructure". Lots of construction jobs for that area.

A billion spent in road construction (fix bridges, potholes, traffic) would deliver the same jobs but much more benefit. Just consider the spending on car repairs due to poor roads, or the economic losses due to traffic.

If these benefits exist as you say, they would be measurable and proveable and thus far the opposite has been established.

the state is getting a billion dollar investment into itself fo only 1/3 of the total. this is a win for the state and the people of Minnesota.

[Bolas 5]

Quote

Quote

A billion spent in road construction (fix bridges, potholes, traffic) would deliver the same jobs but much more benefit. Just consider the spending on car repairs due to poor roads, or the economic losses due to traffic.

Except now you have to spend a billion. In this case you are spending less than half of that, yet still getting the larger investment in your community.

It's not an either or. Road maintenance is a necessary and core expense. A stadium is not. Additionally, some of the jobs created by the stadium may not produce any tax revenue as they may use illegal labor: construction, maintenance, concessions, security, etc.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[Southern_Man 0]

Quote

Quote

Quote

A billion spent in road construction (fix bridges, potholes, traffic) would deliver the same jobs but much more benefit. Just consider the spending on car repairs due to poor roads, or the economic losses due to traffic.

Except now you have to spend a billion. In this case you are spending less than half of that, yet still getting the larger investment in your community.

It's not an either or. Road maintenance is a necessary and core expense. A stadium is not. Additionally, some of the jobs created by the stadium may not produce any tax revenue as they may use illegal labor: construction, maintenance, concessions, security, etc.

Even illegal labor generates tax revenue, especially property tax and sales tax, which are main state/local revenue generators. Even illegal workers have to live somewhere and buy stuff.

"What if there were no hypothetical questions?"

[SkyDekker 1,121]

Quote

It's not an either or. Road maintenance is a necessary and core expense. A stadium is not.

Stadium is already there. Are you advocating that municipalities do not maintain and improve buildings and structures they own?

Quote

Additionally, some of the jobs created by the stadium may not produce any tax revenue as they may use illegal labor: construction, maintenance, concessions, security, etc.

You are starting to grasp at straws.

[billvon 2,396]

>the state is getting a billion dollar investment into itself fo only 1/3 of the
>total. this is a win for the state and the people of Minnesota.

It might well be. Socialism is often a win/win proposition.

[grimmie 173]

One of the main reasons many cities, counties and states are broke is due to their "investments" in business deals such as stadiums, parking garages, convention centers and more.
Here is a prime example;
I worked for the Ontario, California FD for 26 years. The city built a convention center close to the airport and hotels. It was a small center that has not atttracted the events that were promised. The center loses $2.5 million per year.
The city then built an "events Center", no where near the convention center. It is a 10,000 seat arena with luxury seating. It was supposed to be a $66 million building. When it was completed it ended up costing $136 million! The city then gave the management to AEG. The city is guaranteed $1 million per year return. Now the only tenant is the Ontario Reign, ECHL hockey team.
Both of these projects were shopped to private investors and companies, including AEG. No one bit, because the return just isn't there. But the egos on city council love having their names on the side of the buildings, no matter what it costs the taxpayers.
Now the city is looking at purchasing Ontario International Airport back from the City of Los Angeles. The city sold it to LAWA in the early 70's for next to nothing. This will take about $150 million.
City leaders rarely make prudent business decisions. The city of San Diego wants to ad a $550 million dollar addition to the convention center. Taxpayers will take it in the shorts for this deal.
A city has THREE main jobs. Pick up the trash, keep the bad guys in jail and keep the fires put out. Investing in projects shouldn't be one of them.
HOWEVER, cities, and other jurisdictions, SHOULD work to lure and keep businesses in their areas, using all legal means available, such as land, tax breaks, etc.
The City of Sharon, PA, built a parking garage in 1974. They were told that even if it was full 24 hours a day, 365 days per year, it wouldn't pay for itself. It was built and now sits mostly empty, as it has ever since it was finished. The city floated municipal bonds to pay for it. They pay $880,000 per year still, until 2016 to pay it off!!!
Do cities need sports teams? Sure. But at what costs and benefit?
Government officials are horrendous at doing the dollars and cents math on projects.
Just my 2 cents worth...