New Minnesota Vikings Stadium Thread (Minneapolis, Ramsey: subsidized, to live, costs)

[Glenfield]

Here are a couple of studies, or references to them, that conclude that there is no positive economic benefit from the construction of a new stadium.

http://www.cppa.utah.edu/publications/finance_tax/Sports_Stadiums.pdf (broken link)

Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost? - Brookings Institution

[southernsmoke]

Originally Posted by Ghengis

seriously? you realize that when a business sells, all assets and liabilities transfer to the new owner right? presumably the bill to build the stadium would likely include a provision for the team to sign a lease at the new place, but maybe they're actually forgetting that part!

hey legislature! don't forget the part where you require the Vikings to sign a lease.

lol... but seriously, everybody understands this, right?

[snofarmer]

A tidbit of info.

A good friend owned a business, it went union.
sooo he sold it to his Dad.
Guess what? No more union as the new owner was not bound to the contract, he fired everyone and started over.

Don't you think the state had a contract with NWA and they pulled out.
A lease means nothing to these fatcats.

I don't mind the ribbing but remember I'll give it right back.
Not everyone gets my sarcasm.

I do realize it will get built one way or another in the next 15yrs or sooner.

I just think some have misplaced their priorities as entertainment is not vital.
I guess you have noticed I'm for less Govt. involvement.

You may even see my at a game or two.

Originally Posted by Ghengis

seriously? you realize that when a business sells, all assets and liabilities transfer to the new owner right? presumably the bill to build the stadium would likely include a provision for the team to sign a lease at the new place, but maybe they're actually forgetting that part!

hey legislature! don't forget the part where you require the Vikings to sign a lease.

[Ghengis]

Originally Posted by Glenfield

Ok, let's take a look at the numbers. This is what Mondale's numbers assume. On the cost side, we have interest on $300 million at 5%. That's $15 million per year. On the revenue side, we have $12.5 million per year from income taxes on players' salaries plus $5.3 million in sales tax, primarily on liquor.

Now, the state's share is being talked as being, at best, half a billion. So that $25 million per year in debt service costs. Optimistically. Maybe the state has to kick in more but let's call it $25 million in costs.

Let's take Ted at this word that the players will pay $12.5 million a year in come taxes. On the sales tax side, there is no increase in revenue. People are not going to drink more or less because of the stadium. They'll drink at home, at the bar, or at the stadium, but the public, in total, is only going to spend a certain amount and that does not vary.

So where are we? The cost per year is $25 million per year and the revenue is $12.5 million, leaving us $12.5 million per year in the hole. Oh, yeah. We have to pay back the $500 million at the end of the 30 years.

You can make arguments that it's a nice amenity, we love the Vikings, people in other places will think we're fools for not jumping on the stadium bandwagon, or just plain I want this. But you cannot make a case that this will be a financially positive venture for the state and it's taxpayers.

Your leaving out the actual economic impact in the jobs created in building and maintaining a stadium. Estimates on this would be that 7,500 jobs would be created with between $300M - $500M (conservative estimates) paid in wages and benefits. 95% of these jobs went to Minnesotans during the building of TCF Stadium.

Additionally, an estimated 3,400 jobs would be created to support the stadium once it is operational. Presumably these would also include hospitality, restaurant, and manufacturing/supplier industies. Many of these jobs would be putting unemployed Minnesotans back to work and off the unemployment lists and further contributing to local economies and tax revenues.

Vikings stadium would bring jobs - NUJournal.com | News, Sports, Jobs - The Journal, New Ulm, MN

Sports commission: Vikings stadium would create jobs | Minneapolis / St. Paul Business Journal

It would also be false to assume that everyone attending the Vikings games as well as conventions, other sporting events, concerts, etc. would all be from in state and spending a great deal of money that would otherwise not be spent in the state.

The 2010 Final Four in Indianapolis was estimated to bring in $30M - $50M.
Experts Debate Economic Impact Of Final Four - Sports News Story - WRTV Indianapolis

The 2011 Final Four in Houston was estimated at $38M
NCAA tourney brings major economic impact to Houston | abc13.com

Even the most conservative estimates for Super Bowls put the figure at $100M for each city that hosts that event. Almost all coming from out of state visitors. Getting these visitors coming into the area also means they will often be coming back once they see what we have to offer, impossible to quantify but not to presume for anyone that has traveled and returned back to a city we enjoyed visiting in the past.

HHH Metrodome - A Visitor's Perspective - Twinkie Town

[Laggard]

Hopefully if they build it downtown it will create a vibrant neigborhood and business district near the stadium just like at the metrodome. No, wait.... Nevermind

[Laggard]

Originally Posted by Ghengis

Your leaving out the actual economic impact in the jobs created in building and maintaining a stadium

Well heck then, lets come up with some funding and hire a bunch of people to fix every damn pothole that we ALL deal with every day year round. If you really want to drop a billion just to create jobs then make it something useful. And talk about an amenity! Imagine trying to lure people here with the knowledge that they can safely make it to work without breaking a strut. And what would someone moving here care more about? Good roads or being able to watch the Vikings eight sundays a week?

[Ghengis]

Originally Posted by Laggard

Well heck then, lets come up with some funding and hire a bunch of people to fix every damn pothole that we ALL deal with every day year round. If you really want to drop a billion just to create jobs then make it something useful. And talk about an amenity! Imagine trying to lure people here with the knowledge that they can safely make it to work without breaking a strut. And what would someone moving here care more about? Good roads or being able to watch the Vikings eight sundays a week?

you should take personal responsibility and avoid the pot holes but thanks for supporting our car repair shops.

[Laggard]

Originally Posted by Ghengis

you should take personal responsibility and avoid the pot holes but thanks for supporting our car repair shops.

Hey, without driving on the sidewalk there is no way to avoid every pothole.

[Glenfield]

Originally Posted by Ghengis

Your leaving out the actual economic impact in the jobs created in building and maintaining a stadium. Estimates on this would be that 7,500 jobs would be created with between $300M - $500M (conservative estimates) paid in wages and benefits. 95% of these jobs went to Minnesotans during the building of TCF Stadium.

Additionally, an estimated 3,400 jobs would be created to support the stadium once it is operational. Presumably these would also include hospitality, restaurant, and manufacturing/supplier industies. Many of these jobs would be putting unemployed Minnesotans back to work and off the unemployment lists and further contributing to local economies and tax revenues.

Vikings stadium would bring jobs - NUJournal.com | News, Sports, Jobs - The Journal, New Ulm, MN

Sports commission: Vikings stadium would create jobs | Minneapolis / St. Paul Business Journal

It would also be false to assume that everyone attending the Vikings games as well as conventions, other sporting events, concerts, etc. would all be from in state and spending a great deal of money that would otherwise not be spent in the state.

The 2010 Final Four in Indianapolis was estimated to bring in $30M - $50M.
Experts Debate Economic Impact Of Final Four - Sports News Story - WRTV Indianapolis

The 2011 Final Four in Houston was estimated at $38M
NCAA tourney brings major economic impact to Houston | abc13.com

Even the most conservative estimates for Super Bowls put the figure at $100M for each city that hosts that event. Almost all coming from out of state visitors. Getting these visitors coming into the area also means they will often be coming back once they see what we have to offer, impossible to quantify but not to presume for anyone that has traveled and returned back to a city we enjoyed visiting in the past.

HHH Metrodome - A Visitor's Perspective - Twinkie Town

I was commenting on the analysis in the MinnPost.com article here:

MinnPost - Jay Weiner: Tax revenues and a new Vikings stadium: A payback?

and now you are introducing new factors. I think some of those may be legitimate but others are not. Let me try to address these new factors.

I think your point on the construction jobs is a good one. I don't know if the numbers are real, but let's accept them at face value. The problem is that they only last as long as it takes to build the stadium, so they cannot be used to offset the costs for the entire time that it would take to pay off the debt. And forget the benefits... only wages generate disposable and taxable income.

As to the 3,400 service jobs, I don't see this one. We already have a stadium and a team so these are not going to be new jobs but just a continuation of jobs that already exist. Since these jobs are not additive, we can't count the taxes paid by these workers as an offset to the costs.

As to out of state people attending games, conventions, etc., well again, we already have a team and a stadium. There is not going to be an influx of new people coming; they're already coming for the games etc., so this is not a new source of revenue.

The same is true of the Final Four, the Super Bowl etc. You might want to argue that a new stadium would give us the opportunity to host events that we wouldn't have without it, but the Metrodome has already hosted a Final Four and whether or not we'd get a Super Bowl in icy MN is pure speculation. Again, these are events that we've already hosted or that occur once in a great while. They are not new or reoccurring sources of revenue.

So let's tally it up. By my calculations, we are $12.5 million in the hole. The offset is the construction jobs, but they only generate income while the stadium's under construction. So maybe they offset two years of net cost. Then we're back to paying $12.5 million per year. And the $500 million at the end.

Now, since we're trying to take a bigger view of the revenue side, let's make sure we do that on the cost side, too. We're going to have to consider the infrastructure costs. If it's built in Arden Hills, we'll need all new roads to access the area. Same things if it's built over at the farmer's market location. So that another $300 million. And we have to haul a lot of construction materials in to build the thing. This will accelerate the wear and tear on roads and bridges around the state, meaning they'll have to be replaced sooner. There's another couple of hundred million. So now the cost is closer to a billion and we're paying $50 million to service that leaving us $37.5 million in the whole each year.

There are tremendous hidden costs to building a stadium, as New Yorkers have found out. If and when we go ahead with this thing, it's going to cost a lot more than the advertised price.

http://www.fieldofschemes.com/news/archives/001429.html (broken link)

Nope, this still is just a big money loser. That doesn't mean that a new stadium can't be justified, but it cannot be justified financially.

[Ghengis]

Originally Posted by Glenfield

As to the 3,400 service jobs, I don't see this one. We already have a stadium and a team so these are not going to be new jobs but just a continuation of jobs that already exist. Since these jobs are not additive, we can't count the taxes paid by these workers as an offset to the costs.

As to out of state people attending games, conventions, etc., well again, we already have a team and a stadium. There is not going to be an influx of new people coming; they're already coming for the games etc., so this is not a new source of revenue.

The same is true of the Final Four, the Super Bowl etc. You might want to argue that a new stadium would give us the opportunity to host events that we wouldn't have without it, but the Metrodome has already hosted a Final Four and whether or not we'd get a Super Bowl in icy MN is pure speculation. Again, these are events that we've already hosted or that occur once in a great while. They are not new or reoccurring sources of revenue.

they count if the team leaves and these sources leave with them.

I've never maintained that the stadium would be a profit center, but the perception that some have that we are giving Zygi a billion dollars is wrong.