In Worcester, MA, sports economist Zimbalist backs a stadium deal, citing contingencies; other experts disagree
Remember Andrew Zimbalist, the sports economist who, boosting his clients, unwisely predicted Atlantic Yards would be a gold mine for the city and state? Not only were his methods non-credible, he assumed a full buildout on the most optimistic schedule--which, of course, didn't happen.
Well, he's back, working for a city helping recruit a team, rather than warning--as he has for most (but not all) of his career--that such deals are dangers.
Stadium deal watchdog Neil deMause has been keeping track of the effort by Worcester, MA, to draw the Pawtucket (RI) Red Sox, a Triple A team. As he wrote 11/7/17, Zimbalist was actually working for both Worcester and the state of Rhode Island at the time.
deMause, noting a similar episode, pointed out a January 2013 post that Zimbalist was working as a consultant for Major League Baseball while supporting a new stadium for the Tampa Bay Rays, while omitting that client when talking to the Tampa Bay Times.
Fast forward to last week, when deMause pointed 8/20/18 to the team's move to Worcester, with a stadium funded by city borrowing $100.8 million, with the team repaying $30.2 million over 30 years and the rest coming from TIF, or tax-increment financing, money from the associated development.
deMause calls it "easily the largest public subsidy for any minor-league baseball team ever,"
Zimbalist says contingencies needed
The local news site MassLive.com, reported 8/21/18 how Zimbalist defended his advice, saying the key to the deal was development beyond the stadium, including market-rate housing, two hotels and 65,000 square feet of retail space.
From the article:
Maybe he learned a lesson from Atlantic Yards, where the contingencies were absent.
Experts disagree
deMause followed up 8/22/18, noting that Worcester Business Journal queried ten sports economists and stadium experts (including himself), learning that all but Zimbalist questioned the deal.
Wrote deMause:
Well, he's back, working for a city helping recruit a team, rather than warning--as he has for most (but not all) of his career--that such deals are dangers.
Stadium deal watchdog Neil deMause has been keeping track of the effort by Worcester, MA, to draw the Pawtucket (RI) Red Sox, a Triple A team. As he wrote 11/7/17, Zimbalist was actually working for both Worcester and the state of Rhode Island at the time.
deMause, noting a similar episode, pointed out a January 2013 post that Zimbalist was working as a consultant for Major League Baseball while supporting a new stadium for the Tampa Bay Rays, while omitting that client when talking to the Tampa Bay Times.
Fast forward to last week, when deMause pointed 8/20/18 to the team's move to Worcester, with a stadium funded by city borrowing $100.8 million, with the team repaying $30.2 million over 30 years and the rest coming from TIF, or tax-increment financing, money from the associated development.
deMause calls it "easily the largest public subsidy for any minor-league baseball team ever,"
Zimbalist says contingencies needed
The local news site MassLive.com, reported 8/21/18 how Zimbalist defended his advice, saying the key to the deal was development beyond the stadium, including market-rate housing, two hotels and 65,000 square feet of retail space.
From the article:
"The main reason it pays out economically, unlike other places, is because there's a committed investment," Zimbalist said. "Very often that doesn't happen and the whole deal turns out to be economically wasteful."
Zimbalist also said he made conservative estimates about costs and revenues, and included a 5 percent contingency in the plan.
..."Whenever you invest in anything, particularly a 30-year project, there's risk involved. Anyone who tells you otherwise is dishonest," he said. "The questions I always ask are whether the potential returns are worth the risk and if you have made contingencies to control the risk. And I think they have, and there's a potentially very large reward in economic and social terms for the city."(Emphases added)
Maybe he learned a lesson from Atlantic Yards, where the contingencies were absent.
Experts disagree
deMause followed up 8/22/18, noting that Worcester Business Journal queried ten sports economists and stadium experts (including himself), learning that all but Zimbalist questioned the deal.
Wrote deMause:
And also, those with long memories will recall that this is the exact same argument that Zimbalist used on a previous paid gig, for then-New Jersey Nets owner Bruce Ratner, in which he determined that a new Brooklyn arena would lose money for the public, but taxpayers would make it back from all the new housing that would go up alongside it. At the time, I also called for a second opinion from another sports economist, in that case Rod Fort of Washington State University (he’s now moved on to the University of Michigan, who noted this:My comment:
“I would never have undertaken this exercise. In essence, Andy is trying to forecast 33 years hence, and he’s forecasting housing markets, which there are other people spending all their waking moments on. What you see is assumption after assumption after assumption after assumption.”
Notably, @RodneyFort said of Zimbalist's #AtlanticYards projection "Andy is trying to forecast 33 years hence"— Norman Oder (@AYReport) August 22, 2018
Zimbalist assumed full buildout in 10 years of construction. More like 25 years (after project re-approval in 2009), as I wrote for @thebridgebk https://t.co/DbmnMTR5FV
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