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Do financial projections for the new Braves stadium add up?

Cobb commissioners tout a consultant’s rosy economic forecast—and downplay costs to the county.

Rendering of proposed development at the new stadium
Atlanta Braves

If the new Atlanta Braves stadium becomes the economic engine that boosters predict, it would be as likely as seeing Julio Teheran throw a perfect game. Economists say they know of no major league ballparks that justify their public subsidies. "Study after study after study agrees with this finding," said sports economist J.C. Bradbury of Kennesaw State University. "People don’t even study it any more, it’s so non-controversial."

Cobb County commissioners showed they believe otherwise, though, in committing at least $314 million to help build the Braves’ new stadium near Cumberland Mall. Proponents argue that taxes paid and generated by the team will more than cover the county’s investment.

“This is an opportunity of a lifetime that we can’t afford to pass up,” Commissioner JoAnn Birrell said on November 26 just before voting for the Braves deal. “The return on the investment is tremendous.”

How could the same economic figures lead to such different conclusions? A review by Atlanta magazine shows that county officials relied in part on a consultant’s rosy economic report that appears to have overstated the jobs, spending, and tax revenue that the Braves would bring when relocating from Turner Field to the new stadium in Cobb. Compounding the consultant’s optimistic projections, county officials trumpeted their own cost-benefit analysis that played up potential benefits and ignored much of the public cost of moving the team to Cobb.

Jason Thompson, regional vice president of the consulting firm Brailsford & Dunlavey, defends his firm’s methodology and findings as a professional analysis using tried and true economic models. “We’re not trying to fool people,” Thompson said. “We’re not trying to be dastardly with this.”

Consider:

  • Thompson projected the stadium would create 61 paying jobs for Cobb residents but, just before the commission’s vote, hiked that estimate to 543 jobs. That change, he said, was based on new information provided by the Braves.
  • On top of that, Thompson’s report estimated the ballpark would provide an additional 1,074 “nonprofit” jobs, a term that it did not define. As it turns out, those are positions presently filled by unpaid volunteers who work concessions to earn money for charities, certainly no one’s standard definition of a job. Some can work fewer than 20 games a year. Thompson contends the jobs would be there, though, if the Braves dropped the volunteer program, in which case they could become paying gigs. “They may have a change of heart and say, ‘Well, we’re not going to do that anymore,’” he said. “It becomes a job.”
  • Based on data supplied by the Braves, the Brailsford & Dunlavey analysis projected baseball fans will need 402,000 hotel rooms a year, generating $1.7 million in taxes for Cobb. Last summer, though, a different economic impact study found fans attending games at Turner Field need only about one-fourth as many rooms.
  • Cobb will pocket $4 million a year in sales tax on fans’ purchases, Thompson estimated. Maybe so, but economists say many of those dollars would be spent and taxed anyway on movies, bowling or other leisure activities in Cobb. Experts call shifting of discretionary spending from one activity to another the “substitution effect.”
  • The county also expects to collect $6 million annually in property taxes on the Braves’ planned mixed-use project next to the stadium. The question is when. The size and timing of the team’s investment is not guaranteed. The Braves resisted one commissioner’s request to put its commitment to completing the project in writing.
  • Cobb officials’ glowing cost-benefit analysis of the Braves’ move omitted more than half the public costs. It counted $8.7 million a year to be paid by property owners countywide but omitted another $9.2 million a year in new taxes and fees on businesses, apartment owners, hotel guests and car renters. Transportation, public safety and other needs will cost additional millions.

Commission Chairman Tim Lee said the Brailsford & Dunlavey report was one of many factors considered in approving the Braves deal. County officials did not question the accuracy of the findings, Lee said when we talked on April 4. “We read through it and didn’t see anything that raised any red flags,” Lee said.

The county relied on Brailsford & Dunlavey as professionals whose work did not require vetting, Cobb spokesman Robert Quigley said. “When you take a reputable firm like this and ask them to do a study,” he said, “we take it at face value based on the reputation and the work they do.”

The Braves did not respond to calls and emails requesting comment.

Bradbury, who chairs Kennesaw State’s Department of Exercise Science and Sport Management, said he’s not studied the terms of the Braves’ deal with Cobb. But he points to studies that have shown, time and time again, that building a new stadium has a negligible economic benefit for a community.

The conservative American Enterprise Institute and the more liberal Brookings Institution both reached the conclusion that sports venues do not provide economic benefits for communities. The Cato Institute, in a 2004 study of 37 cities, found a slight dip in communities’ per-capita income after major league baseball arrived, as well as an average net loss of 1,924 jobs. An economist at Holy Cross College found no significant impact on local economies during three baseball strikes in the 1980s and 1990s.

“Cities would be wise to view with caution the economic impact estimates provided by supporters of MLB,” Holy Cross’s Victor Matheson wrote in his 2005 research paper “Striking Out? The Economic Impact of Major League Work Stoppages on Host Communities.” Observed Matheson, “As a method of economic development, professional baseball, like Casey at bat, strikes out.”

Cobb taxpayers won’t know whether the new stadium will pay off until at least 2017. If it doesn’t, they can always take comfort in the same mantra as Braves fans after recent lackluster seasons: “Wait ’til next year.”


 

Video of the Day: Philly fan reaction to the Uggla grand slam

Sure, we've taunted Uggla ourselves. But that doesn't reduce our schadenfreude at Phillies' dismay.

Granted, we did our share of taunting Dan Uggla last year. But Phillies fans are the worst. Spend your lunch break replaying this video courtesy of Timothy Burke at Deadspin. Zero in on a different smug face each time, and savor the feeling—in baseball, it doesn't last long.

Watch the video at Deadspin

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