Tuesday, September 23, 2008

Revitalizing Reno

I know nothing about Reno -- well, next to nothing -- so I have no idea if this proposed AAA stadium and mixed use development is a good idea or not. I do know, however, that whenever someone who stands to benefit from such projects says something like this . . .

A self-described lifelong baseball fan, Mr. Katzoff expects the team to be profitable and self-supporting. “The two concepts, baseball and retail, actually feed off each other,” he said.
. . . the taxpayers had best hold on to their wallets.


Pete Toms said...

Where to start?????

1. What is the substitution effect?

"Baseball fans are expected to help much of the downtown area, not just the ballpark, according to the city. The stadium will have limited parking, and fans who cannot park there will choose sites scattered throughout the downtown area, like parking garages in office buildings, and walk to the game. In the process, they will inevitably pass the stores and restaurants of downtown merchants."

From "Public Dollars, Private Stadiums".

"..this increased spending will provide additional tax revenues to the city only if it represents spending that would not otherwise have occured in the city. If fans are spending more at the new stadium but are simultaneously spending less at a local restaurant or a video store, the city has no net increase in tax revenues. This phenomenon is sometimes called the substition effect,...."

I could quote other passages detailing this, including one describing how new ballparks don't benefit local restaurants and retailers to the degree advertised because the new ballparks offer better food and more pre game distractions than in previous eras. Anyway, I would have to type it out cause it ain't online and I'm too lazy.

2. TIFs - Tax Increment Financing

"Another $40 million is being provided in tax-increment financing, in which projected gains in property taxes are applied against debt issued to finance the development."

This is a common financing scam, along with PILOTS ( recently discussed here chez Shyster ). TIFs are widely thought to be BS.

Wasn't there a piece linked on this blog yesterday about a shortfall in projected tax revenue associated with the Nats new digs?

3. Mixed use developments

"Meanwhile, Mr. Katzoff says he believes he may have stumbled on a new business line. As his deal with Reno has been publicized, he claimed, “we have been approached by five or six teams in similar situations.” Now, he said, “we are expanding our business model to become a developer of mixed-use retail projects surrounding ballparks.”

Wrong and he knows it. This is has been goin on for a while now. Taxpayers have figured out that building stadiums for for profit owners is a hose. Mixed use developments are a reaction to this. The public money is being "dressed up differently" now.

Anybody from Reno out there? How's the local economy? These sorts of developments are sold as economic generators, urban rejuvenators etc. in communities that are struggling. They also appeal to community pride and spirit in communities which are struggling.

Anonymous said...

Reno seems to have a very strange element, one that would make for an interesting fanbase. There's a TV show about the Reno sheriff's department that really puts the viewer behind the badge and into a cruiser, and gives you a sense of a day in the life of a Renoite. Renoian? Renoan?

rob said...

I love that the phrase, "Feeds off of one another" is usually treated as a good thing.

I mean, when bacteria feed off of me, I generally feel like shit.