Posts Tagged ‘cities’

Stadiums do not bring economic benefits to cities – study

Saturday, February 2nd, 2013

Montreal stadium from Grimes' Oblivion

The following CBC article confirms what we’ve always known: sports stadiums simply do not deliver on their extravagant economic promises. Just as with casinos, the millionaire proponents of stadiums always claim that these big arenas will make a city rich. But just as with casinos:
1. stadiums do not in fact bring any appreciable economic benefits to a region, and yet
2. the general public (led by the media) persists in believing the wildly overoptimistic forecasts of said millionaire proponents.

So now that we finally have data suggesting that sports stadiums bring no significant economic benefit, we need to demand that they no longer be funded with taxpayers’ money. If millionaire/billionaire team owners want a stadium so badly, they can build it on their own dime.

In Vancouver, we just spent $600 million on the renovation (involving mainly a retractable roof with multiple problems) of a publicly-owned stadium that was already losing money and has in fact hemmorhaged money annually since it was built at taxpayer expense for Expo 86. Fortunately it has just been announced this latest public spending boondoggle is being audited by BC’s Auditor General, but my guess is we’ll never get to the bottom of the project’s Hollywood accounting and construction contracts for friends of the current government. Meanwhile, who are the beneficiaries? One group only: the millionaire owners of the BC Lions and Vancouver Whitecaps who freely use the stadium but don’t even come close to making up for its shortfall. And who suffers? The citizens of British Columbia do, and in more than one way. If you’re interested in where much of the money came from when the massive BC Place Stadium roof reno went overbudget, look at these abrupt cuts to BC charities, including the arts.

For more useful evidence see some striking studies done in Toronto: cultural tourism brings in NINE TIMES the money to cities as sports tourism (and gambling is even lower down the scale). We need to break the illusion and quit these debt-ridden, dystopian megaprojects. That pot of gold at the end of the rainbow? It’s a mirage. A few construction jobs in the short term, and some union food service jobs in the long term, don’t even begin to make these these giant expenditures worthwhile.

Article is below, and I’ve reprinted some of the article’s many excellent reader comments as well.

All images of Montreal’s stadium  are screenshots taken from the video for Oblivion by Vancouver’s Grimes. Oblivion was named #1 single of 2012 by Pitchfork.

Montreal stadium from Grimes video "Oblivion"

Why funding new sports stadiums can be a losing bet

Building stadiums and arenas have little economic benefits for cities, research shows

When people hear of plans to bring a new stadium or arena to their city, they typically envision the stands packed with loyal sports fans, restaurants filled with eager diners from out of town and local hotels bustling with travellers there to see the big game.

That’s what the cities of Edmonton and Markham, Ont., are counting on — both have just green-lighted public funding towards multimillion-dollar arena projects, in the hopes of creating new jobs and drawing in extra visitors.

Edmonton has approved a deal with the owner of the Oilers for the proposed $480-million downtown arena, while many in Markham, Ont., located just north of Toronto, are hoping their planned 20,000-seat rink will be bait for a new NHL franchise.

Both cities will likely be disappointed with the economic outcome, if past research is any indication.

The vast majority of studies done on the financial benefits of new sporting facilities by researchers not connected to any sport, league, or team have not found any economic boost for cities, experts say.

“Most of the independent research can’t find any economic impact associated with either new arenas, new stadiums, or new franchises or large events,” said Victor Matheson, a professor of economics at the College of the Holy Cross in Worcester, Ma., who has been researching the economics of sport for more than a decade.

“So, building a new arena doesn’t seem to have any effect on a city’s employment, per capita income, hotel occupancy rates, [or] taxable sales.”

Economic benefits greatly exaggerated

And for those cities that do see a business bump from hosting sporting events, it’s a fraction of what is touted, he added.

Matheson cited a study he conducted in the U.S. that examined cities that hosted the Super Bowl between 1970 and the mid-2000s. His analysis found that the mega-sporting event was associated with an increase in income in each city of roughly $30 million to $90 million US.

“That’s positive, but that’s also between one-quarter and one-tenth of what the [National Football] League says,” Matheson said.

Very little Canadian sports economic research has been conducted, Matheson said, in part because many researchers in this field are south of the border, and because of the ease of access to data there.

But one 2005 study, conducted by University of Ottawa researchers, looked at the economic impact of professional sports teams on hotel occupancy rates between 1990 and 1999 in eight Canadian cities, including Toronto, Edmonton and Montreal.

The research, published in the Journal of Sports Economics, found that in 11 out of 17 cases, when a city with a major league franchise goes through a period without a team — due to a league lockout, for example, or when a team such as the Winnipeg Jets leaves — it “had no statistically significant impact” on the hotel occupancy rates in that city.

80% of ticket sales come from within the community

One of the issues is that consumers have a relatively fixed budget for their leisure activities. So, money spent on a hockey game could be cash that would have been used to, say, pay for a round of golf or to watch a basketball game.

“While local businesses may see an increase in sales around the stadium, it’s sales and money that would have been spent in other parts of the community, for the most part,” said Richard Powers, a lecturer at the Rotman School of Management at the University of Toronto. “So they’re just redirecting it into a certain area.”

As for attracting outside interest, studies show that just 20 per cent of the sporting event tickets are bought by people who live elsewhere, added Powers.

With little economic benefit, the hefty amount of money coming out of city coffers to fund these shiny new facilities is “hard to justify if other infrastructure projects are being put on hold,” he added.

Most stadium and arena projects have been financed with public money, which often leave taxpayers in the city or municipality on the hook for several years.

One example is the 1976 Summer Games in Montreal. It took three decades for Quebec taxpayers to pay off the $1.5 billion Cdn debt from that venture. The astronomical cost — funded with 30-year bonds — included building Olympic Stadium, the Olympic village, a post-modern apartment building complex, the Velodrome and other facilities.

The 58,500-seat Olympic Stadium eventually became the home of the Montreal Expos, until the Major League Baseball team was sold to Washington, D.C., in 2004. The facility’s lingering debt earned it the nickname the “Big Owe.”

“We had Montreal citizens paying off the last of those bonds, paying off the ‘Big Owe’ after the Montreal Expos had already left town,” said Matheson.

Projects often go over initial budget estimate

In Markham, a city of about 300,000 people, the proposed arena is estimated to cost $325 million. Half of the money will come from private sources, namely the Remington Group, and the other half will be generated through a levy on newly built homes, townhouses and condominiums.

In Edmonton, the proposed arena will cost roughly $480 million — $143 million put up by Edmonton Oilers owner Daryl Katz, $219 million coming from the city and $114 million coming from other levels of government. A ticket surcharge is expected to raise another $125 million.

An artist’s rendition of the proposed arena for Edmonton. (City of Edmonton/Canadian Press)
The initial budgets for both of these arenas are likely conservative estimates, said Powers.

“They have a price tag right now, but again, if you were going to sell something, you’re going to put it as low as you can… And we know what happens in these projects. They are notorious for cost overruns.”

In some cases, going over budget is legitimate, he said. The projects take several years to build, and over that time, economic conditions, the cost of labour and the value can change. But, either way, it is often the municipality left with the bill when the project goes over budget, Powers said.

Hidden costs

Beyond the outlay of funds to build the stadium, there are costs related to subsidies and concessions given to the team owner, says Matheson.

For example, it is common for franchise owners to negotiate a deal with a city to not pay property tax on the land or facility, he said.

“Had that land instead been given to a shopping mall developer, that would have obviously generated property taxes and other types of sales and use taxes. That is now forgone.”

There is also the loss in taking public money away from other projects that would also benefit the community.

“Where are you diverting cash from? What other infrastructure projects that would be benefiting the community are being cancelled or put on hold?” Powers said.

There are indirect benefits, however, of a new sports facility to the surrounding community that can’t be quantified.

Having a local team to cheer on, and new amenities, can help boost the well-being and sense of civic pride among local residents.

“There are positives to it,” said Powers. “You know there’s community pride, there’s certainly a rallying point around a team. But are the costs worth it?… Ask people what they would rather do: have a stadium or a rapid transit system? I think you’ll find that most people would go for the rapid transit system.”

Cautionary tales

That being said, there are examples of sporting projects that did continue generating revenue, such as the facilities built as part of the Calgary 1988 Olympics, he added.

But the bulk have produced little economic benefit, or are major losses. One recent cautionary tale is the new Marlins Park baseball stadium in Miami.

Miami-Dade County taxpayers paid for most of the $634 million US required to build it. However, to start construction, the city took out a loan, and the city will end up repaying roughly $2.4 billion US over 40 years, according to the South Florida Sun-Sentinel.

Even so, cities are still clamouring to build their own mega-sporting projects.

One reason is that sporting leagues have been “pretty smart about playing cities off of each other,” said Matheson.

Teams can threaten to move their franchises unless they get a new facility, for example.

“All of these leagues are pretty good at keeping up a monopoly, and limiting the number of franchises, which makes franchise relocation a real, credible threat,” he said.

Also, team owners or promoters have vested interests, he added.

“Just because an arena or stadium isn’t good for a city as a whole doesn’t mean it’s not great for a franchise owner,” he said. “And the franchise owner has a real incentive to try to lobby hard for that.”

Another reason could be that the perceived economic boost — a flurry of ticket sales and a bump in spending near the arena — comes long before the debt problems are apparent, said Mike Moffat, an assistant professor at the Richard Ivey School of Business at the University of Western Ontario.

“It is a little bit puzzling,” he said. “I think part of the problem is that the big problems tend to come 15, 20, 25 years down the line, at which point the mayor has retired. But the benefits come up front.”



Selected comments: 

Tridus: “It’s a great bet, if you’re the billionaire team owner or millionaire players that benefit from it. It’s a pretty lousy bet if you’re a taxpayer struggling to make ends meet, since you get the privilege of subsidizing the billionaire and millionaires.”

PlainTalk: “Wow ………I am amazed at this study. I always thought the opposite and that sports stadiums were a gigantic boost to the local economy. Assuming this article is valid and I have no reason not to, building sports arenas should not be done at the taxpayers expense. We have far more important things to deal with than arenas.”

HolyMacinaw: “Nah, the infrastructure doesn’t need attention, lets build an arena for the few privileged and blame the province or feds when our pipes burst. Enough of the pet projects.”

Neil Gregory: “A few of us have been saying this for years, but until recently have always been shouted down. It really is a great feeling to discover that we were right all along. There is NO WAY IN HELL that ordinary citizens should be saddled with the expense of building and maintaining these playpens for a few rich yuppy puppies or so that some city politician can place a siil bet with some other city politician on the outcome of a game. Let the owners, the players and the foolish fans pay for their stadiums and arenas.”

kannuc: “the most sucessful sports franchises own their facilities, teams like Manchester United, Dallas Cowboys and New York Yankees. So when a team like the Oilers demand a new arena from the host city or they leave town, Edmonton should tell them “don’t let the door hit you on the way out”. A good hockey town shouldn’t worry about not having a franchise and question the economical viability of the current owner.”

Arctic Dude: “Please see the stories about collusion and graft and corruption between contractors, organized crime and local and provincial governments that is occurring everywhere in this country.”

Montreal stadium from Grimes video "Oblivion"

Oh, and by the way? A new Vancouver Art Gallery would have far more economic justification than any casino or stadium. Such institutions are proven to attract more visitors—and those visitors are from a particular class of educated, wealthy tourist who spends far more per visit than any other tourist type.

The Limits of Density

Thursday, May 17th, 2012

South False Creek low rises, Vancouver
Low-rises in Vancouver’s S. False Creek

Quebec City, Quebec
Quebec City, successful lo-rise/high density combination

This short essay by Richard Florida in Atlantic Cities magazine has been making the rounds. It is just the latest in a long string of arguments from many quarters that highrise density isn’t the right density: usustainable, human-unfriendly, sterile, and inimical to innovation, interaction and arts. Highrise density primarily benefits the large developers who build it. We need a different model for Vancouver.

Density is all the rage these days. Urban economists, some of whom could be heard extolling the praises of “sun, skills, and sprawl” just a few years ago, now see increasing density as the key to improving productivity and driving economic growth. In his story for The Atlantic, “How Skyscrapers Can Save the City,” Harvard University’s Edward Glaeser put it this way: “As America struggles to regain its economic footing, we would do well to remember that dense cities are also far more productive than suburbs, and offer better-paying jobs … tall buildings enable the human interactions that are at the heart of economic innovation, and of progress itself.” Well-intentioned planners and preservationists drive up prices when they stand in the way of taller and taller buildings, he argues. Overly restrictive height limitations not only impede economic progress, but make cities less, not more, liveable.

There can be no doubt that density has its advantages. In general, denser cities are more productive, more innovative, and more energy efficient. But only up to a point.

The key function of a city is to enable exchange, interaction, and the combination and recombination of people and ideas. When buildings become so massive that street life disappears, they can damp down and limit just this sort of interaction, creating the same isolation that is more commonly associated with sprawl. As Jane Jacobs aptly put it: “in the absence of a pedestrian scale, density can be big trouble.” Skyscraper canyons of the sort that are found in many Asian mega-cities, and that are increasingly proposed in great American cities, risk becoming vertical suburbs, whose residents and occupants are less likely to engage frequently and widely with the hurly-burly of city life.

Edward McMahon of the Urban Land Institute cuts to the chase, differentiating between density and high-rise buildings in his recent post for Citiwire, “Density Without Highrises?”. If the pendulum originally swung too far in the direction of sprawl over the past 50 years, the risk today is that it is swinging way too far back toward high-rise skyscrapers. “To oppose a high-rise building,” he writes, “is to run the risk of being labeled a NIMBY, a dumb growth advocate, a Luddite — or worse. Buildings 20, 40, 60 even 100 stories tall are being proposed and built in low and mid-rise neighborhoods all over the world. All of these projects are justified with the explanation that if density is good, even more density is better.”

Stop and think for a moment: What kind of environments spur new innovation, start-ups and high-tech industries? Can you name one instance, one, of this sort of creative destruction occurring in high-rise office or residential towers, in skyscraper districts? The answer is no. High-rise districts typically house either corporate office functions or residences. During the post-war era, while they were building these towers for their corporate functions, large U.S. companies housed their research scientists in green, low-rise R&D campuses, where the scientists could interact more freely.

America’s high-tech, venture-funded start-up model of innovation came of age not in skyscraper canyons but in places like Silicon Valley, which provided such an ideal eco-system for creativity because of its city-like aspects. As Jonah Lehrer told Cities recently, “Silicon Valley manages to replicate the essential function of a dense city, which is to foster a diversity of interactions and knowledge spillovers,” albeit largely across industrial parks and based on the car.

Similarly, you don’t find great arts districts and music scenes in high-rise districts but in older, historic residential, industrial or warehousing districts such as New York’s Greenwich Village or Soho, or San Francisco’s Mission District, which were built before elevators enabled multi-story construction.

The urban tech districts that are emerging today, from SoMa in San Francisco to New York’s Silicon Alley and London’s Silicon Roundabout, are housed in similarly walkable, low to mid-story neighborhoods.

What we need are new measures of density that do not simply count how many people we can physically cram into a space but that accounts for how well the space is utilized, the kinds of interactions it facilitates. “By this measure,” McMahon writes, “one block of an older neighborhood might include a community theatre, a coffee shop, an art gallery, two restaurants, a bicycle shop, 10 music rehearsal studios, a church, 20 apartments and a couple of bars, and all with much more 24/7 activity and intensity of use than one block of (much taller) office buildings on K Street [in Washington, D.C.].”

Too many people today conflate density with height. Real interactive density can be better achieved by other means. “Yes, we do need more compact, walkable higher density communities,” writes McMahon. “But no we do not need to build thousands of look-a-like glass and steel skyscrapers to accomplish the goals of smart growth or sustainable development.” Neighborhoods like Georgetown in Washington, D.C., Brooklyn’s Park Slope, and the Fan in Richmond were largely built before the age of elevators and they are all dense. New Orleans’ “French Quarter has a net density of 38 units per acre, Georgetown 22 units per acre.” The real issue isn’t just height and the massing of people and work, but of enabling interaction and recombination.

“Density does not always demand high-rises,” notes McMahon. “Skyscrapers are a dime a dozen in today’s world. Once a low rise city or town succumbs to high-rise mania, many more towers will follow, until the city becomes a carbon-copy of every other city in a ‘geography of nowhere.'”

Richard Florida is Senior Editor at The Atlantic and Director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. He is a frequent speaker to communities, business and professional organizations, and founder of the Creative Class Group.

Vision Vancouver, and Vancouver’s developers who erect giant carbuncles on the Vancouver landscape far from even a whiff of a reputable architect: take note.

See also Martha Rosler’s “Culture Class: Art, Creativity, Urbanism” and search this blog for “highrises” to find many other posts on this topic. Also see this on Northrop Frye and condo culture/garrison mentality. And The End of the Age of Tall Buildings.

Amy Goodman and Chris Hedges on Charlie Rose

Wednesday, October 26th, 2011

Amy Goodman of Democracy Now speaks with Asma Mahfouz, the girl who began the Tahrir Square revolution in Egypt, in Zucotti Park yesterday. Photo by Democracy Now

Renegade brokers and police joining the demonstrators today, photo by Canadian filmmaker Velcrow Ripper (more here).

I just don’t feel like writing about design much these days, unless the definition of design is broadened very, very far.

The first video below features Amy Goodman and Pulitzer prizewinning journalist Chris Hedges of Truthdig talking about “Occupy Everywhere” on Charlie Rose’s show. (A previous post on Chris Hedges is here.)

Occupy Vancouver, which doesn’t always fully realize that our equivalent of Goldman Sachs/Wall Street banks is actually property speculation, should be directing energy against the BC government rather than the banks. (Non-Canadian readers may not know that banks are somewhat more regulated in Canada, thus saving us from the subprime mortgage idiocy.) But the Occupy Vancouver movement is still finding its way through complicated issues. Let’s hope the City of Vancouver follows Mayor Naheed Nenshi’s example in Calgary and everything stays peaceful.

One thing is for sure: this gap between rich and poor is inherently unstable. This is as true in B.C. as it is everywhere else. The income gap in British Columbia is one of the widest in Canada, and is getting by virtue of some very sketchy mechanisms. By the way, our recent fight against a predatory province-imposed casino in this town, effectively a regressive tax on the poor and vulnerable, is squarely a part of this same protest against the wealth divide.

Cities won’t be peaceful places again until this gap is narrowed. In the TED video at bottom, Richard Wilkinson looks at global data correlating income gaps with a society’s life expectancy, health, mental illness and many other factors. Notice that the USA, the advance guard of unregulated capitalism, comes out very, very badly in every parameter.

Either we’ll force these governments to re-regulate, or there’s going to be ongoing and widespread unrest. When I was in art school a long time ago a teacher of mine remarked one day in the cafeteria that we would soon see a massive gap between rich and poor, a feudal-type economic system, universal unrest and small scale warfare, gated communities and the rise of religious and market fundamentalism. So prescient. I have thought of this often over the years while witnessing things like massive concentration of ownership, the loss of the Tommy Douglas/Lester Pearson social safety net in Canada, and a crude, so-called free enterprise ideology take over every element of public and social life. While we retreat into our interiors.

Geoffrey West: The surprising math of cities and corporations

Saturday, October 22nd, 2011

Geoffrey West: The surprising math of cities and corporations. How come it’s so hard to kill a city?

There is an interesting discussion of West’s idea in the NYT. I find them interesting, but unclear on the implications for the increasing appetite for new resources. As West points out himself, the resource/depletion/new resource revolutions are accelerating. What next?


Better late than never

Monday, July 18th, 2011

From my friend Alan: “The best graffiti I’ve seen in a while. Freshly applied a couple days ago.”

Public squares & dissent – Julian Assange, Slavoj Žižek, Amy Goodman

Monday, July 4th, 2011

For those who haven’t seen it, here’s the video of the discussion between Amy Goodman of Democracy Now, Julian Assange of Wikileaks, and Slovenian philosopher Slavoj Žižek. It took place in London over the weekend and was produced by Frontline Club. The discussion is wide-ranging but one remark that really struck me was Assange observation of the importance of a city’s central square in democratic movements, that it’s the place where the people can witness their own numbers, their own majority in the face of a governments’ insistence that opposition is merely a minority of agitators. I thought of Vancouver’s stubborn avoidance over many decades of building a public square or central gathering place. This was quite deliberate—it is well documented—as a means of preventing large gatherings. Fortunately there exist intangible squares and plazas as well, online perhaps, but Assange’s discussion of the role of city squares in the Arab Spring is instructive.

Try to ignore Žižek’s manic fidgeting. He can’t leave his t-shirt alone.

Assange’s greatest hope for the future is “to see a more civilised world and to change the author George Orwell’s dictum that ‘he who controls the present controls the past.’ ” He says “by civilised I mean people collaborating to not do the dumb thing.” Via Frontline Club.

The only YouTube video showing the whole discussion is unfortunately quite lo res. To see the original at Democracy Now but it’s in a looping livestream format so you can’t scroll back and forward, which is frustrating. Let’s hope they embed a scrollable version of the video soon.

Also see this interview, in which when asked who his #1 enemy is (at about 12:00) he answers:

“Our #1 enemy is ignorance. And I believe it’s the #1 enemy of everyone, not understanding what is actually going on in the world. It’s only when you start to understand that you can make effective decisions and effective plans. Now, the question is who is promoting ignorance. Those organizations trying to  keep things secret, and those organizations which distort true information to make it false and misrepresentative. In this latter category, it is bad media. It really is my opinion that the media in general are so bad, we have to question whether the world wouldn’t be better off without them altogether. They’re so distortive to how the world actually is, that the result is we see wars and we see corrupt governments continue on. One of the hopeful things that I have discovered is that nearly every war that has started in the past fifty years has been a result of media lies. The media could have stopped it, if they had searched deep enough, if they hadn’t reprinted government propaganda, they could have stopped it. But what does that mean? Well that means is that basically, populations don’t like wars and populations have to be fooled into wars. Populations don’t willingly and with open eyes go into a war. So if you we have a good media environment, then we also have a peaceful environment.”