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Home Issues Stadium Benefits
Stadium Costs And Benefits
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Is a baseball stadium an economic bonanza for San Jose? Stadium supporters claim that it is - that San Jose will get 1000 jobs, $1.5 million in tax revenue, and $86.5 million in new direct spending as a result of a stadium. These claims come from the Economic Impact Analysis report released by the San Jose Redevelopment Agency in Sept., 2009. Unfortunately, this report and these claims are highly misleading. The benefits are exaggerated, the costs are glossed over, and more rewarding alternative uses of the Diridon site are not honestly evaluated.

The Economic Report includes a very deceptive analysis of a possible alternative development at the Diridon site, to conclude the baseball stadium is better. This false conclusion depends on a very simple trick. For the baseball analysis, the report includes spending from 5 major categories. For the alternate development, all but 1 category are declared difficult to estimate, and then are left out – the result is to use an estimate of $0 for each of these categories. This is obviously the most inaccurate estimate possible. When common sense estimates are applied, the result is that the alternative development will generate much more spending than baseball, growing to be 4 times as much annually. All other economic benefits are similarly larger.  Read a full review of the Economic Analysis report here.

The stadium proposition has been compared to a parent telling a 9 year old: "I'll give you a shiny red new scooter now, or I'll pay for your college education when the time comes in 10 years. It's your choice".

We're not 9 years old. It is our choice.

We can do better, for ourselves and our children.

Last Updated on Wednesday, 28 April 2010 21:26
 

Stadium Costs

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Total Direct Cost: $90M to $145M

Claim:

  • stadium will be privately funded.

Fact:

  • stadium will require land purchases and infrastructure improvements costing San Jose at least $90M initially, plus a loss of roughly $1M a year from foregone property taxes.
  • This is a net ROI (Return on Investment) of 2% or less.

 

The Economic Impact Analysis says nothing about what a baseball stadium will cost San Jose. Supporters talk about the stadium as privately financed, implying no cost to San Jose. This is a critical, and not accidental, omission. No honest financial statement reports only gross income, ignoring the upfront costs and the ongoing expenses. But that is exactly what the Economic Analysis does.

 

The truth is the baseball stadium is not free for San Jose, and it is a very poor investment.

Last Updated on Wednesday, 28 April 2010 18:21 Read more...
 

Economic Activity

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Economic Activity: Alternative Development gives 4 times more benefit than baseball

Claim:

  • stadium    - $86.5M a year in net new direct spending within San Jose;

Fact:

  • alternate  - $370.5M a year in net new direct spending in the medium term; $92.6M a year in the same time frame as baseball;
  • stadium    -  loss of $284M a year of new direct economic activity compared to alternate development.

Baseball gets a lot of publicity – it sells papers and advertising. But in fact it is not a large business. Baseball is in the minor leagues in terms of economic activity. Compare the A’s, with roughly $200 million dollar a year in revenue, to Adobe, with $3 billion a year in revenue. Worse, baseball is a static business, with little potential for growth and minimal business spin-off effect.

To rebut the case for alternate development at Diridon, stadium supporters simplistically cite the current vacancy rate for downtown buildings. This is extremely short sighted and wrong headed. If San Jose has any future at all, there will be demand for office space at the Diridon site.

Last Updated on Wednesday, 28 April 2010 21:38 Read more...
 

Tax Revenue

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Tax Revenue: $6M a year lost

Claim:

  • stadium    - almost $1.5M a year for the San Jose General Fund; more than $5M a year for all local governments

Fact:

  • alternate development will generate $4.5M a year to the San Jose General Fund; $9.98M a year in property tax revenue alone for local governments
  • stadium represents a $6M loss per year in property tax revenue, compared to alternate;  $3M loss per year for the San Jose General Fund.

The Economic Report calculates the fiscal benefits to the San Jose General Fund and other government entities. These benefits come almost entirely from sales taxes and property tax, assessed on the construction costs of a stadium. But anything that gets built at the Diridon location will generate sales and property taxes. So again, the stadium must be compared honestly to alternative uses of the site. The Report fails to do that.

Last Updated on Wednesday, 28 April 2010 17:56 Read more...
 

Jobs

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Jobs: more than 2,500 jobs lost
Claim:

  • stadium - nearly 1,000 jobs created (direct, indirect, induced)

Fact:

  • stadium - will create just 138 new, seasonal, mostly low wage jobs at stadium;
  • stadium - most of the claimed jobs are part time, seasonal, low wage jobs
  • alternate development- would create almost 700 new, full time, professional jobs initially;
  • alternate development - jobs would grow to more than 2,600 new, full time jobs (stadium has no growth potential)
Last Updated on Wednesday, 28 April 2010 17:52 Read more...
 


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Better Sense San Jose is a community based all volunteer organization founded to promote open and transparent government, and sensible, prioritized spending in the City of San Jose.

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"Brokers around (San Francisco) AT&T Park emphasized that new residential projects played a key role in sparking commercial development in South Beach, more so than the ballpark"
Neighborhood Economic Impacts of the Proposed San Jose Stadium
November 2006; prepared for San Jose Redevelopment Agency

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