Saturday, December 29, 2007

New Winnipeg stadium: city boon or public bilk?

Photo: Montreal's Olympic Stadium

Quite interesting is the recently reported poll on whether Manitobans would support public funding for a new Winnipeg Blue Bombers stadium.

The proposal, as it now stands, calls for the provincial and federal governments together to put up $40 million, which would match the $40 million being put up by private investors. According to the Probe/Jory Capital poll reported in today’s Free Press, 50% oppose (32% strongly, 18% somewhat) while 43% support (20% strongly, 23% somewhat) the use of government monies for the new stadium.

The poll comes only days after yet more evidence questioning the value that public funding of such projects have for the city in which they are built. Academics Dennis Coates and Brad R. Humphreys report in their recent
article (kudos to Richard Florida for his blog's link and discussion) that, “in stark contrast to the results claimed by most prospective economic impact studies commissioned by teams or stadium advocates, the consensus in the academic literature has been that the overall sports environment has no measurable effect on the level of real income in metropolitan areas. Our own research suggests that professional sports may be a drain on local economies rather than an engine of economic growth.”

An economic impact study of the Winnipeg stadium project apparently projects $17 million dollars in tax revenue for the province from the construction alone. Being no stranger to economic impact studies, I find that figure to be suspiciously high for an $80 million project. Coates and Humphreys would probably agree: they note in their article that “the results of these studies invariably reflect the desires of those who commission them, and advocates of stadiums and franchises typically produce impact studies that find large economic impacts, translated as benefits, from building a stadium or enticing a team to enter the city.” They go on to describe a number of flaws typically associated with such studies.

The debate is similar to the one that followed the demise of the Winnipeg Jets team and the subsequent True North/MTS Centre arena construction. Some of this is chronicled in
Thin Ice, a book by Jim Silver, who took the position that no public money should go to fund luxuries such as professional sports when our society faces far more pressing needs. Personally, I think the MTS Centre is a beautiful, amazing and highly successful arena, though I wonder whether the economic and civic pride spin-offs of that project even come close to balancing against the $40.5 million contributed by taxpayers.

In the case of the current proposed stadium project, it will of course be incumbent upon the promoters of the stadium to prove that the project is worth the input of public funds. We should be open to an investment of public money into an asset that will be cherished and used by the province’s citizens, but certainly not to corporate welfare for the Asper clan. In other words, let’s not rely on a questionable economic impact study funded by the very folks who stand to gain from the development.

There should certainly also be a cap on the public’s contribution, a lesson learned most harshly by Montreal in the construction of their Olympic Stadium: built for the 1972 Olympics for a projected public contribution of $120 million, the project was finally only fully paid for in 2006, for a total tab of $1.47 billion.

The public debate over this project should be far more than just about the money invested, too. As our Premier noted in his response to the poll, a critical piece of the public debate is about whether the provincial government should enter into a public-private partnership with Asper, an issue the poll questions didn’t even touch upon. We certainly don’t want an arrangement whereby the private owners who run the stadium reap the bulk of the project’s rewards while the public sector bears the bulk of the project’s risks.