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Joyce Clark Unfiltered

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The NFL is a Super Bully. It is incredibly rich which accrues it tremendous power. It is a non-profit that pays no taxes and is a monopoly. Quite literally, it is the only (football) game in town. It can call the shots and is not shy about doing so. It’s also like your miserly grandfather, watching every penny and constantly on the lookout for freebies. Do you think Glendale should host the Super Bowl? Vote in the informal poll to the left of this article.

The NFL has a wonderful scam going. It encourages potential host cities to build or upgrade facilities by dangling the carrot of an economic bonanza with the prospect of a Super Bowl coming to town. The website www.planetizen.com has an article by Boramici from February of 2013.  He says, “ ‘Since 1990, taxpayers have been paying more than 60% of the bill for new NFL stadiums and more than 59% for new professional baseball stadiums in the U.S. While professional sports teams are integral to their host cities, the sense of ‘identity and civic pride’ they lend comes ‘at such a high price, one extracted not by these civic-minded fans, mind you, but by a uniquely undemocratic cabal of mayors and monopolists’, writes Harry Moroz.
“This year’s Super Bowl in New Orleans’s rehabbed Superdome comes with a price tag of $471 million to taxpayers with $41 million of those coming from FEMA.
“Several survey-based recent studies show that the value taxpayers place on professional sports team retention in their cities does not match up to the cost of building new stadiums or even renovating existing ones.
“What keeps the cycle of dependence going?
“With a limited supply and a more or less credible threat of leaving a city, sports teams are able to appeal to the risk-averse part of city leaders’ brains: People forget about $100 million lost here or there, but the departure of a sports team will be written in a mayor’s obituary.”

Couple the NFL clarion call to build even bigger and better facilities with its tried and true tactic of funding and issuing an economic study that promises untold financial benefit. There is an excellent piece of research by Victor A. Matheson of the College of the Holy Cross; Department of Economics entitled Economics of the Super Bowl. Here is the link: http://college.holycross.edu/RePEc/hcx/Matheson_SuperBowl09.pdf . He contends, “The Super Bowl is America’s premier sporting event. This paper details basic economic facts about the game as it examines the controversy surrounding the purported economic impact of the game on host communities. While the league and sports boosters claim that the game brings up to a $500 million economic impact to host cities, a review of the literature suggests that the true economic impact is a fraction of this amount.”  In his research paper he refers to a W.P. Carey MBA Sports Business Program study commissioned by the NFL on the economic impact to the Phoenix metropolitan region as a result of the 2008 Glendale hosted Super Bowl. That study claimed an economic benefit of $550.6 million dollars to the greater Phoenix area. He states, “There are reasons to be skeptical of such claims, however, since the league has strong financial incentives to publicize studies that report a large financial windfall for host cities. The NFL explicitly uses the lure of the Super Bowl as a carrot to convince otherwise reluctant cities to provide public subsidies for the construction of new playing facilities.” Relying on a study the NFL paid for isn’t the most reliable indicator as, “It appears that most economic impact reports are “padded” at least as well as the players on the field.” That study has become mantra in the Phoenix area and every time there is renewed discussion of hosting yet another Super Bowl it is cited ad nausea. If you repeat something often enough we assume it must be true. Doesn’t this sound all too familiar? The state created the Arizona Sports and Tourism Authority (AZSTA) to collect hotel and rental car taxes within Maricopa County to fund, in part, the construction of the UofP Stadium because the NFL and Bidwills all but promised that it would host a Super Bowl. And we all drank the kool-aid.

An often cited component of every economic impact study focuses on sales tax collection. It is generally accepted that sales tax figures are a reliable indicator.  How the sales tax figures are generated offers an opportunity for exaggeration. Matheson says, “…of the 23 new  stadiums constructed for NFL franchises between 1992 and 2009, 7 were funded, at least in part, through increases in the local general sales tax rate while another 8 were funded through increased excise taxes, i.e. sales taxes on specific goods and services such as rental cars or hotel rooms (Baade and Matheson 2006b).” Among researchers without a financial dog in the fight the general consensus is that any Super Bowl game generates $100 million dollars – not NFL fueled study numbers of $400 million or $500 million — of economic impact.  Many studies have been done on the South Florida area because of the inordinate number of Super Bowls that area has hosted over the years. One researcher offered this rather sardonic comment, “Finally, it is worth noting that taxable sales in the area during January-February 2000, the year after the game, were $1.26 billion higher than in the same months during the Super Bowl year. Strangely, the NFL never publicized a story announcing, ‘Thanks to the lack of a Super Bowl, there was a $1.26 billion increase in taxable sales in South Florida compared to the equivalent January- February period in 1999.’”

If all else fails and one’s critics will not accept sales tax figures one can always fall back on the intangibles.”… in assessing the impact Super Bowl XLII in Glendale, Arizona, Michael Mokwa, chairman of the marketing department at the W. P Carey School of Business stated, ‘The money is just the tip of the iceberg. Thousands and thousands of people who came here for the Super Bowl, of whom many had never been to the Valley before, took away powerful memories and a good feeling about Arizona.’ This translates, he said, into coveted return visits, family and business relocations, and word-of-mouth marketing throughout the country. Priceless, as MasterCard is fond of saying (W.P. Carey School of Business, 2008).”

The problem with intangibles is they are intangible. They are extremely difficult to quantify and substantiate. Have we ever heard a CEO of a company state that he moved the company to Arizona because he had powerful memories and fell in love with it while attending the Super Bowl in Glendale? It is the stuff of urban legend that was used frequently by Julie Frisoni (Glendale’s Director of Communications and Marketing) in 2008 while making a case for Glendale’s first hosting of the Super Bowl. She continually cited the exposure Glendale would receive in hosting the Super Bowl but to my knowledge, there is no company that relocated to Glendale as a direct result of having attended the 2008 Super Bowl.

Government revenues, another intangible, are also non-existent because of the NFL’s stipulation that it pay no taxes. While there is an increase in employment and as a result, personal income, it does not have a lasting effect beyond the event. It is an event that provides an increase in jobs for perhaps a month and then, poof…they are gone. Matheson goes on to say,“Ex post economic analyses of the Super Bowl by scholars not financially connected with the game have typically found that the observed effects of the game on real economic variables such as employment, government revenues, taxable sales, GDP, and personal income, while generally positive, are a fraction of those claimed by the league and sports boosters. When considering optimal public policy with respect to sports infrastructure, it would be wise to take any claims of super benefits from the Super Bowl with a grain of salt.”

The NFL waves the magic wand of promise of a “Super Bowl To Come” to bring pressure to upgrade or construct a facility worthy of such an event. Then for good measure it issues an NFL funded economic impact study that can prove the region will realize a financial windfall. What’s not to like? It is powerful and enticing and appeals to many regions of the country struggling with the aftermath of the Great Recession. The crushing debt it causes taxpayers will be the catalyst causing us to take a second look and ask the question, is it really worth it?

The very last thing the NFL will tolerate is insubordination in its ranks of host cities. A hole in the dike is to be stopped at all cost to keep a flood of skepticism from washing over its always reliable revenue streams. The sentinel that alerts it to impending trouble is the Host Committee. In the next blog, we’ll look at the Arizona Host Committee and Glendale’s role as a host city.

©Joyce Clark, 2013

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photo 3Over the next couple of weeks I will be sharing the history and current condition of the city’s airport. The reason for this long overdue discussion is the resurrection of John F. Long’s Trust (read Jake Long and siblings) to once again bring forward an excavation and mining operation across Glen Harbor Blvd. and 450 feet away from the airport proper. To give you some perspective the length of a football field is 100 yards or 300 feet. The proposed mining operation would be only 1 ½ football fields away from the airport.

Why should you, as a Glendale resident or user of the city airport, care? A 20 or 30 year mining operation across the street from the airport will create irrevocable economic harm to the entire city. The city is working hard to maintain the airport as a viable entity and to reinvigorate it with new economic development.  An active, healthy city airport earns sales tax revenue for the city and contributes to a more robust city economy. This proposed project is in direct contradiction to the city’s goal.

We have seen that the airport has the potential to be economically successful during the city’s hosting of the Super Bowl. Dozens of corporate jets flew into the city airport because of its close proximity to Westgate, the Renaissance Hotel and the Stadium. When the national great recession hit, it stopped all economic growth at the airport in its tracks. The airport has yet to recover.

What is this project all about?  Several years ago, Jake Long (John F. Long’s son who took over the business after his Father passed away) met with former Mayor Scruggs and me to propose a Special Use District Overlay for their land. At that time we indicated that we could not and would not support such a proposal. The Long’s went away knowing that there was no support on the former council to move forward with their request.

photo 1The current proposal and its presentation are very slick. In it there are 4 phases of development including mining, commercial, office, light industrial and an option for live/work but none of the non-mining development will occur until after the mining operation has stripped the land of every nickel it can produce. That will be in 20 or 30 years. To make the mining more palatable the carrot is to develop the land for airport related commercial uses but not for many, many years. Their stated reason for requesting the mining is, “This SUD will provide a reliable mechanism to finance the installation of necessary infrastructure without coming to the City for support or overwhelming the site with private debt.” The city is not required nor bound to finance infrastructure for a private developer. That is the developer’s responsibility. So what they are really saying is that they don’t want to be responsible for their own loan to develop the infrastructure on their property.

Why is this not a good project? It is in direct opposition to economic development of the airport. Do you see mining at Deer Valley Airport or Goodyear Airport? No, of course not. It will create visual, auditory and environmental blight. Visually, across the street from the airport, 450 feet away will be a 10’ dirt berm (that’s about half the height of your home) and behind it will be a pit with the excavation equipment. Noise from the heavy equipment will be heard at the airport, all day long, 365 days a year and will create auditory blight. Environmentally, dirt and dust will drift, every day, from the mining operation on to the airport and will damage delicate aircraft engines and supporting aircraft equipment. That’s a given as winds in the Valley typically blow from west or southwest to the east. This mining operation is directly west of the airport.

What can you do to let the city know that you do not support this proposed project? You can do two things. Right now, as you are reading this fire off a letter to the city’s Planning Director, Jon Froke, asking him to recommend denial of this proposed project. Below is a sample letter that you can use. Please add your own reason for your opposition:

Your name

Your address

 

City of Glendale Planning

Attn: Jon Froke

5850 West Glendale Avenue, Suite 212

Glendale, Arizona 85301-2599

 

Dear Mr. Froke:

I oppose the use of land immediately adjacent to and across Glen Harbor Blvd. for the purpose of mining and excavation because (fill in your reason here).

I urge the your department to recommend denial to the Planning Commission and the City Council of the proposed Special Use District Overlay (SUD) requested. Thank you for your consideration of my request.

 

Sincerely,

Your name

 

If you are a Glendale resident living anywhere in the city or have used/currently using the airport you should plan to attend the Public Meeting hosted by the applicant. Mark your calendars now. I will be there to voice my opposition. The meeting will be:

 

Monday, August 5, 2013 at 6 p.m.

Airport Conference Room (second floor)

Glendale Municipal Airport

6801 North Glen Harbor Boulevard

Glendale, Arizona

 

photo 2Numbers count in this matter. What do we typically do when asked? We say someone else will do it or my voice doesn’t count. Not this time. Your voice added to dozens of others will be the catalyst to stop this proposed project. After all, the Glendale Airport needs your help.

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