Tuesday, September 27, 2005
I've pointed out two things that have changed. The first is that the original deal had the Vikings putting up 70% of the cost of the deal, a number the Vikings in principle didn't flinch at when Red owned the team. This would have at a minimum been $330 million of the low-end cost of $475 million. The proposal unveiled last week has the owner's number reduced to $280 million, and the cost ratcheted up to $780 million, including the retractable roof (which added about $115 million to the price, and for which Wilf says he will not pay.)
Second, the whole argument about economic benefits in the original proposal -- that it would generate $1.1 billion in private investment -- seems pretty far-fetched, and even more so now that some of Wilf's money is off the table. The assumption that a dollar of public investment could leverage $3.50 in private investment struck me as a reach in any case. The multipliers we're talking about normally are more likely less than $2 to $1, and perhaps much less. And there's no reason to believe the investment would not come without the Vikings. Remember that part of the deal is to speed up infrastructure investment, mostly through widening roads. So those roads would have been widened, and the private investment would have flowed, with or without the Vikings. What changes is the nature of the investment: What different types of businesses will be built around the area with and without a stadium, and why are those with a stadium better types of investments? There is little different between investing in stadium construction and other types of industrial policy -- government uses public monies to pick winning and losing types of firms. Its history in picking winners and losers is, well, not much better than Flash's history picking NFL games.
John Laplante observes that putting this deal out there with the Twins and University of Minnesota proposals makes all three deals unlikely to survive legislative scrutiny. I think the answer is more nuanced: If Wilf and Anoka County officials can figure out how not to ask the state for $115 million (for example, by scratching the retractable roof), all they need is to be rolled into the Hennepin proposal to have the law requiring a county vote on the stadium proposal waived. That proposal would then gather a little steam; I would make the vote for that deal in a special session still less than 50-50 in favor, but it would have a real shot.
Last note on this: Mark Yost on Next Big Thing has asked me a few times on the question of whether the "psychic income" argument -- "you love those sports teams, and you'd be depressed to live in a city without them" -- carries any water. There's an article from three economists who did a study of the psychic income generated by the Pittsburgh Penguins. Most people feel pride about having a sports team in their town, but they also feel pride over a zoo or a museum, and those things don't cost nearly as much as a stadium. And those who feel civic pride for sports happen to be those who go to games; those who feel civic pride from museums and theaters are art lovers, etc.
Overall, we find that the civic pride benefit of a sports team is primarily found in citizens who attend games and who feel that sports generate civic pride for the community. This conclusion suggests that the public choice theory is not necessarily a minority exercising their will on the majority, but a minority that believes that their public good is everyone's public good.That last sentence accords to my feeling when I hear people tell me how Minnesota needs the Twins or the Vikings. "Those buggers are going to tax me anyway, they should spend it on things that I like, which are sports." Down that road lies the welfare state.
UPDATE: Phil Miller notes that Zygi is trying to logroll the three stadium proposals, but Phil thinks this will not work.