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January 14, 2012
In the New Yorker, a dissection of plans behind a new stadium (and some AY echoes); also, a look at the modest study of the Staples Center economic impact
Atlantic Yards Report
Connie Bruck's New Yorker profile of Philip Anschutz and the Anschutz Entertainment Group, The Man Who Owns L.A.: A secretive mogul’s entertainment kingdom., is subscribers-only, but it's well worth reading, especially for the machinations behind plans for a new football stadium in Los Angeles.
Anschutz owns the Staples Center and L.A. Live, and via key lieutenant Tim Leiweke, has proven quite adept at getting city and state legislators on their side.
Getting going
Bruck writes:
For the nation's second-largest city, L.A.'s downtown was shockingly underdeveloped. By the late nineties, many of its biggest firms... had been bought by other companies and their headquarters moved elsewhere. It was the perfect place for Anschutz, a confirmed bottom-fisher, to buy low and build a new empire.
Of course, L.A. is a more sprawling, West Coast city, and it had a large downtown, not a small piece of land, as in Brooklyn, designated for sports facility development.
...
As it happens, the Los Angeles City Controller commissioned a 2003 study by sports economist Robert Baade, which aimed to "address the issue of whether the City of Los Angeles derives revenue sufficient to justify their $71.1 million investment in the Staples Center." The report says yes, but the claims are modest, not outlandish.
Baade notes that the investment--which likely involved lower exposure to taxpayers--was quite low in the general realm. And Staples houses five professional sports teams.
...
Baade offers some guidance to those who present gauzy projections regarding sports facilities:
If prospective estimates are to be used in assessing the merits of subsidies for sports facilities, then they should, at the very least, be filtered through retrospective analyses for cities of a similar economic character to lend some context or supportive evidence.
Regarding Atlantic Yards, we could do that already. All the optimistic studies--from the developer's consultant Andrew Zimbalist, the NYC Economic Development Corporation, the Empire State Development Corporation--depend on a full buildout of the project in a decade. No alternative numbers were offered, based on a slower, or less complete, buildout. Thus the extant numbers are all suspect.
Posted by steve at January 14, 2012 10:28 PM