Effects of Sports and Tourism on a Regional Economy

Report
Measuring the Effects of Sports and
Tourism on a Regional Economy
MARK D’AMATO
Senior Economist
what does REMI say? sm
Model Features
• Four distinct
quantitative
methodologies
• Impacts are
measured over
time (to 2050)
Integrated
Dynamic
Customized
Structural
• Built specifically
to user needs
by regions
what does REMI say? sm
• Transparent
theories and
relationships
Integration
Input-Output
Econometric
REMI PI+
General
Equilibrium
what does REMI say? sm
New Economic
Geography
Structural Model
what does REMI say? sm
New Economic Geography
Model Structure
what does REMI say? sm
Dynamic
2,600,000
2,400,000
2,200,000
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
Control Forecast
what does REMI say? sm
Alternative Forecast
Model Studies
Site Selection
Travel & Tourism
• Economic Analysis of Casino Applicants for
Missouri‘s Gaming License
• Missouri Department of Economic Development
• The Travel and Tourism Industry in Vermont
• The Vermont Department of Tourism and Marketing
Mixed-Use Stadium
• St. Louis Ball Park Stadium & Village
• MCRIC, MDEC & the State of Missouri
Ballpark
Reconstruction
• New Fenway Park Proposal
• The Boston Redevelopment Authority
Franchise
Acquisition
what does REMI say? sm
• New England Patriots Franchise Acquisition
• Connecticut Department of Economic Development
Fenway Park
Current Park
New Ballpark
Economic Impact
Economic Impact
Supports 1,608
jobs through
Greater Boston
Economy
Large initial
affects from
construction
Intangible factors
important, yet
difficult to
quantify
Long-term fiscal
obligations and
lack of “net new”
economic growth
what does REMI say? sm
Fenway Park
• Existing annual economic impact of Fenway Park
(in 2000 dollars)
– $127 million in output to the greater Boston
economy
– $78 million of which contributed towards
growth of GRP
– Supports 1,608 jobs
– Generates $15 million in state and local taxes,
produced $93 million in personal income
what does REMI say? sm
New Fenway Park
Construction Efforts
• Creation of 3,900 jobs over four years and
generation of $209 million of new GRP
• Would require a $240 million public subsidy for a
construction cost of $422 million
• Regardless of the impacts created from building a
new stadium, would the project spin off enough
benefits to justify the financing of this project?
what does REMI say? sm
Evaluating the Alternative
• Eight alternative scenarios discussing:
– High attendance
– Moderate attendance
– Conservative attendance
– Worst-case attendance
– All with constant and high spending constraints
what does REMI say? sm
Results
• Large attendance increases may not materialize
and is dependent on future team success
• Fans tend to have a fixed entertainment dollar they
are willing to spend and will not be able to take full
advantage of services in and around the ballpark
• Not all of the additional revenue would be “net
new” to the economy
• Building a new park would require the Red Sox to
spend an additional $19 million annually in debt
service, compared to their current minimal
maintenance costs
what does REMI say? sm
St. Louise Ballpark Stadium
& Village
• Ballpark stadium would replace existing Bush
Stadium
• Ballpark village would be a mixed-use development
surrounding the ballpark, including office, retail,
restaurant space, parking and entertainment
attractions.
• Financing assumed
by State, County &
City Government
what does REMI say? sm
Results
• By 2005, near-complete construction would result
in a 0.02% gain is GSP ($35.64 mil).
• By 2008, there is a drop in GSP due to phase-out of
massive construction.
• By 2011, construction and operation of Phase One
would result in a 0.04% gain in GSP ($90.14 mil).
• By 2014, full operation of the ballpark village
would result in a 0.06% gain in GSP ($153.77 mil).
• By 2034 the economic impact levels off, with the
gain of 0.04% in GSP ($134.78 mil).
what does REMI say? sm
GDP
what does REMI say? sm
Employment
• By 2005, near-complete construction would result in
765 new jobs and $38.84 mil in wages.
• By 2008, there is a drop in employment due to phaseout of massive construction.
• By 2011, construction and operation of Phase One
would result in 2,195 new jobs and $116.49 mil in
wages.
• By 2014, full operation of the ballpark village would
result in 3,549 new jobs and $204.28 mil in wages.
• By 2034 the economic impact levels off, resulting in
3,092 new jobs and $201.73 mil in wages.
what does REMI say? sm
Employment
what does REMI say? sm
Tax Impacts
• Between 2005-2010 the State of Missouri would
experience a net tax cost due to bond payments.
• By 2011 the State of Missouri would experience a
net tax benefit due to partial ballpark operation.
• At full operation between 2014-2034, the State of
Missouri would experience a net tax benefit of
$12.99 million per annum.
• The ballpark project would generate a net tax
benefit of $61.68 million NPV between 2002-2034.
what does REMI say? sm
Tax Impacts
what does REMI say? sm
Summary
Sound methodology
• Well-established economic impact model
• Understanding of industry and geographic structure
Creditable assumptions
• Academic literature, secondary data, benchmarks from similar scenarios
• Clear economic theory
• Straightforward assumptions structured by a consistent argument
Context
• Provide background synopses of legislation or issues
• Narratives on the development of the project
• Relevant socio-economic information
what does REMI say? sm
Contact Us
www.remi.com
HEADQUARTERS:
----433 West St.
Amherst, MA 01002
TEL: (413) 549-1169
FAX: (413) 549-1038
what does REMI say? sm
DISTRICT OFFICE:
----700 12th St. NW
Suite 700
Washington, DC 20005
TEL: (202) 904-2490
Regional Impact of
Super Bowl XLVI
Michael Hicks
Director, Bureau of Business Research
Ball State University
765-285-3398
[email protected]
what does REMI say? sm

similar documents