- The Washington Times - Wednesday, September 29, 2004

District officials lobbied hard to persuade business owners to support their financing package for a baseball stadium, arguing that a team will pump $50 million a year into the local economy.

Business owners, whose support is crucial because they will pay an estimated $24 million annually in taxes to help fund the $400 million stadium, aren’t sold on the team’s ability to boost the District’s economy.

But many businesses endorsed the District’s aggressive bid for the Expos and the massive financing package because they believe it will spur redevelopment along the neglected Anacostia waterfront and bolster the region’s image.

The baseball project “is not like an economic engine that will ignite anything. I think people see it as solidifying the area,” said Richard Bradley, executive director of the Downtown D.C. Business Improvement District, a nonprofit group representing business owners.

Even if the Expos do generate $50 million a year in consumer spending, it would be a drop in the economic bucket. The size of the local economy was $288 billion last year, said Stephen Fuller, professor of public policy at George Mason University.

“Baseball isn’t very big in that context. It’s a middle-sized company,” he said.

The team is likely to generate commercial and retail development, similar to what happened in Chinatown when the MCI Center was built. But in economic terms, baseball will be a winner on a smaller scale, generating spending at hotels and restaurants in Southeast and stimulating a geographic fragment of the economy.

“We put MCI down in the middle of a neighborhood and it boomed. The same thing will happen on the waterfront,” said Bob Peck, president of the Greater Washington Board of Trade.

A new stadium for the baseball team won’t open until the 2007 season, and the team will play in Robert F. Kennedy Stadium until then.

The economic impact “depends on whether the stadium is surrounded by a supportive tourism infrastructure,” said Anirban Basu, chief executive of Sage Policy Group, an economic and policy consulting firm in Baltimore. “Baseball operations can provide a city with the momentum it needs to spur massive redevelopment and increase property value.”

The 20-acre tract in Southeast where the stadium will be built is dominated by warehouses, vacant land and sex shops.

“I think it’s going to affect the area for the better,” said Balwinder Singh, who owns four taxi cab services and operates them out of a building he owns on O Street Southwest, a block from the ballpark site.

Mark Sneed, president of Phillips Foods and Seafood Restaurants, which has a location on Water Street in Southwest, says the Expos will generate spending at his restaurant and create better development for the area.

“It’s not just about benefiting our restaurant and other businesses,” he said. “It’s about what might come after — like other attractions and businesses. It’s about creating critical mass to the waterfront.”

The restaurant industry is expected to get the biggest boost, with fans spending an estimated $17 million on food and drink, according to economic forecasts produced last year by the District.

Hotels will also benefit. Visiting teams and fans will create a demand for more than 113,000 rooms a year, spending $15 million, according to estimates.

“It will be good for business and for the neighborhood,” said Dixie Eng, general manager of the 203-room Best Western Capitol Skyline on I Street Southwest. “We’ve put quite a lot of money into this hotel in anticipation of Southwest and Southeast continuing to grow into a visitor-friendly environment.”

The Washington DC Convention and Tourism Corp. estimates about 5 percent of people who attend baseball games will stay overnight in hotels. In figures released this week, the convention and tourism group said hotels will generate about $19.9 million in revenue through money spent on rooms, at hotel restaurants and hotel stores.

Money spent at hotels and restaurants will reach an estimated $31.4 million, the tourism group said. That is more likely to occur if the neighborhood surrounding the proposed ballpark site is transformed into an entertainment district, where the stadium serves as an anchor.

“The key is to build a critical mass around the stadium that can perform on its own,” Mr. Basu said. “Then the baseball team would be a bonus.”

He said Baltimore has done just that, building up its thriving Inner Harbor to attract visitors when the Orioles aren’t playing.

But home games are a big boost for the city with fans spending an estimated $2 million to $2.6 million per game or as much as $210 million a season, Mr. Basu said.

The team’s economic impact also may depend in part on its success. The success of the Orioles in Baltimore has been a factor on consumer spending there.

“My sense is that there is a correlation. Winning is important. If a team is a loser, if it’s in the cellar, it won’t fulfill its promise,” Mr. Fuller said.

Phillips Seafood Restaurant, located in Baltimore’s Inner Harbor, had a big boost in business when Oriole Park at Camden Yards opened in 1992. Business increased 25 percent on game days during the team’s winning years. Now the seafood restaurant gets a 15 percent boost when the Orioles play at home.

“We had much more impact when the stadium was new and the team was winning,” Mr. Sneed said.

The new stadium also will generate money through creation of an estimated 1,000 jobs with an annual payroll of $47.7 million, according to the 2003 study.

“If it’s going to bring jobs, that’s good,” said Robert Siegal, who owns Glorious Health Club, an adult theater and bookstore that will be razed to make room for the ballpark.

But jobs are at the heart of skepticism among business groups about the baseball project’s economic value to the District. The ballpark won’t prop up the District’s economy because it will provide low-paying, seasonal jobs, said Tim Chapin, assistant professor in the department of urban and regional planning at Florida State University.

The baseball team will play 81 home games.

“A lot of these jobs are not the type you build your economy on,” said Mr. Chapin, a native of Falls Church and an avowed Montreal Expos fan.

Public officials from Baltimore to Cleveland — two cities that financed baseball parks in the 1990s — long have thrown nearly unconditional support behind public financing to build stadiums, even though sports complexes have little economic benefit, Mr. Chapin said.

“The reason to build a stadium is not to make money. It’s great for a city’s image, and the District needs that. But when it comes to stadiums, they aren’t money makers,” he said.

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