Backers Say Downtown Sacramento Arena Could Provide $11.5B For Local Businesses
Facing a "possible ballot fight over the proposed NBA arena in downtown Sacramento, project backers served up an economic-impact study Thursday that said the new facility would generate" an $11.5B "economic bounty for restaurants, bars, hotels and other businesses over its 35-year life," according to Dale Kasler of the SACRAMENTO BEE. The estimate was the "major finding of the study, commissioned by Mayor Kevin Johnson’s newly formed political action committee." The "Renaissance Report" includes the "estimated economic impact of the new arena as well as the planned redevelopment of 1.5 million square feet of surrounding space at Downtown Plaza." Many academic economists "dismiss such studies, arguing that sports stadiums simply move dollars from one part of town to another as consumers spend their money on arena tickets instead of bowling or movies or other forms of entertainment." Univ. of Maryland-Baltimore County economics professor Dennis Coates said, "Basically they are just PR documents." The study showed that the "arena and the surrounding development at Downtown Plaza would lead" to $230M in annual spending, "not counting arena ticket sales." Factoring in inflation, that would add up to $11.5B in 35 years. Taking out the dollars that would "be spent 'regardless of the existence of the new facilities,' the net impact is reduced" to an estimated $25M a year, "or about $1.25 billion over 35 years" (SACRAMENTO BEE, 12/20).