A pro basketball team in Virginia Beach, just blocks from the Oceanfront–the buzz alone was enough to pack city council chambers where people heard how much we needed a team and how much good it would do the region.
It was said that this is one of the largest underserved markets in North America.
But the financial projections — authored by an ODU economics professor — run contrary to decades of sports studies.
The ODU study said the arena will generate net new economic activity of $98,435,352 in a single year. But the Heartland Institute, after studying nearly 50 similar plans, says there is ”No factual basis that stadiums have a significant impact on a region`s economic growth.”
The city won`t reveal financing yet, although it is certain to need public money.
A Harvard University study that public sports subsidies typically cost taxpayers 40 percent more than first advertised.
And the ODU study said an arena would generate 1,230 net new jobs.
But research from the Federal Reserve Bank of Kansas City found when it comes to sports facilities, ‘the net number of jobs created is quite low. It is almost certainly less that 1,000 and likely to be much closer to zero.’
Why the disparity? These sports studies researched what actually happened, not what was predicted to happen, and the ODU professor simply took the arena backers’ predictions and “relied upon those projections to generate economic impact and job estimates.”
The problem with these optimistic economic studies is that researchers usually believe money spent at a sports stadium is extra money. But sports economists say that’s not always the case. Sure they say people will spend money at arenas and the restaurants around them. But that spending usually comes at the expense of other areas in the region.