Editor’s Note: This story appeared in Style Weekly Nov. 13, 2012. It is an excellent piece of investigative journalism written by Scott Bass, a former editor at Style. Scott is now the editor at The Chesterfield Observer and he still doing excellent work. More’s the pity that the Redskins continue to siphon much needed money from the City of Richmond, money that could be spent on fixing our schools. And the state-of-the-art sports medicine facility is the perfect size for an elementary school. Encourage Mayor Stoney and City Council to consider saving some money by revisiting and revising this deal. Yellow highlights are mine. ~ Carol A.O. Wolf
Why the Washington Redskins aren’t worth $10 million to Richmond.
BY SCOTT BASS @SCTTBASS
BY SCOTT BASS @SCTTBASS
Draped from head to toe in burgundy and gold, Harry Cousins grumbles loudly at the outbursts. The 50 or so residents gathered at the Science Museum of Virginia last week question everything about the city's deal to bring the Washington Redskins to Richmond. What happens to the park space? What about the economic costs? Why is the city rushing this deal? Where is the transparency?
Cousins, 73, shakes his head. How can they not see the benefits?
Imagine: his beloved Washington Redskins preparing for the 2013 football season in a spanking new training camp facility on 17 acres behind the museum, pumping untold millions of dollars into city coffers, boosting the area's civic pride to new heights. The Redskins are coming to Richmond, after all.
After more than an hour of tough questions from residents, Cousins finally is granted a turn to speak. He has just one question: "When can ya'll get the party started?" Smiles break out, some start clapping. The city official leading the presentation, Jane Ferrara, deputy director of economic and community development, grins knowingly.
"Right now," she says, the project does "not cost the taxpayers any money."
But it does. And it's already cost taxpayers plenty. Gov. Bob McDonnell struck a deal earlier this year to keep the Redskins headquarters in Loudoun County with a $4 million grant from the state and another $2 million from Loudoun taxpayers. As a result the Redskins agreed to move their summer training camp to Richmond. Soon after, Mayor Dwight Jones appointed a steering committee to recommend a location for the camp. The team needs two side-by-side football fields in addition to meeting rooms and other training facilities. They fit nicely behind the Science Museum. The total cost is $10 million.
But there's a hitch: The Redskins aren't putting up any of the money. In addition to getting $6 million for its Loudoun headquarters, the deal in Richmond includes training facilities at no cost to the team. And the city must agree to pay the Redskins $500,000 a year — for moving expenses and sponsors.
Vowing that the project would be paid for solely with private dollars, city officials struck a deal with Bon Secours Richmond Health System in late summer. Bon Secours would put in $6.4 million to offset the costs of the training fields, and toss in a sports medicine facility. In exchange, Bon Secours gets naming rights to the new Redskins camp. The city also would lease the former Westhampton School site at Patterson and Libbie avenues to Bon Secours for an expansion of nearby St. Mary's Hospital. The lease is a bargain — $5,000 a year for the next 60 years, for a total of $300,000. The 6.5 acre property, in a prime spot for retail development, is assessed at $7.5 million.
Who could argue? Forbes estimates that the Washington Redskins are worth $1.6 billion, making them the third richest sports franchise in the country. The Redskins are one of the most beloved professional sports teams in the world, having produced some of the greatest football players in history, including Sonny Jurgenson, Sammy Baugh, John Riggins and Darryl Green. The team now has one of the brightest, most marketable stars in the league, quarterback Robert Griffin III.
City and team officials say the Redskins will draw 100,000 fans to Richmond during a little more than two weeks of training camp, and generate more than $8.5 million a year in economic impact. Mayor Jones made the point earlier this summer that the $8.5 million will cover all of the city's expenses on the Redskins in just the first year.
But there's something they aren't telling the testy residents at the Science Museum forum. The numbers are flimsy. The opportunity costs are huge. And the primary drivers of all that new money flowing into Richmond — the 100,000 fans expected to descend on the city, dropping millions of dollars on food, hotels and merchandise — are hardly a guarantee.
The biggest piece of that $8.5 million in annual economic impact is "leisure visitor spending" of $6.4 million, according to an analysis completed by Chmura Economics and Analytics. But the source of that 100,000 visitor figure remains a mystery.
Despite the promises, it's far more likely that the deal will wind up costing Richmond millions of dollars — and perhaps a lot more.
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Start with the basic assumption that the Redskins camp will draw 100,000 people to Richmond every summer. According to the economic analysis by Chmura, 40,000 of those attendees will stay in the city for at least two days and spend $137 a day on hotel accommodations, food and other goods. This is the source of the primary economic benefit.
The remaining 60,000 fans likely will come from within the Richmond region, according to the analysis. Those people won't spend as much — $44 a day in the city, Chmura estimates. But much of that money won't be new money. If those people already are here, they're likely to spend that money somewhere else anyhow.
So where does the 100,000 visitor figure come from?
Reached last week by phone, Christine Chmura, president and chief economist for Chmura Economics and Analytics, at first says it wasn't her company that did the study. She puts a reporter on hold and fetches another economist in the office, Xiaobing Shuai, who relays that the number came from another study, done earlier this year for the state. He says he's sure it's from the Redskins, but doesn't know if the attendance counts came from fan surveys or official turnstile counts — or some other method.
"We did it in a very short time frame," Shuai says of the Chmura study. "We did it in a couple of days."
It turns out the 100,000 figure first was asserted by Mangum Consulting, another economic analytics company in Richmond, which was commissioned to conduct the study earlier this year for the Virginia Economic Development Partnership. Mangum, according to its Web site, "specializes in producing objective economic analyses in support of strategic decisions," and was hired to study the impact of the Redskins in the run-up to McDonnell's deal to keep the team in Loudoun.
Fletcher Mangum, the company's founder and managing partner, says the 100,000 figure was supplied by the Redskins.
"The training facility exists currently in Loudoun County, so it's based on actual data collected there," Fletcher says.
Does he know who collected the data, and how? Because of confidential agreements, Fletcher can't be more specific. "That was based on a survey that I think Loudoun County itself had done," he says.
At the Science Museum Thursday, Eric Finkbeiner, a lawyer with McGuire Woods Consulting who represents the Redskins, says the attendance figures are based on the team's experiences in Loudoun. After the meeting, he tells a Style reporter that Loudon officials supplied the figures. The county was in the process of making the case for keeping the Redskins in Virginia, and likely had done attendance counts to support its cause.
The next day, Finkbeiner says the numbers actually came from the Redskins, who had taken attendance counts at its training camps for many years. "It's from the Redskins," says Finkbeiner, a former senior policy adviser to McDonnell. "They have been averaging anywhere between 2,000 and 5,000 a day, and on Fan Appreciation Day, they do between 20,000 and 25,000."
This year's training camp in Loudon, from July 26 to Aug. 14, spanned 20 days. But only 13 of the days featured practices open to the public. Assuming the high end of Finkbeiner's estimate, attendance would have totaled 85,000 for the 13 days (that's 12 days at 5,000 fans per day, plus 25,000 for Fan Appreciation Day).
As for the assumption that 40 percent of the fans who come to training camp will be out-of-town visitors — where the bulk of the $8.5 million in economic impact comes from — that's not based on the team's experience in Loudoun.
"The 40 percent is an NFL standard," Finkbeiner says. It's culled from previous studies of other training camps across the country. He points to a recent economic analysis of the Arizona Cardinals training camp.
In 2010, business and economics professors at Northern Arizona University completed a study of the Cardinals' training camp in Flagstaff, Ariz. They found that 47 percent of the fans stayed in local hotels overnight. Overall economic impact was $6.7 million, according to the study. Combined with the team's spending on the training camp, the total impact comes to $9.7 million.
There are some caveats. For starters, total attendance at the training camp was 38,000, according to the study. Flagstaff is just south of the San Francisco Peaks, the highest mountain range in Arizona, and just a 90-minute drive from the Grand Canyon. In other words, the town already is a popular tourist stop.
It's also difficult to reconcile the training camp's true effects in the last couple of years. The year before the study was done, the Cardinals made it to the Super Bowl, losing to the Pittsburgh Steelers. The 2009 training camp drew record attendance. Oddly enough, overall taxable sales in Flagstaff for the month of August, when the bulk of the team's training camp takes place, declined by 4 percent from August 2008. In 2010, overall sales in August dropped even further, by 6 percent.
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So what do Loudoun officials think about the 100,000 attendance figure? "It sounds high," says Brian Jenkins, director of business strategy and research for the Loudoun Convention and Visitors Bureau. He says most of the fans who show up are from the Washington area and other parts of Northern Virginia, the heart of the Redskins fan base.
It also turns out that Loudoun didn't do any hard attendance counts. Nor did officials commission an economic study of the camp's impact — figuring it wasn't worth the trouble. Most people who attend the camp stay for the day, hop back on the interstate and head home. Do 40 percent of the fans stay in local hotels? "That would not be accurate here," Jenkins says.
Attendance at training camps often has as much to do with a city or town's existing tourism attractions. The Dallas Cowboys, for instance, have held their summer training camp in Oxnard, Calif., off and on for the past 10 years. This year the team returned to the popular coastal town in Southern California (it's about 60 miles northwest of Los Angeles) where cool ocean breezes keep temperatures in the 70s in August, a welcome retreat from other parts of the state.
"A lot of times our summers are when the coastal fogs come in. It's cool with no humidity," says Janet Sederquist, president and chief executive of the Oxnard Convention and Visitors Bureau. The Cowboys, who typically hold camp out of state for marketing purposes, love the cool breezes, as do vacationers. Sederquist says the city is host to multiple festivals during the Cowboys camp, such as wine tastings and the Ventura County fair.
Oxnard commissioned an economic study of the Cowboys 2012 camp this year and found it generated an overall impact of $3.6 million, Sederquist says. A little more than 52,000 fans attended the team's two-week-plus training camp.
Being host of the camp and promoting it is a year-round affair, Sederquist says. Oxnard spends anywhere from $10,000 to $50,000 a year marketing the town's affiliation with the Cowboys, not including staff time and resources. The visitors' bureau also operates a booth at the training camp facility.
"I can't tell you how many times we hear, 'You have a beach?'" Sederquist says of some of the diehard Cowboy fans who show up. "It's only 20 minutes from the camp!"
While there have been individual training camp studies done for local visitors bureaus, host cities and team officials, there isn't much by way of independent academic research. Sports economists long have focused on the games themselves, and the impact of publicly subsidized stadiums. The closest independent analysis of professional training camps that Style could uncover was done by John Zipp, a professor of sociology at the University of Akron in the late 1990s. Zipp studied the economic impact of major league baseball's pre-season league in Florida, a popular tourism draw, shortly after the strike-shortened 1994 season (the World Series was canceled that year).
The 1995 spring training consisted of replacement players, and Zipp found that the effect on local tourism was minimal.
"This seems to indicate that, even in the relatively small economies of these Florida counties, professional sports can produce rather limited economic benefits," he writes in "Sports, Jobs and Taxes: the Economic Impact of Sports Teams and Stadiums," which was published in 1997.
Reached last week, Zipp says he found that tourists didn't really come for the baseball, specifically. "My conclusion: People come to Florida for the sun and the beaches," he says. Baseball, he found, was "a nice additional thing, but it's not why people come there."
If Richmond isn't already a popular tourist destination, having the Redskins in town for a couple of weeks isn't likely to produce a big spike in spending, Zipp says.
Victor Matheson, an associate professor of economics at College of the Holy Cross in Worcester, Mass., agrees. "Even if it is 100,000 people, the chances of it being significant economic impact is pretty low," he says. "If you are really getting 40,000 new people to stay in hotels overnight, then this really is an economic generator. But you should always take such claims with a grain of salt."
Zipp says what often doesn't get factored into the economic impact studies are the additional expenses that come with publicly subsidized sports facilities. That includes additional police protection, traffic congestion that crowds out other economic activity, considerable economic leakages — unless the hotel's ownership is based in the city, additional profits likely funnel back to company headquarters outside the area — and the opportunity costs of spending tax dollars in one place rather than another.
In Richmond, the most immediate tradeoff would involve the Westhampton School site, which the city is leasing to Bon Secours for $5,000 a year. At the Science Museum last week, Ferrara, the city's deputy director of economic and community development, says that Walgreens drug stores had offered $1 million an acre for the Westhampton property. If the property were sold to a retail developer, the money would revert to the Richmond Public Schools.
"The property is worth $7.5 to $10 million," state Delegate G. Manoli Loupassi says. "If they sold it all the money would go to the schools." Loupassi lambasted the deal in a letter to Mayor Jones in late October. "Giving up a $7.5 million piece of property is way too much," he says. "We're not flush with cash."
The city says the deal ultimately costs taxpayers nothing: Bon Secours' expansion at the Westhampton site and another 25,000-square-foot expansion of Richmond Community Hospital, announced as part of the Redskins deal, means the overall project will lead to $42 million being invested in the city, creating an additional 200 jobs.
How much of that would have happened regardless of the Redskins? Bon Secours has long expressed interest in the Westhampton site, and a 3-week training camp isn't going to drive major expansions it wasn't already planning.
While the city says the Redskins camp ultimately won't cost the taxpayers anything, it certainly requires a hefty public investment up front. In order to get the facilities built, the city must loan the Richmond Economic Development Authority $10 million and then recoup the money in annual rents collected from Bon Secours.
What else is at stake? Accommodating the Redskins is likely to push other projects to the back burner — including plans to build a new ballpark for the Richmond Flying Squirrels, at cost of $40 million to $50 million. While Mayor Jones has said the Redskins deal has no bearing on the ballpark plans, there's been little movement since it was announced earlier this summer that the city planned to move the ballpark off the Boulevard — to a site in Manchester or Shockoe Bottom.
Lou DiBella, managing owner of the Squirrels, says he isn't worried about the Redskins stealing the spotlight — and public funding — away from the Squirrels. But he raises a point that might cause the Redskins equal concern: The Squirrels have been promised a new stadium since they arrived in Richmond three years ago. In other words, can City Hall really produce a $10 million sports facility in less than nine months?
"I'm concerned with the lack of progress that has taken place from the second we moved to Richmond," DiBella says. "Who would be content with the lack of progress?" S
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