Thursday, August 11, 2016

Economics and the New Stadium

Today at the Arlington Convention and Visitor’s Board meeting we had a report on a study accomplished by a firm in California.  They provide this type of service for most cities across the U.S.  What I gleaned from the report was that Arlington has 13.9 visitors a year, and they spend $140 mil in our city each year, not to include hotel, and rental car.  We are looking at about $100 a night/person to our local economy.   This is significant in that VISA tells us that 52% of our sales tax is paid for by visitors or people that live in zip codes outside the city.  So when you look at the price of a new stadium the numbers prove that the citizens of Arlington will pay less than half of the price.  But remember that rental car tax and hotel tax is also being thrown into the subsidy.  These are likely visitors also.

Let’s break down the numbers for the stadium.  I will do this without figuring in interest, because if the stadium is paid off early, like all the others, that could reduce the obligation by hundreds of millions of dollars.  So let’s keep it simple.

The stadium cost to the city is capped at $500 mil.  If you divide this by 30 yrs. you will get $16 mil a year as an obligation.  Remember that 52% is paid for by visitors or people that simply don’t live in Arlington.  So now we are down to $8 mil to the taxpayers.  The Rangers will pay $2 mil a yr. for rent or the right to play in your stadium.  So now we are down to $6 mil a yr.  So let’s include the Rental Car and Hotel tax also paid by our visitors at $2.5 mil.  That brings us down to the actual cost of $3.5 mil a yr. to the citizens of Arlington.  So for $3.5 mil a yr. the city of Arlington gets major league baseball and an economic impact of $77.5 mil to the economic engine of this city.  Don’t get me wrong, $3.5 mil is not chump change, but the return on investment is much greater.  These numbers clearly indicate the fact that Arlington is a major entertainment venue and we are adding to it with Texas Live and additional hotels in the area.  I hope that you can understand the magnitude of this decision and the impact that it has on the economics of our city and its ability to provide services to our citizens.

I will be voting YES to keep the Rangers in Arlington.  I hope you can see the reasoning in my decision.

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